UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ To ______________________

CHUMA HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)


Nevada	000-53447	20-5893809
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

20945 Devonshire Street, Suite 208

(Address of principal executive offices, including Zip Code)

(702) 751-8455

Registrant's telephone number, including area code:

(Former name or former address if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) had been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the Registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

Smaller reporting company [ X ]

(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]


Class of Stock	No. Shares Outstanding	Date
Common Stock	65,710,864	April 20, 2015


		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9

Item 4.	Controls and Procedures	9

PART II.	OTHER INFORMATION	10

Item 1.	Legal Proceedings	10

Item 1A.	Risk Factors	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13

Item 3.	Defaults Upon Senior Securities	13

Item 4.	Mine Safety Disclosures – Not Applicable	13

Item 5.	Other Information	13

Item 6.	Exhibits	14

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report may constitute forward-looking statements that include information related to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: the ability of Chuma Holdings, Inc. to secure appropriate funding to implement its business plan, the demand for Chuma’s services, Chuma's ability to maintain customer and strategic business relationships, the regulation of the legal cannabis industry on both state and federal levels, the impact of competitive products and pricing, and growth in targeted markets. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this 10-Q report in its entirety, including all other filings made by the Company with the SEC. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this 10-Q report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

Unless otherwise noted, references to “Chuma,” “CHUM,” the “Company,” “we,” “our,” or “us” means Chuma Holdings, Inc., a Nevada corporation.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

The unaudited consolidated financial statements of Chuma Holdings, Inc. follow. All currency references in this report are in US dollars unless otherwise noted.

Chuma Holdings Inc.

February 28, 2015

(Expressed in US dollars)

(unaudited)

Index

Consolidated Balance Sheets

F-1

Consolidated Statements of Operations

F-2

Consolidated Statements of Cash Flows

F-3

Notes to the Consolidated Financial Statements

F-4

Chuma Holdings Inc.

Consolidated Balance Sheets

(Expressed in US dollars)


	February 28, 2015 $	November 30, 2014 $
	(unaudited)
ASSETS

Current Assets

Cash	10,503	4,853
Accounts receivable (Note 3)	72,763	31,539
Amounts receivable (Note 7)	27,663	27,921
Loans receivable (Note 5)	77,740	77,343

Total Current Assets	188,669	141,656

Deferred financing costs	10,000	–
Property and equipment (Note 4)	–	29
Loans receivable (Note 5)	722,791	731,847

Total Assets	921,460	873,532

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts payable	275,490	248,838
Accrued liabilities	59,929	29,093
Due to related parties (Note 7)	105,147	82,480
Loans payable (Note 6)	319,795	321,870

Total Current Liabilities	760,361	682,281

Loans payable (Note 6)	10,000	10,000

Total Liabilities	770,361	692,281


Nature of Operations and Continuance of Business (Note 1) Commitments (Note 10) Subsequent Event (Note 12)

Stockholders’ Equity

Preferred stock, 20,000,000 shares authorized, $0.0001 par value; nil shares issued and outstanding (November 30, 2014 – nil shares)	–	–

Common stock, 1,000,000,000 shares authorized , $0.0001 par value; 65,710,864 shares issued and outstanding (November 30, 2014 – 54,920,864 shares)	6,571	5,492

Additional paid-in capital	15,190,593	11,195,671

Common stock subscribed (Note 8)	115,000	70,000

Accumulated deficit	(15,161,065)	(11,089,912)

Total Stockholders’ Equity	151,099	181,251

Total Liabilities and Stockholders’ Equity	921,460	873,532

(The accompanying notes are an integral part of these consolidated financial statements)

F-1

Chuma Holdings Inc.

Consolidated Statements of Operations

(Expressed in US dollars)

(unaudited)


	For the Three Months Ended	For the Three Months Ended
	February 28,	February 28,
	2015	2014
	$	$

Revenue

Interest revenue	23,551	–
Management fee and service revenue	40,325	–

Total Revenue	63,876	–

Operating Expenses

Bad debts	17,500	–
Depreciation	29	43
General and administrative (Notes 7 and 9)	114,510	28,424
Impairment of intangible assets (Note 11)	3,996,453	–

Total Operating Expenses	4,128,492	28,467

Loss Before Other Expense	(4,064,616)	(28,467)

Other Expense

Interest expense	(6,537)	(7,371)


Loss from Continuing Operations	(4,071,153)	(35,838)

Discontinued Operations


Loss on Discontinued Operations	–	(15)

Net Loss and Comprehensive Loss	(4,071,153)	(35,853)

Net Loss Per Share – Basic and Diluted	(0.07)	(0.00)

Weighted Average Shares Outstanding	55,880,000	52,656,000

(The accompanying notes are an integral part of these consolidated financial statements)

F-2

Chuma Holdings Inc.

Consolidated Statements of Cash Flows

(Expressed in US dollars)

(unaudited)


	For the Three Months Ended February 28, 2015 $	For the Three Months Ended February 28, 2014 $

Operating Activities

Net loss	(4,071,153)	(35,853)

Adjustments to reconcile net loss to net cash used in operating activities:
Accrued management fee income included in loans receivable	(17,500)	–
Bad debt expense	17,500	–
Depreciation	29	43
Gain on foreign currency translation	(2,075)	(1,158)
Impairment of intangible assets	3,996,453	–
Stock-based compensation	3,702	–

Changes in operating assets and liabilities:
Accounts receivable	(40,477)	–
Amounts receivable	258	(192)
Prepaid expenses	–	(5,576)
Accounts payable	19,782	(6,668)
Accrued liabilities	30,836	19,682
Due to related parties	44,767	7,970

Net Cash Used in Operating Activities	(17,878)	(21,752)

Investing Activities

Advances of loans receivable	(12,744)	–
Repayments of loans receivable	23,056	–
Cash received on acquisition of PSA	316	–

Net Cash Provided by Investing Activities	10,628	–

Financing Activities

Proceeds from common stock subscribed	45,000	–
Deferred financing costs	(10,000)	–
Proceeds from loans payable	–	40,000
Repayment of related party loans	(22,100)	(23,000)

Net Cash Provided by Financing Activities	12,900	17,000

Increase (Decrease) in Cash	5,650	(4,752)

Cash, Beginning of Period	4,853	9,119

Cash, End of Period	10,503	4,367

Supplemental Disclosures

Interest paid	–	–
Income taxes paid	–	–

(The accompanying notes are an integral part of these consolidated financial statements)

F-3

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Nature of Operations and Continuance of Business

Chuma Holdings Inc. (the “Company”) was incorporated in the State of Nevada on February 14, 2006 under the name XTOL Energy Inc. On October 11, 2007, the Company changed its name to LAUD Resources Inc. On June 23, 2008, the Company changed its name from LAUD Resources Inc. to MASS Petroleum Inc. On March 6, 2014, the Company changed its name from MASS Petroleum Inc. to Dyna Nutra, Inc. On April 7, 2014, the Company changed its name from Dyna Nutra, Inc. to Cannamed Corporation. On August 29, 2014, the Company changed its name from Cannamed Corporation to Chuma Holdings Inc. The Company’s principal business was formerly the acquisition and exploration of oil and gas properties located in the United States until the sale of its sole oil and gas property on May 30, 2014. The Company’s current operations are to offer turnkey support services and financing loans to companies involved in the legal cannabis industry. Support services provided by the Company include compliance consulting, security services, management, bookkeeping and financial services.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at February 28, 2015, the Company has a working capital deficit of $517,692 and has accumulated losses totaling $15,161,065 since inception. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable and sustainable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Summary of Significant Accounting Policies

(a)

Principles of Consolidation

The preparation of these consolidated financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, the collectability of accounts receivable and loans receivable, and fair value of share-based compensation. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

(b)

Basis of Presentation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is November 30.

