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EX-32.2 - EXHIBIT 32.2 - Cryomass Technologies, Inc.exhibit32-2.htm
EX-32.1 - EXHIBIT 32.1 - Cryomass Technologies, Inc.exhibit32-1.htm
EX-31.2 - EXHIBIT 31.2 - Cryomass Technologies, Inc.exhibit31-2.htm
EX-31.1 - EXHIBIT 31.1 - Cryomass Technologies, Inc.exhibit31-1.htm

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 June 30, 2018

or

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

For the transition period from ___________ to ___________

Commission File Number 333-181259

FIRST COLOMBIA DEVELOPMENT CORP.
(Exact name of registrant as specified in its charter)

Nevada N/A
(State or other jurisdiction of incorporation or (IRS Employer Identification No.)
organization)  

3020 Bridgway, Ste 505 Sausalito, CA 94965
(Address of principal executive offices) (Zip Code)

415-300-6144
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, 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) has 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).
[X] YES  [  ] NO

1


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [  ] Accelerated filer [  ]
Non-accelerated filer    [  ] Smaller reporting company [X]
(Do not check if a smaller reporting company)  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
[  ] YES  [X] NO

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

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[  ] YES  [  ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

73,520,016 common shares issued and outstanding as of October 26, 2018.

2


TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION 4
   
Item 1. Financial Statements 4
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
     
Item 4. Controls and Procedures 16
     
PART II – OTHER INFORMATION 17
   
Item 1. Legal Proceedings 17
     
Item 1A. Risk Factors 17
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
     
Item 3. Defaults Upon Senior Securities 17
     
Item 4. Mine Safety Disclosures 17
     
Item 5. Other Information 17
     
Item 6. Exhibits 17
     
SIGNATURES 18

3


PART I – FINANCIAL INFORMATION

Item1. Financial Statements

Consolidated Financial Statements

Our unaudited condensed consolidated financial statements for the three and six month periods ended June 30, 2018 and 2017 form part of this quarterly report. Unless otherwise specified our consolidated financial statements are expressed in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles with the instructions to Form 10-Q and Article 8 of Regulation S-X.

Operating results for the six month period ended June 30, 2018 are not necessarily indicative of the results that can be expected for the year ending December 31, 2018.

4


First Colombia Development Corp.
Condensed Consolidated Balance Sheets

    June 30,     December 31,  
    2018     2017  
    (Unaudited)        
ASSETS            
Current Assets            
   Cash $  597,417   $  107  
   Inventory (Note 6)   11,589      
   Prepaids expenses and advances   24,785      
Total current assets   633,791     107  
   Equipment, net of accumulated depreciation of $94 and $0, respectively (Note 3)   6,365      
   Goodwill (Note 2)   56,472      
   Property deposit (Note 5)   50,000      
   Other assets   62      
Total Assets $  746,690   $  107  
             
LIABILITIES AND STOCKHOLDERS’ DEFICIT            
Current Liabilities            
   Accounts payable and accrued liabilities $  44,110   $  122,662  
   Due to related party (Note 4)   8,146     54,515  
Total Liabilities   52,256     177,177  
             
Commitments and Contingencies (Note 1)            
Stockholders’ Equity (Deficit)            
Preferred stock, $0.001 par value, 100,000,000 shares authorized,
no shares issued and outstanding
       
Common stock, $0.001 par value, 500,000,000 shares authorized,
73,520,016 and 69,520,016 shares issued and outstanding, respectively
  73,520     69,520  
Common stock subscribed   465,000      
Additional paid-in capital   708,765     166,609  
Accumulated deficit   (548,880 )   (413,199 )
Accumulated other comprehensive income   (3,971 )    
Total Stockholders’ Equity (Deficit)   694,434     (177,070 )
Total Liabilities and Stockholders’ Equity (Deficit) $  746,690   $  107  

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

5


First Colombia Development Corp.
Condensed Consolidated Statements of Operations
(Unaudited)

