INTEGRATED VENTURES, INC. - Quarter Report: 2017 December (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

¨ TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 333-174759

73 Buck Road, Suite 2, Huntingdon Valley, PA 19006

(Address of principal executive offices) (Zip Code)

(215) 613-1111

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required 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 o

 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 x No o

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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 o

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

The number of shares outstanding of the issuer’s common stock, $0.001 par value per share, was 8,501,203 as of February 14, 2018. 

INTEGRATED VENTURES, INC.

(FORMERLY EMS FIND, INC.)

FORM 10-Q

DECEMBER 31, 2017

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

TABLE OF CONTENTS

See notes to condensed financial statements

See notes to condensed financial statements

See notes to condensed financial statements

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

EMS Find, Inc. (“EMSF,” “the "Company," "we," "our," or "us") was incorporated in the State of Nevada on March 22, 2011, under the name of Lightcollar, Inc. On March 20, 2015, the Company amended its articles of incorporation and changed its name from Lightcollar, Inc. to EMS Find, Inc. On May 30, 2017, Integrated Ventures, Inc. (“INTV,” a Nevada corporation, was formed as a wholly owned subsidiary of EMSF. Pursuant to an Agreement and Plan of Merger dated May 30, 2017, INTV was merged into EMSF, with the Company being the surviving corporation and changing its name to Integrated Ventures, Inc. Our corporate office is located in Bucks County, Pennsylvania.

The Company has discontinued its prior operations and changed its business focus, from its prior technologies relating to the EMS Find platform to acquiring, launching and operating companies in the cryptocurrency sector, mainly in digital currency mining, equipment manufacturing, and sales of branded mining rigs, as well as blockchain software development.

The Company is in the process of developing and acquiring a diverse portfolio of digital currency assets and block chain technologies, and recently completed the installation, setup and deployment of crypto-currency mining equipment in its first location in Pennsylvania. Crypto-currency mining revenues commenced in November 2017. Crypto-currencies are a medium of exchange that uses decentralized control (a block chain) as opposed to a central bank to track and validate transactions. The Company, through its wholly owned subsidiary, BitcoLab, Inc., is currently mining Bitcoin, Litecoin and Ethereum, whereby the Company earns revenue by solving “blocks” to be added to the block chain. The installation and setup of crypto-currency mining equipment is nearing completion in the Company’s second location in Pennsylvania.

On August 21, 2017, the Board of Directors of the Company approved a 1-for-50 reverse split of the Company’s common shares, which through approval of FINRA was effective September 21, 2017. The reverse split has been given retroactive effect in the condensed financial statements for all periods presented.

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations for the interim periods ended December 31, 2017 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2018. In the opinion of the Company's management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company's results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company's Annual Report on Form 10-K for the year ended June 30, 2017 filed on September 14, 2017 and Management's Discussion and Analysis of Financial Condition and Results of Operations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of the Company are disclosed in Notes to Financial Statements included in the Company’s Annual Report on Form 10-K. The following summary of significant accounting policies of the Company is presented to assist in understanding the Company’s interim financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

Digital Currencies

Digital currencies, generally received as compensation for crypto-currency mining services, are stated a fair value based on quoted market prices. The digital currencies are revalued at every reporting period with changes in the fair value during the period recorded as unrealized gains or losses in other income (expense) in the statements of operations. Realized gains on the sale of digital currencies are included in other income (expense) in the statements of operations.

Inventories

Inventories at December 31, 2017 consist of crypto-currency mining units held for sale and are stated at the lower of cost or estimated realizable value.

Marketable Securities

Marketable securities included in current assets in the balance sheet, are classified as trading securities, and reported at fair value based on quoted market prices. Changes in the fair value of the investments during the period are recorded as unrealized gains or losses in other income (expense) in the statements of operations. Realized gains on the sale of marketable securities are included in other income (expense) in the statements of operations.

Property and Equipment

Property and equipment, consisting primarily of computer and other crypto-currency mining equipment, is stated at cost and is depreciated when placed into service using the straight-line method over a five-year estimated service life. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal.

Accounting for Derivatives

The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

We estimate the fair value of the derivatives associated with our convertible notes payable and warrants using the Black-Scholes pricing model and multinomial lattice models that value the derivative liability based on a probability weighted discounted cash flow model using future projections of the various potential outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, and, in the case of our convertible notes payable, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Stock-Based Compensation

The Company accounts for all equity based payments in accordance with ASC Topic 718, “Compensation – Stock Compensation.” ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock awards, stock options, warrants and other equity based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The fair value of a stock award is recorded at the fair market value of a share of the Company’s stock on the grant date. The Company estimates the fair value of stock options and warrants at the grant date by using an appropriate fair value model such as the Black-Scholes option pricing model or multinomial lattice models.

Revenue Recognition

Revenue is recognized when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales terms are fixed or determinable, (iii) title and risk of loss have transferred, and (iv) collectability is reasonably assured — generally when products are shipped to the customer and services are rendered. Our revenues currently consist of crypto currency mining revenues and revenues from the sale of crypto-currency mining equipment.

The Company earns its crypto-currency mining revenues by providing transaction verification services within the digital currency networks of crypto-currencies, such as Bitcoin, Litecoin and Ethereum. In consideration for these services, the Company receives digital currency Coins. The Coins are recorded as revenue, using the spot price of the currencies on the date of receipt. Expenses associated with running the crypto-currency mining operations, such as equipment depreciation, rent, operating supplies, rent, utilities and monitoring services are recorded as cost of revenues.

Income (Loss) Per Share

Basic net income or loss per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted income or loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as “in-the-money” stock options and warrants, convertible debt and convertible preferred stock, were exercised or converted into common stock. Equivalent shares are not utilized when the effect is anti-dilutive.