(c)

Interim Financial Statements

These interim unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the period shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

F-4

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Summary of Significant Accounting Policies (continued)

(d)

Use of Estimates

(e)

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

(f)

Property and Equipment

Property and equipment consists of computer hardware, and is recorded at cost and amortized on a straight-line basis over its estimated life of three years.

(g)

Long-lived Assets

In accordance with ASC 360, Property, Plant, and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

(h)

Revenue Recognition and Accounts Receivable

The Company’s revenue consists of management fees and services and interest income on loans receivable. Management fees and service revenue are recognized when fees and services are at a fixed or determinable price, persuasive evidence of an arrangement exists, the services have been provided, and collectability is reasonably assured. Interest income on loan receivable are recognized on an accrual basis when the interest rates on the loans have been fixed or determined, a signed agreement exists between the Company and borrower, financing has been provided to the borrower, and collectability of the interest revenue is reasonably assured.

The Company assesses its accounts receivable periodically throughout the year and records an allowance for doubtful accounts if factors or events occur that indicate a potential default of the amounts owing. At February 28, 2015, the Company recognized an allowance for doubtful accounts of $39,750 (November 30, 2014 - $22,250).

F-5

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Summary of Significant Accounting Policies (continued)

(i)

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.

ASC 718 requires company to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option pricing model as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

(j)

Loss Per Share

The Company computes loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing the loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At February 28, 2015, the Company had 166,667 (November 30, 2014 – 116,667) potentially dilutive shares outstanding.

(k)

Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at February 28, 2015 and 2014, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

(l)

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Transactions may occur in a foreign currency and management has adopted ASC 830, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

F-6

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Summary of Significant Accounting Policies (continued)

(m)

Financial Instruments and Fair Value Measures

ASC 820, Fair Value Measurements and Disclosures, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, accounts receivable, amounts receivable, loans receivable, accounts payable, accrued liabilities, amounts due to related parties, and loans payable. Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

The Company has transactions in both Canada and the United States, which results in exposure to market risks from changes in foreign currency rates. The Company’s function currency is the United States dollar. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

(n)

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

F-7

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Accounts Receivable


	February 28, 2015	November 30, 2014
	$	$

Interest revenue on loans receivable	51,438	29,539
Management fees and services	21,325	2,000

	72,763	31,539

Property and Equipment


	Cost $	Accumulated Depreciation $	February 28, 2015 Net Carrying Value $	November 30, 2014 Net Carrying Value $

Computer hardware	4,454	4,454	–	29

Loans Receivable

(a)

On June 27, 2012, the Company entered into a bridge loan agreement with D-Helix Inc. (“D-Helix”), whereby the Company agreed to lend $75,000 to D-Helix. Under the terms of the agreement, the principal amount will be due and payable on the earlier of September 30, 2012 or within ten business days of the closing of a potential share exchange agreement between the Company and D-Helix. The loan is unsecured, bears interest at 10% per annum, and is payable in quarterly installments from September 30, 2012. As of November 30, 2013, the Company recorded a full allowance on the principal amount and accrued interest due to uncertainty of future collection of the loan receivable.

(b)

On June 25, 2014, Cal-West received a secured promissory note from 20 Bear, LLC (“20 Bear”), effective as of May 29, 2014, in the principal amount of $43,418 (November 30, 2014 - $41,865) to acquire agricultural real estate in California which is secured against the promissory note. During the three months ended February 28, 2015, the Company advance additional principal of $1,553. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $589 commencing on January 15, 2015. On January 12, 2015, the Company received a refund of principal amount of $200. As at February 28, 2015, Cal-West has not received any repayments from 20 Bear. As at February 28, 2015, the Company has recognized accrued interest receivable of $3,245 (November 30, 2014 - $2,157).

(c)

On June 25, 2014, Cal-West received a secured promissory note from Cal-Southridge, LLC (“Southridge”), effective as of June 2, 2014, in the principal amount of $68,342 (November 30, 2014 - $66,380) to acquire agricultural real estate in California which is secured against the promissory note. During the three months ended February 28, 2015, the Company advanced additional principal of $1,962. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $933 commencing on January 15, 2015. As at February 28, 2015, Cal-West has not received any repayments from Southridge. As at February 28, 2015, the Company has recognized accrued interest receivable of $5,103 (November 30, 2014 - $3,343).

F-8

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Loans Receivable (continued)

(d)

On June 25, 2014, Cal-West received a secured installment note from Orange County Growers Association (“OCGA”) in the principal amount of $160,000. The installment note is secured by OCGA’s interest in machinery, equipment, fixtures, appliances and other assets, bears interest at 10% per annum commencing November 30, 2014, and is due on November 30, 2017, with monthly payments of $5,388 commencing on November 30, 2014. OCGA owns and operates a California medical marijuana dispensary properly organized under the California Attorney General’s guidelines. As at February 28, 2015, the Company has advanced $140,375 (November 30, 2014 - $139,875) under this secured installment note and has not received any repayments from OCGA. As at February 28, 2015, the Company has recognized accrued interest receivable of $3,533 (November 30, 2014 - $nil).

(e)

On June 25, 2014, Cal-West received a secured promissory note from Rattlesnake Pine, LLC (“Rattlesnake”), effective as of May 22, 2014, in the principal amount of $120,921 (November 30, 2014 - $122,038) to acquire agricultural real estate in California which is secured against the promissory note. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $1,721 commencing on January 15, 2015. On January 12, 2015, the Company received a refund of principal amount of $1,117. As at February 28, 2015, Cal-West has not received any repayments from Rattlesnake. As at February 28, 2015, the Company has recognized accrued interest receivable of $9,729 (November 30, 2014 - $6,534).

(f)

On June 25, 2014, Cal-West received a secured promissory note from 50 Bear, LLC (“50 Bear”), effective as of May 29, 2014, in the principal amount of $99,661 (November 30, 2014 - $99,789) to acquire agricultural real estate in California which is secured against the promissory note. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $1,404 commencing on January 15, 2015. On January 12, 2015, the Company received a refund of principal amount of $128. As at February 28, 2015, Cal-West has not received any repayments from 50 Bear. As at February 28, 2015, the Company has recognized accrued interest receivable of $7,756 (November 30, 2014 - $5,141).

(g)

On June 25, 2014, Cal-West received a secured promissory note from 3180 Dips, LLC (“3180”), effective as of June 9, 2014, in the principal amount of $79,626 (November 30, 2014 - $74,308) to acquire agricultural real estate in California which is secured against the promissory note. During the three months ended February 28, 2015, the Company advance additional principal amount of $5,529. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $1,042 commencing on January 15, 2015. On January 13, 2015, the Company received a refund of principal amount of $212. As at February 28, 2015, Cal-West has not received any repayments from 3180. As at February 28, 2015, the Company has recognized accrued interest receivable of $5,577 (November 30, 2014 - $3,592).