    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2018     2017     2018     2017  
Expenses                        
       Bank charges $  456   $  42   $  223   $  114  
       Selling, marketing and administrative   82,293     15,248     96,941     28,867  
Total Operating Expenses   82,749     15,290     97,164     28,981  
Loss Before Other Expenses   (82,749 )   (15,290 )   (97,164 )   (28,981 )
Other Expenses                        
   Interest expense   (2,667 )       (38,992 )    
   (Loss) gain on foreign exchange   (218 )       475      
Loss before taxes   (85,634 )   (15,290 )   (135,681 )   (28,981 )
Income taxes                
Net Loss $  (85,634 ) $  (15,290 ) $  (135,681 ) $  (28,981 )
Foreign currency translation adjustments   (3,971 )       (3,971 )    
Comprehensive Loss   (89,605 )   (15,290 )   (139,652 )   (28,981 )
Net loss per common share – Basic and Diluted $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.00 )
Weighted Average Shares Outstanding   73,520,016     69,520,016     72,348,745     69,520,016  

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

6


First Colombia Development Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

    Six Months Ended  
    June 30,  
    2018     2017  
Operating Activities            
     Net Loss $  (135,681 ) $  (28,981 )
     Adjustments to reconcile net loss to cash used in operating activities:        
           Depreciation expense   94      
     Changes in operating assets and liabilities:            
           Prepaids and advances   12,724      
           Other assets   (62 )    
           Accounts payable and accrued liabilities   (90,847 )   28,867  
Net Cash Used in Operating Activities   (213,772 )   (114 )
Investing Activities            
Purchase of property, plant and equipment   (54,793 )    
Net cash paid for acquisition of subsidiary   (97,494 )    
Net Cash Used in Investing Activities   (152,287 )    
Financing Activities            
     Proceeds (payments) on related party loans   (213 )   295  
     Proceeds from common stock subscribed   465,000      
     Proceeds from sale of common stock   500,000      
Net Cash Provided by Financing Activities   964,787     295  
Effect of Exchange Rate Changes on Cash   (1,418 )    
Increase (Decrease) In Cash   597,310     181  
Cash - Beginning of Year   107     9  
Cash - End of Year $  597,417   $  190  
             
Non-Cash financing activities            
     Forgiveness of shareholder loan $  46,156   $  –  
             
Supplemental Disclosures            
     Interest paid $  –   $  –  
     Income taxes paid $  –   $  –  

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

7


First Colombia Development Corp.
Notes to Interim Condensed Consolidated Financial Statements
June 30, 2018 and 2017
(Unaudited)

1.

Nature of Operations

   

First Colombia Development Inc. (the “Company”) was incorporated under the laws of the State of Nevada on May 10, 2011. Effective April 26, 2018, the Company changed its name from AFC Building Technologies Inc. to First Colombia Development Inc. The Company is establishing various business ventures in Colombia in the agriculture and real estate development, tourism, and infrastructure sectors. The Company’s initial endeavor is acquiring, free ranging and reselling cattle for the domestic Colombian beef market . On May 10, 2018, the Company acquired all the issued and outstanding share capital of a Colombian company, First Colombia Devco SAS.

   

Going Concern

   

These unaudited interim condensed 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. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and note holders, the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. As at June 30, 2018, the Company has not generated any revenues and has an accumulated deficit of $548,880 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated 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

   

Basis of Presentation and Consolidation

   

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the Securities and Exchange Commission (“SEC”) instructions for companies filing Form 10-Q. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2018, and the results of operations and cash flows for the periods ended June 30, 2018 and 2017. The financial data and other information disclosed in the notes to the interim condensed consolidated financial statements related to the periods are unaudited. The results for the three-month and six-month period ended June 30, 2018 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending December 31, 2018. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s annual audited financial statements and notes thereto for the year ended December 31, 2017, included in the Company’s Form 10-K filed on May 1, 2018 with the SEC.

   

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, First Colombia Devco SAS (from the date of acquisition, May 10, 2018). All inter-company balances and transactions have been eliminated.

   

Use of Estimates

   

The preparation of these unaudited interim condensed consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the estimated useful lives and recoverability of long- lived assets, deferred income tax asset valuations and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. 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.

8


First Colombia Development Corp.
Notes to Interim Condensed Consolidated Financial Statements
June 30, 2018 and 2017
(Unaudited)

Inventory

Inventory consists of cattle acquired in May 2018 which are valued at the lower of cost and market. The Company expects to sell the inventory in less than one year.

Property and Equipment

Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates:

  Office equipment and furniture 10 years straight-line basis
  Machinery and equipment 5-10 years straight-line basis

Goodwill

Goodwill was generated through the acquisition of First Colombia Devco SAS as the total consideration paid exceeded the fair value of the net assets acquired.

