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EX-31.1 - EXHIBIT 31.1 SECTION 302 CERTIFICATION - BINGO NATION INCf10q123114_ex31z1.htm
EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATION - BINGO NATION INCf10q123114_ex32z1.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


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

For the quarterly period ended December 31, 2014


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

For the transition period from ___________ to ___________


Commission File Number: 333-139482


INDIE GROWERS ASSOCIATION

(Exact name of Registrant as specified in its charter)


Nevada

 

98-0492900

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

311 Division St.

 

 

Carson City, NV 89703

 

Telephone: 888-648-0838

(Address of principal executive offices)

 

(Registrant's telephone number, including area code)


 

Former Name, Address and Fiscal Year, If Changed Since Last Report


Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  X . No      .


We had a total of 148,660,437 shares of common stock issued and outstanding at February 11, 2015.


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


Transitional Small Business Disclosure Format: Yes      . No  X .





PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


The interim financial statements included herein are unaudited but reflect, in management's opinion, all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial position and the results of our operations for the interim periods presented. Because of the nature of our business, the results of operations for the quarterly period ended December 31, 2014 are not necessarily indicative of the results that may be expected for the full fiscal year.





INDIE GROWERS ASSOCIATION

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


 

 

December 31, 2014

 

December 31, 2013

ASSETS

 

 

 

 

Cash

$

1,739

$

37,319

Accounts receivable

 

73,114

 

Note receivable

 

 

Property and Equipment

 

294,812

 

Acquisition of River Ridge Sunshine Farms LLC

 

46,500,000

 

TOTAL ASSETS

$

46,869,664

$

37,319

 

 

 

 

 

LIABILITIES

 

 

 

 

Accounts payable

$

45,983

$

26,438

Payable to related party

 

57,786

 

38,250

Notes payable

 

431,872

 

119,425

TOTAL LIABILITIES

 

535,641

 

184,113

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

Common stock, $0.001 par value, Authorized: 400,000,000, Issued: 148,660,437 (March 31, 2014: 1,159,736)

 

148,660

 

1,160

Additional paid-in capital

 

190,482,031

 

30,912,340

Accumulated deficit

 

(144,296,668)

 

(31,060,294)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)

 

46,334,023

 

(146,794)

 

 

 

 

 

TOTA L LIABILITIES AND STOCKHOLDERS'DEFICIT

$

46,869,664

$

37,319


The accompanying notes are an integral part of these unaudited financial statements.





INDIE GROWERS ASSOCIATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


 

 

Three Months Ended

 

Nine Months Ended

 

 

December 31, 2014

 

December 31, 2013

 

December 31, 2014

 

December 31, 2013

 

 

 

 

 

 

 

 

 

REVENUE

$

43,868

$

$

73,114

$

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

Automobile

 

1,442

 

 

4,390

 

Bank and interest charges

 

890

 

 

3,480

 

Building supplies

 

227

 

 

7,635

 

Communications

 

 

15,000

 

10,333

 

41,000

Consulting Fees

 

4,900

 

 

4,900

 

Directors Fees

 

 

 

48,200,000

 

Equipment Rental

 

 

 

2,230

 

Loss on extinguishment of debt

 

 

 

64,850,500

 

Loss on forfeiture of deposit

 

 

 

156,212

 

Office & Miscellaneous

 

5,425

 

 

10,488

 

Professional

 

1,200

 

 

59,320

 

TOTAL EXPENSES

 

14,084

 

15,000

 

113,309,488

 

41,000

NET INCOME (LOSS)

$

29,784

$

(15,000)

$

(113,236,374)

$

(41,000)

 

 

 

 

 

 

 

 

 

BASIC & DILUTED INCOME (LOSS) PER COMMON SHARE

$

0.00

$

(0.02)

$

(1.14)

$

(0.04)

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES

 

148,660,437

 

997,236

 

99,562,255

 

997,236


The accompanying notes are an integral part of these unaudited financial statements.





