NewBridge Global Ventures, Inc. - Quarter Report: 2013 September (Form 10-Q)

AGRICON GLOBAL CORPORATION

November 14, 2013

/s/ Allan Kronborg

Allan Kronborg

Chief Executive Officer

agricon10q09302013.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the Quarterly Period Ended September 30, 2013

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

For the Transition Period From ________ to _________

Commission File Number 000-33215

AGRICON GLOBAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		84-1089377
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

25 East 200 South
Lehi, Utah		84043
(Address of principal executive offices)		(Zip Code)

801-592-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 þ No o

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

Large accelerated filer o Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o Noþ

As of November _____, 2013, the registrant had 18,708,841 shares of common stock, par value $0.0001, issued and outstanding.

AGRICON GLOBAL CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

FORM 10-Q

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements		Page

	Condensed Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and June 30, 2013	3

	Condensed Consolidated Statements of Operations (Unaudited) for the
	three months ended September 30, 2013 and 2012, and for the period from inception (July 5, 2011) through September 30, 2013	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the
	three months ended September 30, 2013 and 2012 and for the period from inception (July 5, 2011) through September 30, 2013	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations		15

Item 3. Qualitative and Quantitative Disclosures About Market Risk		18

Item 4. Controls and Procedures		19

PART II — OTHER INFORMATION

Item 1. Legal Proceedings		21

Item 1A. Risk Factors		21

Item 6. Exhibits		21

Signatures		22

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AGRICON GLOBAL CORPORATION AND SUBSIDIARIES

(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30			June 30,
	2013			2013
	(Unaudited)
ASSETS
Current Assets
Cash	$	3,204		$	4,770
Interest receivable		2,187			833
Subscriptions receivable		-			100,000
Notes receivable, current portion		256,297			148,804
Total current assets		261,688			254,407

Equipment, net of depreciation of $912 and $0, respectively		31,873			32,785
Land under capital lease		1,055,575			1,055,575
Notes receivable, net of current portion		-			128,657

Total Assets	$	1,349,136		$	1,471,424

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	108,646		$	61,912
Accounts payable, related parties		117,287			181,631
Accrued liabilities		260,741			229,730
Unsecured notes payable, related parties		434,428			280,193
Secured convertible notes payable, related parties, net of discount of $10,924
and $44,424, respectively		38,076			22,576
Current portion of capital lease obligation		31,416			31,416
Total current liabilities		990,594			807,458

Capital lease obligations, net of current portion		905,159			905,159

Total Liabilities	$	1,895,753		$	1,712,617

Commitments and Contengiencies (see note 13 to the financial statements)
STOCKHOLDERS' DEFICIT
Preferred stock, $.0001 par value, 400,000 shares authorized; no shares
issued and outstanding		-			-
Common stock $.0001 par value, 100,000,000 shares authorized;
18,708,841 shares issued and outstanding		1,871			1,871
Additional paid-in capital		2,073,743			2,034,321
Deficit accumulated during developmental stage		(2,622,231	)		(2,277,385	)
Total stockholders' deficit		(546,617	)		(241,193	)

Total Liabilities and Stockholders' Deficit	$	1,349,136		$	1,471,424

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

AGRICON GLOBAL CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For the Three Months Ended September 30,			For the Three Months Ended September 30,			For the Period from Inception (July 5, 2011) through September 30,
	2013			2012			2013
Operating Expenses:
Selling, general and administrative	$	(175,474	)	$	(238,295	)	$	(1,297,244	)
Lease acquisition costs		(82,250	)		-			(1,118,916	)
Total Operating Expenses		(257,724	)		(238,295	)		(2,416,160	)

Loss from Operations		(257,724	)		(238,295	)		(2,416,160	)

Other Income and Expense:
Interest income		7,189			6,778			41,533
Interest expense		(94,311	)		(2,321	)		(247,604	)
Total Other Income and Expense		(87,122	)		4,457			(206,071	)

Net Loss	$	(344,846	)	$	(233,838	)	$	(2,622,231	)

Basic and diluted loss per common share	$	(0.02	)	$	(0.01	)

Basic and diluted weighted average number of common shares outstanding		18,708,841			17,154,841

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

AGRICON GLOBAL CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the Three Months Ended September 30,			For the Three Months Ended September 30,			For the Period from Inception (July 5, 2011) through September 30,
	2013			2012			2013
Cash Flows From Operating Activities
Net loss	$	(344,846	)	$	(233,838	)	$	(2,622,231	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation		39,422			9,183			749,773
Accretion of debt discount		33,500			-			56,076
Depreciation		912			-			912
Common stock issued for services		-			-			50,463
Changes in operating assets and liabilities:
Prepaid expenses		-			-			5,000
Interest receivable		(1,354	)		-			(2,187	)
Accounts payable		46,734			39,425			143,440
Accounts payable, related parties		34,391			-			216,022
Accrued liabilities		104,011			112,847			228,554
Net Cash Used in Operating Activities		(87,230	)		(72,383	)		(1,174,178	)