The Company tests its goodwill for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results. There were no impairment charges during the six months ended June 30, 2018.

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 a 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.

Foreign Currency Translation

The functional currency of the Company is the United States dollar. The functional currency of the subsidiary is the Colombian Peso. The financial statements of the Company’s Colombian subsidiary were translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters, using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Gains and losses arising on foreign currency denominated transactions included in the determination of income. Foreign currency transactions are primarily undertaken in Colombian Pesos and Canadian dollars. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Comprehensive Loss

ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive income (loss) and its components in the consolidated financial statements. During the six months ended June 30, 2018 and 2017, the Company’s only component of comprehensive income was foreign currency translation adjustments.

9


First Colombia Development Corp.
Notes to Interim Condensed Consolidated Financial Statements
June 30, 2018 and 2017
(Unaudited)

Basic and Diluted Net Loss Per Share

The Company computes net 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 statement of operations. Basic EPS is computed by dividing net income (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 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 potentially dilutive shares if their effect is anti-dilutive. The Company did not have any dilutive potential shares outstanding at June 30, 2018 or June 30, 2017.

Revenue Recognition

Revenue will be recognized when a formal arrangement exists, the price is fixed or determinable, delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured.

2.

First Colombia Devco SAS Acquisition

   

On May 10, 2018, pursuant to a purchase agreement the Company purchased all of the issued and outstanding capital stock of First Colombia Devco SAS. The Company closed and completed the acquisition on May 10, 2018. The results of First Colombia Devco SAS’ operations have been included in the consolidated financial statements since that date. First Colombia Devco SAS was acquired to establish various business ventures in Colombia in the agriculture and real estate development, tourism, and infrastructure sectors.

   

The purchase price paid by the Company was $100,000. Any costs related to the acquisition were expensed in current period. The following table summarizes the allocation of the preliminary purchase price as of the acquisition date:

Purchase Price

  Cash $  100,000  
  Total Purchase Price $  100,000  

Allocation of Purchase Price

  Cash $  2,506  
  Prepaid expenses and advances   37,509  
  Property, plant and equipment   1,704  
  Inventory   12,017  
  Accounts payable and accrued expenses   (12,295 )
  Goodwill   58,559  
  Net assets acquired $  100,000  

The following table summarizes our consolidated results of operations for the six months ended June 30, 2018, as well as unaudited pro forma consolidated results of operations as though the acquisition had occurred on January 1, 2018 and 2017:

      June 30, 2018     June 30, 2017  
  As Reported Pro Forma As Reported Pro Forma
  Net Sales $  –   $  –   $  –   $  –  
  Net Loss   (135,681 )   (197,451 )   (28,981 )   (28,981 )
                           
  Earnings per common share:                        
                           
  Basic $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.00 )
  Diluted $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.00 )

10


First Colombia Development Corp.
Notes to Interim Condensed Consolidated Financial Statements
June 30, 2018 and 2017
(Unaudited)

3.

Property and Equipment


      June 30,     December 31,  
      2018     2017  
  Office equipment $  1,666   $  –  
  Machinery and equipment   4,793      
  Total   6,459      
  Less: accumulated depreciation   (94 )    
  Equipment, Net $  6,365   $  –  

During the six months ended June 30, 2018, the Company recorded $94 (2017 - $0) of depreciation expense. During the three months ended June 30, 2018, the Company recorded $94 (2017 - $0) of depreciation expense.

4.

Related Party Transactions


  a)

At June 30, 2018, the Company owed $8,146 (December 31, 2017 - $8,358) to the Chief Financial Officer of the Company. These were monies advanced for general working capital purposes, (i.e. accounting and professional fees) as required. The amount is unsecured, non-interest bearing and due on demand.

     
  b)

During the six months ended June 30, 2018, a shareholder of the Company agreed to forgive $46,156 of outstanding debt. As the debt forgiven was owed to a related party, the Company recognized the $46,156 forgiven as an equity transaction recorded in additional paid-in capital. At June 30, 2018, the Company owed $0 (December 31, 2017 - $46,156) to a shareholder of the Company. These were monies advanced for general working capital purposes, (i.e. accounting and professional fees) as required.


5.

