Cyberfort Software, Inc. - Annual Report: 2016 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended March 31, 2016

or

¨ 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: 333-174894

Registrant’s telephone number, including area code: (503) 505-6946

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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 ¨ No x

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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

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

There was no active public trading market as of the last business day of the Company’s first fiscal quarter, so there was no aggregate market value of common stock held by non-affiliates.

As of September 7, 2016, the registrant had 74,789,871 shares of common stock, par value $0.001 per share, outstanding.

Documents incorporate by reference: None.

 PATRIOT BERRY FARMS, INC. 

ANNUAL REPORT ON FORM 10-K 

TABLE OF CONTENTS

EXPLANATORY NOTE

Patriot Berry Farms, Inc. (“Patriot Berry,” or the “Company,” “we,” “us” or “our”) is filing this comprehensive Annual Report on Form 10-K for the fiscal years ended March 31, 2016 and 2015 (the “Comprehensive Form 10-K”) as part of its efforts to become current in its filing obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This Comprehensive Form 10-K is the Company’s first annual periodic filing with the Securities and Exchange Commission (the “Commission”) since the filing of its Annual Report on Form 10-K for the year ended March 31, 2014. Included in this Comprehensive Form 10-K are the Company’s audited financial statements for the fiscal years ended March 31, 2016 and 2015, which have not been previously filed with the Commission.

Readers should be aware that several aspects of this report differ from other annual reports. First, this report is for each of the fiscal years ended March 31, 2016 and 2015, in lieu of filing separate reports for each of those fiscal years. Second, because of the amount of time that has passed since our last periodic report was filed with the SEC, the information relating to our business and related matters is focused on our more recent periods, including certain information for periods after June 30, 2014 and through the day of filing this report.

Background for Filing Delay: We were unable to file the above referenced periodic reports due to capital constraints resulting from our reduced and discontinued berry production in 2015 and 2016 and limited access to financing. As a result, the Company was unable (i) to satisfy significant payables due to third parties, including its independent auditors, for work performed for the Company, (ii) to maintain an adequate financial staff, and (iii) to retain the necessary advisors to prepare and complete the financial reports required by the Exchange Act and the rules and regulations of the SEC. Due to these constraints, the Company was unable to prepare and file the required reports with the SEC under Section 13(a) of the Exchange Act in June 2014. This Comprehensive Form 10-K should be read together and in connection with the other reports filed by us with the SEC for a comprehensive description of our current financial condition and operating results. In the interest of complete and accurate disclosure, we have included current information in this annual report for all material events and developments that have taken place through the date of filing of this annual report with the SEC.

Other Information. Due to our failure to file timely our periodic reports with the SEC since the filing of the Quarterly Report on Form 10-Q for the Quarter ended September 30, 2014, we were unable to comply with the listing standards of OTCBB and our Common Shares were removed from listing on OTCBB. As a result, our Common Shares are currently listed to trade on the Pink OTC Market, Inc.

FORWARD-LOOKING STATEMENTS

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These statements use words such as “believe,” “expect,” “should,” “strive,” “plan,” “intend,” “estimate,” “anticipate” or similar expressions. The forward-looking statements included herein are based on our current beliefs, assumptions, and expectations, and are subject to numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions of the continuing expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately, and many of which are beyond our control. Although we believe our assumptions underlying the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. These forward-looking statements are made as of the date of this report, and we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements.

USE OF CERTAIN DEFINED TERMS

In this Report, unless otherwise noted or as the context otherwise requires: “the Company,” “we,” “us,” and “our” refers to the combined company Patriot Berry Farms, Inc.

PART I

Item 1. Business.

Patriot Berry Farms, Inc. (“Patriot Berry” or the “Company”) was incorporated in the State of Nevada on December 15, 2010 under the name of Gaia Remedies, Inc.). Since 2013, the Company has been in the business of acquiring and establishing profitable berry farms throughout the United States. The main focus of the Company has been on blueberry production with a secondary focus on strawberry and raspberry production. Patriot Berry has only received one year of revenue from its 2014 harvest of Morningstar farm, but has since sold the property due to financial restraints. Although still openly seeking investment to continue within the berry sector, the Company has received interest to potentially rebrand itself into a technology company and is currently considering its options to increase shareholder value.

On December 27, 2012, a change in control occurred as an officer and director of the Company purchased 54,400,000 shares of common stock of the Company’s common stock, par value $0.001 per share (the “Common Stock”), of which 19,200,000 shares were subsequently voluntarily cancelled for no consideration. On January 28, 2013, the Company changed its name to Patriot Berry Farms, Inc.

An additional change in control occurred pursuant to a stock purchase agreement (the “Stock Purchase Agreement”), dated March 21, 2014, whereby the Company’s President and sole director sold 35,200,000 shares of Common Stock to Daniel Cattlin for an aggregate price of $20,000, which sale of common stock constituted a controlling interest in Company, or 50.5% of the Company’s then issued and outstanding common stock. In connection with the Stock Purchase Agreement, the Company’s former President, Alexander Houstoun-Boswall resigned from his positions of President, Chief Executive Officer, Treasurer, and member of the board of the directors, while remaining with the Company in the capacity of a business development consultant. The Company’s board of directors accepted the resignation of Mr. Houstoun-Boswall and appointed Mr. Cattlin to serve as the Company’s President, Chief Executive Officer, Secretary, Treasurer, and sole director of the Company.