INDIE GROWERS ASSOCIATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


 

 

Nine Months Ended

 

 

December 31, 2014

 

December 31, 2013

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

Net income (loss)

$

(113,236,374)

$

(41,000)

Stock issued for extinguishment of debt

 

64,850,500

 

Stock issued for director's fees

 

48,200,000

 

Loss on forfeiture of deposit

 

156,212

 

Accounts receivable

 

(73,114)

 

Accounts payable

 

19,545

 

41,000

NET CASH USED IN OPERATING ACTIVITIES

 

(83,231)

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

Property and infrastructure

 

(294,812)

 

NET CASH USED IN INVESTING ACTIVITIES

 

(294,812)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

Payable to related party

 

19,536

 

Notes payable

 

322,926

 

NET CASH USED IN FINANCING ACTIVITIES

 

342,463

 

 

 

 

 

 

NET CHANGE IN CASH

 

(35,580)

 

CASH at beginning of period

 

37,319

 

CASH AT END OF PERIOD

$

1,739

$

 

 

 

 

 

CASH PAID FOR

 

 

 

 

Interest

$

2,217

$

Income Tax

$

$

 

 

 

 

 

SHARES PAID FOR:

 

 

 

 

Property

 

62,000,000

 

Debt

 

64,500,000

 

Services

 

21,000,000

 


The accompanying notes are an integral part of these unaudited financial statements.





INDIE GROWERS ASSOCIATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014

(Unaudited)


1. ORGANIZATION AND BASIS OF PRESENTATION


The company was incorporated under the laws of the state of Nevada on March 24, 2006 with 75,000,000 authorized common shares with a par value of $0.001. In January 2011 the company filed an amendment with the state of Nevada to increase the authorized shares to 400,000,000 shares of common stock at a par value of $0.001 per share.


The company was initially organized for the purpose of acquiring and developing mineral claims and is in the pre-exploration stage. On April 28, 2014 the Company name was changed from Viking Minerals, Inc. to Indie Growers Association to reflect the change of business. The Company through acquisition of River Ridge Sunshine Farms LLC is now in the business of sub-leasing its land to licensed marijuana growers. However, the Company does not derive any income from the production, processing, or sale of cannabis or related products.


The interim financial statements for the nine months ended December 31, 2014 and 2013 are unaudited. These financial statements are prepared in accordance with requirements for unaudited interim periods, and consequently do not include all disclosures required to be in conformity with accounting principles generally accepted in the United States of America. The results of operations for the interim periods are not necessarily indicative of the results for the full year. In management’s opinion all adjustments necessary for a fair presentation of the Company’s financial statements are reflected in the interim periods included, and are of a normal recurring nature. These interim financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K, for the year ended March 31, 2014, as filed with the SEC.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


ACCOUNTING METHOD


The company recognizes income and expenses based on the accrual method of accounting.


DIVIDEND POLICY


The company has not yet adopted a policy regarding payment of dividends.


INCOME TAX


The company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recorded, when it is more likely than not that such tax benefits will not be realized.


FINANCIAL AND CONCENTRATIONS RISK


The company has no financial and concentrations risks.


BASIC AND DILUTED NET INCOME (LOSS) PER SHARE


Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights, unless the exercise becomes antidilutive, and then the basic and diluted per share amounts are the same. The Company has entered into various notes with a third party, which as of December 31, 2014 totaled $431,872 which is convertible at $0.001 per share. This represents a potential dilution of 431,872,000 shares.





STATEMENT OF CASH FLOWS


For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.


REVENUE RECOGNITION


Revenue is recognized on the sale and delivery of a product or the completion of a service provided.


ADVERTISING AND MARKET DEVELOPMENT


The company expenses advertising and market development costs as research data expenses.


IMPAIRMENT OF LONG-LIVED ASSETS


The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.


ENVIRONMENTAL REQUIREMENTS


At the report date environmental requirements related to a formally held mineral claim are unknown and therefore any estimate of future costs cannot be made.


ESTIMATES AND ASSUMPTIONS


Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.


FINANCIAL INSTRUMENTS


The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short term maturities.


RECENT ACCOUNTING PRONOUNCEMENTS


In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as “Development Stage Entities” (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard.





In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement, however it believes that there will be no material effect on the consolidated financial statements.


In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.


A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.


We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.


3. INVESTMENTS


a)

CANCELLATION OF INVESTMENT IN INDIE GROWERS UNION LLC.


On April 8, 2014, the Company entered into a binding share exchange agreement, fully executed by all parties, between the unit holders of Indie Growers Union LLC of Washington State and Viking Minerals Inc. (now known as Indie Growers Association Inc.). Under the terms of the agreement, the Company was to issue a total of 87,500,000 shares of common stock in exchange for all of the outstanding member units and assets of Indie Growers Union LLC on or before April 30, 2014. In addition, the Company had forwarded a total of $185,000 to Indie Growers Union LLC as a good faith payment. On April 28, 2014 the Company cancelled this Agreement. No stock was issued and $28,788 of the $185,000 deposit was recovered.