Property Deposit

   

On June 7, 2018, the Company entered into a property purchase agreement whereby the Company agreed to acquire real estate located in the Municipality of Tarso, Antioquia, in Colombia. The property is 13.3125 hectares in size and the consideration for the purchase is $450,000. At June 30, 2018, $50,000 of the purchase price has been paid as a non-refundable deposit against the purchase price, with the balance being due within 90 days. The closing date of the agreement will be the date upon which the full purchase price has been paid. The remaining $400,000 was paid subsequent to June 30, 2018.

   
6.

Inventory

   

At June 30, 2018, inventory consisted of $11,589 of cattle. The cattle are raised by a third party rancher who bears the cost of development. Upon the sale of the cattle the Company will receive 40% of the earnings and the rancher will receive the remaining 60%.

   
7.

Licensing Agreement

   

On June 30, 2015, the Company entered into a license agreement with a shareholder of the Company. Pursuant to the agreement, the Company received an exclusive worldwide license in regards to 15 domain names related to the automotive e-commerce business for a period of 40 years. In consideration for the granting of the license, the Company will pay to the licensor a royalty of 2.5% of gross sales for any revenue derived from the use of the licensed domains. The Company has not generated any revenue to date.

   
8.

Common Stock

   

On February 22, 2018, the Company issued 4,000,000 post-split shares of common stock at $0.125 per share for cash proceeds of $500,000.

   

On April 26, 2018, the Company effected a 2-1 forward stock split of the issued and outstanding shares of common stock. All share and per share information have been retroactively adjusted to reflect the forward stock split.

11


First Colombia Development Corp.
Notes to Interim Condensed Consolidated Financial Statements
June 30, 2018 and 2017
(Unaudited)

9.

Subsequent Events


  a)

On August 3, 2018, the Company completed a non-brokered private placement and issued 2,880,000 post- split shares of common stock at $0.25 per share for aggregate gross proceeds of $720,000. At June 30, 2018, subscriptions of $465,000 relating to the private placement had been received.

     
  b)

On August 15, 2018, the Company paid $400,000 pursuant to the property purchase agreement described in Note 5.

12



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

Forward-Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Unless otherwise specified our financial statements are expressed in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this quarterly report and unless otherwise indicated, the terms “we”, “us”, “our” and “our company” mean First Colombia Development Corp., a company incorporated under the laws of the state of Nevada, and our current wholly-owned subsidiary, First Colombia Devco SAS, a Colombian company, unless otherwise indicated.

General Overview

We were incorporated under the laws of the state of Nevada on May 10, 2011. Our fiscal year end is December 31. Our business offices are currently located at 3020 Bridgway, Ste 505 Sausalito, CA 94965. The address of agent for service in Nevada and registered corporate office is c/o National Registered Agents, Inc. of Nevada, 100 East William Street, Suite 204, Carson City, NV, 89701. Our telephone number is (415) 300-6144.

We recently effected a forward stock split of our authorized and issued and outstanding shares of common stock on a one (1) old for two (2) new basis. Upon effect of the forward split, our authorized capital increased from 250,000,000 shares of common stock to 500,000,000 shares of common stock and correspondingly, our issued and outstanding shares of common stock will increase from 34,760,008 to 73,520,016 shares of common stock, all with a par value of $0.001. Certificate of Change and Articles of Merger to effect the forward split and the merger and change of name were filed with the Nevada Secretary of State on April 12, 2018, with an effective date of April 26, 2018. The name change and reverse stock split were subsequently reviewed and approved by the Financial Industry Regulatory Authority (FINRA) with an effective date of April 26, 2018.

Our Current Business

Effective May 10, 2018, we executed and closed a purchase agreement with Grupo Jaque Ltd. and First Colombia Devco SAS whereby we acquired the issued and outstanding share capital of First Colombia Devco SAS, a Colombian company, from its sole shareholder, Grupo Jaque Ltd. The consideration for the purchase was $100,000, which represented a reimbursement of the Seller’s costs to capitalize and establish the Colombian company, and the costs of establishing the company’s Colombian head offices.

Our goal with First Colombia Devco SAS is to establish business ventures in Colombia’s rapidly developing economy, with a focus on agriculture and real estate development, tourism, infrastructure, and other high growth sectors that may be identified as worth pursuing. Such enterprises are in the initial planning and investigation stages, with the initial endeavor of First Colombia Devco SAS being a pilot program for a cattle division which acquires, free ranges and resells cattle for the domestic Colombian beef market, to establish the commercial viability of such an approach.