Description of Business

On July 7, 2016, the Company received funding from its CEO in order to bring its SEC filings up to date and start seeking investment so that the Company can continue looking for possible acquisitions within the berry market. The CEO has been unable to secure the necessary investment to pursue this option and has since been contacted by a third party who is interested in supporting a rebrand of the Company into the technology sector. Extensive talks have occurred with this third party to potentially vend a software company into Patriot Berry once all its filings are current. The software company in question has developed content filtering software. No Letter of Intent or definitive agreement has been signed with this company and there is no assurance that an agreement will be signed with this company in the future.

There has been a very limited activity within the Company since September 2014 due to the fact that the Company has not been able to secure the necessary financing to sustain its operations.

Morningstar Farm

On November 15, 2013, the Company closed on a contract for sale and purchase, dated August 27, 2013, with Douglas and Gail Harmon, for the purchase of an operational blueberry farm in Levy County, Florida (the “Morningstar Farm”). In accordance with the terms of the contract the Company paid $400,000, plus $2,765 in closing costs, for a total purchase price of $402,765. In conjunction with the acquisition of the Morningstar Farm, the Company originated a $280,000, non-interest bearing note payable with the seller. The terms of the promissory note require the Company to remit payments of principal in the amount of $20,000 in fourteen (14) equal monthly installments until paid in full. If payment has not been remitted on the first of each respective month, a late fee of $1,000 will be assessed.

Due to financial restraints, the Company was not able to keep up payments on The Morningstar Farm which required the Company to sell the property on April 23, 2015 for $235,000 with the promise that all outstanding mortgage payments totaling $200,000 and outstanding costs for the farm upkeep, the farmer and the harvest would be forgiven. The sale of the Company’s sole asset allowed the Company’s to look at other potential opportunities both in and outside of its current sector.

Exclusive Blueberry Sales Agreement

While in possession of the Morningstar Farm, on April 4, 2014, the Company, through Douglas Harmon (the Grower), who was the Company’s Farm Manager (the Farm), entered into an exclusive sales agreement (the Agreement) with Dole Berry Company (Dole). Pursuant to the Agreement, Dole was acting as the exclusive sales agent of the Company to market and sell all of the blueberries produced from the Farm for a period of five (5) harvest years beginning January 1, 2014 until December 31, 2018 unless terminated earlier. The Company received advances equal to $1.00 per pound of finished product weight each week minus receiving and handling charges, as well as 10% commission to be paid to Dole. The Company agreed to pay to the Grower a commission equal to 2% of the revenues from the sales of finished products.

The Company had sales of $0, $117,120 and $0 for the year ended March 31, 2016, 2015 and 2014, respectively. Sales in connection with the Agreement represented 88% of sales during the year ended March 31, 2015.

Berry Market Overview

Blueberries have been transformed from a niche market to a global commodity marked by increasing, year-round demand.

While North America represents nearly 90% of the global production of blueberries, the US is the world's largest single producer, with 667.6 million pounds harvested in 2014 alone. In the US blueberries are the second most important berry crop, representing over 24% of the nation's $3.5 billion strawberry-blueberry-raspberry market.

Driving the market is increased consumption by existing blueberry eaters, the introduction of new consumers, and market expansion into new domestic regions and growing export regions.

In turn, the strength of the blueberry market represents many new opportunities, particularly in terms of improved grower economics and new end market users.

Not surprisingly, US blueberry growers are highly optimistic about the long-term the future of what they consider an increasingly dynamic industry.

Projects

May 2014 saw a successful end to Patriot Berry’s 2014 harvest, with its last batch of early-ripened Florida Blueberry’s being delivered to Dole Berry Company, LLC, on May 11th, 2014. The harvest, which commenced on April 16, 2014, amassed 32,196 lb.’s of Florida Blueberry’s, more than double when compared to 2012’s crop.

Due to Morningstar’s geographical position, (being placed in North-Central Florida), Patriot Berry Farm was able to benefit financially from the ‘Early Crop’ Florida Blueberry Market, which for a six-week period supplies the United States with blueberries exclusively.

Patent, Trademark, License and Franchise Restrictions and Contractual Obligations and Concessions

We do not own, either legally or beneficially, any patents or trademarks.

Research and Development Activities

On June 11, 2013, the Company engaged Strikly Berry Consulting, LLC to advise the Company on its berry farm development program, including: assessment of land or existing farms the Company is considering acquiring, assistance with evaluation of historical farm performance and production system advice including, but not limited to, pre-plant decision making, fertility, and pruning/training recommendations of berry crops.

On August 1, 2013, the Company entered into an Executive Agreement (the “Dimeo”) with Mr. Anthony Dimeo III. Pursuant to the Dimeo Agreement, the Mr. Dimeo acted as the Company’s Director of Farming by providing consulting services to the Company including: identifying new farms; advising the Company regarding new farm purchases; participating in negotiations; developing berry distribution; and helping improve the Company’s operations. The Agreement was effective for a term of 24 months.

Employees

The Company’s sole employee is Daniel Cattlin, its sole officer and director. Our officer and director is responsible for planning, developing and operational duties, and will continue to do so throughout the early stages of our growth.

Reports to Securities Holders

We provide an annual report that includes audited financial information to our shareholders. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Securities Exchange Act of 1934. We are subject to disclosure filing requirements including filing Form 10K annually and Form 10Q quarterly. In addition, we will file Form 8K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. 