INVESTMENT IN RIVER RIDGE SUNSHINE FARMS LLC


On April 28, 2014, the Company entered into an agreement to acquire a 30 % interest as well as a long term lease on the remaining 70 % of River Ridge Sunshine Farms LLC (“RRSF”), a $ 1.2 Million agricultural property in Prosser, Washington in exchange for 62,000,000 shares. After completion of due diligence, the agreement was amended and executed on June 30, 2014 and completed and closed on July 1, 2014. The market value of the Company’s shares as of the date of the acquisition was $0.75 per share there by valuing the acquisition at $46,500,000.





The net effect of the acquisition on the Balance Sheet of the Company as of June 30, 2014 as previously filed with the SEC will be as follows:


 

 

Indie Growers Association

 

River Ridge Sunshine Farms

 

Consolidated

ASSETS

 

 

 

 

 

 

 

 

Cash

 

 

 

1,465

 

9,103

 

10,568

Accounts Receivable

 

 

 

 

6,123

 

6,123

Notes Receivable

 

 

 

 

2,000

 

2,000

Property & Infrastructure

 

 

 

 

137,580

 

137,580

TOTAL ASSETS

 

 

 

1,465

 

154,807

 

156,272

LIABILITIES

 

 

 

 

 

 

 

 

Accounts Payable

 

 

 

40,362

 

8,195

 

48,557

Notes Payable

 

 

 

220,098

 

164,148

 

384,246

TOTAL LIABILITIES

 

 

 

260,460

 

172,343

 

432,803

EQUITY

 

 

 

 

 

 

 

 

Share Capital

 

 

 

24,160

 

 

24,160

Additional paid-in capital

 

 

 

82,216,589

 

 

82,216,589

Accumulated Deficit

 

 

 

(82,499,744)

 

(17,535)

 

(82,517,279)

TOTAL EQUITY

 

 

 

(258,995)

 

(17,535)

 

(276,530)

TOTAL LIABILITIES & EQUITY

 

 

 

1,465

 

154,807

 

156,272


The net effect of the acquisition on the Statement of Operations of the Company for the three months ended June 30, 2014 as previously filed with the SEC will be as follows:


 

 

Indie Growers Association

 

River Ridge Sunshine Farms

 

Consolidated

INCOME

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

Building Supplies

 

 

 

 

4,523

 

4,523

Equipment Rental

 

 

 

 

2,230

 

2,230

Loss on extinguishment of debt

 

 

 

3,038,000

 

 

3,038,000

Loss on forfeiture of deposit

 

 

 

156,212

 

 

156,212

Office & Miscellaneous

 

 

 

1,818

 

3,782

 

5,600

Professional Fees

 

 

 

43,420

 

7,000

 

50,420

Shares issued for services

 

 

 

48,200,000

 

 

48,200,000

TOTAL EXPENSES

 

 

 

51,439,450

 

17,535

 

51,456,985

NET INCOME

 

 

 

(51,439,450)

 

(17,535)

 

(51,456,985)






The net effect of the acquisition on the Statement of Cash Flows of the Company for the three months ended June 30, 2014 as previously filed with the SEC will be as follows:


 

 

Indie Growers Association

 

River Ridge Sunshine Farms

 

Consolidated

OPERATING ACTIVITIES

 

 

 

 

 

 

Net Income

 

(51,439,450)

 

(17,535)

 

(51,456,985)

Accounts Payable

 

7,472

 

8,195

 

15,667

Accounts Receivable

 

 

(6,123)

 

(6,123)

Loss on extinguishment of debt

 

3,038,000

 

 

3,038,000

Loss on forfeiture of deposit

 

156,212

 

 

156,212

Notes Receivable

 

 

(2,000)

 

(2,000)

Stock issued for services

 

48,200,000

 

 

48,200,000

NET CASH USED IN OPERATING ACTIVITIES

 

(37,767)

 

(17,464)

 

(55,230)

INVESTING ACTIVITIES

 

 

 

 

 

 

Buildings and Infrastructure

 

 

(137,580)

 

(137,580)

Deposit

 

(156,212)

 

 

(156,212)

NET CASH USED IN INVESTING ACTIVITIES

 

(156,212)

 

(137,580)

 

(293,792)

FINANCING ACTIVITIES

 

 

 