14


Effective June 7, 2018, we executed a property purchase agreement with Terra Viva Property Development S.A.S. whereby we have agreed to acquire certain real property located in the Municipality of Tarso, Antioquia, in Colombia. The property is 13.3125 hectares in size. The consideration for the purchase is $450,000, of which $50,000 has been advanced as a deposit against the purchase price, with the balance being paid on August 15, 2018.

The Municipality of Tarso, approximately 50km from Medellin, is in the Suroeste region of Antioquia and is a popular resort area. The company intends to construct a resort development of casitas on the property. The region has been increasing in popularity with recent planned infrastructure developments in the area that will be making it substantially more accessible from Medellin. This infrastructure will entail improved highways, bridges and tunnels with the goal of increasing accessibility to the Pacific Coast, with these improvements running through the Suroeste region.

Cash Requirements

Based on our planned expenditures, we will require approximately $500,000 over the next 12 months. In order to provide funds, we plan to pursue additional equity financing from private investors or possibly a registered public offering. We do not currently have any definitive arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.

We have not investigated the availability of commercial loans or other debt financing to supplement or meet our cash requirements. In the uncertain event that any such debt financing alternatives were available to us on acceptable terms, they would increase our liabilities and future cash commitments.

Future Financings

We will continue to rely on equity sales of our common shares and funding from directors and shareholders in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Off-Balance Sheet Arrangements

We have no 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 stockholders.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended June 30, 2018, which are included herein.

Three Months Ended June 30, 2018 and June 30, 2017

Our operating results for the three months ended June 30, 2018 and June 30, 2017 are summarized as follows:

15



    Three     Three  
    Months     Months  
    Ended     Ended-  
    June     June  
    30,     30  
    2018     2017  
Revenue $  -   $  -  
Cost of sales   -     -  
Bank charges and interest   456     42  
Selling, marketing and administrative   82,293     15,248  
Other Expenses   2,885     -  
Net Loss   (85,634 )   (15,290 )
Loss per common share – Basic and Diluted $  (0.00 ) $  (0.00 )

Revenue and Cost of Sales

We had no revenues and did not engage in any sales activities during the three month periods ended June 30, 2018 and June 30, 2017, respectively.

Operating Expenses

We incurred a net loss of $85,634 for the three months ended June 30, 2018, compared to $15,290 during the three months ended June 30, 2017. The significant increase in net loss during the three months ended June 30, 2018 resulted from the $82,749 in total operating expenses (June 30, 2017 - $15,290) incurred in the expansion of the Company’s operations in Colombia.

Six Months Ended June 30, 2018 and June 30, 2017

Our operating results for the six months ended June 30, 2018 and June 30, 2017 are summarized as follows:

    Six     Six  
    Months     Months  
    Ended     Ended  
    June     June  
    30,     30  
    2018     2017  
Revenue $  -   $  -  
Cost of sales   -     -  
Bank charges and interest   223     114  
Selling, marketing and administrative   96,941     28,867  
Other Expenses   38,517     -  
Net Loss   (135,681 )   (28,981 )
Loss per common share – Basic and Diluted $  (0.00 ) $  (0.00 )

Revenue and Cost of Sales

We had no revenues and did not engage in any sales activities during the six month periods ended June 30, 2018 and June 30, 2017, respectively.

Operating Expenses

We incurred a net loss of $135,681 for the six months ended June 30, 2018, compared to $28,981 during the six months ended June 30, 2017. The significant increase in net loss during the six months ended June 30, 2018 resulted from the $97,164 in operating expenses (June 30, 2017 - $28,981) incurred due to expansion of the Company’s operations and the resulting additional expenses.

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Liquidity and Financial Condition

Working Capital

    At     At  
    June     December  
    30,     31,  
    2018     2017  
Current assets $  633,791   $  107  
Current liabilities   52,256     177,177  
Working capital (deficit) $  581,535   $  (177,070 )

As at June 30, 2018 we had current assets of $633,791 (consisting of cash, inventory and prepaid expenses and advances), current liabilities of $52,256, and a working capital of $581,535. This compares to our total current assets of $107, current liabilities of $177,177, and working capital deficit of $177,070 as at December 31, 2017.