(h)

On July 18, 2014, Cal-West received a secured promissory note from Horizons Partners, LLC (“Horizons”) in the principal amount of $146,375 (November 30, 2014 - $146,375). The note is unsecured, bears interest at 6% per annum, and is due on July 18, 2016. During the year ended November 30, 2014, the Company received payment of $1,700 against the note. As at February 28, 2015, the Company has recognized accrued interest receivable of $5,416 (November 30, 2014 - $3,303).

F-9

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Loans Receivable (continued)

(i)

On May 30, 2014, the Company entered into leasing and property management agreements with each of 20 Bear, Southridge, Rattlesnake, 50 Bear, and 3180 (collectively, the “Owners”). Under the terms of these agreements, the Company agreed to manage various properties on behalf of the Owners in consideration for monthly management fees of $1,167 per month for an initial term of five years, and advances for leasehold improvements. Management fees may be payable pursuant to revolving promissory notes entered into with each Owner. During the period ended February 28, 2015, the Company has charged management fees of $17,500 (November 30, 2014 - $35,000), advanced $3,000 (November 30, 2014 - $14,060) for leasehold improvements secured under these notes, and has recognized accrued interest receivable of $1,303 (November 30, 2014 - $1,071). During the period ended February 28, 2014, the Company recorded a $17,500 (November 30, 2014 - $24,560) provision for loans receivable due to the future uncertainty of collection. At February 28, 2015, the Company is due $18,713 (November 30, 2014 - $24,560) from the Owners. The amounts owing are due in June 2016.

(j)

On July 8, 2014, the Company entered into lease agreements with each of 2131 Inc., 3231 Inc., 5301 Inc., 7141 Inc., and 5621 Inc. (collectively, the “Tenants”) on behalf of each the Owners. Under the terms of these agreements, the Company agreed to lease out the Owners’ various properties on behalf of the Owners to the Tenants for an initial term of five years. Beginning as of the effective date of the agreements and continuing for a period not exceeding 24 months, rent may be payable pursuant to revolving promissory notes entered into with each Tenant. During the period ended February 28, 2015, the Company received payments of $10,900 against the notes. As at February 28, 2015, the Company has advanced an aggregate of $83,100 (November 30, 2014 - $94,000) for leasehold improvements secured under these notes and has recognized accrued interest receivable of $10,358 (November 30, 2014 - $4,399).

Loans Payable

(a)

On July 6, 2009, the Company entered into a loan agreement for $7,500 which is payable on the earlier of July 15, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(b)

On July 14, 2009, the Company entered into a loan agreement for $15,000 which is payable on the earlier of July 15, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On July 15, 2010, the loan was extended to June 15, 2011. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(c)

On July 17, 2009, the Company entered into a loan agreement for $5,000 which is payable on the earlier of July 15, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On July 15, 2010, the loan was extended to June 15, 2011. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(d)

On January 12, 2010, the Company entered into a loan agreement for $6,500 which is payable on the earlier of January 12, 2011 or within 7 days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 2% per annum. On January 12, 2011, the Company extended the maturity date of the loan to June 15, 2011. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(e)

On January 21, 2010, the Company entered into a loan agreement for $1,500 which is payable on the earlier of January 21, 2012 or within 7 days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On January 21, 2012, the Company did not repay the note and the note became due on demand.

F-10

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

Loans Payable (continued)

(f)

On March 15, 2011, the Company received a loan of $29,300, which is payable on the earlier of March 15, 2012 or within 7 days of the Company completing a financing in excess of $1,500,000. The amount owing is unsecured and bears interest at 5% per annum. On March 15, 2012, the Company did not repay the note and the note became due on demand.

(g)

On June 29, 2012, the Company entered into a loan agreement for proceeds of $75,000. The amount owing is unsecured, non-interest bearing, and due on demand.

(h)

On December 24, 2012, the Company entered into a loan agreement for $80,000 which is payable on the earlier of December 24, 2014 or within seven days of the Company completing a financing in excess of $2,000,000. The amount owing is unsecured and bears interest at 5% per annum.

(i)

On December 20, 2013, the Company entered into a loan agreement for $30,000 which is payable on the earlier of December 31, 2014 or within ten days of the Company completing a financing in excess of $2,000,000. The amount owing is unsecured and bears interest at 5% per annum.

(j)

On February 6, 2014, the Company entered into a loan agreement for $10,000 which is payable on the earlier of February 6, 2016 or within ten days of the Company completing a financing in excess of $2,000,000. The amount owing is unsecured and bears interest at 5% per annum.

(k)

On November 3, 2014, the Company entered into a loan agreement for $25,000. The amount owing is unsecured, payable on December 3, 2014, and bears interest at $500 per month thereafter.

(l)

On November 3, 2014, the Company entered into a loan agreement for $25,000. The amount owing is unsecured, payable on December 3, 2014, and bears interest at $500 per month thereafter.

(m)

On November 7, 2014, the Company entered into a loan agreement for Cdn$25,000. At February 28, 2015, the Company owed $19,995 (November 30, 2014 - $22,070). The amount owing is unsecured, payable on December 7, 2014, and bears interest at $500 per month thereafter.

Related Party Transactions

(a)

During the three months ended February 28, 2015, the Company incurred $nil (2014 - $2,758) of management fees to the former Chief Financial Officer (“CFO”) of the Company and a company controlled by the former CFO of the Company. As at February 28, 2015, the company controlled by the former CFO of the Company owed $840 (Cdn$1,050) (November 30, 2014 - $927 (Cdn$1,050)) to the Company.

(b)

On December 4, 2009, the Company entered into a loan agreement with the former President and current Chief Executive Officer (“CEO”) of the Company for $7,000 which is payable on the earlier of December 4, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount is unsecured and bears interest at 5% per annum. On December 4, 2010, the Company extended the maturity date of the loan to December 4, 2013. On August 26, 2011, the Company repaid $2,000 of the loan by issuance of 20,000 common shares at $0.0001 per share resulting in a loss on settlement of $52,000.

(c)

During the three months ended February 28, 2015, the Company incurred $15,000 (2014 - $nil) of management fees to the CEO of the Company. As at February 28, 2015, the CEO of the Company owed $21,934 (November 30, 2014 - $21,722) to the Company. These amounts are unsecured, non-interest bearing, and due on demand.

(d)

During the three months ended February 28, 2015, the Company incurred $2,000 (2014 - $nil) of management fees to the former Vice President of Finance of the Company. As at February 28, 2015, the Company owed $16,731 (November 30, 2014 – $14,731) to the Vice President of Finance. These amounts are unsecured, non-interest bearing, and due on demand. On December 15, 2014, the Vice President of Finance of the Company terminated her employment agreement with the Company.

(e)

During the three months ended February 28, 2015, the Company incurred $20,000 (2014 - $nil) of management fees to the Chief Financial Officer (“CFO”) of the Company. As at February 28, 2015, the Company owed $16,471 (November 30, 2014 - $7,018) of management fees and $2,882 (November 30, 2014 – $100) of general and administrative expenses to the CFO of the Company. These amounts are unsecured, non-interest bearing, and due on demand.