As of December 31, 2017, common stock equivalent shares which may dilute future earnings per share include 112,558 common shares issuable upon conversion of convertible notes payable, 1,200 common shares issuable upon exercise of warrants, and 23,250,000 common shares issuable upon conversion of Series B Preferred Stock. For all periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share; therefore, basic net loss per share is the same as diluted net loss per share.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2017 and June 30, 2017, the amounts reported for cash, accounts receivable and prepaid expenses and other current assets, accounts payable, accrued expenses, note payable and due to related party approximate fair value because of their short maturities.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Our digital currencies and marketable securities are measured at fair value on a recurring basis and estimated as follows:

Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows:

During the six months ended December 31, 2017, the Company had the following activity in its derivative liabilities:

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

Recently Issued Accounting Pronouncements

In July 2017, the FASB issued Accounting Standards Update ("ASU") 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception." Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, "Distinguishing Liabilities from Equity," because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently unable to determine the impact on its consolidated financial statements of the adoption of this new accounting pronouncement.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

Reclassifications

Certain amounts in the condensed financial statements for the prior-year periods have been reclassified to conform to the presentation for the current-year periods.

3. GOING CONCERN

The Company has reported recurring net losses, had a working capital deficiency as of December 31, 2017 of $13,109, and used net cash in operations of $263,727 in the six months ended December 31, 2017. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to reach a successful level of operations is dependent on the execution of management's plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.

There can be no assurances that the Company will be successful in attaining a profitable level of operations or in generating additional cash from the equity/debt markets or other sources fund its operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Should the Company not be successful in its business plan or in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

4. NOTE RECEIVABLE AND MARKETABLE SECURITIES

On April 6, 2016, the Company completed the sale of its subsidiary, Viva Entertainment, to Black River Petroleum Corp., a Nevada publicly-traded company (“Black River”), at a closing where, in exchange for all sale of all of the outstanding shares of Viva Entertainment, Black River issued to the Company its 10% (15% default rate) promissory note in the principal amount of $100,000, due December 31, 2016 (the “Viva Note”). The Company gave no effect to the Viva Note in its financial statements, pending collection of the note and completion of the transaction. We discontinued consolidation of the accounts of Viva Entertainment effective April 6, 2016.

On February 27, 2017, the Viva Note was in default and no repayments to the Company had been made. On that date, the parties entered into an addendum to the Viva Note, establishing the principal amount at $100,000 and accrued interest at $6,000. Terms of the Viva Note were also amended to allow the Company to convert the unpaid principal and interest into common shares of Viva Entertainment using a Variable Conversion Price equal to 50% of the lowest one day Trading Price for the Viva Entertainment common stock during the twenty Trading Day period ending on the last complete Trading Day prior to the Conversion Date. Effective February 27, 2017, the Company recognized a gain of $106,000 on the April 6, 2016 sale of its investment in Viva Entertainment and recorded a note receivable of $100,000 and accrued interest receivable of $3,000.

On April 4, 2017, the Company and Global Opportunity Group LLC (“Global”), a lender, entered into a Purchase, Exchange and Escrow Agreement whereby the Company assigned $50,000 principal and $3,000 accrued interest of the Viva Note to Global in extinguishment of a convertible promissory note payable to Global dated March 28, 2017 with a principal balance of $18,150 and accrued interest payable of $35. The Company recognized a gain on extinguishment of debt of $34,815.

These common shares of Viva Entertainment were initially recorded at their cost basis, as determined by the principal balance of the Viva Note and accrued interest converted, and are classified as trading securities in the Company’s financial statements, and subsequently reported at fair value based on quoted market prices. Changes in the fair value of the marketable securities are recorded as unrealized gains or losses in other income (expense) in the statements of operations. Realized gains on the sale of marketable securities are included in other income (expense) in the statements of operations.

Pursuant to multiple conversions during April 2017 through June 2017, the Company converted $33,128 principal of the Viva Note and $2,205 accrued interest payable into a total of 173,809,000 common shares of Viva Entertainment. As of June 30, 2017, the Viva Note had a principal balance of $16,872 and accrued interest of $1,519 outstanding. As of June 30, 2017, the Company held a total of 86,000,000 common shares of Viva Entertainment, recorded at market value of $253,998.

On July 20, 2017, the Company converted $16,850 principal of the Viva Note into a total of 84,250,000 common shares of Viva Entertainment.

During July 2017, the Company sold a total of 170,250,000 common shares of Viva Entertainment, with net proceeds of $551,800, and recorded a realized gain on sale of marketable securities of $281,223 for the three months ended September 30, 2017.

In July and August 2017, the Company advanced a total of $49,880 cash to Viva Entertainment pursuant to a new convertible note receivable dated July 5, 2017 (the “July 2017 Viva Note”). On August 1, 2017, the Company converted the remaining principal balance of the Viva Note of $22, the principal balance of the July 2017 Viva Note of $49,880 and accrued interest receivable of $98, for a total of $50,000, into 55,555,555 common shares of Viva Entertainment.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

On December 31, 2017, the Company and Global entered into a Purchase and Escrow Agreement whereby the Company sold 55,555,555 common shares of Viva to Global for the following consideration:

Derivative liabilities of $78,718 related to the convertible notes payable were also extinguished The Company recognized a realized gain on sale of investments of $82,162 in the transaction.

The accounts receivable of $15,000 was collected in January 2018.

At December 31, 2017, marketable securities consisted of funds held in a brokerage account of $1,760

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 2017:

6. RELATED PARTY TRANSACTIONS

On July 29, 2017, the Board of Directors of the Company established annual compensation for Steve Rubakh of $125,000 per year, effective July 1, 2017. In addition, Steve Rubakh receives shares of Series B Preferred Stock on a quarterly basis. For the three months ended September 30, 2017, the Company authorized the issuance of 30,000 shares of Series B preferred stock, and stock-based compensation valued at $9,000 was recorded. For the three months ended December 31, 2017, the Company authorized the issuance of 40,000 shares of Series B preferred stock, and stock-based compensation valued at $400,000 was recorded.

