$MJMJ Files Form 10-Q

The following discussion and analysis provides information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. This discussion should be read together with our financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q (the “Report”). This information should also be read in conjunction with the information contained in our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on August 29, 2014, including the audited consolidated financial statements and notes included therein as of and for the year ended April 30, 2014. The reported results will not necessarily reflect future results of operations or financial condition.

Throughout this Report, the terms “we,” “us,” “our,” “our Company,” or “The Mary Jane Group,” refers to The MaryJane Group, Inc., a Nevada corporation, and unless otherwise specified, includes our wholly owned operating subsidiaries listed below.

We maintain a website at www.themaryjanegrp.com and our Common Stock trades on the OTCQB under the symbol “MJMJ.”

Overview of Operating Businesses

We were incorporated in Nevada on February 16, 2012 under the name of Pladeo Corp. for the purpose of developing online chat systems free of charge. Through a series of transactions in the first quarter of 2014, we changed our focus to provide lodging and hospitality services to the recreational marijuana industry and changed our name to The MaryJane Group, Inc.

On January 1, 2014, the State of Colorado became the first state to legalize the use of recreational marijuana. Colorado residents, who are at least 21 years of age with photo identification, may purchase as much as one ounce of marijuana in a single transaction. Non-Colorado residents, bearing the same identification, may purchase as much as one-quarter ounce. Marijuana cannot be consumed in any public space, including the shops where it was purchased. Our operating subsidiaries outlined below were formed for the purpose of providing cannabis-friendly lodging and to provide value added services of information and entertainment to consumers supporting the recreational marijuana industry. Currently, the following states and jurisdictions allowing the use of recreational marijuana are Colorado, Washington, Oregon, Alaska and Washington, D.C.

Current Operations

Capital Growth Corporation, organized on February 4, 2014 as a Colorado corporation (“Capital Growth”), was formed for the purpose of providing short- and long-term financing to assist growers and retail establishments engaged in the manufacture and distribution of recreational marijuana within the State of Colorado. Since its formation, Capital Growth has not entered into any funding transactions and we do not intend to do so in the future. Going forward, we intend to use Capital Growth as a business development company.

Mary Jane Entertainment, LLC, organized on May 21, 2013 as a Colorado limited liability company (“Mary Jane Entertainment”), was formed to provide contracted limousine and party-bus services. Currently, Mary Jane Entertainment is operating on a limited basis as a concierge service. In July 2014, we moved the operations of Mary Jane Tours, LLC, a Colorado limited liability company providing unique cannabis-related tours, into Mary Jane Entertainment and we dissolved Mary Jane Tours, LLC.

Bud and Breakfast, LLC, organized on April 10, 2014 as a Colorado limited liability company (“Bud and Breakfast”), was formed to operate and manage our marijuana-friendly bed and breakfast located at The Adagio, 1430 Race Street, Denver, Colorado. This is our most successful business operation and we plan to focus a majority of our efforts pursuing and developing this opportunity. We are actively seeking additional locations to expand our line of lodging. To that end, on September 4, 2014, we entered into a one year lease (“Lease”) with the owners of the Mountain Vista Bed and Breakfast, located at 358 Lagoon Lane, Silverthorne Colorado. The Lease commenced on October 1, 2014 and expires September 30, 2014. The monthly rent is $3,500 per month, plus 2% of the monthly gross lodging sales. As additional consideration, we issued the owners of the Mountain Vista 10,000 shares of our Common Stock. Lastly, pursuant to the Lease, we were granted the exclusive option to purchase the

Mountain Vista at the market value of the premises determined by a commercial appraisal on the option exercise date.

MaryJane Hospitality, LLC, organized on July 22, 2014 as Colorado limited liability company, was formed to seek additional lodging and hospitality businesses that are not only located within the State of Colorado, but in other jurisdictions as recreational marijuana becomes legal in other states. Currently, the following states and jurisdictions allowing the use of recreational marijuana are Colorado, Washington, Oregon, Alaska and Washington, D.C.

MaryJane Events, LLC, organized on July 22, 2014 as a Colorado limited liability company, was formed for the purpose of planning private and corporate events focused upon, but not limited to, the recreational/medicinal marijuana industry.