 

 

 

Notes Payable

 

158,125

 

164,148

 

322,273

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

158,125

 

164,148

 

322,273

NET CHANGE IN CASH

 

(35,854)

 

9,103

 

(26,751)

Cash at the beginning of the period

 

37,319

 

 

37,319

CASH AT END OF PERIOD

 

1,465

 

9,103

 

10,568


INVESTMENT IN GMM GLOBAL MULTI-MINING DIVERSIFIED GROUP LIMITED


On July 10, 2012, the Company entered into an agreement with GMM Global Multi-Mining Diversified Group Limited (“GMM”) wherein GMM assigned and transferred a 60% interest in a joint venture to the company for 655,000 shares of the company’s common stock (valued at $131,000 per the agreement) and $500,000 cash. The 655,000 shares of common stock were issued on July 10, 2012; however, the Company failed to pay the required $500,000 and forfeited its right to the 60% interest as of April 1, 2013. The Company recorded a loss on impairment of $131,000. On July 2, 201 4, the company reached an agreement with GMM whereby they would return the shares for cancellation. Once returned and cancelled, the $131,000 loss on impairment will be reversed.


4. COMMON STOCK


At inception the company issued 1,750 private placement common shares for cash of $20,000.


In May 2010, the company issued 18 shares for services for a deemed value of $7,500.


In January 2011, the company executed a forward split of its common stock on the basis of 35 new common shares for each existing 1 common share. All share references in these financial statements have been retroactively adjusted for this forward split.


In June 2011, the company cancelled 1,228 shares and returned them to treasury.


In July 2012, the company executed a reverse split decreasing shares by 1 for 1,000. All share references in these financial statements have been retroactively adjusted for this reverse split.


In July 2012, the company completed an agreement with GMM Global Multi-Mining Diversified Group Limited (“GMM”) wherein GMM assigned and transferred a 60% interest in a joint venture to the company for 655,000 shares of the company’s common stock at a deemed valued of $131,000. However, the company did not complete the transaction, forfeiting its right to the 60% interest, and recording a loss on impairment of $131,000.





In July 2012, the company completed a transaction whereby it issued 99,750 shares of its common stock for $19,950 in debt. The debt was comprised of prior advances from an unrelated third party. This transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50. The shares were valued at $300.00 per share, which was the price of the Company’s common stock on the closing date of July 12, 2012. The difference between the stock price and the net carrying amount of the extinguished debt was recognized as a loss on extinguishment of debt in the statement of operations in the amount of $29,905,050.


In October 2012, the company completed a transaction whereby it issued 75,000 shares of its common stock for $15,000 in debt. The debt was comprised of advances from unrelated third parties. This transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50. The shares were valued at $4.50 per share which was the price of the Company’s common stock on the closing date of October 31, 2012. The difference between the stock price and the net carrying amount of the extinguished debt was recognized as a loss on extinguishment of debt in the statement of operations in the amount of $322,500.


In January 2013, the company completed a transaction whereby it issued 166,946 shares of its common stock for $33,389 in debt. The debt was comprised of advances from unrelated third parties. This transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50. The shares were valued at $2.56 per share which was the price of the Company’s common stock on the closing date of January 31, 2013. The difference between the stock price and the net carrying amount of the extinguished debt was recognized as a loss on extinguishment of debt in the statement of operations in the amount of $394,111.


In August 2013, the company completed a transaction whereby it issued 87,500 shares of its common stock for $17,500 of unpaid compensation owed to a former director. The transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50. The shares were valued at $0.40 per share which was the price of the Company’s common stock on the closing date of August 7, 2013. The difference between the stock price and the net carrying amount of the extinguished debt was recognized as a loss on extinguishment of debt in the statement of operations in the amount of $17,500.


In January 2014, the company completed a transaction whereby it issued 75,000 shares of its common stock for $15,000 of debt. The transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50. The shares were valued at $0.40 per share which was the price of the Company’s common stock on the closing date of January 13, 2014. The difference between the stock price and the net carrying amount of the extinguished debt was recognized as a loss on extinguishment of debt in the statement of operations in the amount of $15,000.


In March 2014, the company executed a reverse split decreasing shares by 1 for 200. All share references in these financial statements have been retroactively adjusted for this reverse split.


In May 2014, the Company issued 21,000,000 shares to its directors. The Company’s shares were valued at $2.30 per share on the issue date of May 2, 2014. Therefore, the compensation expense was recorded in the Company’s statement of operations as $48,200,000.