On August 31, 2017, Steve Rubakh converted accrued compensation of $15,625 into 347,222 common shares of the Company.

As of December 31, 2017 and June 30, 2017, amounts due to related party totaled $993 and $20,216, respectively.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

7. NOTES PAYABLE

Notes payable, all classified as current, consist of the following:

Note Payable

On October 22, 2015, the Company entered into a Securities Purchase Agreement ("Purchase Agreement"), dated as of October 22, 2015, with LG Capital Funding, LLC ("LG"), pursuant to which the Company sold LG a convertible note in the principal amount of $125,000 (the first of four such Convertible Notes each in the principal amount of $125,000 provided for under the Purchase Agreement), bearing interest at the rate of 8% per annum (the "Convertible Note"). Each of the Convertible Notes issuable under the Purchase Agreement provides for a 15% original issue discount ("OID"), such that the purchase price for each Convertible Note is $106,250, and at each closing LG is entitled to be paid $6,000 for legal and other expenses. The Convertible Note provides LG the right to convert the outstanding balance, including accrued and unpaid interest, of such Convertible Note into shares of the Company's common stock at a price ("Conversion Price") for each share of common stock equal to 80% of the lowest trading price of the common stock as reported on the National Quotations Bureau for the OTCQB exchange on which the Company's shares are traded or any exchange upon which the common stock may be traded in the future, for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. The Convertible Note was payable, along with interest thereon, on October 22, 2016 and was in default. The convertible note had an OID of 15%, which was recorded at $18,750 and which has been fully amortized. The Company recorded a debt discount of $44,643, which has also been fully amortized.

On October 14, 2016, the Supreme Court of the State of New York County of Kings, in regards to LG Capital Funding, LLC v. EMS Find, Inc., issued a judgment against EMS Find, Inc. in favor of LG Capital Funding, LLC, in the amount of $135,202, which includes principal and interest (calculated as of September 29, 2016), in regards to the convertible promissory note dated October 22, 2015. The judgment includes an Information Subpoena with Restraining Notice, which addressed the EMS Find, Inc. bank account at TD Bank. As a result of the judgment, the conversion feature of the note was eliminated and therefore, the associated derivative liability was extinguished. As of December 31, 2017, the debt has been recorded as a note payable of $125,000, a current liability in the balance sheet, and $26,301 of interest has been accrued.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

Convertible Notes Payable

On July 25, 2016, the Company entered into an equity purchase agreement with River North Equity, LLC (“River North”) for up to $2,000,000. On July 25, 2016, the Company entered into a convertible promissory note with River North for $33,333. The convertible promissory note had a maturity date of March 29, 2017 and bears interest at 10%. The convertible promissory note provided for an OID of $3,333, a deduction of $4,000 for River North’s legal fees, and a debt discount of $33,333. The conversion price is the lower of 65% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. On February 1, 2017, River North converted $2,036 principal and $1,744 accrued interest into 52,878 common shares of the Company. On April 20, 2017, the Company and River North entered into a Settlement Agreement & Mutual Release with respect to this note, resulting in penalties of $17,955 added to the note principal to bring the principal balance to $49,252 and requiring a principal payment of $30,000, which payment was financed by the issuance of a new convertible promissory to Global. On June 2, 2017, River North converted $14,592 principal into 172,685 common shares of the Company, resulting in a principal balance of $4,660 as of June 30, 2017. As of June 30, 2017, the OID and the debt discount had been fully amortized and there was accrued interest payable of $1,236. The Company recorded a derivative liability of $12,535 as of June 30, 2017. On July 5, 2017, River North converted the remaining principal of $4,660 into 183,068 common shares of the Company and the accrued interest payable balance of $1,236 was written off. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

On October 6, 2016, the Company entered into a convertible promissory note with EMA for $33,000. The note matures on October 6, 2017 and bears interest at 12%. A debt discount of $33,000 was recorded. The conversion price is the lower of 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date or the closing bid price on the original issue date. Pursuant to multiple conversions in May and June 2017, EMA converted principal of $24,084 into 976,000 shares of the Company’s common stock, resulting in a principal balance of $8,916 as of June 30, 2017. As of June 30, 2017, $30,606 of the debt discount had been amortized, and there was accrued interest of $2,677. The Company recorded a derivative liability of $25,368 as of June 30, 2017. On July 5, 2017, July 7, 2017 and July 12, 2017, EMA converted the remaining principal of $8,916, accrued interest payable of $2,715 and penalties totaling $29,908 into a total of 830,776 common shares of the Company. The OID and the debt discount have been fully amortized. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

On December 2, 2016, the Company entered into a convertible promissory note with Global for $18,700. The note matures on December 2, 2017 and bears interest at 12%. The convertible promissory note provided for an OID of $1,700; therefore, the net proceeds to the Company was $17,000. A debt discount of $18,700 was recorded. The conversion price is the lower of 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date or the closing bid price on the original issue date. As of June 30, 2017, $978 of the OID had been amortized, $15,822 of the debt discount had been amortized and there was accrued interest of $1,297. The Company recorded a derivative liability of $47,634 as of June 30, 2017. Additionally, the Company issued 1,650 five-year warrants for common stock with an exercise price of $7.50 per share, subject to certain adjustments, and a cashless exercise option. On July 13, 2017 and August 15, 2017, Global converted the entire principal of $18,700 and fees totaling $1,250 into a total of 567,867 common shares of the Company and the accrued interest payable balance of $1,541 was written off. The OID and the debt discount have been fully amortized. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