(f)

During the three months ended February 28, 2015, the Company incurred $12,000 (2014 - $nil) of management fees to the President of the Company. As at February 28, 2015, the Company owed $24,000 (November 30, 2014 - $12,000) to the President of the Company. These amounts are unsecured, non-interest bearing, and due on demand.

(g)

As at February 28, 2015, the Company owed $12,000 (November 30, 2014 - $12,000) to a company controlled by the President of the Company. These amounts are unsecured, non-interest bearing, and due on demand.

(h)

As at February 28, 2015, the Company owed $28,903 (Cdn$36,137) (November 30, 2014 - $32,558 (Cdn$36,137)) to the President of the Company. These amounts are unsecured, non-interest bearing, and due on demand.

F-11

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

8. Share Capital

(a)

On February 20, 2015, the Company issued 1,790,000 shares of common stock at a fair value of $662,300 pursuant to the share exchange agreement entered on November 20, 2014. Refer to Note 12(a).

(b)

On February 20, 2015, the Company issued 9,000,000 shares of common stock at a fair value of $3,330,000 pursuant to the share exchange agreement entered on January 23, 2015. Refer to Note 12(b).

(c)

As at February 28, 2015, the Company received share subscriptions of $115,000 for the future issuance of 230,000 shares of common stock, of which $70,000 had been received as at November 30, 2014.

9. Stock Options

On December 15, 2014, the Vice President of the Company terminated her employment agreement with the Company and the 400,000 stock options granted to her during the year ended November 30, 2014 were cancelled. During the three months ended February 28, 2015, the Company reversed stock-based compensation $257,570 in relation to the unvested stock options granted to the Vice President of the Company.

The following table summarizes the continuity of the Company’s stock options:


	Number of Options	Weighted Average Exercise Price $	Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding, November 30, 2014	1,200,000	1.64

Cancelled	(400,000)	(1.65)

Outstanding, February 28, 2015	800,000	1.64	4.35	$ –

Exercisable, February 28, 2015	166,667	1.85	4.18	$ –

F-12

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

9. Stock Options (continued)

Additional information regarding stock options as of February 28, 2015, is as follows:


	Outstanding			Exercisable
Range of Exercise Prices $	Number of Options	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price $	Number of Options	Weighted Average Exercise Price $

1.43	400,000	4.52	1.43	–	–
1.85	400,000	4.18	1.85	166,667	1.85

	800,000	4.35	1.64	166,667	1.85

During the three months ended February 28, 2015, the Company recorded stock-based compensation of $3,702 (2014 - $nil), which is net of the reversal of $257,570 (2014 - $nil) for the cancellation of unvested stock options, and has been recorded in general and administrative expense. The weighted average grant date fair value of stock options granted during the period ended February 28, 2015 was $nil (2014 - $1.63) per share.

A summary of the changes of the Company’s non-vested stock options is presented below:


	Number of Options	Weighted Average Exercise Price
		$
Non-vested as at November 30, 2014	1,083,333	1.62
Vested	(50,000)	1.85
Cancelled	(400,000)	1.65

Non-vested as at February 28, 2015	633,333	1.58

10. Commitments

(a)

On April 30, 2014, the Company entered into an employment agreement with the President of the Company for a period of two years, with options to extend annually on the mutual agreement of the Company and the President of the Company. Pursuant to the agreement, the Company is to pay a monthly fee of $4,000.

(b)

On July 24, 2014, the Company entered into an employment agreement with the CEO of the Company for a period of two years, with options to extend annually on the mutual agreement of the Company and the CEO of the Company. Pursuant to the agreement, the Company is to pay a monthly fee of $5,000 commencing June 1, 2014.

(c)

On September 3, 2014, the Company entered into an employment agreement with the CFO of the Company for a period of two years, with options to extend annually on the mutual agreement of the Company and the CFO of the Company. Pursuant to the agreement, the Company is to pay the CFO of the Company at an hourly rate of $125 per hour.

F-13

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

10. Commitments (continued)

(d)

On October 23, 2014, the Company entered into a consulting agreement with a non-related party for marketing and public relation services. Under the terms of the agreement, for the first three months of the agreement, the Company will pay $2,000 and issue common shares with a fair value of $3,000 per month on the last trading day of each month. The agreement is effective until April 15, 2015. As at February 28, 2015, the Company has not issued any shares to the consultant.

(e)

On October 21, 2014, the Company entered into a consulting agreement with Strategic Management LLC for business development services to not exceed $10,000 per month and 25,000 shares of common stock per month, issued on a quarterly basis. The agreement expires on October 21, 2024 and either party may terminate the agreement with one year of prior written notice.

(f)

On October 21, 2014, the Company entered into a consulting agreement with Sunshine Global Services, LLC for business development services. At the end of each month, the compensation will be determined between the Company and the consultant based on the service performed. The agreement expires on September 25, 2024, and either party may terminate the agreement with one year of prior written notice.

(g)

On October 23, 2014, the Company entered into a consulting agreement with Institute for Wellbeing LLC for business development services to not exceed $5,000 per month and 5,000 shares of common stock per month, issued on a quarterly basis. The agreement expires on October 23, 2015, and either party may terminate the agreement within 30 days of prior written notice.

(h)

On October 27, 2014, the Company entered into a consulting agreement with Harmony Group International LLC for business development services to not exceed $5,000 per month and 5,000 shares of common stock per month, issued on a quarterly basis. The agreement expires on October 27, 2015, and either party may terminate the agreement within 30 days of prior written notice.

(i)

On October 29, 2014, the Company entered into a consulting agreement with Refcon Development Services, LLC for business development services to not exceed $5,000 per month and 5,000 shares of common stock per month, issued on a quarterly basis. The agreement expires on October 29, 2015, and either party may terminate the agreement within 30 days of prior written notice.

(j)

On November 4, 2014, the Company entered into a consulting agreement with Frank G. Finkbeiner for business development services to not exceed $5,000 per month and 5,000 shares of common stock per month, issued on a quarterly basis. The agreement expires on November 4, 2015, and either party may terminate the agreement within 30 days of prior written notice.

(k)

On February 17, 2015, the Company entered into a placement agent agreement with Spencer Edwards, Inc. Under the terms of the agreement, Spencer Edwards Inc. will act as the Company’s exclusive placement agent for the Company in connection with an offering of the Company’s securities in exchange for: (i) 2% non-accountable expense allowance: (ii) 10% sales commission of the gross proceeds of the offering; and (iii) 10% placement agent warrant. The agreement is effective until July 31, 2015, unless one party provides written notice of termination to the other party for failure to comply with the terms of the agreement.

F-14

Chuma Holdings Inc.

Notes to the Consolidated Financial Statements

February 28, 2015

(Expressed in US dollars)

(unaudited)

11. Acquisition Agreements

(a)

On November 20, 2014, the Company entered into a Share Exchange Agreement (the “Agreement”) with Paul Shively and Associates, Inc. (“PSA”), a Nevada corporation, pursuant to which the Company would acquire 100% of the shares of common stock of PSA in exchange for the issuance of 1,790,000 shares of common stock of the Company. Upon closing, PSA became a wholly-owned subsidiary of the Company and will continue its operations in California’s legal cannabis industry. On February 20, 2015, the agreement was completed upon the issuance of 1,790,000 shares of common stock to PSA with a fair value of $662,300, which was based on the end of day trading price of the Company’s common shares on the date of completion.