In June 2014, the company completed a transaction whereby it issued 2,000,000 shares of its common stock for $2,000 of debt. The transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50. The shares were valued at $1.52 per share which was the price of the Company’s common stock on the closing date of June 2, 2014. The difference between the price and the net carrying amount of the extinguished debt was recognized as a loss on extinguishment of debt in the statement of operations in the amount of $3,038,000.


In July 2014, the company completed a transaction with Ricardo Esparza for the acquisition of River Ridge Sunshine Farms LLC. Under the terms of the agreement, Esparza transferred his 100% ownership in River Ridge Sunshine Farms LLC in exchange for 62,000,000 restricted shares of the common stock of the Company. The shares were valued at $0.75 per share which was the price of the Company’s common stock on the closing date of July 1, 2014. Therefore, the acquisition cost was recorded on the Company’s Balance Sheet as $46,500,000.


In July 2014, the company completed a transaction whereby it issued 62,500,000 shares of its common stock for $62,500 of debt. The transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50. The shares were valued at $0.99 per share which was the price of the Company’s common stock on the closing date of July 21, 2014. The difference between the price and the net carrying amount of the extinguished debt was recognized as a loss on extinguishment of debt in the statement of operations in the amount of $61,812,500.





5. SUBSEQUENT EVENTS


There were no subsequent events to report.


6. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES


During the nine months ended December 31, 2014, an officer of the company advanced $51,284.


On June 17, 2014, a former director of the Company, Mr. Charles Irizarry, agreed to forgive the $38,250 indebtedness due from the Company to him. The release agreement was signed on June 17, 2014 and the recovery of $38,250 was applied to Additional Paid-in Capital and recorded on the Balance Sheet of the Company as of June 30, 2014. The signed release agreement was received by the company on July 16, 2014.


7. OTHER TRANSACTIONS


During the nine months ended December 31, 2014, the Company wrote down accounts payable in the amount of $14,942 for charges from two professional services firms. These charges were being disputed. However, one of the firms is no longer in business and the other firm is no longer pursuing payment. The $14,942 recovery has been applied to Additional Paid-in Capital.


8. GOING CONCERN


The accompanying financial statements have been prepared assuming that the company will continue as a going concern. The company does not have a sufficient working capital for its planned activity, and to service its debt, which raises substantial doubt about its ability to continue as a going concern.


Continuation of the company as a going concern is dependent upon obtaining additional working capital and the management of the company has developed a strategy which it believes will accomplish this objective through advances from an officer-director, and additional equity investments, which will enable the company to continue operations for the coming year.





ITEM 2. MANAGEMENT`S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FORWARD LOOKING STATEMENTS


This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.


RESULTS OF OPERATIONS


We have an accumulated deficit of $144,296,668 from inception (March 24, 2006) to December 31, 2014.


The net income gained during the quarter ended December 31, 2014 was $29,784 compared to a loss of $15,000 for the quarter ended December 31, 2013. The net income was the result of rental income of $43,868 for the quarter.


The loss incurred during the nine months ended December 31, 2014 was $113,236,374 compared to a loss of $41,000 for the nine months ended December 31, 2013. The loss was the result the following non-cash items: Extinguishment of Debt of $64,850,500, Directors fees of $48,200,000, and forfeiture of a deposit of $156,212 as more fully explained below.


On April 8, 2014, the Company entered into a share exchange agreement, fully executed by all parties, between the unit holders of Indie Growers Union LLC of Washington State. Under the terms of the agreement, the Company was to issue a total of 87,500,000 shares of common stock in exchange for all of the outstanding member units and assets of Indie Growers Union LLC on or before April 30, 2014. In addition, the Company had forwarded a total of $185,000 to Indie Growers Union LLC as a good faith payment. This Agreement was terminated by the Company on April 28, 2014. All but $28,788 of the $185,000 deposit was forfeited, therefore a loss of $156,212 was recorded.


RISK FACTORS


As we have changed businesses a number of the risks of the new business are discussed as follows:


Because we have no operating history in the cannabis industry, we may not succeed.


We have no specific operating history or experience in procuring, building out or leasing real estate for agricultural purposes, specifically marijuana grow facilities, or with respect to any other activity in the cannabis industry. Moreover, we are subject to all risks inherent in a developing a new business enterprise. Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with establishing a new business and the competitive and regulatory environment in which we operate. For example, the medical marijuana industry is new and may not succeed, particularly should the federal government change course and decide to prosecute those dealing in medical marijuana. If that happens there may not be an adequate market for our properties or other activities we propose to engage in.