On December 13, 2016, the Company entered into a convertible promissory note with GPL for $10,000. The note matures on July 13, 2017 and bears interest at 12%. A debt discount of $10,000 was recorded. The conversion price is the lower of 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date or the closing bid price on the original issue date. As of June 30, 2017, $9,387 of the debt discount had been amortized, and there was accrued interest of $658. The Company recorded a derivative liability of $24,876 as of June 30, 2017. On July 6, 2017 and July 12, 2017, GPL converted the entire principal of $10,000 into a total of 400,000 common shares of the Company and the accrued interest payable balance of $687 was written off. The OID and the debt discount have been fully amortized. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited) 

On February 13, 2017, the Company entered into a convertible promissory note with Global for $10,000. The note matures on February 13, 2018 and bears interest at 2%. The convertible promissory note provides for an OID of $1,000. Therefore, the net proceeds to the Company was $9,000. A debt discount of $10,000 was recorded. The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. As of June 30, 2017, $375 of the OID had been amortized, $3,753 of the debt discount had been amortized and there was accrued interest of $75. The Company has recorded a derivative liability of $22,661 as of June 30, 2017. Additionally, the Company issued 6,667 seven-year warrants for common stock with an exercise price of $0.50 per share, subject to certain adjustments, and a cashless exercise option. On September 15, 2017, Global sold the $10,000 note and $1,117 accrued interest payable to A1Solar. The OID and the debt discount have been fully amortized. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

On September 15, 2017, A1 Solar Corp (“A1 Solar”) purchased $10,000 principal and $1,117 accrued interest payable of the February 13, 2017 Global convertible promissory note. The $11,117 convertible replacement note matures on September 29, 2018 and bears interest at an annual rate of 12%. A debt discount of $11,117 and a derivative liability of $26,209 were recorded. The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. On October 5, 2017, A1 Solar converted $5,558 principal into 297,245 common shares of the Company. As of December 31, 2017, $9,497 of the debt discount had been amortized and there was accrued interest payable of $39. The Company has recorded a derivative liability of $26,974 as of December 31, 2017.

On March 28, 2017, the Company entered into a convertible promissory note with Schraub for $16,500. The note matures on March 28, 2018 and bears interest at 10%. A debt discount of $16,500 and a derivative liability of $40,982 were recorded. The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. Additionally, the Company issued 12,100 seven-year warrants for common stock with an exercise price of $0.50 per share, subject to certain adjustments, and a cashless exercise option. These warrants were surrendered to the Company and cancelled on May 8, 2017. On July 31, 2017, Schraub assigned the $16,500 note to Global. The debt discount has been fully amortized and $565 of accrued interest payable was written off. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

On July 31, 2017, Global was assigned the $16,500 principal of the March 28, 2017 Schraub convertible promissory note. The note matures on March 28, 2018 and bears interest at 10%. A debt discount of $16,500 and a derivative liability of $114,489 were recorded. The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. As of December 31, 2017, $10,519 of the debt discount had been amortized and there was accrued interest payable of $1,259. The Company has recorded a derivative liability of $16,061 as of December 31, 2017.

On April 4, 2017, the Company entered into a convertible promissory note with Schraub for $20,000. The note matures on April 4, 2018 and bears interest at 10%. A debt discount of $20,000 and a derivative liability of $75,295 were recorded. The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. Additionally, the Company issued 15,000 seven-year warrants for common stock with an exercise price of $0.50 per share, subject to certain adjustments, and a cashless exercise option. These warrants were surrendered to the Company and cancelled on May 8, 2017. On July 31, 2017, Schraub assigned the $20,000 note to Global. The debt discount has been fully amortized and $647 of accrued interest payable was written off. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

On July 31, 2017, Global was assigned the $20,000 principal of the April 4, 2017 Schraub convertible promissory note. The note matures on April 4, 2018 and bears interest at 10%. A debt discount of $20,000 and a derivative liability of $140,711 were recorded. The conversion price is 50% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. On October 18, 2017 Global converted $4,651 principal into 248,691 common shares of the Company, and on December 4, 2017, Global converted $3,275 principal into 100,000 common shares of the Company. Pursuant to a Purchase and Escrow Agreement dated December 31, 2017 (Note 4), the remaining principal of $12,074 and accrued interest payable of $1,367 were extinguished. As of December 31, 2017, the entire $20,000 debt discount had been amortized. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

On December 30, 2017, the Company and Global entered into an Exchange Agreement pursuant to which warrants held by Global to purchase a total of 11,115 shares of the Company’s common stock were cancelled in exchange for a convertible promissory note payable to Global in the principal amount of $25,000. The note matures on December 30, 2018 and bears interest at an annual rate of 5%, compounded monthly. A derivative liability of $67,064 was recorded. Pursuant to a Purchase and Escrow Agreement dated December 31, 2017 (Note 4), the $25,000 principal and accrued interest payable of $3 were extinguished. The note has been repaid in full and no related derivative liability was recorded as of December 31, 2017.

On July 6, 2017, Schraub converted fees of $600 into 618,500 common shares of the Company.

As detailed above, during the six months ended December 31, 2017, a total of 2,640,017 shares of the Company’s common stock were issued in conversion of $55,760 note principal, $2,715 accrued interest payable, $2,450 in fees, $29,908 in penalties and $276,409 loss on conversion of debt into common stock.

8. STOCKHOLDERS’ DEFICIT

Preferred Stock

Series A Preferred Stock

On March 10, 2015, the Company, with the approval of a majority vote of its Board of Directors, approved the filing of a Certificate of Designation establishing the designations, preferences, limitations and relative rights of the Company's Series A preferred stock (the "Series A Designation" and the "Series A Preferred Stock"). The terms of the Certificate of Designation of the Series A Preferred Stock, which was filed with the State of Nevada on March 12, 2015, include the right to vote in aggregate, on all shareholder matters equal to 1,000 votes per share of Series A Preferred Stock. The shares of Series A Preferred Stock are not convertible into shares of common stock.