Item 1B. Unresolved Staff Comments                         

None.

Item 2. Properties

The Company is based in Orlando, Florida, with principal executive offices located at 7380 Sand Lake Road, Suite 500, Orlando, Florida 32819 and our telephone number is (503) 505-6946.

On April 23, 2015 due to lack of funding and increasing debt the Company completed the sale of its sole property of the Morningstar Farm, an operational blueberry farm in Levy County, Florida.

Item 3. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issue Purchases of Equity Securities

Market Information

Shares of our common stock have been quoted on the OTCQX since July 25, 2013, under the symbol “PBFI”. The market for our common stock is limited, and can be volatile. The following table sets forth the high and low bid prices relating to our common stock on a quarterly basis for the periods indicated as quoted by the OTCQX. These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions, and may not reflect actual transactions.

Holders

As of September 6, 2016, there were [12] total record holders of 74,789,871 shares of the Company's common stock.

Dividends

The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company's business.

Securities Authorized for Issuance under Equity Compensation Plans

None

Recent Sales of Unregistered Securities

Except for provided below, all unregistered sales of our securities were previously disclosed in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

In July, 2016 the Company issued 1,000,000 shares of the Company’s common stock to Daniel Cattlin pursuant to the addendum to his employment agreement with the Company dated June 23, 2014.

In July 2016, Company issued 100,000 shares of its common stock, par value $0.001 per share, valued at $0.10 per share to its President in consideration of $10,000 settlement payment that was made by Cattlin on behalf of the Company to Anthony DiMeo on December 24, 2014.

In July 2016, The Company issued 290,000 shares of its common stock, par value $0.001 per share, valued at $0.10 per share to its President in consideration of $29,000 invested into the Company on July 7, 2016.

The above issuances of shares are exempt from registration, pursuant to Section 4(2) of the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 6. Selected Financial Data

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our financial statements and related notes appearing elsewhere in this prospectus. This discussion and analysis contains forward looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forwarding looking statements as a result of certain factors, including but not limited to, those which are not within our control.

Although we qualify as an “emerging growth company” as defined in the JOBS Act, and have elected not to take advantage of certain exemptions from various reporting requirements that are available to “emerging growth companies.”

Overview

Patriot Berry Farms, Inc. was incorporated in the State of Nevada on December 15, 2010 under the name of Gaia Remedies, Inc.). On December 27, 2012, a change in control occurred as a director of the Company purchased 54,400,000 shares of common stock of the Company. On January 28, 2013, the Company changed its name to Patriot Berry Farms, Inc.

On May 15, 2013, the Company began implementation of its new business plan: the acquisition and operation of established and profitable berry farms throughout the United States. The Company’s main focus is on blueberry production with a secondary focus on strawberry and raspberry production.

In August, 2013, the Company hired a Director of Farming and entered into an agreement, wherein the Company will pay a fee of $5,000 per month to the director for a period of 24 months in exchange for assistance in identifying, underwriting, and negotiating the terms of potential farm acquisitions on the Company’s behalf. Further, the director will assist the Company in the development of its operations and distribution, amongst other responsibilities. Upon the expiration of the initial 24 months of the director’s agreement’s term, the Company will ascertain if an increase in the monthly fee is warranted.

In November, 2013, the Company acquired the Morningstar Farm, an operational blueberry farm in Levy County, Florida.

On April 4, 2014, the Company, through Douglas Harmon, who was the Company’s Farm Manager of the Morningstar Farm entered into the Sale Agreement with Dole Berry Company. Pursuant to the Sale Agreement, Dole was acting as the exclusive sales agent of the Company to market and sell all of the blueberries produced by the Grower from the Farm for a period of five (5) harvest years beginning January 1, 2014 until December 31, 2018 unless terminated earlier. The Company received advances equal to $1.00 per pound of finished product weight each week minus receiving and handling charges, as well as 10% commission that was paid to Dole. The Company was due to pay to the Mr. Harmon a commission equal to 2% of the revenues from the sales of finished products, but has since made a settlement within the sale of the farm, which included this payment.

On July 1, 2014, the Board of Directors and majority shareholders of the Company approved an amendment to the Articles of Incorporation of the Company to change its name from Patriot Berry Farms, Inc. to Patriot Cannabis Farms, Inc. As of the date of this report, the name change has not been effected.

On June 23, 2014, the Company amended the Cattlin Employment agreement, pursuant to which the Company agreed to issue Daniel Cattlin, the sole officer and director of the Company, 1,500,000 shares of Common Stock upon execution of the addendum, and 500,000 shares of Common Stock upon each one year anniversary of the addendum's effective date.

On July 25, 2014, the Company renewed its agreement Strikly Berry Consulting, LLC to advise the Company on its berry farm development program, including: assessment of land or existing farms the Company is considering acquiring, assistance with evaluation of historical farm performance and production system advice including, but not limited to, pre-plant decision making, fertility, and pruning/training recommendations of berry crops.

On December 24, 2014, the Company terminated its agreement Anthony DiMeo (Director of Farming).

On November 2, 2014, the Company terminated its agreement with Strikly Berry Consulting, LLC.

On April 23, 2015, the Company sold the Morningstar Farm to Douglas and Gail Harmon.

In July, 2016 the Company issued 1,000,000 shares of the Company’s common stock to Daniel Cattlin pursuant to the addendum to his employment agreement with the Company dated June 23, 2014.