You should further consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages. For example, unanticipated expenses, delays and or complications with build outs, zoning issues, legal disputes with neighbors, local governments, communities and or tenants. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point investors may lose their entire investment.





Because we may be unable to identify and or successfully acquire properties which are suitable for our business, our financial condition may be negatively affected.


Our business plan involves the identification and the successful acquisition of properties which are zoned for marijuana businesses, including grow and retail. The properties we acquire will be leased to licensed marijuana operators. Local governments must approve and adopt zoning ordinances for marijuana facilities and retail dispensaries. A lack of properly zoned real estate may reduce our prospects and limit our opportunity for growth and or increase the cost at which suitable properties are available to us. Conversely a surplus of real estate zoned for marijuana establishments may reduce demand and prices we are able to charge for properties we may have previously acquired.


Because our business is dependent upon continued market acceptance by consumers, any negative trends will adversely affect our business operations.


We are substantially dependent on continued market acceptance and proliferation of consumers of medical marijuana. We believe that as marijuana becomes more accepted the stigma associated with marijuana use will diminish and as a result consumer demand will continue to grow. And while we believe that the market and opportunity in the marijuana space continues to grow, we cannot predict the future growth rate and size of the market. Any negative outlook on the marijuana industry will adversely affect our business operations.


In addition, it is believed by many that large well-funded businesses may have a strong economic opposition to the cannabis industry. We believe that the pharmaceutical industry clearly does not want to cede control of any product that could generate significant revenue. For example, medical marijuana will likely adversely impact the existing market for the current “marijuana pill” sold by the mainstream pharmaceutical industry, should marijuana displace other drugs or encroach upon the pharmaceutical industry’s products. The pharmaceutical industry is well funded with a strong and experienced lobby that eclipses the funding of the medical marijuana movement. Any inroads the pharmaceutical could make in halting the impending cannabis industry could have a detrimental impact on our proposed business.


Because marijuana is illegal under federal law, we could be subject to criminal and civil sanctions for engaging in activities that violate those laws.


The U.S. Government classifies marijuana as a schedule-I controlled substance. As a result, marijuana is an illegal substance under federal law. Even in those jurisdictions in which the use of medical marijuana has been legalized at the state level, its prescription is a violation of federal law. The United States Supreme Court has ruled in United States v. Oakland Cannabis Buyers' Coop. and Gonzales v. Raich that it is the federal government that has the right to regulate and criminalize cannabis, even for medical purposes. Therefore, federal law criminalizing the use of marijuana pre-empts state laws that legalizes its use for medicinal purposes.


As of January 31, 2014, 21 states and the District of Columbia allow its citizens to use medical marijuana. Additionally, voters in the states of Colorado and Washington approved ballot measures last November to legalize cannabis for adult use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, there is no guarantee that the administration will not change its stated policy regarding the low-priority enforcement of federal laws. Additionally, any new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the federal government's enforcement of current federal laws could cause significant financial damage to us and our shareholders.


Should such a change occur, our business operations would be affected. If our marijuana tenants are forced to shut their operations, we would need to seek to replace those tenants with non-marijuana tenants, who would likely expect to pay lower rents. Moreover if the marijuana industry were forced to shut down at once, it would result in a high amount of vacancies at once and create a surplus of supply, driving leases and property values lower. Additionally, we would realize an economic loss on any and all improvements made to the properties that were specific to the marijuana industry and we would likely lose any and all investments in the US market that were marijuana related.





Further, and while we do not intend to harvest, cultivate, possess, distribute or sell cannabis, by leasing facilities and financing growers of medicinal marijuana, we could be deemed to be participating in marijuana cultivation or aiding and abetting, which remains illegal under federal law, and exposes us to potential criminal liability, with the additional risk that our properties could be subject to civil forfeiture proceedings. Moreover, since the use of marijuana is illegal under federal law, we may have difficulty acquiring or maintaining bank accounts and insurance and our shareholders may find it difficult to deposit their stock with brokerage firms.


Laws and regulations affecting the regulated marijuana industry are constantly changing, which could detrimentally affect our proposed operations, and we cannot predict the impact that future regulations may have on us.


Local, state and federal medical marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on its operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our proposed business. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.