MaryJane Designs, LLC, organized on August 28, 2014 as a Colorado limited liability company (“Mary Jane Designs”) was formed to operate our apparel division that creates clothing items with our logo to be sold at our lodging facilities. In July, 2014, we folded the sandblasting operations of Mary Jane Glassworks, LLC, a Colorado limited liability company formed for the purpose of providing hand-blown glass products used in the recreational marijuana industry, into Mary Jane Designs, and we dissolved Mary Jane Glassworks, LLC in November 2014.

Former Operations

Dab City Radio (“Dab City Radio”) and Mile High Life, LLC f/k/a Mile High Times, LLC, organized on February 16, 2014 and October 13, 2013, respectively, were formed to be the promotional arms of Mary Jane Tours and Mary Jane Entertainment. Through Dab City Radio and Mile High Life, we advertised and marketed Mary Jane Tours and the Bud and Breakfast through Internet radio broadcasting and newsprint. In November 2013, Mile High Life (under the name Mile High Times) released its first newspaper in print. On June 9, 2014, we terminated the operations of Mile High Times due to continued losses in our operations and our inability to adequately compete with the larger and more established newspapers/magazines in the cannabis sector. We dissolved Mile High Life, LLC in November 2014.The operations of Dab City Radio were also terminated due to continued losses and our inability to generate enough advertising income to cover the cost of operations. We dissolved Dab City Radio in November, 2014.

Events Occurring During Third Quarter 2014

On November 24, 2014, we amended an aggregate of $86,000 of Convertible Notes originally issued to TJC Trading, LLC. The original notes were issued on May 15, 2014 ($50,000) and July 10, 2014 ($36,000). The amendment reduces the conversion rate from $1.00 to the lesser of $.10 or 45% discount to the market price of our Common Stock. In connection with this amendment the Company agreed to issue 400,000 restricted shares of its Common Stock to TJC Trading, LLC, simultaneously TJC returned 50,000 shares of free trading shares that were previously issued to them.

On November 26, 2014, we issued an 8% Convertible Note in the principal amount of $50,000. The 8% Convertible Note matures on August 26, 2015 and is convertible into our shares of Common Stock at a 45% discount to the market price of our Common Stock. “Market Price” as defined in the 8% Convertible Note means the average lowest two (2) trading prices for our Common Stock during the twenty-five trading day period ending on the latest complete trading day prior to the date of conversion. We received net proceeds of $44,250 from this transaction after payment of $2,750 in expenses and $3,000 in legal fees. The proceeds from the sale of the 8% Convertible Note are being used as working capital.

Results of Operations

Three months ended October 31, 2014 compared to three months ended October 31, 2013

Net Revenue

Net revenue for the three months ended October 31, 2014 totaled $164,293 compared to $0 in the comparable period in 2013. During the quarter ended October 31, 2014, our net revenue increased month over month. Our net revenue increased $51,354 from net revenue of $112,939 during the quarter ended July 31, 2014, representing growth of 45%. These increases are primarily a result of revenue from our bed and breakfast operations.

Cost of Goods Revenue

Cost of revenue for the three months ended October 31, 2014 totaled $94,152 compared to $0 in the comparable period in 2013. Our cost of revenue increased by $7,055 from cost of revenue of $87,097 during the quarter ended July 31, 2014. Cost of revenue as a percentage of sales for the three months ended October 31, 2014 was 57% compared to 77% for the three months ended July 31, 2014. This improvement is a result of the elimination of glassware and advertising activity which negatively impacted the quarter ended July 31, 2014.

General and Administrative

General and administrative costs for the three months ended October 31, 2014 increased by $1,087,733 to $1,091,394 from $3,661 in the comparable period in 2013. This increase is directly attributable to the commencement of operations in 2014 and costs associated with the issuance of shares of our Common Stock to employees, consultants and vendors totaling approximately $1,005,000.

Sales and Marketing

Sales and marketing costs for the three months ended October 31, 2014 were $2,515 compared to $0 for the comparable period in 2013.

Depreciation

Depreciation expense for the three months ended October 31, 2014 was $1,007 compared to $0 for the comparable period in 2013.