In July 2016, the Company issued 100,000 shares of its common stock, par value $0.001 per share, valued at $0.10 per share to its President in consideration of $10,000 settlement payment that was made by Cattlin on behalf of the Company to Anthony DiMeo on December 24, 2014.

In July 2016, the Company issued 290,000 shares of its common stock, par value $0.001 per share, valued at $0.10 per share to its President in consideration of $29,000 invested into the Company on July 7, 2016.

Plan of Operation

Berry Farming Operations

The Company is currently in a stage of aggressive initial asset growth through acquisition. To reach the goal of being a major operator within the US berry market, the Company plans to gather 1,000 to 2,000 acres of mature blueberry plantings under a single operational team. To expedite this process, the Company is currently identifying a farm development company capable of managing:

Results of Operations

Comparison of the year ended March 31, 2016 and 2015

Revenues

During the year ended March 31, 2016, we generated no revenues. During the year ended March 31, 2015, we generated revenues totaling $117,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Cost of Products Sold

During the year ended March 31, 2016, we did not incur any cost of products sold. During the year ended March 31, 2015, we had total cost of products sold of $29,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Expenses

We incurred operating expenses in the amount of $173,565 during the year ended March 31, 2016 compared to $1,521,593 for the year ended March 31, 2015. The decrease is due to $216,184 decrease in general and administrative expenses and $965,000 decrease in stock-based compensation in the year ended March 31, 2016.

Gain on Settlements of Debt

During the year ended March 31, 2016, we incurred $12,000 gain on settlement of debt. During the year ended March 31, 2015, we incurred total of $21,132 gain on settlement of debt.  

Loss on Sale of Assets

During the year ended March 31, 2015, we recorded impairment of $159,766 on the blueberry farm. During the year ended March 31, 2016, we did not incur any loss on sale of assets. The loss on sale of assets is due to the sale of Morningstar Farm.

Net Loss

Comparison of the nine months ended December 31, 2015 and 2014

Revenues

During the nine months ended December 31, 2015, we generated no revenues. During the nine months ended December 31, 2014, we generated revenues totaling $117,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Cost of Products Sold

During the nine months ended December 31, 2015, we did not incur any cost of products sold. During the nine months ended December 31, 2014, we had total cost of products sold of $29,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Expenses

We incurred operating expenses in the amount of $141,223 during the nine months ended December 31, 2015 compared to $1,260,933 for the nine months ended December 31, 2014. The decrease is due to $199,518 decrease in general and administrative expenses and $915,000 decrease in stock-based compensation for the nine months ended December 31, 2015 compared to same period in 2014.

Gain on Settlements of Debt

During the nine months ended December 31, 2015, we incurred $12,000 gain on settlement of debt. During the nine months ended December 31, 2014, we incurred total of $21,132 gain on settlement of debt.

Loss on Sale of Assets

During the nine ended December 31, 2015, we incurred $0 loss on sale of assets. During the nine months ended December 31, 2014, we did not incur any loss on sale of assets. The increase on loss on sale of assets is due to the sale of berry farm.

Net Loss

We incurred a net loss of $129,223 during the nine months ended December 31, 2015, compared to a net loss of $1,151,801 for the corresponding period ended December 31, 2014. 

Comparison of the three months ended December 31, 2015 and 2014

Revenues

The Company did not generate any revenues during the three months ended December 31, 2015 and 2014.

Cost of Products Sold

The Company did not incur any cost of products sold during the three months ended December 31, 2015 and 2014.

Expenses

We incurred operating expenses in the amount of $43,658 during the three months ended December 31, 2015 compared to $118,045 for the three months ended December 31, 2014. The decrease is due to $22,503 decrease in general and administrative expenses for the three months ended December 31, 2015 compared to same period in 2014.

Gain on Settlements of Debt

During the three months ended December 31, 2015, we did not incur any gain on settlement of debt. During the three months ended December 31, 2014, we incurred total of $21,132 gain on settlement of debt.

Loss on Sale of Assets

During the three ended December 31, 2015 and 2014, we did not incur any loss on sale of assets.

Net Loss

We incurred a net loss of $43,658 during the three months ended December 31, 2015, compared to a net loss of $96,913 for the corresponding period ended December 31, 2014. 

Comparison of the six months ended September 30, 2015 and 2014

Revenues

During the six months ended September 30, 2015, we generated no revenues. During the six months ended September 30, 2014, we generated revenues totaling $117,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Cost of Products Sold

During the six months ended September 30, 2015, we did not incur any cost of products sold. During the six months ended September 30, 2014, we had total cost of products sold of $29,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Expenses

We incurred operating expenses in the amount of $97,565 during the six months ended September 30, 2015 compared to $1,142,888 for the six months ended September 30, 2014. The decrease is due to $177,015 decrease in general and administrative expenses and $865,000 decrease in stock-based compensation for the six months ended September 30, 2015 compared to same period in 2014.

Gain on Settlements of Debt

During the six months ended September 30, 2015, we incurred $12,000 gain on settlement of debt. During the six months ended September 30, 2014, we did not incur any gain on settlement of debt.

Net Loss

We incurred a net loss of $85,565 during the six months ended September 30, 2015, compared to a net loss of $1,054,888 for the corresponding period ended September 30, 2014.

Comparison of the three months ended September 30, 2015 and 2014

Revenues

The Company did not generate any revenues during the three months ended September 30, 2015 and 2014.

Cost of Products Sold

The Company did not incur any cost of products sold during the three months ended September 30, 2015 and 2014.

