Evergreen Sustainable Enterprises, Inc. - Quarter Report: 2018 June (Form 10-Q)

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Condensed Consolidated Balance Sheets

 

		June 30,				December 31,
		2018				2017
		(unaudited)
Assets
Current Assets:
Cash		$	40,177			$	49,437
Rent receivable			500				4,176
Prepaid expenses			2,058				-
Total current assets			42,735				53,613
Property and equipment, net			786,564				797,557
Other assets:
Security deposits			3,222				1,400
Total assets		$	832,521			$	852,570
Liabilities and Shareholders' Deficit
Liabilities:
Accounts payable		$	10,285			$	21,017
Accrued wages			71,212				43,612
Accrued liabilities			60,222				61,788
Accrued interest – related party			1,224				4,505
Note payable, current portion			5,363				11,090
Related party note payable			620				9,397
Total current liabilities			148,926				151,409
Long term debt, net of current portion			789,774				789,774
Total liabilities			938,700				941,183
Commitments and Contingencies
Shareholders' deficit:
Common stock, no par value; 100,000,000 shares authorized,
13,205,450 and 13,205,450 shares issued and outstanding, respectively			215,267				215,267
Additional paid in capital			96,476				96,476
Accumulated deficit			(417,922	)			(400,356	)
Total shareholder's deficit			(106,179	)			(88,613	)
Total liabilities and shareholders' deficit		$	832,521			$	852,570

 

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 Condensed Consolidated Statements of Operations

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Condensed Consolidated Statements of Cash Flows

See accompanying notes to unaudited consolidated financial statements.

 

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Note 1:  Basis of Presentation

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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Note 5:  Long-Term Debt

On September 15, 2014, the Company entered into a promissory note for $840,000 on the purchase of three warehouse units known as 4420, 4430 and 4440 Garfield Street, Denver, Colorado. The Company is leasing each of the three separate units to licensed third party growers for cannabis cultivation.  The terms of the variable interest 25 year amortization note carried by the seller of the property call for payments to seller as follows:

1.	First and Second year interest rate at 7% with 25 year amortization payment at $5,937 per month.

3.	Fifth year at 9% with 25 year amortization payment at $6,640 per month.

4.	Balloon payment of $777,255 due at end of the fifth year.

The note to seller is secured by the three warehouse units.

As of June 30, 2018, the balance of the note was $795,137 and the annual maturities of the long-term debt were:

 

Note 6:  Subsequent Events

 

The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no events that require disclosure as of the date of issuance.

 

 

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The following discussion should be read in conjunction with the financial statements of Home Treasure Finders, Inc. and Subsidiaries (the "Company"), which are included elsewhere in this Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking information. Forward-looking information includes statements relating to future actions, future performance, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other such matters of the Company. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. Forward-looking information may be included in this Quarterly Report on Form 10-Q or may be incorporated by reference from other documents filed with the Securities and Exchange Commission (the "SEC") by the Company. You can find many of these statements by looking for words including, for example, "believes", "expects", "anticipates", "estimates" or similar expressions in this Quarterly Report on Form 10-Q or in documents incorporated by reference in this Quarterly Report on Form 10-Q. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.

We have based the forward-looking statements relating to our operations on our management's current expectations, estimates and projections about our Company and the industry in which we operate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In particular, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual results may differ materially from those contemplated by these forward-looking statements. Any differences could result from a variety of factors, including, but not limited to general economic and business conditions, competition, and other factors.

Financial Condition and Results of Operation

Home Treasure Finders, Inc. was formed on July 28, 2008. The founder, sole director and officer of our company is Corey Wiegand. On March 3, 2014 we formed a wholly owned subsidiary, HMTF Cannabis Holdings, Inc. to purchase properties that qualify for legal cultivation of cannabis. 

Our net loss for the six months ended June 30, 2018 was $17,566.  We generated operating revenue from three sources, sales commissions, property management, and commercial real estate for legal cannabis cultivation. We manage approximately 115 rental real estate owned by non-related third parties. In comparison our net loss for the six months ended June 30, 2017 was $13,351.

For the six months ended June 30, 2018 the Company generated a total of $271,125 in revenues, consisting of $128,042 from sales commissions and $143,083 from rental and property management.  During the six months ended June 30, 2017 we generated a total of $197,210 in revenues, consisting of $70,299 from sales commissions and $126,911 from rental and property management.  Commission income increased over prior year due to additional agents joining the Company.  The increase in rental and property management is the result of an increase in the number of rentals we manage.

During the six months ending June 30, 2018 we incurred operating expenses totaling $256,667. Such expenses consisted primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  During the six months ended June 30, 2017 we incurred a total of $191,996 of operating expenses consisting primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  The increase in expenses over prior year was primarily related to an increase in commission expense as a result of the increase in sales commission.  Also, property management expenses increased with the increase in the number of rental units we manage.

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Our net loss for the three months ended June 30, 2018 and 2017 was $6,202 and $17,055, respectively.  For the three months ended June 30, 2018 the Company generated a total of $152,214 in revenues, consisting of $80,038 from sales commissions and $72,176 from rental and property management.  During the three months ended June 30, 2017 we generated a total of $86,894 in revenues, consisting of $20,822 from sales commissions and $66,072 from rental and property management

During the three months ending June 30, 2018 we incurred operating expenses totaling $142,469. Such expenses consisted primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  During the three months ended June 30, 2017 we incurred a total of $101,969 of operating expenses consisting primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  The increase in expenses over prior year was primarily related to increase in commission expense as a result of the increase in sales commission and increase in property management expense.

Liquidity and Capital Resources

At June 30, 2018, we had $40,177 in cash and working capital deficit of $106,191.  At December 31, 2017 we had $49,437 in cash and a working capital deficit of $97,796.

The business plan of our subsidiary, HMTF Cannabis Holdings, Inc. is capital intensive and requires that we raise significant additional capital to acquire and improve real estate. We are negotiating with various sources for an equity infusion to match our long term capital needs.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

No response required.

Item 4.  Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our Chief Executive Officer has reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) within the end of the period covered by this Quarterly Report on Form 10-Q and has concluded that the disclosure controls and procedures are ineffective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no changes in our internal controls or in other factors that could materially affect these controls subsequent to the last day they were evaluated by our Chief Executive Officer, who is our principal executive officer and our principal financial officer.

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

 

 

Item 1A.  Risk Factors

 

No response required.

 

No response required..

 

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