The fair value of assets acquired and liabilities assumed from PSA are as follows:


	$

Cash	316
Accounts receivable	2,400
Intangible assets	666,453
Accounts payable	(6,869)
(b)
Total purchase price	662,300

On February 28, 2015, the Company recorded an impairment of its intangible assets of $666,453, as there is uncertainty as to the future profitability of PSA.

(b)

On January 23, 2015, the Company entered into a Share Exchange Agreement (the “Agreement”) with California Acquisitions Group, Inc. (“CAGI”), a Nevada corporation, pursuant to which the Company would acquire 100% of the shares of common stock of CAGI in exchange for the issuance of 9,000,000 shares of common stock of the Company. Upon closing, CAGI became a wholly-owned subsidiary of the Company and will continue its operations in California’s legal cannabis industry. On February 20, 2015, the agreement was completed upon the issuance of 9,000,000 shares of common stock to CAGI with a fair value of $3,330,000, which was based on the end of day trading price of the Company’s common shares on the date of completion.

The fair value of assets acquired and liabilities assumed from CAGI are as follows:


	$

Intangible assets	3,330,000

Total purchase price	3,330,000

On February 28, 2015, the Company recorded an impairment of its intangible assets of $3,330,000 due to the uncertainty of CAGI to generate future profitability.

12. Subsequent Event

On March 2, 2015, the Company entered into a settlement agreement with the former Vice President of the Company for unpaid wages and expenses for $16,731. Refer to Note 7(d).

F-14

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our financial statements and related notes. Some of the information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this report, includes forward-looking statements based on our current management’s expectations. There can be no assurance that actual results, outcomes, or business conditions will not differ materially from those projected or suggested in such forward-looking statements. Some of the factors that may cause results to differ are described in the forward-looking statements cautionary language on page two of this report.

Company Background

Pre Cannabis Industry

The Company was incorporated in Nevada on February 14, 2006, under the name XTOL Energy Inc. On October 10, 2007, the Company changed its name to LAUD Resources Inc. On June 23, 2008, the Company changed its name to MASS Petroleum Inc. through a name change.

On November 15, 20l3, the Company entered into a Share Exchange Agreement with Dyna Nutra, Inc., a Florida corporation ("Dyna"), where the Company would change its name to Dyna and carry on the business of Dyna as its primary business. On March 6, 2014, the name change merger between the Company and Dyna took effect in the State of Nevada, and the Company’s name became Dyna Nutra, Inc. Ultimately, although the name change had gone effective with the State of Nevada, the Company and Dyna Nutra were unable to close the Share Exchange Agreement and consummate the contemplated transaction. On March 19, 2014, the Company requested to withdraw its application with the Financial Industry Regulatory Authority (“FINRA”) regarding this name change.

Until the Company’s entry into the Cannabis Industry, the Company’s principal business was the acquisition and exploration of oil and gas properties located in the United States. In fact, effective May 30, 2014, the Company assigned its only remaining oil and gas interests, a 2.34% non-operating interest, to a third party. Now, the Company’s principal business focuses on financing, servicing and certification solutions in the legal cannabis industry.

Entry into the Cannabis Industry

On March 20, 2014, the Company’s Board of Directors approved an Agreement and Plan of Merger to merge with a newly formed, wholly-owned subsidiary, CannaMed Corporation. The purpose of this merger, and the incorporation of the subsidiary, was solely to effectuate a name change. The Company remained the surviving entity. The name change to CannaMed Corporation became effective on April 7, 2014. The Company was quoted over the counter under the symbol MDMJ until August 29, 2014. At this time, the Company became aware of a California company operating in the cannabis sector with a similar name, Cannamed. In order to avoid confusion between these two entities, the Company rebranded its name to, Chuma Holdings, Inc. The name change was accomplished through a merger with the Company's wholly-owned subsidiary, Chuma Holdings, Inc., that became effective on August 29, 2014. CannaMed Corporation is the surviving entity in the merger, but it will continue with the new name, Chuma Holdings Inc., and new ticker symbol (CHUM). Only the Company's name was changed in the Articles of Incorporation. In connection with the name change, FINRA assigned the Company a new CUSIP number (171326101).

Company Overview

General

Chuma Holdings, Inc. is a public company incorporated in Nevada, with its principal place of business in Chatsworth, California. The Company is quoted on the OTCBB as CHUM. Chuma and its wholly-owned subsidiaries, 1849 Holdings, Inc., Cal-Westridge, LLC, Paul Shively & Associates, Inc., and California Acquisitions Group, Inc. provide turnkey support solutions to the legal cannabis industry. We provide “seed to sale” key business services including:

•

Funding and Financing Solutions

•

Compliance Consulting and Certification Solutions

•

Dispensary and Retail Solutions

•

Commercial Production and Equipment Build Out Solutions

•

Banking and Payment Processing Solutions

•

Multichannel Supply Chain Solutions

•

Branding, Marketing and Sales Solutions

•

Research and Development Solutions

•

Consumer Product Solutions

Chuma is expanding throughout California and presently intends to bring its array of services to each new state that legalizes the use of cannabis according to appropriate state and federal laws.

At this time, Chuma does not grow, process, own, handle, transport, or sell marijuana as the Company is organized and directed to operate strictly in accordance with all applicable state and federal laws. As the legal environment changes in California and other states, the Company’s management may explore business opportunities that involve ownership interests in dispensaries and growing operations if and when such business opportunities become legally permissible under applicable state and federal laws.

Services and Markets

To date, we have provided financing for one California medical marijuana dispensary. We’ve also provided financing for the acquisition of five agricultural properties in Northern California. We have multiple service contracts in place in areas in the following sectors:

Funding and Financing Solutions

Our goal is to become the funding and financing service partner of choice in the legal California cannabis market before expanding nationwide if and when applicable state and federal laws allow us to do so. We offer financing and financial aid to collectives, dispensaries, producers, and product businesses in the legal cannabis industry with alternative funding and financing solutions. In the evolving legal cannabis industry, where traditional banking opportunities are grossly limited, we step in to provide the “traditional” bank lending services; lines of credit, property financing, and/or commercial loans. Businesses and individuals seeking funding and financing solutions are qualified and scored based on their experience, current operations, financial records, and compliance grades given by our proprietary compliance engine that complies with all state governance rules. After this evaluation, we assign them a Chuma Compliance Index (“CCI”) Score, a 130 point rating system that determines their eligibility for assistance. This score helps us determine which service and financing package we are able to offer to these businesses or individuals.

Chuma Certification and Compliance Solutions

Led by Mr. Paul Shively, our compliance team guides our clients through the complex and ever-changing legal landscape regarding the legal cannabis industry. Legal cannabis retail, production, and product manufacturers must comply with all regulations in the highly governed legal cannabis industry, as local and state laws dictate different business requirements. Since complying with applicable laws can be complex, we help service our clients in areas such as entity selection, internal bookkeeping, government reporting, and inventory and patient records tracking in order to help our clients be compliant.