Expenses

We incurred operating expenses in the amount of $44,632 during the three months ended September 30, 2015 compared to $256,427 for the three months ended September 30, 2014. The decrease is due to $82,410 decrease in general and administrative expenses and $127,500 decrease in stock based compensation for the three months ended September 30, 2015 compared to same period in 2014.

Loss on Sale of Assets

During the three ended September 30, 2015 and 2014, we did not incur any loss on sale of assets.

Net Loss

We incurred a net loss of $44,632 during the three months ended September 30, 2015, compared to a net loss of $256,427 for the corresponding period ended September 30, 2014. 

Comparison of the three months ended June 30, 2015 and 2014

Revenues

During the three months ended June 30, 2015, we generated no revenues. During the three months ended June 30, 2014, we generated revenues totaling $117,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Cost of Products Sold

During the three months ended June 30, 2015, we did not incur any cost of products sold. During the three months ended June 30, 2014, we had total cost of products sold of $29,120 from our business operations. The decrease is due to the sale of Morningstar Farm in April 2015.

Expenses

We incurred operating expenses in the amount of $52,933 during the three months ended June 30, 2015 compared to $886,461 for the three months ended June 30, 2014. The decrease is due to $94,605 decrease in general and administrative expenses and $737,500 decrease in stock based compensation for the three months ended June 30, 2015 compared to same period in 2014.

Gain on Settlements of Debt

During the three months ended June 30, 2015, we incurred $12,000 gain on settlement of debt. During the three months ended June 30, 2014, we did not incur any gain on settlement of debt.

Net Loss

We incurred a net loss of $40,933 during the three months ended June 30, 2015, compared to a net loss of $798,461 for the corresponding period ended June 30, 2014. 

Comparison of the year ended March 31, 2015 and 2014

Revenues

During the year ended March 31, 2015, we generated revenues totaling $117,120 from our business operations. During the year ended March 31, 2014, we generated no revenues. The increase is due to products sold from Morningstar Farm during the year ended March 31, 2015.

Cost of Products Sold

During the year ended March 31, 2015, we had total cost of products sold of $29,120 from our business operations. During the year ended March 31, 2014, we did not incur any cost of products sold. The increase is due to cost of products sold from Morningstar Farm during the year ended March 31, 2015.

Expenses

We incurred operating expenses in the amount of $1,521,593 for the year ended March 31, 2015 compared to $904,255 for the year ended March 31, 2014. This is due to $465,000 increase in stock-based compensation during the year ended March 31, 2015.

Gain on Settlements of Debt

During the year ended March 31, 2015, we incurred $21,132 gain on settlement of debt. During the year ended March 31, 2014, we did not incur any gain on settlement of debt.

Net Loss

We incurred a net loss of $1,412,461 during the year ended March 31, 2015, compared to a net loss of $904,255 for the corresponding year ended March 31, 2014.

Comparison of the nine months ended December 31, 2014 and 2013

Revenues

During the nine months ended December 31, 2014, we generated revenues totaling $117,120 from our business operations. During the nine months ended December 31, 2013, we generated no revenues. The increase is due to products sold from Morningstar Farm during the nine months ended December 31, 2014.

Cost of Products Sold

During the nine months ended December 31, 2014, we had total cost of products sold of $29,120 from our business operations. During the nine months ended December 31, 2013, we did not incur any cost of products sold. The increase is due to the cost of products sold from Morningstar Farm during the nine months ended December 31, 2014.

Expenses

We incurred operating expenses in the amount of $1,260,933 during the nine months ended December 31, 2014 compared to $675,127 for the nine months ended December 31, 2013. This is primarily due to $340,000 increase in stock-based compensation for the nine months ended December 31, 2014 compared to same period in 2013.

Gain on Settlements of Debt

During the nine months ended December 31, 2014, we incurred $21,132 gain on settlement of debt. During the nine months ended December 31, 2013, we did not incur any gain on settlement of debt.

Net Loss

We incurred a net loss of $1,151,801 during the nine months ended December 31, 2014, compared to a net loss of $675,127 for the corresponding period ended December 31, 2013. 

Comparison of the three months ended December 31, 2014 and 2013

Revenues

The Company did not generate any revenues during the three months ended December 31, 2014 and 2013.

Cost of Products Sold

The Company did not incur any cost of products sold during the three months ended December 31, 2014 and 2013.

Expenses

We incurred operating expenses in the amount of $118,045 during the three months ended December 31, 2014 compared to $219,804 for the three months ended December 31, 2013. The decrease is due to $41,143 decrease in general and administrative expenses for the three months ended December 31, 2014 compared to same period in 2013.

Gain on Settlements of Debt

During the three months ended December 31, 2014, we incurred total of $21,132 gain on settlement of debt. During the three months ended December 31, 2013, we did not incur any gain on settlement of debt.

Net Loss

We incurred a net loss of $96,913 during the three months ended December 31, 2014, compared to a net loss of $219,804 for the corresponding period ended December 31, 2013. 

Comparison of the six months ended September, 2014 and 2013

Revenues

During the six months ended September 30, 2014, we generated revenues totaling $117,120 from our business operations. During the six months ended September 30, 2013, we generated no revenues. The increase is due to the products sold from Morningstar Farm during the nine months ended September 30, 2014.

