7. Subsequent Events

Preferred Stock Issuance

 In July of 2015, the Company sold 180,000 shares of Series A preferred stock with par value of $0.001 and 36,000 warrants to purchase common stock for a purchase price of $450,000 to a group of private investors. The shares of preferred stock automatically convert to shares of common stock either at (i) a subsequent equity financing of at least $1,000,000 or (ii) October 1, 2015, whichever is earlier. The warrants are exercisable at a price of $5.00 per share and expire five years from the issuance date. The Company incurred offering costs of $12,000 associated with this round which was netted against the proceeds.

CBD Research Agreement

In July of 2015, the Company entered into a research agreement with UM to begin studies concerning research and development of cannabidiol (CBD) formulations.  The fee payable to UM is based on the achievement of certain milestones in the project. The agreement also grants an exclusive option to license the technology from the University within 180 days from the commencement of the agreement. Either party may terminate the agreement with 30 days written notice.