The Company has 20,000,000 shares of Series A Preferred Stock authorized, with 500,000 shares issued and outstanding as of December 31, 2017, which were issued in March 2015 in consideration for services on the Company’s Board of Directors.

Series B Preferred Stock

On December 21, 2015, the Company filed a Certificate of Designation for its new Series B Convertible Preferred Stock with the State of Nevada following approval by the board of directors of the Company. Five Hundred (500,000) Thousand shares of the Company's authorized preferred stock are designated as the Series B Convertible Preferred Stock (the "Series B Preferred Stock"), par value of $0.001 per share and with a stated value of $0.001 per share (the "Stated Value"). Holders of Series B Preferred Stock shall be entitled to receive dividends, when and as declared by the Board of Directors out of funds legally available therefor. At any time and from time to time after the issuance of shares of the Series B Preferred Stock, each issued share of Series B Preferred Stock is convertible into One (100) Hundred shares of Common Stock ("Conversion Ratio"). The holders of the Series B Preferred Stock shall have the right to vote together with holders of Common Stock, on an as "converted basis", on any matter that the Company's shareholders may be entitled to vote on, either by written consent or by proxy. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Series B Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series B Preferred Stock an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable prior to any distribution or payment shall be made to the holders of any junior securities.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

As of December 31, 2017, the Company had 232,500 shares of Series B Preferred Stock issued and outstanding.

On July 1, 2016, the Board of Directors of the Company agreed to compensate Steve Rubakh on a quarterly basis through the issuance of shares of Series B Preferred Stock. For the three months ended September 30, 2017, the Company issued 30,000 shares of Series B preferred stock to Steve Rubakh valued at $9,000. For the three months ended December 31, 2017, the Company issued 40,000 shares of Series B preferred stock to Steve Rubakh valued at $400,000.

On October 25, 2017, four investors entered into subscription agreements for the purchase of a total of 16,000 shares of Series B Preferred stock for cash at $10 per share. Through December 31, 2017, 12,500 of the shares had been issued for an investment of $125,000. As of December 31, 2017, a stock subscription payable of $35,000 was recorded for unissued shares.

Common Stock

On August 21, 2017, the Board of Directors of the Company approved a 1-for-50 reverse split of the Company’s common shares. The reverse split has been given retroactive effect in the condensed financial statements for all periods presented.

During the six months ended December 31, 2017, the Company issued a total of 3,175,773 shares of its common stock.

On July 6, 2017, 188,240 shares of common stock were issued to Global in the cashless exercise of warrants recorded at par value of $188. See Note 9.

On August 31, 2017, 347,222 shares of common stock valued at $15,625 were issued to Steve Rubakh for accrued compensation. See Note 6.

As detailed in Note 7, during the six months ended December 31, 2017, a total of 2,640,017 shares of the Company’s common stock were issued in conversion of $55,760 note principal, $2,715 accrued interest payable, $2,450 in fees, $29,908 in penalties, derivative liabilities of $11,779 and $276,409 loss on conversion of debt into common stock.

On September 30, 2017, the Company increased the number of outstanding common shares by 114 shares due to rounding of shares in the reverse stock split.

During the six months ended December 31, 2016, the Company issued a total of 275,514 shares of its common stock.

On July 1, 2015, 6,000 shares of common stock and 1,200 issuable shares of common stock valued at $37,500 were issued to Steve Rubakh for accrued compensation.

During the six months ended December 31, 2016, the Company issued a total of 268,314 shares of common stock for debt converted of $327,160.

Integrated Ventures, Inc.

(formerly EMS Find, Inc.)

Notes to Condensed Financial Statements

Six Months Ended December 31, 2017

(Unaudited)

9. WARRANTS

The Company has granted warrants to non-employee lenders in connection with the issuance of certain convertible promissory notes, certain of which were subsequently surrendered to the Company and cancelled. See Note 7. Warrant activity for these warrants for the six months ended December 31, 2017 is as follows:

The warrants were valued at the grant date using a Black-Scholes calculation. No stock-based compensation was recorded for warrants during the six months ended December 31, 2017.

As discussed in Note 7, on December 30, 2017, the Company and Global entered into an Exchange Agreement pursuant to which warrants held by Global to purchase a total of 11,115 shares of the Company’s common stock were cancelled in exchange for a convertible promissory note payable to Global in the principal amount of $25,000. Derivative liabilities related to the warrants of $28,299 were also extinguished in this transaction and the Company recorded a loss on settlement of warrants of $63,765.

10. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of filing of this report, there were no pending or threatened lawsuits, except as stated below.

On October 14, 2016, the Supreme Court of the State of New York County of Kings, in regards to LG Capital Funding, LLC v. EMS Find, Inc., issued a judgment against EMS Find, Inc. in favor of LG Capital Funding, LLC, in the amount of $135,202, which includes principal and interest (calculated as of September 29, 2016), in regards to the convertible promissory note dated October 22, 2015. The judgment includes an Information Subpoena with Restraining Notice, which addressed the EMS Find, Inc. bank account at TD Bank.

11. SUBSEQUENT EVENTS

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following:

On January 19, 2018, the Company and St. George Investments LLC (“St. George”) entered into a Securities Purchase Agreement, pursuant to which St. George purchased 462,900 restricted common shares of the Company for $750,000. The Company received net proceeds of $720,000. The Company also issued to St. George a three-year warrant for the purchase of 347,175 shares of the Company’s common stock at an exercise price of $2.16 per share.