Commercial Build Out and Dispensary Solutions

In addition, we offer turnkey build-out and commercial services to our clients. Whether it is financial assistance, real estate consulting, operations design, or building construction, our Company helps design and rollout customized services for our clients. We also offer traditional business services to dispensaries as well. These services include human resources, payroll, workers compensation, donation accounting, tax planning, government audit preparation, and succession strategies. It is important to note that we are not a “one size fits all” organization, but are committed to custom tailored solutions for legal cannabis industry participants.

Supply Chain Solutions

We offer assistance in the design, planning, and execution of supply chain control and monitoring systems for legal cannabis retail and production facilities. Our objective is to create overall value for our book of contracts, build a competitive infrastructure, coordinate logistics, and assist in providing metrics to synchronize supply and demand, while monitoring, measuring and reporting performance. We are currently compiling a catalogue of unique products and pricing that Chuma can offer to all industry participants.

Branding, Marketing, and Sales Solutions

Our sales team assists clients in developing effective branding geared towards enhancing distribution networks. Our team works closely with operations personnel to ensure that both the products and the client are fulfilling the promises made to their customers. We continue to examine brand licensing agreements in this uncertain legal climate, the value of brand intellectual property, and master distribution channels. We are able to earn fees based on providing solutions to matters such as packaging, sales, marketing support, brand licensing, product book development, and other valuable services.

Plan of Operations

Provided it is able to secure the necessary cash resources, the Company plans to continue its financing activities in Southern California. Specifically, it seeks to provide start-up capital, bridge loans, general working capital, or special project financing for legal cannabis participants. Simultaneously, the Company seeks to aggressively identify and engage legal cannabis industry participants in California that may benefit from its service offerings by leveraging relationships developed and networks accessed through financing activities. Finally, further development and deployment of the Company’s compliance package is also planned over the next two to three quarters.

Chuma is organized and directed to operate strictly in accordance with all applicable state and federal laws.

Off Balance Sheet Arrangements

As of February 28, 2015, there were no off balance sheet arrangements.

Liquidity and Capital Resources

As of February 28, 2015, we had cash of $10,503 and a working capital deficit of $571,692. Our accumulated deficit from inception to February 28, 2015 was $15,161,065. Our net loss of $4,071,153 for the three months ended February 28, 2015 was mostly funded by the sale of shares of common stock of the Company and loans and funding from related parties. For the three months ended February 28, 2015, we received cash of $12,900 for financing activities, compared to $17,000 during the same period in 2014. During the three months ended February 28, 2015 our cash position increased by $5,650.

We used net cash of $17,878 in operating activities for the three months ended February 28, 2015 compared to net cash of $21,752 used in operating activities for the same period in 2014. Considering the Company’s net cash used in both operating and investing activities for the three months ended February 28, 2015, the Company had a monthly cash requirement of approximately $2,600. During the three months ended February 28, 2014, our monthly cash requirement was approximately $7,250. We will need additional financing to carry out our business plan. There is no assurance that any financing will be available or if available, on terms that will be acceptable to us.

Since we have limited liquidity and have suffered losses, we depend to a great degree on the ability to attract external financing in order to conduct our business activities and expand our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. If we are unable to raise additional capital from conventional sources, including increases in related party and non-related party loans and/or additional sales of stock, we may be forced to curtail or cease our operations. Even if we are able to continue our operations, the failure to obtain financing could have a substantial adverse effect on our business and financial results. We anticipate that we will require additional capital in order to grow our business by increasing headcount and our budget for the upcoming year. We may use a combination of equity and/or debt instruments to fund our growth strategy or enter into a strategic arrangement with a third party. As stated above, the Company will need additional financing in order to continue with its business plan. However, there can be no guarantee that financing will be available. Even if available, there can be no assurances that the terms will be acceptable.

Obtaining additional financing will be subject to a number of factors including market conditions, investor acceptance of the Company’s business plan in the legal cannabis industry, investor sentiment generally towards legal cannabis, legalization of medicinal and recreational use across the United States, and regulatory action in the legal cannabis industry. These factors and others may make the timing, amount, terms, and conditions of additional financing unattractive or unavailable to the Company. If the Company cannot raise enough to fund its business plan related to the legal cannabis industry, the Company will need to significantly reduce spending, slow or cease investment activities, delay or cancel planned activities, or substantially change its business plan. In such an event, the Company intends to implement expense reduction plans in a timely manner. However, these actions would have a material adverse effect on the Company, its operating results, and its prospects, resulting in a possible failure of its business and cessation of operations.

Results of Operations for the Three Months Ended February 28, 2015 as Compared to the Three Months Ended February 28, 2014

The Company produced $40,325 in management fee and service revenue during the three months ended February 28, 2015 from property management and service agreements. No corresponding revenue was generated during the same period in 2014 as current operations had not yet commenced.

The Company incurred operating expenses in the amount of $4,128,492 for the three months ended February 28, 2015, compared to $28,467 for the same period in 2014. This represents an increase of $4,100,025. The change can be attributed to a $3,996,453 impairment loss on the intangible assets acquired from the acquisition of PSA and CAGI during the period and an increase of $86,086 in general and administrative expenses. General and administrative expenses consist of professional fees, management and consulting fees, bank charges, travel, meals, entertainment, rent, office maintenance, communications, postage, and office supplies.

In addition to operating expenses, the Company incurred interest expenses of $6,537 for the three months ended February 28, 2015, as compared to $7,371 for the same period in 2014. Interest income of $23,551 was recorded during the three months ended February 28, 2015 compared to $nil for the three months ended February 28, 2014.

The Company’s net loss from continuing operations for the three months ended February 28, 2015 was $4,071,153 as compared to $35,853 for the three months ended February 28, 2014. This increase can be attributed to the $3,996,453 impairment of intangible assets acquired from the acquisition of PSA and CAGI.

Item 3.

Quantitative and Qualitative Disclosure About Market Risk.

The Company is not required to provide the information requested by this item.

Item 4.

Controls and Procedures.

Evaluation of disclosure controls and procedure

Management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our chief executive officer and chief financial officer concluded that, as of February 28, 2015, our disclosure controls and procedures are once again effective, providing reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. This information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required continuing disclosures.

In the quarter ended February 28, 2015, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s report on internal control over financial reporting.

Management is responsible for establishing and maintaining adequate control over financial reporting for Chuma. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal controls over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Chuma; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of Chuma are being made only in accordance with authorizations of management and directors of Chuma; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Chuma’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, with the participation of our principal executive officer and principal financial and accounting officer, conducted an evaluation of the effectiveness of Chuma’s internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management believes that our internal control over financial reporting is once again effective as of February 28, 2015.

Saturna Group Chartered Accountants LLP, our independent registered public accounting firm, was not required to, and has not performed an evaluation of the effectiveness of our internal controls and procedures.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

The Company is aware of a potential threatened legal lawsuit between the Company and a former employee. As of the date of this filing, Management is not aware whether such suit has actually been filed, nor has the Company been served with notice of such suit.

Management is not aware of any actual pending legal proceedings involving the Company as a party.

We are not aware of any legal proceedings contemplated by any governmental authority against us.

Item 1A Risk Factors.