Cost of Products Sold

During the six months ended September 30, 2014, we had total cost of products sold of $29,120 from our business operations. During the six months ended September 30, 2013, we did not incur any cost of products sold. The increase is due to the cost of products sold from Morningstar Farm during the nine months ended September 30, 2014.

Expenses

We incurred operating expenses in the amount of $1,142,888 during the six months ended September 30, 2014 compared to $455,322 for the six months ended September 30, 2013. The increase is due to $93,797 increase in general and administrative expenses and $465,000 increase in stock-based compensation for the six months ended September 30, 2014 compared to same period in 2013.

Gain on Settlements of Debt

During the six months ended September 30, 2014 and 2013, we did not incur any gain on settlement of debt.

Net Loss

We incurred a net loss of $1,054,888 during the six months ended September 30, 2014, compared to a net loss of $455,322 for the corresponding period ended September 30, 2013. 

Comparison of the three months ended September 30, 2014 and 2013

Revenues

The Company did not generate any revenues during the three months ended September 30, 2014 and 2013.

Cost of Products Sold

The Company did not incur any cost of products sold during the three months ended September 30, 2014 and 2013.

Expenses

We incurred operating expenses in the amount of $256,427 during the three months ended September 30, 2014 compared to $404,207 for the three months ended September 30, 2013. The decrease is due to $285,000 decrease in stock based compensation for the three months ended September 30, 2014 compared to same period in 2013.

Net Loss

We incurred a net loss of $256,427 during the three months ended September 30, 2014, compared to a net loss of $404,207 for the corresponding period ended September 30, 2013. 

Liquidity and Capital Resources

Since its inception, the Company has financed its cash requirements from the sale of common stock and advances from related party. Uses of funds have included activities to establish our business, professional fees and other general and administrative expenses.

We believe the Company will need additional resources to implement its strategic objectives in upcoming quarters. Due to our lack of operating history, however, our auditors have stated their opinion that there currently exists substantial doubt about our ability to continue as a going concern. As of September 30, December 31, 2014 and March 31, 2015, the Company has an accumulated deficit of $2,050,261, $2,147,174 and $2,407,834. As of June 30, September 30, December 31 2015 and March 31, 2016, the Company has an accumulated deficit of $2,448,767, $2,493,399, $2,537,057 and $2,569,399. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

The ability of the Company to continue as a going concern is dependent upon, among other things, obtaining additional financing to continue operations. In response to this and other potential problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Material Events and Uncertainties

Our operating results are difficult to forecast. Our prospects should be evaluated in light of the risks, expenses and difficulties commonly encountered by comparable exploration stage companies.

There can be no assurance that we will successfully address such risks, expenses and difficulties.

Off-balance sheet arrangements

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 8. Financial Statements and Supplementary Data.

 Patriot Berry Farms, Inc.

Index to the Financial Statements

March 31, 2016, 2015, and 2014

LBB & ASSOCIATES LTD., LLP

10260 Westheimer Road, Suite 310

Houston, TX 77042

Phone: (713) 800-4343 Fax: (713) 456-2408

Report of Independent Registered Public Accounting Firm

To the Board of Directors of

Patriot Berry Farms, Inc.

Orlando, Florida

We have audited the accompanying balance sheets of Patriot Berry Farms, Inc. (the “Company”) as of March 31, 2016, 2015 and 2014, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended 2016, 2015, and 2014. Patriot Berry Farms, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Patriot Berry Farms, Inc. as of March 31, 2016, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2016, 2015, and 2014, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 3 to the financial statements, the Company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2017 raise substantial doubt about its ability to continue as a going concern. The 2016 financial statements do not include any adjustments that might result from the outcome of this uncertainty.

LBB & Associates Ltd., LLP

Houston, Texas

Patriot Berry Farms, Inc.

Balance Sheets

See accompanying notes to the financial statements.

Patriot Berry Farms, Inc.

Statements of Operations

See accompanying notes to the financial statements.

Patriot Berry Farms, Inc.

Statement of Stockholders’ Equity (Deficit)

See accompanying notes to the financial statements

Patriot Berry Farms, Inc.

Statements of Cash Flows

See accompanying notes to the financial statements.

Patriot Berry Farms, Inc.

Notes to the Financial Statements

NOTE 1 - ORGANIZATION

Patriot Berry Farms, Inc. (“Patriot” or the “Company”) was incorporated in the State of Nevada on December 15, 2010 under the name of Gaia Remedies, Inc. Patriot is in the business of acquiring and establishing profitable berry farms throughout the United States.

On July 1, 2014, the Board of Directors and majority shareholders of the Company approved an amendment to the Articles of Incorporation of the Company to change its name from Patriot Berry Farms, Inc. to Patriot Cannabis Farms, Inc. As of the date of this quarterly report, the name change has not been effected.

In April 2015, the Company sold the blueberry farm and currently has minimal operations.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with original maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $0, $0 and $451 in cash as of March 31, 2016, 2015 and 2014, respectively.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation. Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations. Depreciation is computed by applying the straight-line method over the estimated useful lives which are generally seven years.

LONG-LIVED ASSETS

We review our long-lived assets for recoverability whenever events or changes in circumstances indicate that the carrying amount of such long-lived asset or group of long-lived assets (collectively referred to as "the asset") may not be recoverable. Such circumstances include, but are not limited to:

We continually evaluate whether such events and circumstances have occurred. When such events or circumstances exist, the recoverability of the asset's carrying value shall be determined by estimating the undiscounted future cash flows (cash inflows less associated cash outflows) that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the asset. To date, no such impairment has occurred. To the extent such events or circumstances occur that could affect the recoverability of our long-lived assets, we may incur charges for impairment in the future.