Subsequent to December 31, 2017, the Company issued a total of 112,866 shares of its common stock to two lenders in conversions of convertible promissory note principal totaling $22,059, accrued interest totaling $1,356 and fees of $500.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are "forward-looking statements" within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations." You can expect to identify these statements by forward-looking words such as "may," "might," "could," "would," "will," "anticipate," "believe," "plan," "estimate," "project," "expect," "intend," "seek" and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve 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 these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the "Risk Factors" section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended June 30, 2017 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

GENERAL

We were incorporated in the State of Nevada on March 22, 2013 under the name Lightcollar, Inc. On March 22, 2015, we changed our name to EMS Find, Inc., and in May 2017, we changed our name to Integrated Ventures, Inc. We have licensed our Ems Find platform and related technologies to EpicMD, Inc. via a Licensing Agreement and management has determined to focus our business on developing and operating digital currency assets. Our offices are located at 73 Buck Road, Suite 2, Huntingdon Valley, Pennsylvania 19006.

We have discontinued our prior operations and changed our business focus, from our prior technologies relating to the EMS Find platform to acquiring, launching and operating companies in the cryptocurrency sector, mainly in digital currency mining, equipment manufacturing, and sales of branded mining rigs, as well as blockchain software development.

Financial

The Company has purchased in excess of $288,000 of mining rigs in the fiscal quarter ended December 31, 2017 and the number of our installed mining rigs had reached 110 at that date. This number is directly related to the availability of the electric power, which is currently at maximum utilization capacity at both of our locations. On November 22, 2017, we successfully launched our cryptocurrency operations. We finished our second quarter, ending December 31, 2017, with total revenues of $105,088, consisting of: (1) revenues from mining operations of $59,498 received in digital currencies and (2) equipment retail sales of $45,590. These results were achieved in 39 days of crypto currency operations. At December 31, 2017, we owned mined assets (Bitcoin, Ethereum and Litecoin), with market value of $43,786 at that date.

On December 30, 2017, the Company entered into an Exchange Agreement between the Company and Global Opportunity Group, LLC (“Global”), pursuant to which Global exchanged warrants that it held to purchase an aggregate of 555,170 shares of common stock of the Company for a convertible note in the principal amount of $25,000 (the “Note”) issued by the Company. The Note was due December 18, 2018 and was extinguished on December 31, 2017 pursuant to a Purchase and Escrow Agreement with Global discussed below.

On December 31, 2017, the Company and Global entered into a Purchase and Escrow Agreement whereby the Company sold 55,555,555 common shares of Viva to Global for the following consideration:

Derivative liabilities of $78,718 related to the convertible notes payable were also extinguished The Company recognized a realized gain on sale of investments of $82,162 in the transaction. The accounts receivable of $15,000 was collected in January 2018.

On January 19, 2018 the Company closed an equity financing through a Securities Purchase Agreement with St. George Investments LLC for the purchase from the Company, for an aggregate purchase price of $750,000 of: (a) 462,900 shares of restricted Common Stock of the Company; and (b) a three-year common stock purchase warrant to purchase 347,175 shares of common stock of the Company at an exercise price of $2.16 per share. Net proceeds to the Company from the equity financing were $720,000.

Collaborative Agreements

We have signed a software development agreement with ITBS LLC, a New York-based IT group, to create a new lending platform, LoanFunder, designed to connect private businesses and publicly traded companies with pre-qualified institutional lenders to originate loans, issue convertible debt notes and to manage the entire lifecycle of a lending contract, consisting of initiating, qualifying, underwriting, funding, tracking and retiring financial instruments. LoanFunder would be the the world's first financial platform designed to integrate with decentralized and encrypted lending ledger, which offers a secure, efficient, verifiable and permanent way of storing lending information. Such protocols are the backbone of numerous digital currencies that are being mined by us, including Bitcoin, Ethereum and Litecoin.

We have signed an Authorized Reseller Agreement with Shenzhen Halley Cloud Technology Company, the exclusive manufacturer of PandaMiners. PandaMiner is a GPU integrated altcoin mining device which supports multiple hashing algorithms like ETH and other cryptocurrencies. It is assembled using a high configuration graphics card, customized and highly compatible case and other optimized accessories for the highest mining efficiency. As part of this Agreement, the Company agreed to purchase 50 PandaMiner B3 Pro mining rigs with total purchase price of $213,500.

The Digital Asset Market

The Company is focusing on the mining of digital assets , as well as blockchain applications (“blockchain”) and related technologies. A blockchain is a shared immutable ledger for recording the history of transactions of digital assets—a business blockchain provides a permissioned network with known identities. A Bitcoin is the most recognized type of a digital asset that is issued by, and transmitted through, an open source, math-based protocol platform using cryptographic security that is known as the “Bitcoin Network.” The Bitcoin Network is an online, peer-to-peer user network that hosts the public transaction ledger, known as the blockchain, and the source code that comprises the basis for the cryptography and math-based protocols governing the Bitcoin Network.

Bitcoins, for example, can be used to pay for goods and services or can be converted to fiat currencies, such as the US Dollar, at rates determined on Bitcoin exchanges or in individual end-user-to-end-user transactions under a barter system. The networks utilized by digital coins are designed to operate without any company or government in charge, governed by a collaboration of volunteer programmers and computers that maintain all the records. These blockchains are typically maintained by a network of participants which run servers while securing their blockchain. Third party service providers such as Bitcoin exchanges and bitcoin third party payment processing services may charge significant fees for processing transactions and for converting, or facilitating the conversion of, bitcoins to or from fiat currency.

This market is rapidly evolving and there can be no assurances that we will remain competitive with industry participants that have or may have greater resources or experience in in this industry than us, nor that the unproven digital assets that we mine will ever have any significant market value.

FINANCIAL OPERATIONS REVIEW

Since our inception through December 31, 2017, we have generated approximately $1.1 million in revenues. Revenues to date have been generated substantially from the now discontinued Ambulance services, which we have discontinued to focus on new revenue sources. However, in November 30, 2017 revenues commenced from our crypto-currency mining operations and from sales of crypto-currency mining equipment.