You should consider each of the following risk factors and any other information set forth in this Quarterly Report, including our financial statements and related notes, in evaluating our business and prospects. Current reports and more recent SEC filings should also be considered. The risks and uncertainties described below are not the only ones that impact our operations and business. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, may also impair our business or operations. If any of these risks, uncertainties, and other factors actually occurs, it could materially and adversely affect our business, financial condition, results of operations, cash flows, or prospects. In that case, the value of the Company’s common stock could decline, and you may lose all or part of your investment.

Risks Related to the Company

Substantial doubt exists about our ability to continue our business as a going concern.

We believe our current capital is insufficient to develop our business, execute our business strategy, and satisfy our near-term working capital requirements. If we fail to raise sufficient capital, we will likely need to raise additional financing in order to continue to implement our business model. If such funds are not available to us, we may be forced to curtail or cease our activities, which would likely result in the loss to our investors of all or a substantial portion of their investment. These conditions create uncertainty as to our ability to continue as a going concern.

The Company has a limited operating history in the legal cannabis industry.

Although Company personnel collectively have years of experience in the legal cannabis industry, the Company’s operations in this industry constitute a new venture. Our entry into this industry commenced during the first quarter of 2014. As a result, the Company has limited historical financial information on which an investor can evaluate the prior performance of the Company. While we have closed certain financing transactions, our business largely depends on our ability to recruit legal cannabis industry participants and enter consummate service contracts with them. We are subject to all of the business risks and uncertainties associated with any new business, including the risk the we will not achieve our business objectives.

We just started the initial stages of our business plan. As a result, it is very difficult to evaluate the likelihood that we will be able to operate the business successfully.

There is no assurance of planned growth, and our inability to grow could adversely affect operating results.

We believe our future operating results will depend largely on our ability to increase our penetration in California and in states where cannabis is legalized in the future. Additional personnel and assets may be required to execute those actions. There can be no assurance that we will successfully expand and operate profitably. Our expansion plans will likely result in increased operating expenses in the future. Results of operations may therefore be adversely affected during this expansion within California and in other states at some time in the future. There can be no assurance that we will anticipate and respond effectively to all of the changing demands that our expanding operations will have on our management, financing activities, suite of services, and industry as a whole. The failure to adapt our financing and service solutions could have a material adverse effect on our results of operations and financial condition. There is no assurance that we will successfully achieve our planned expansion or, if achieved, that the expansion will result in profitable operations.

In the performances of certain services we can provide, we will need to rely on third parties whose actions may be beyond our control.

We currently offer or intend to offer a broad suite of services to clients that may involve the use of third party independent contractors or service providers. While management will ensure these entities are fully vetted, actions of these third parties are beyond our control. If these third parties are unable to perform, make a mistake, or render services that do not meet the clients’ expectation, then this will have a negative impact on our brand and may impair our ability to close new service contracts. This eventuality would negatively affect our financial results.

We may be unable to establish a market for our services.

It will take a substantial amount of time and resources to achieve broad market acceptance of our service offerings and financial products. While the cannabis industry represents an untested new and emerging market, our service offerings are in an early stage of development. We also may be offering services that have benefits not immediately known to prospective clients. As a result, demand for and market acceptance of our services is highly uncertain and subject to significant risk. Customers and potential partners may perceive little or no benefit from the certain services offered by us. Our efforts to establish a market for our services may also encourage the development of competitors. We cannot guarantee that a broad base of customers will ultimately avail themselves of the Company’s offerings.

We will continue to need additional financing to carry out our business plan. Such funds may not be available to us, which lack of availability could reduce our operating income, product development activities, and future business prospects.

We likely will need to obtain significant additional funding to successfully continue our business in California and elsewhere. At present, we do not have committed sources of additional capital, and there can be no assurance that any financing arrangements will be available in amounts or on terms acceptable to us, if at all. Furthermore, the sale of additional equity or convertible debt securities may result in additional dilution to existing stockholders and our investors. If adequate additional funds are not available, we may be required to delay, reduce the scope of, or eliminate material parts of the implementation of our business strategy. This limitation would impede our growth and could result in a contraction of our operations, which would reduce the Company’s operating income, product development activities, and future business prospects.

Our future success depends on our ability to grow and expand our client base. The failure to achieve such growth or expansion could materially harm our business.

Our success and the planned growth and expansion of our legal cannabis financing and service solutions will depend on achieving acceptance of our offered turnkey services and expanding our client base. There can be no assurance that clients in Los Angeles and elsewhere will enter into service agreements or that we will continue to expand. If we are unable to effectively market or expand the service offerings, we will be unable to grow and expand our legal cannabis service and financing business strategy. This could materially impair our ability to increase sales and revenue.

If the Company incurs substantial liability from litigation, complaints, or enforcement actions resulting from misconduct by our borrowers or service clients (“Material Parties”), the Company’s financial condition could suffer.

To the extent feasible, the Company will require that Material Parties comply with applicable law and with our policies and procedures. Although the Company will use various means to address misconduct by Material Parties, it will still be difficult to detect and correct all instances of misconduct. Violations of applicable law or the Company’s policies and procedures by Material Parties could lead to litigation, formal or informal complaints, enforcement actions, and inquiries by various federal, state, or foreign regulatory authorities against the Company and/or Material Parties. Litigation, complaints, and enforcement actions involving the Company and Material Parties could consume considerable amounts of financial and other corporate resources, which could have a negative impact on the Company’s sales, revenue, profitability and growth prospects. As of the date of this report, we have not been, and are not currently, subject to any material litigation, complaint or enforcement action regarding Material Party misconduct by any federal, state or foreign regulatory authority.

The Company’s future success depends on its ability to meet and understand federal and state regulation and compliance guidelines. The Company failure to meet such and understand compliance and regulatory requirements could materially harm its business.

Legal cannabis is highly regulated on the federal, state, and local levels. An important part of the Company’s business plan is for the Company itself to be compliant of such laws and provide compliance services to industry participants. If the Company is found to be out of compliance with any applicable laws on federal, state, or local levels, then it would likely materially impair the Company’s reputation, existing contracts, and credibility in the market. Furthermore, if the Company misinterprets or incorrectly advises a client on complex regulatory issues in this ever-changing legal environment, this could materially impair the Company’s ability to expand its client base, increase sales, and revenue. Under either of these scenarios, the Company may be subjected to regulatory action or a lawsuit, which could necessitate very large expenditures of both human and financial resources. This would hinder the Company’s ability to effectively execute its business plan, generate revenue, and continue as a going concern.

The Company’s forecasts are highly speculative in nature and it cannot predict results with a high degree of accuracy.

Any financial projections, especially those based on ventures with minimal operating history, are inherently subject to a high degree of uncertainty, and their ultimate achievement depends on the timing and occurrence of a complex series of future events, both internal and external to the enterprise. There can be no assurance that potential revenues or expenses the Company projects will, in fact, be received or incurred.

Federal regulation and enforcement may adversely affect the implementation of cannabis laws and regulations may negatively impact our revenues and profits.

Currently, there are twenty three states plus the District of Columbia that have laws and/or regulation that recognize in one form or another legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states are considering legislation to similar effect. In addition, four states have laws and/or regulations that permit the recreational use of cannabis. Many other states are considering legislation to similar effect. As of the date of this report, the policy and regulations of the federal government and its agencies is that cannabis has no medical benefit and a range of activities including cultivation and use of cannabis for personal use is prohibited on the basis of federal law and may or may not be permitted on the basis of state law. Active enforcement of the current federal regulatory position on cannabis on a regional or national basis may directly and adversely affect the willingness of Company clients to use the services of or accept financing from the Company that may be used in connection with operating in the legal cannabis industry. Active enforcement of the current federal regulatory position on the legal cannabis industry may thus indirectly and adversely affect revenues and profits of Company.