INCOME TAXES

The Company accounts for income taxes under FASB ASC 740 "Income Taxes." Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

REVENUE RECOGNITION

The Company derives revenue from the sale of agricultural products. In accordance with ASC 605, Revenue Recognition, revenue and related costs of products sold are recognized when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. These terms are typically met upon shipment of the product to the customer.

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 "Equity - Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.

NET INCOME OR (LOSS) PER SHARE OF COMMON STOCK

The Company has adopted ASC 260 “Earnings per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2016 and 2015, the Company has an accumulated deficit of $2,269,399 and $1,998,068. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

The ability of the Company to continue its operations is dependent upon, among other things, obtaining additional financing. In response to this and other potential problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 - PROPERTY AND EQUIPMENT

In November 2013, the Company acquired an operational blueberry farm in Levy County, Florida, including equipment (“Harmon Blueberry Farm”). In accordance with the terms of the contract the total purchase price was $402,765. The Company paid $122,765 in cash and issued a note for $280,000 (the “Note”).

The Note is non-interest bearing and requires payments of principal in the amount of $20,000 in fourteen (14) equal monthly installments until paid in full. During the year ended March 31, 2015 the Company was unable to make its monthly installments, resulting in a note payable balance of $ $200,000 and $12,000 of accrued penalties as of March 31, 2015.

In April 2015, the Company sold the blueberry farm including equipment at a selling price of $235,000 to the original seller. The Company and the Buyer entered into a mortgage note for $25,000 of the total $235,000 which shall be paid by the buyer before or on July 15, 2015 instead of upon closing of the sale. The net proceeds received upon sale of the farm is $4,970, after repaying $200,000 notes payable balance and $5,030 transaction fees incurred. Accordingly, as of March 31, 2016, the outstanding balance of the Note Payable is $0 and the accrued penalty fees of $12,000 were forgiven. During the year ended March 31, 2015, $159,766 impairment loss was recognized.

Property and equipment consists of the following:

During the year ended March 31, 2016, 2015 and 2014, the Company recorded depreciation expenses of $461, $7,538 and $0.

NOTE 5 - NOTE RECEIVABLE

In April 2015, the Company sold the blueberry farm including equipment at a selling price of $235,000. The Company and the Buyer entered into a mortgage note that $25,000 of the total $235,000 shall be paid by the buyer to the Company before or on July 15, 2015 instead of upon closing of the farm sale. The note receivable is non-interest bearing and may be prepaid in whole or in part at any time without penalty. As of March 31, 2016, $25,000 was received and receivable balance is $0.

NOTE 6 - REVENUES

Exclusive Blueberry Sales Agreement

On April 4, 2014, the Company, through Douglas Harmon (the “Grower”), who is the Company’s Farm Manager (the “Farm”), entered into an exclusive sales agreement (the “Agreement”) with Dole Berry Company (“Dole”). Pursuant to the Agreement, Dole will be acting as the exclusive sales agent of the Company to market and sell all of the blueberries produced from the Farm for a period of five (5) harvest years beginning January 1, 2014 until December 31, 2018 unless terminated earlier. The Company shall receive advances equal to $1.00 per pound of finished product weight each week minus receiving and handling charges, as well as 10% commission to be paid to Dole. The Company will pay to the Grower a commission equal to 2% of the revenues from the sales of finished products.

The Company had sales of $0, $117,120 and $0 for the year ended March 31, 2016, 2015 and 2014, respectively. Sales in connection with the Agreement represented 88% of sales during the year ended March 31, 2015.

NOTE 7 - RELATED PARTY ADVANCES

During the year ended March 31, 2014 the Company’s former President advanced $90,916 to fund certain operating expenses. In September 2013, the Company’s board of directors voted to convert $95,949 of the then-existing related party advances balance into shares of its common stock at $0.40 per share, for a total of 239,871 shares of common stock. The remaining balance of $15,697 owed to the former President was forgiven and recorded in additional paid in capital as contributed capital.

During the year ended March 31, 2015, the Company’s President advanced $10,000 to pay the settlement of the outstanding balance of consulting agreement on behalf of the Company. These advances were non-interest bearing, due upon demand and unsecured.

As of March 31, 2016, 2015 and 2014, the balance of related party advances is $10,000, $10,000 and $0.

NOTE 8 - RELATED PARTY TRANSACTIONS

In May 2013, the Company entered into a formal employment agreement with its former President. Pursuant to the terms of the agreement, the Company’s former President was appointed to act in its capacity for an initial period of three years, and at an annual salary of $120,000.

On March 21, 2014, the Company entered into a formal employment agreement with its newly appointed President, whereby the Company agreed to remit an annual salary of $120,000, payable monthly, for services rendered. On June 23, 2014, the Company amended the Cattlin Employment agreement (the “Cattlin Addendum”), pursuant to which the Company agreed to issue Daniel Cattlin, the sole officer and director of the Company, 1,500,000 shares of Common Stock upon execution of the addendum, and 500,000 shares of Common Stock upon each one year anniversary of the addendum's effective date.

Furthermore, the Company entered into a consulting agreement with its former President, whereby the Company agreed to remit $3,000 per month for services rendered on its behalf. In July 2014, the consulting agreement was terminated and the payable balance of $125,000 in stock based compensation was forgiven and recorded in additional paid in capital as contributed capital.