We are incurring increased costs as a result of being a publicly-traded company. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. We also have paid compensation through the issuance of shares of our common stock and warrants, the valuation of which has resulted in significant stock-based compensation. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, have required changes in corporate governance practices of public companies and will require us to comply with these rules. These new rules and regulations have will increase our legal and financial compliance costs and have made some activities more time-consuming and costly. In addition, these new rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance, which we currently cannot afford to do. As a result of the new rules, it may become more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as executive officers. We cannot predict or estimate the amount of additional costs we may incur as a result of being a public company or the timing of such costs.

To complete and successfully launch our planned digital currency mining facilities and to fund future operations, we will need to raise additional capital. The amount and timing of future funding requirements will depend on many factors, including the timing and results of our ongoing development efforts, the potential expansion of our current development programs, potential new development programs and related general and administrative support. We anticipate that we will seek to fund our operations through further liquidation of our marketable securities, public or private equity or debt financings or other sources, such as potential collaboration agreements. We cannot be certain that anticipated additional financing will be available to us on favorable terms, or at all.

RESULTS OF OPERATIONS

THREE AND SIX MONTHS ENDED DECEMBER 31, 2017 COMPARED TO THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2016

Revenues

In November 2017 we commenced operations in our first crypto-currency mining location and reported crypto-currency mining revenues of $59,498 for the three months and six months ended December 31, 2017.

We also had revenues from the sale of crypto-currency mining units that we purchased or assembled for resale of $45,590 for the three months and six months ended December 31, 2017.

We did not have any revenues for the three months and six months ended December 31, 2016.

Cost of Revenues

Cost of revenues were $46,818 for the three months and six months ended December 31, 2017. Expenses associated with running the crypto-currency mining operations, such as equipment depreciation, rent, operating supplies, utilities and monitoring services are recorded as cost of revenues. Also included in cost of revenues are the costs of purchasing or assembling the crypto-currency mining units sold.

Operating Expenses

General and administrative expenses increased $397,213 to $494,247 for the three months ended December 31, 2017 from $97,034 for the three months ended December 31, 2016. The increase was primarily due to an increase in stock-based compensation, payroll and professional fees. General and administrative expenses decreased $218,226 to $634,124 for the six months ended December 31, 2017 from $852,350 for the six months ended December 31, 2016. The decrease on a year-to-date basis was due primarily from significant stock-based compensation in fiscal year 2016 from warrants to issued to officers and directors, partially offset by increases in payroll and professional fees in the current fiscal year.

Other Income (Expense)

For the three months ended September 30, 2017, our other income totaled $200,016, comprised of interest and other income of $1,304, realized gain on sale of investments of $85,911, change in fair value of derivative liabilities of $273,032 and gain on extinguishment of debt of $3,259, partially offset by unrealized loss on investments of $64,987, interest expense of $34,738 and loss on settlement of warrants of $63,765. By comparison, our other income totaled $22,074 for the three months ended December 31, 2017, comprised of change in fair value of derivative liability of $376,412, partially offset by interest expense of $120,128 and loss on extinguishment of debt of $234,210.

Interest and other income are not currently material to our operations.

During the three months ended December 31, 2017, we reported total realized gains on sale of investments of $85,911, including $3,776 from sales of digital currencies and $82,162 from the sales of common shares of Viva Entertainment. During the six months ended December 31, 2017, we reported total realized gains on sale of investments of $367,134, including $3,776 from sales of digital currencies and $364,874 from the sales of common shares of Viva Entertainment. We reported no realized gain on sale of marketable securities in the three months or six months ended December 31, 2016.

Pursuant to multiple conversions of convertible promissory notes from Viva Entertainment during May, July and August 2017, the Company converted total principal of $79,652 into a total of 225,805,555 common shares of Viva Entertainment. During the three months ended December 31, 2017, we exchanged 55,555,555 common shares of Viva Entertainment for convertible notes principal of $37,074, accrued interest payable of $1,370 and accounts receivable of $15,000, and reduced related derivative liabilities by $78,718. We also incurred investment related fees of $30 in the three months ended December 31, 2017. As a result we reported a realized gain on sale of investments of $85,911 in the three months ended December 31, 2017.

For the six months ended December 31, 2017, in addition to the realized gain on investments of $85,911 reported in the three months ended December 31, 2017, we sold a total of 170,250,000 shares of Viva Entertainment stock, receiving net proceeds of $551,800 and recorded a realized gain on sale of marketable securities of $281,223. As a result we reported a realized gain on sale of investments of $367,134 in the six months ended December 31, 2017.

As of September 30, 2017, the Company recorded an unrealized gain on investment of $61,111 related to shares of Viva Entertainment stock. That unrealized gain was reversed in the three months ended December 31, 2017 when the remaining shares of Viva Entertainment were exchanged. Unrealized loss on digital currencies as of December 31, 2017 was $3,876. As a result, we reported unrealized loss on investments of $64,987 for the three months ended December 31, 2017 and $3,876 for the six months ended December 31, 2017. We reported no unrealized gain or loss on investments in the three months and six months ended December 31, 2016.

The decrease in our interest expense, which includes the amortization of debt discount and original issue discount, resulted from the decrease in our convertible notes payable during the current fiscal year.

We estimate the fair value of the derivatives associated with our convertible notes payable and warrants using the Black-Scholes pricing model and multinomial lattice models that value the derivative liability based on a probability weighted discounted cash flow model using future projections of the various potential outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, and, in the case of our convertible notes payable, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

The increase in loss on extinguishment of debt in the current fiscal year resulted from multiple conversions of convertible notes payable into shares of our common stock where the conversion price was substantially lower than the current market price of the common shares issued in the conversions.