Cash Flows

    Six     Six  
    Months     Months  
    Ended     Ended  
    June 30,     June 30,  
    2018     2017  
Net cash Used In operating activities $  (213,772 ) $  (114 )
Net cash (Used In) investing activities   (152,287 )   -  
Net cash provided by financing activities   964,787     295  
Net increase in cash during period $  597,310     181  

Operating Activities

Net cash used in operating activities was $213,772 during the six months ended June 30, 2018 compared with net cash used in operating activities of $114 during the six months ended June 30, 2017. This increase in cash used was mostly as a result of the Company's increased operational activity due to the expansion of its operations in Colombia.

Investing Activities

Net cash used in investing activities was $152,287 during the six months ended June 30, 2018 compared to no activities during the six months ended June 30, 2017. The increase in cash used in investing activities was the result of the purchase of property plant and equipment and cash paid to acquire the Company’s subsidiary.

Financing Activities

Net cash provided by financing activities was $964,787 during the six months ended June 30, 2018 compared with $295 in the prior period. This increase in cash provided was the result of proceeds of the sale of common stock and stock subscriptions receivable.

Going Concern

Our consolidated financial statements for the six month period ended June 30, 2018 have been prepared on a going concern basis that contemplates the realization of assets and liquidation of liabilities in the normal course of business, and contain an additional explanatory paragraph which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders and note holders, the ability of our company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. As at June 30, 2018, our company has not generated any revenues, and has an accumulated deficit of $548,880. These factors raise substantial doubt regarding our company’s ability to continue as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. These condensed consolidated 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 our company be unable to continue as a going concern.

Critical Accounting Policies

These financial statements and related notes are expressed in US dollars. The consolidated financial statements include the accounts of the Company and its formerly wholly-owned subsidiary, DSL Products Limited. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is December 31.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by our Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Pursuant to Rule 13a-15(b) under the Exchange Act, our Company carried out an evaluation with the participation of our Company’s management, including our Company’s Chief Executive Officer (“CEO”) and our Company’s Chief Financial Officer (“CFO”), of the effectiveness of our Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of June 30, 2018. Based upon that evaluation, our Company’s CEO and CFO concluded that our Company’s disclosure controls and procedures were not effective as of June 30, 2018 due to our Company’s limited internal resources and lack of ability to have multiple levels of transaction review.

Management is in the process of determining how best to change our current system and implement a more effective system to insure that information required to be disclosed in the reports that we file or submit under the Exchange Act have been recorded, processed, summarized and reported accurately. Our management intends to develop procedures to address the current deficiencies to the extent possible given limitations in financial and personnel resources. While management is working on a plan, no assurance can be made at this point that the implementation of such controls and procedures will be completed in a timely manner or that they will be adequate once implemented.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

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Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Exhibit Description
Number  
   
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation (incorporated by reference to our Registration Statement on Form S- 1 filed on May 9, 2012).
3.2 By-laws (incorporated by reference to our Registration Statement on Form S-1 filed on May 9, 2012).
3.3 Certificate of Amendment (incorporated by reference to our Current Report on Form 8-K filed on January 13, 2014).
3.4 Certificate of Change filed with the Nevada Secretary of State on April 12, 2018 with an effective date of April 26, 2016. (incorporated by reference to our current report on Form 8-K filed on May 2, 2018)
3.5 Articles of Merger filed with the Nevada Secretary of State on April 12, 2018 with an effective date of April 26, 2016. (incorporated by reference to our current report on Form 8-K filed on May 2, 2018)
(10) Material Contracts
10.1 Consulting Agreement dated December 30, 2011 between our company and Cindy Kelly & Associates (incorporated by reference to our Registration Statement on Form S-1 filed on May 9, 2012).
10.2 Purchase Agreement with Grupo Jaque Ltd. and First Colombia Devco SAS, dated May 10, 2018 (incorporated by reference to our current report on Form 8-K filed on May 19, 2018)
(31) Rule 13a-14(a)/15d-14(a) Certifications
31.1* Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32) Section 1350 Certifications
32.1* Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101* Interactive Data File
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document

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101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

*

Filed herewith.

   
**

Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

  FIRST COLOMBIA DEVELOPMENT CORP.
  (Registrant)
   
   
   
Dated: October 26, 2018 /s/Christopher Hansen
  Christopher Hansen
  President, Chief Executive Officer,
  and Director
  (Principal Executive Officer)

Dated: October 26, 2018 /s/Cindy Lee Kelly
  Cindy Lee Kelly
  Chief Financial Officer and Treasurer
(Principal Financial Officer and Principal Accounting Officer)

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