Prospective customers may be deterred from doing business with a company with a significant nationwide online presence because of fears of federal or state enforcement of laws prohibiting possession and sale of medical or recreational marijuana.

Our website is visible in jurisdictions where medicinal and/or recreational use of cannabis is not permitted and, as a result, we may be found to be violating the laws of those jurisdictions. We could lose potential customers as they could fear federal prosecution for the services we provide.

The Company may provide services to and potentially handle monies for businesses in the legal cannabis industry.

Selling or distributing medical or retail cannabis is deemed to be illegal under the Federal Controlled Substances Act even though such activities may be permissible under state law. A risk exists that our lending and services could be deemed to be facilitating the selling or distribution of cannabis in violation of the federal Controlled Substances Act, or to constitute aiding or abetting, or being an accessory to, a violation of that Act. Such a finding, claim, or accusation would likely severely limit the Company’s ability to continue with its operations and may result in our investors losing all of their investment in our Company.

The Company is subject to evolving and expensive corporate governance regulations and requirements. Our failure to adhere to these requirements or the failure or circumvention of our controls and procedures could seriously harm our business.

The Company’s shares are publicly traded, and therefore, we are subject to various federal, state, and other rules and regulations, including applicable requirements of the Sarbanes-Oxley Act of 2002. Compliance with these evolving regulations is costly and requires a significant diversion of management time and attention, particularly with regard to our disclose procedures. Our internal controls and procedures, while monitored, may not be able to prevent errors or fraud in the future. Faulty judgments, simple errors or mistakes, or the failure of our personnel to adhere to the established controls and procedures, may make it difficult for us to ensure that the objectives of the control system are met. A failure of our controls and procedures to detect other than inconsequential errors or fraud could seriously harm our business and results of operations.

Many large banking institutions will not make loans or extend lines of credit to legal cannabis industry participants, which we have done and which we will continue to do.

The Company is trying to fill a void left by traditional banking institutions. Since cannabis is prohibited by the federal government, and likely for numerous other reasons, many traditional banking institutions will not loan money to or do business with legal cannabis industry participants. The Company has also seen evidence that banking institutions are worried that loan collateral associated with legal cannabis may be put at risk because of its connection with the industry. The Company is entering a business that other well-funded financial institutions deem risky. The Company’s lending activities may subject it to enforcement actions. Further, enforcement actions related to the Company or a borrower could jeopardize the Company’s collateral (e.g., real estate securing repayment of certain promissory notes). Legal cannabis lending is a high risk business activity, and investors should consider this before investing in our Company. Enforcement actions or other legal proceedings involving the Company or a borrower would materially harm the business and results of operations.

The legal cannabis industry faces an uncertain legal environment on state, federal, and local levels.

Although we continually monitor the most recent legal developments affecting the legal cannabis industry, the legal environment in California and elsewhere could shift in a manner not currently contemplated by the Company. For example, while we think there will always be a place for compliance-related services, broader state and federal legalization could render the compliance landscape significantly less technical, which would render our suite of compliance services less valuable and marketable. Lending money to legal cannabis participants could also be subject to legal challenge if the federal government or another jurisdiction decides to more actively enforce applicable laws. These unknown legal developments could directly and indirectly harm our business and results of operations.

Profit sharing, distributions, and equity ownership in California medical marijuana dispensaries and growing operations are not permissible.

The Company does not currently maintain an ownership interest in legal cannabis dispensaries or growing operations in California or elsewhere. We believe such ownership is not permitted by applicable law. Investors should be aware that the Company will not engage in such activity until such time as it is legally permissible. If the applicable laws make it so that the Company is unable to own interests in legal cannabis dispensaries in growing operations ever, the Company may not be able to attain its financial projections, and thus, this would directly and indirectly harm our business and results of operations.

Our trade secrets may be difficult to protect.

Our success depends upon the skills, knowledge, and experience of our personnel, our consultants, and advisors. Because we operate by providing services to legal cannabis industry participants, we rely in part on trade secrets to provide such services and to identify industry participants. However, trade secrets are difficult to protect. We try to protect our trade secrets by entering into confidentiality or non-disclosure agreements with certain partners, employees, consultants, and other advisors. These agreements generally require that the receiving party keep confidential, and not disclose to third parties confidential information developed by the receiving party or made known to the receiving party by us during the course of the receiving party’s relationship with us.

These confidentiality, non-disclosure, and other similar agreements may be breached and may not effectively assign intellectual property rights to us. Our trade secrets also could be independently discovered by competitors, in which case we would not be able to prevent the use of such trade secrets by our competitors. The enforcement of a claim alleging that a party illegally obtained and was using our trade secrets could be difficult, expensive, and time consuming, and the outcome would be unpredictable. The failure to obtain or maintain meaningful trade secret protection could adversely affect our competitive position.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

(a)

As previously disclosed in the Company’s Form 8-K filed with the SEC on November 21, 2014, and 10-K filed on March 17, 2015, the Company entered into a share exchange agreement with Paul Shively and Associates, Inc. (“PSA”), a Nevada corporation and a company controlled by the CFO of the Company, pursuant to which the Company was to acquire 100% of the shares of common stock of PSA, in exchange for the issuance of 1,790,000 shares of common stock of the Company. Upon closing, PSA is to become a wholly-owned subsidiary of the Company that will continue its operations in California’s legal cannabis industry. On February 20, 2015, the agreement was completed upon the issuance of 1,790,000 shares of common stock to PSA.

(b)

As previously disclosed in the Company’s Form 8-K filed with the SEC on January 29, 2015, and 10-K filed on March 17, 2015, the Company entered into a share exchange agreement with California Acquisitions Group, Inc. (“CAGI”), a Nevada corporation and a company with common directors, pursuant to which the Company is to acquire 100% of the shares of common stock of CAGI, in exchange for the issuance of 9,000,000 shares of common stock of the Company. Upon closing, CAGI is to become a wholly-owned subsidiary of the Company that will continue its operations in California’s legal cannabis industry. On February 20, 2015, the agreement was completed upon the issuance of 9,000,000 shares of common stock to CAGI.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

Vinisha Agnihotri, the Company’s former Vice President of Finance, terminated her employment agreement with the Company on December 15, 2014. On March 2, 2015, the Company entered into a settlement agreement for unpaid wages and expenses for $16,731.

Effective April 17, 2015, Jordan Shapiro, the Company’s CEO and Board member, resigned from his positions with the Company due to personal reasons. The Company anticipates that it will continue to have a working relationship with Mr. Shapiro, but in a lesser capacity. In connection with Mr. Shapiro’s resignation, Mr. Kevin Wright, the Company’s current President, shall be the Company’s new CEO.

Item 6.

Exhibits.


Number	Exhibit
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CHUMA HOLDINGS, INC.

Date: April 20, 2015

By:

/s/ Kevin Wright

Kevin Wright

Chief Executive Officer

CHUMA HOLDINGS, INC. 10-Q