Net Loss

As a result, our net loss for the three months ended December 31, 2017 increased to $235,961 from $74,960 for the three months ended December 31, 2016. Our net loss for the six months ended December 31, 2017 increased to $462,557 from $261,437 for the six months ended December 31, 2016

LIQUIDITY AND CAPITAL RESOURCES

Overview

As of December 31, 2017, our current liabilities exceeded our current assets by $13,109. As of December 31, 2017, the Company had $121,061 in cash, not sufficient to fund our operations for the next twelve months. However, we have converted two notes receivable from Viva Entertainment into shares of Viva Entertainment common stock and have sold a significant portion of the shares into the market to raise capital for our operations. During the six months ended December 31, 2017, we received net proceeds from the sale of investments of $579,460, which we have used to fund our operations and to purchase property and equipment for our crypto-currencies mining operations. During the six months ended December 31, 2017 we also received proceeds of $160,000 from subscriptions to purchase shares of our Series B Preferred Stock. Subsequent to December 31, 2017, we received net proceeds of $720,000 from the sale of our common shares and warrants.

We have also improved our liquidity through the reduction in our convertible debt. As of December 31, 2017, we had convertible notes payable before debt discount totaling $22,059 compared to $88,776 as of June 30, 2017. Through conversions of convertible notes payable subsequent to December 31, 2017, the remaining principal balance of the convertible notes payable was extinguished.

Sources and Uses of Cash

We used net cash in operations of $263,727 in the six months ended December 31, 2017 as a result of our net loss of $462,557, non-cash gains totaling $568,331, increases in digital currencies of $61,892, inventories of $17,730 and accrued interest receivable of $98, and decreases in accounts payable of $827, accrued expenses of $1,786 and due to related party of $19,223, partially offset by non-cash expenses totaling $863,717 and a decrease in prepaid expenses and other current assets of $5,000.

By comparison, we used net cash in operations of $157,708 in the six months ended December 31, 2016 as a result of our net loss of $261,437, non-cash gain of $1,157,729 and decreases in due to related party of $10,980 and checks written in excess of cash balances of $11,695, partially offset by non-cash expenses totaling $1,253,946 and increases in accounts payable of $27,293 and accrued expenses of $2,894.

During the six months ended December 31, 2017, we had net cash provided by investing activities of $209,097, comprised of net proceeds from the sale of investments of $579,460, partially offset by purchase of investments of $9,651, increase in notes receivable of $49,880 and purchase of property and equipment of $310,832. During the six months ended December 31, 2017, we had no net cash used in or provided by investing activities.

During the six months ended December 31, 2017, we had net cash provided by financing activities of $160,000, comprised of proceeds from sale of preferred stock of $125,000 and proceeds from stock subscriptions payable of $35,000. We had net cash provided by financing activities of $184,257 for the six months ended December 31, 2016, comprised of proceeds from convertible notes payable.

We will have to raise funds to complete and successfully deploy our digital mining facilities and to fund our operating expenses. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.

Going Concern

The Company has reported recurring net losses, had a working capital deficiency as of December 31, 2017 of $13,109, and used net cash in operations of $263,727 in the six months ended December 31, 2017. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to reach a successful level of operations is dependent on the execution of management's plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.

There can be no assurances that the Company will be successful in attaining a profitable level of operations or in generating additional cash from the equity/debt markets or other sources fund its operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Should the Company not be successful in its business plan or in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are disclosed in Note 2 to our condensed financial statements and in the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2017. The following is a summary of those accounting policies that involve significant estimates and judgment of management.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

Accounting for Derivatives

The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date.

We estimate the fair value of the derivatives associated with our convertible notes payable and warrants using the Black-Scholes pricing model and multinomial lattice models that value the derivative liability based on a probability weighted discounted cash flow model using future projections of the various potential outcomes. We estimate the fair value of the derivative liabilities at the inception of the financial instruments, and, in the case of our convertible notes payable, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, additional paid-in capital and a gain or loss on change in derivative liabilities as applicable. These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility, variable conversion prices based on market prices as defined in the respective agreements and probabilities of certain outcomes based on management projections. These inputs are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2017 and June 30, 2017, the amounts reported for cash, accounts receivable and prepaid expenses and other current assets, accounts payable, accrued expenses, note payable and due to related party approximate fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Our digital currencies and marketable securities are measured at fair value on a recurring basis and estimated as follows:

Our derivative liabilities are measured at fair value on a recurring basis and estimated as follows:

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term "disclosure controls and procedures" to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange 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 Securities Exchange Act of 1934 is accumulated and communicated to the issuer's management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and interim chief financial officer to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

To remediate our internal control weaknesses, management intends to implement the following measures:

The additional hiring is contingent upon the Company's efforts to obtain additional funding through equity or debt and the results of its operations. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

Changes in Internal Control Over Financial Reporting

Except as set forth above, there was no change to our internal controls or in other factors that could affect these controls during the three month period ended December 31, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There are no pending legal proceedings in which we are a party or in which any of our directors, officers or affiliates, any owner of record or beneficiary of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us, except as stated below. Our property is not the subject of any pending legal proceedings.

On October 14, 2016, the Supreme Court of the State of New York County of Kings, in regards to LG Capital Funding, LLC v. EMS Find, Inc., issued a judgment against EMS Find, Inc. in favor of LG Capital Funding, LLC, in the amount of $135,202, which includes principal and interest (calculated as of September 29, 2016), in regards to the convertible promissory note dated October 22, 2015. The judgment includes an Information Subpoena with Restraining Notice, which addressed the EMS Find, Inc. bank account at TD Bank.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the three months ended December 31, 2017, the Company issued a total of 645,936 shares of its common stock in conversion of $13,484 note principal and $500 in fees.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

(a) Exhibits.

______________

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

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