Healthier Choices Management Corp. - Quarter Report: 2009 May (Form 10-Q)

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

For the Quarter ended:  May 31, 2009

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

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 Exchange Act):  Yes [X] No [  ]

As of August 26, 2009, there were outstanding 6,404,640 shares of the registrant’s common stock, $.001 par value per share.

MILLER DIVERSIFIED CORPORATION
Notes to Condensed Financial Statements
(Unaudited)

Note 1: Basis of presentation

The condensed financial statements presented herein have been prepared by the Company in accordance with the accounting policies in its Form 10-KSB with financial statements dated August 31, 2008, and should be read in conjunction with the notes thereto.

In the opinion of management, the accompanying condensed financial statements contain all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim periods presented. Certain information and footnote disclosures, normally included in the financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted. The results of operations presented for the three and nine months ended May 31, 2009 are not necessarily indicative of the results to be expected for the year.

Financial data presented herein are unaudited.

Note 2: Related Party Transactions

Note Payable and Other Indebtedness to Related Party

During the nine months ended May 31, 2009, Miller Feed Lots, Inc ("MFL"), our affiliate, paid $26,730 of expenses on behalf of the Company. The affiliate also provided administrative services during the nine months ended May 31, 2009, valued at $12,500 based on our Board of Directors estimate on time and effort. At May 31, 2009, we were indebted to our affiliate in the amount of $655,393, which was included as indebtedness to related party in the accompanying unaudited, condensed financial statements.

In fiscal year 2004, we borrowed $262,000 from MFL pursuant to two promissory notes for working capital purposes. The notes are due on demand with interest rates at 7.5 percent. During the nine months ended May 31, 2009 and 2008, we incurred $11,427 and $14,738 in interest expense, respectively. At May 31, 2009, interest payable to our affiliate totaled $105,071.

On April 30, 2009, the Company and MFL entered into a Debt Cancellation and Liability Release Agreement (the "Agreement") whereby the Company purchased all of the above obligations (totaling $1,022,464) from MFL for $200. Because the transaction occurred between related parties, the $1,022,264 gain resulting from the extinguishment of the liabilities has been recognized as additional paid-in capital in the accompanying unaudited, condensed financial statements.

Contributed Rent

MFL contributed the use of facilities to the Company through April 30, 2009. The fair value of the facilities was estimated in good faith by management at $100 per month and is included in the accompanying financial statements as contributed rent expense with a corresponding credit to additional paid-in capital.

MILLER DIVERSIFIED CORPORATION
Notes to Condensed Financial Statements
(Unaudited)

Note 3: Income Taxes

The Company records its income taxes in accordance with Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes". The Company incurred net operating losses during the periods shown on the condensed financial statements resulting in a deferred tax asset, which was fully allowed for, therefore the net benefit and expense result in $-0- income taxes.

Note 4: Material Definitive Agreement

On April 24, 2009, the Company entered into a Material Definitive Agreement with Belmont Partners, LLC ("Belmont") by which Belmont acquired 3,341,994 shares of the Company's common stock. The transaction, which closed on  May 7, 2009,  resulted in a change in control whereby Belmont controls approximately 52% of the Company's outstanding common stock.

On April 24, 2009, Joseph Meuse was appointed to the Board of Directors, and as president and secretary of the Company. Effective May 7, 2009, Norman Dean, James Miller, and Clark Miller resigned from their positions as directors and/or officers of the Company.

Note 5: Subsequent Events

On June 9, 2009, Vapeco Holdings, Inc. ("Vapeco"), a Florida corporation, entered into a stock purchase agreement with Belmont by which Vapeco acquired 3,341,994 shares of the Company's common stock. The transaction resulted in a change in control whereby Vapeco controls approximately 52% of the Company's outstanding common stock.

On June 9, 2009, Kevin Frija was appointed to the Board of Directors, and as president and secretary of the Company. Effective June 9, 2009, Joseph Meuse resigned as a director and officer of the Company.

On July 15, 2009, the Company entered into a binding Letter of Intent with Smoke Anywhere USA, Inc. ("Smoke"), a Florida corporation. Pursuant to the Letter of Intent, Smoke and the Company will commence the negotiation and preparation of a definitive share purchase agreement whereby the Company will receive 100% of the issued and outstanding shares of Smoke in exchange for common stock of the Company representing approximately 83% of the outstanding shares of common stock on a fully diluted basis on or before September 1, 2009. Pursuant to the Letter of Intent, Smoke will become a wholly-owned subsidiary of the Company.

Smoke Anywhere USA, Inc. was founded in 2008 and is a marketer and distributor of personal vaporizers. Smoke′s brands include Fifty-One®, Krave®, EZsmoker® and GreenPuffer®. Smoke currently sells its personal vaporizers internationally and domestically through distributors, wholesalers and direct to consumers through its website.
 

The Company is subject to certain market risks, including changes in interest rates. The Company does not undertake any specific actions to limit those exposures.

Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report (the "Evaluation Date"), have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and (ii) is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item

None.

Not applicable.

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