FDA regulation of marijuana and the possible registration of facilities where medical marijuana is grown could negatively affect the cannabis industry which would directly affect our financial condition.


Should the federal government legalize marijuana for medical use, it is possible that the U.S. Food and Drug Administration (FDA) would seek to regulate it under the Food, Drug and Cosmetics Act of 1938. Additionally, the FDA may issue rules and regulations including cGMPs (certified good manufacturing practices) related to the growth, cultivation, harvesting and processing of medical marijuana. Clinical trials may be needed to verify efficacy and safety. It is also possible that the FDA would require that facilities where medical marijuana is grown be registered with the FDA and comply with certain federally prescribed regulations. In the event that some or all of these regulations are imposed, we do not know what the impact would be on the medical marijuana industry, what costs, requirements and possible prohibitions may be enforced. If we or our tenants are unable to comply with the regulations and or registration as prescribed by the FDA, we and or our tenants may be unable to continue to operate their and our business in its current form or at all.


Our clients and our company may have difficulty accessing the service of banks, which may make it difficult to contract for real estate needs.


On February 14, 2014, the U.S. government issued rules allowing banks to legally provide financial services to state-licensed marijuana businesses. A memorandum issued by the Justice Department to federal prosecutors re-iterated guidance previously given, this time to the financial industry that banks can do business with legal marijuana businesses and “may not” be prosecuted. The Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued guidelines to banks that “it is possible to provide financial services"” to state-licensed marijuana businesses and still be in compliance with federal anti-money laundering laws. The guidance falls short of the explicit legal authorization that banking industry officials had pushed the government to provide and to date it is not clear what if any banks have relied on the guidance and taken on legal marijuana companies as clients. The aforementioned policy may be administration dependent and a change in presidential administrations may cause a policy reversal and retraction of current policies, wherein legal marijuana businesses may not have access to the banking industry. We could be subject to sanctions if we are found to be a financial institution and not in harmony with FinCET guidelines. Also, the inability of potential clients in our target market to open accounts and otherwise use the service of banks may make it difficult for them to contract with us.


Because we buy, sell and lease property, we will be subject to general real estate risks.


We will be subject to risks generally incident to the ownership of real estate, including: (a) changes in general economic or local conditions; (b) changes in supply of, or demand for, similar or competing properties in the area; (c) bankruptcies, financial difficulties or defaults by tenants or other parties; (d) increases in operating costs, such as taxes and insurance; (e) the inability to achieve full stabilized occupancy at rental rates adequate to produce targeted returns; (f) periods of high interest rates and tight money supply; (g) excess supply of rental properties in the market area; (h) liability for uninsured losses resulting from natural disasters or other perils; (i) liability for environmental hazards; and (j) changes in tax, real estate, environmental, zoning or other laws or regulations. For these and other reasons, no assurance can be given that we will be profitable.





Because our business model depends upon the availability of private financing, any change in our ability to raise money will adversely affect our financial condition.


Our ability to acquire, operate and sell properties, engage in the business activities that we have planned and achieve positive financial performance depends, in large measure, on our ability to obtain financing in amounts and on terms that are favorable. The capital markets in the United States have recently undergone a turbulent period in which lending was severely restricted. Although there appears to be signs that financial institutions are resuming lending, the market has not yet returned to its pre-2008 state. Obtaining favorable financing in the current environment remains challenging. We recently entered into a drawdown agreement for $14 million. In the event the lender is unable to finance on our drawdowns, we will not be able to implement our business plan and our financial performance could be adversely affected.


Because we will compete with others for suitable properties, competition will result in higher costs that could materially affect our financial condition.


We will experience competition for real estate investments from individuals, corporations and other entities engaged in real estate investment activities, many of whom have greater financial resources than us. Competition for investments may have the effect of increasing costs and reducing returns to our investors.


Because there may be restrictions on the transfer and further encumbrance of our properties, there may be negative consequences that will affect our financial condition.


The terms of our drawdown agreement allow properties that we acquire to be collateral to secure the loans we receive. We may be prohibited from transferring or further encumbering the properties or any interest in our properties except with a lender’s prior consent. The loans may provide that upon violation of these restrictions, a lender may declare the entire amount of the loan to be immediately due and payable. If we are unable to obtain replacement financing or otherwise fail to immediately repay the loans in full, the lender may invoke its remedies under the loan, including proceeding with a foreclosure sale that could result in our losing our entire interest in the properties subject to the loans.