During the year ended March 31, 2016, 2015 and 2014, the Company incurred total of $0, $1,935 and $113,955 in salaries and $0, $0, $500,000 in stock based compensation to its former President.

During the year ended March 31, 2016, 2015 and 2014, the Company incurred total of $120,000, $120,000 and $3,548 in salaries and $0, $750,000 and $0 in stock based compensation to its current President.

As of March 31, 2016, 2015 and 2014, the balance in accounts payable- related party is $193,579, $103,548 and $129,613.

NOTE 9 - STOCKHOLDERS’ EQUITY

In March 2014, the Company issued 40,000 shares of its common stock, par value $0.001 per share, for $20,000 in cash.

In May 2014, the Company issued 120,000 shares of its common stock, par value $0.001 per share, for $60,000 in cash.

In June 2014, the Company issued 1,500,000 shares of its common stock to its current President, par value $0.001 per share, for the service rendered. These shares have been valued at $0.50 per share and $750,000 has been expensed as stock based compensation for the year ended March 31, 2015.

In August 2014, the Company issued 50,000 shares of its common stock to its consultant, par value $0.001 per share, for the service rendered per consulting agreement. These shares have been valued at $0.30 per share and $15,000 has been expensed as stock based compensation for the year ended March 31, 2015.

As of March 31, 2016, 2015 and 2014, 73,399,871, 73,399,871 and 71,729,871 shares of common stock were issued and outstanding, respectively.

NOTE 10 - COMMITMENTS

In May 2013, the Company entered into an investment agreement with a third-party (the “Investor”) whereby the Investor agreed to invest up to $8,500,000 in exchange for the Company’s common stock. The Investor’s investment in common stock of the Company is to be made in multiple closings between May 2013 and May 2015 pursuant to the agreement. On July 24, 2013, the Investor cancelled its investment agreement.

In August 2013, the Company hired a Director of Farming and entered into an agreement, wherein the Company will pay a fee of $5,000 per month to the director for a period of 24 months in exchange for assistance in identifying, underwriting, and negotiating the terms of potential farm acquisitions on the Company’s behalf. Further, the director will assist the Company in the development of its operations and distribution, amongst other responsibilities. Upon the expiration of the initial 24 months of the agreement, the Company will ascertain if an increase in the monthly fee is warranted. In November 2014, the agreement was terminated and settled with $10,000 payment in full satisfaction to the outstanding balance of $24,000.

In December 2013, the Company entered into an agreement with a third-party for a period of six (6) months, wherein the Company will pay a fee of $2,000 per month in exchange for advisory services, including providing information and suggestions for improvement of production systems of berry crops, particularly blueberry, and on farms or properties being considered for purchase by the Company. Accordingly, during the year ended March 31, 2014, the Company had incurred $8,000 pursuant to the terms of the agreement, which amount is included in selling, general and administrative expense. In November 2014, the agreement was terminated and $8,000 payable is still outstanding as of March 31, 2016 and 2015.

During the year ended March 31, 2016, 2015 and 2014, the Company incurred $0, $49,000 and $63,000 in advisory fees, which amount were included in selling, general and administrative expense and $0, $15,000 and $50,000 in stock based compensation, which amount were included in stock based compensation, respectively.

In April 2015, the Company and its note payable holder forgave $12,000 in accrued penalty expenses in connection with the sale of the blueberry farm to him. 

In December 2014, the Company and two vendors reached a settlement on certain outstanding accounts payable. The vendor forgave total of $21,132 related to previous services provided.

During the years ended March 31, 2016 and 2015, the Company recorded a gain on settlement of accounts payable of $12,000 and $21,132, respectively.

NOTE 12 – INCOME TAXES

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended March 31, 2016, 2015 and 2014, respectively, under ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet.

The Company is subject to United States income taxes at a rate of 34%. Operating loss carry forwards totaled $2,269,000, $1,998,000 and $995,374 as of March 31, 2016, 2015 and 2014, respectively, and will begin to expire in 2033. Accordingly deferred Federal and State tax assets of approximately $92,300, $80,900 and $120,500, respectively, were offset by a valuation allowance.

NOTE 13 - SUBSEQUENT EVENTS

On July 25, 2016, the Company issued 1,000,000 shares of its common stock to its current President, par value $0,001 per share, in connection with his employment agreement. These shares have been valued at $0.50 and $0.10 per share and were accrued as stock based compensation over the service periods. 

On July 29, 2016, the Company issued 100,000 shares of Company’s common stock to its current President, in consideration to reimburse $10,000 settlement payment that was advanced by its current President on behalf of the Company in December 2014.

On July 7, 2016, the current President advanced $29,000 to pay certain accounts payable on behalf of the Company. On July 29, 2016, the Company issued 290,000 shares of Company’s common stock to its current President to reimburse $29,000 paid on behalf of the Company.

Patriot Berry Farms, Inc.

Index to the Financial Statements

Patriot Berry Farms, Inc.

Balance Sheets

(Unaudited)

See accompanying notes to the financial statements.

Patriot Berry Farms, Inc.

Statements of Operations

(Unaudited)

See accompanying notes to the financial statements

Patriot Berry Farms, Inc.

Statements of Cash Flows

(Unaudited)

See accompanying notes to the financial statements.

Patriot Berry Farms, Inc.

Balance Sheets

(Unaudited)