Other Income (Expense)

Other expense for the three months ended October 31, 2014 was $97,382 compared to $0 for the comparable period in 2013, primarily a result of interest expense associated with our debt funding.

Net Loss

Net loss for the three months ended October 31, 2014 was $1,122,157 compared to $3,661 for the comparable period in 2013.

Six months ended October 31, 2014 compared to six months ended October 31, 2013

Net Revenue

Net revenue for the six months ended October 31, 2014 totaled $277,232 compared to $0 in the comparable period in 2013. During the six months ended October 31, 2014, our net revenue increased month over month. These increases are primarily a result of revenue from our bed and breakfast operations.

Cost of Goods Revenue

Cost of revenue for the six months ended October 31, 2014 totaled $181,249 compared to $0 in the comparable period in 2013. Cost of revenue as a percentage of sales for the six months ended October 31, 2014 was 65%.

General and Administrative

General and administrative costs for the six months ended October 31, 2014 increased by $1,560,628 to $1,572,854 from $12,226 in the comparable period in 2013. This increase is directly attributable to the commencement of operations in 2014 and costs associated with the issuance of shares of our Common Stock to employees, consultants and vendors totaling approximately $1,194,000.

Sales and Marketing

Sales and marketing costs for the six months ended October 31, 2014 were $9,632 compared to $0 for the comparable period in 2013.

Depreciation

Depreciation expense for the six months ended October 31, 2014 was $2,015 compared to $0 for the comparable period in 2013.

Other Income (Expense)

Other expense for the six months ended October 31, 2014 was $211,324 compared to $0 for the comparable period in 2013, primarily a result of interest expense associated with our debt funding.

Net Loss

Net loss for the six months ended October 31, 2014 was $1,699,842 compared to $12,226 for the comparable period in 2013.

Liquidity and Capital Resources

We are dependent upon obtaining additional financing in order to adequately fund working capital, infrastructure, expansion expenses and significant marketing/investor related expenditures to gain market recognition, so that it can achieve a level of revenue adequate to support our cost structure, none of which can be assured. We believe that we will need approximately $2 million over the next twelve months. While initial operations have been funded with private placements of equity and bridge loans, there can be no assurance that adequate financing will continue to be available, and, if available, be on terms that are favorable. As of October 31, 2014, we had approximately $27,092 on deposit.

As of October 31, 2014, our working capital was $21,250, our accumulated deficit was $1,955,234, and our stockholders’ deficit was $42,622. Operating loss was $1,124,085 and $1,701,770 for the three and six months ended October 31, 2014, respectively.

We reduced our net cash flows used in operation by $145,622, or 64%, during the quarter ending October 31, 2014 and we expect to improve upon it further during the quarter ending January 31, 2014 as the Mountain Vista increases its occupancy during the winter months; however, due to conditions and influences out of our control, including the current state of the national economy, we cannot guarantee that this improvement will be achieved or that it will be achieved in the stated time frame, nor is there any assurance that such an operating level can ever be achieved.

Off-Balance Sheet Arrangements

As of October 31, 2014, we had no material off-balance sheet arrangements.

In the normal course of business, we may be confronted with issues or events that may result in a contingent liability. These generally relate to lawsuits, claims, environmental actions or the actions of various regulatory agencies. We consult with counsel and other appropriate experts to assess the claim. If, in our opinion, we have incurred a probable loss as set forth by generally accepted accounting principles in the U.S. (“GAAP”), an estimate is made of the loss and the appropriate accounting entries are reflected in our financial statements. After consultation with legal counsel, we do not anticipate that liabilities arising out of currently threatened lawsuits and claims, if any, will have a material adverse effect on our financial position, results of operations or cash flows.

Critical Accounting Estimates

Please refer to our Annual Report on Form 10-K for the year ended April 30, 2014 filed with the Commission on August 13, 2014, as amended thereto on August 29, 2014, and incorporated herein by reference, for detailed explanations of our critical accounting estimates, which have not changed significantly during the three months ended October 31, 2014.

New Accounting Pronouncements

There have been no material changes to our significant accounting policies as summarized in our Annual Report on Form 10-K for the year ended April 30, 2014. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our condensed consolidated financial statements.