Because we are liable for hazardous substances on our properties, environmental liabilities are possible and can be costly.


Federal, state and local laws impose liability on a landowner for releases or the otherwise improper presence on the premises of hazardous substances. This liability is without regard to fault for, or knowledge of, the presence of such substances. A landowner may be held liable for hazardous materials brought onto a property before it acquired title and for hazardous materials that are not discovered until after it sells the property. Similar liability may occur under applicable state law. Sellers of properties may make only limited representations as to the absence of hazardous substances. If any hazardous materials are found within our properties in violation of law at any time, we may be liable for all cleanup costs, fines, penalties and other costs. This potential liability will continue after we sell the properties and may apply to hazardous materials present within the properties before we acquire the properties. If losses arise from hazardous substance contamination which cannot be recovered from a responsible party, the financial viability of the properties may be adversely affected. It is possible that we will purchase properties with known or unknown environmental problems which may require material expenditures for remediation.


Because we may not be adequately insured, we could experience significant liability for uninsured events.


While we intend to carry comprehensive insurance on our properties, including fire, liability and extended coverage insurance, there are certain risks that may be uninsurable or not insurable on terms that management believes to be economical. For example, management may not obtain insurance against floods, terrorism, mold-related claims, or earthquake insurance. If such an event occurs to, or causes the damage or destruction of, a property, we could suffer financial losses.





If we are found non-compliance with the Americans with Disabilities Act, we will be subject to significant liabilities.


If any of our properties are not in compliance with the Americans with Disabilities Act of 1990, as amended (the “ADA”), we may be required to pay for any required improvements. Under the ADA, public accommodations must meet certain federal requirements related to access and use by disabled persons. The ADA requirements could require significant expenditures and could result in the imposition of fines or an award of damages to private litigants. We cannot assure that ADA violations do not or will not exist at any of our properties.


The following table provides selected financial data about our company for the three months ended December 31, 2014 and March 31, 2014.


Balance Sheet Data

 

December 31, 2014

 

March 31,

2014

Cash

$

1,739

$

37,319

Liabilities

$

535,641

$

184,113

Stockholders' Equity ( Deficit )

$

46,334,023

$

(146,794)


LIQUIDITY AND CAPITAL RESOURCES


Our cash balance at December 31, 2014 was $1,739 with outstanding liabilities of $535,641. Management believes our current cash balance will be unable to sustain operations for the next 12 months. We will be forced to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan.


PLAN OF OPERATION


Our cash balance is $ 1,739 as of December 31, 2014. We believe our cash balance is insufficient to fund our levels of operations for the next twelve months. As a result we will be forced to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.


OFF-BALANCE SHEET ARRANGEMENTS


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not required.


ITEM 4. CONTROLS AND PROCEDURES


The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.


As of December 31, 2014 management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.





The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company's Chief Financial Officer in connection with the review of our financial statements as December 31, 2014 and communicated the matters to our management.


Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not affect the Company's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can affect the Company's results and its financial statements for the future years.


We are committed to improving our financial organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.


Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.


We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.


There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the small business issuer's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II – OTHER INFORMATION.


ITEM 1. LEGAL PROCEEDINGS.


We are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.


Not applicable.





ITEM 3. DEFAULTS UPON SENIOR SECURITES.


None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.


No matters were submitted to our security holders for a vote during the period ending December 31, 2014.


ITEM 5. OTHER INFORMATION.


None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.


Exhibit Number

 

Description of Exhibit

 

 

 

3.1

 

Articles of Incorporation (1)

3.2

 

Bylaws (1)

10.1

 

Material Contract to acquire GMM Global Multi-Mining Diversified Group Limited by reference herein filed with the Securities and Exchange Commission on July 12, 2012

10.2

 

Material Contract to acquire Indie Growers Union LLC incorporated by reference herein filed with the Securities and Exchange Commission on April 10, 2014.

10. 3

 

Material Contract confirming acquisition of River Ridge Sunshine Farms LLC Incorporated by reference herein filed with the Securities and Exchange Commission on July 2, 2014

31.1

 

Certification by Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith

32.1

 

Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith


(1)

Filed with the SEC as an exhibit to our Form SB-1 Registration Statement originally filed on December 19, 2006.





SIGNATURES


In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Date: February 12, 2015

By:

/s/ Robert Coleridge

Robert Coleridge

Chief Financial Officer, President, Secretary, Treasurer and Director (Principal Executive Officer and Principal Accounting Officer)