Cash Flows From Investing Activities
Principal payments on notes receivable		24,164			23,235			140,667
Advance to vendor		(3,000	)		-			(53,000	)
Purchase of equipment		-			-			(32,785	)
Net Cash Provided by Investing Activities		21,164			23,235			54,882

Cash Flows From Financing Activities
Proceeds from issuance of common stock for cash		100,000			50,000			1,210,000
Principal payments on unsecured notes payable, related parties		(17,500	)		-			(17,500	)
Proceeds from issuance of secured convertible notes payable, related parties		-			-			67,000
Principal payments on secured convertible notes payable, related parties		(18,000	)		-			(18,000	)
Payment on capital lease obligation		-			-			(119,000	)
Net Cash Provided by Financing Activities		64,500			50,000			1,122,500

Net (Decrease) Increase in Cash		(1,566	)		852			3,204
Cash at Beginning of Period		4,770			5,221			-
Cash at End of Period	$	3,204		$	6,073		$	3,204

Supplemental Disclosures of Cash Flow Information:
Noncash Investing and Financing activities:
Common Stock issued for CPGL (see Note 5 - Recapitalization)	$	-		$	-		$	50,463
Recapitalization		-			-			348,964
Subscription receivable		-			-			150,000
Conversion of accounts payable and accrued liabilities to notes payable		171,735			-			390,028
Purchase of land under capital lease		-			-			1,055,575
Benficial conversion feature on notes payable		-			-			67,000
Cancellation of shares of common stock		-			-			36

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

AGRICON GLOBAL CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — THE COMPANY AND BASIS OF PRESENTATION

Principles of Consolidation — The accompanying condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America and include operations and balances of Agricon Global Corporation (formerly BayHill Capital Corporation) and its wholly-owned subsidiaries Canola Properties Ghana Limited (“CPGL”) and Agricon SH Ghana Limited (“ASHG”), both Ghanaian limited liability companies collectively “Agricon” or the “Company.” CPGL and ASHG were incorporated under the laws of Ghana on July 5, 2011 and November 7, 2012 respectively. Intercompany balances and transactions have been eliminated in consolidation.

Nature of Operations — All of the Company’s business is conducted through its two wholly-owned subsidiaries CPGL and ASHG. The Company is in the development stage and its business activities to date have been organizing the Company, locating appropriate land that might be leased or purchased for cultivating and harvesting agricultural products. The Company completed its first lease transaction on December 13, 2012 of 8,000 acres in the Shai Hill area near Accra, the largest city in Ghana. We plan to begin clearing and cultivating the land included in the first lease purchase during 2013.

The Company plans to locate and then lease additional undeveloped land in Ghana that can be cleared and used for agricultural purposes and prepare the land for cultivation and production of primarily rotation crops such as rice, maize (corn), canola, sunflower, and soya. The Company has located two additional leases totaling approximately 20,000 acres of land that could be leased in the future.

NOTE 2 – GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $344,846 for the quarter ended September 30, 2013 and has an accumulated deficit of $2,622,231 at September 30, 2013. The Company also used cash in operating activities of $87,230 during the quarter ended September 30, 2013. At September 30, 2013, the Company had negative working capital of $728,906. The Company is in default on notes payable. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

In order for us to continue as a going concern, we expect to obtain additional debt and/or equity financing. We are regularly and continually seeking additional funding from investors and from time to time we are in various stages of negotiations. Nonetheless, to date we have not accomplished a financing of the size needed to put the Company on a stable operating basis. There can be no assurance that we will be able to secure additional debt or equity financing, that we will be able to attain positive cash flow operations, or that, if we are successful in any of those actions, those actions will produce adequate cash flow to enable us to meet our future obligations. All of our existing financing arrangements are short-term. If we are unable to obtain additional debt and/or equity financing, we may be required to significantly reduce or cease operations.

Table of Contents

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they are condensed and do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. The results of operations for the three months ended September 30, 2013, may not be indicative of the results that may be expected for the year ending June 30, 2014.

These financial statements should be read in conjunction with the financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2013. The accounting policies set forth in those annual financial statements are the same as the accounting policies utilized in the preparation of these financial statements, except as modified for appropriate interim financial statement presentation.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Actual results could differ from those estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure on contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include estimated future value of leased properties, realizability of notes receivable, and realizability of deferred tax assets. Actual results could differ from those estimates.

Business Condition – The Company only recently commenced its new agricultural business in Ghana. Management plans to meet its cash needs through various means including raising additional capital through equity sales, securing debt financing and developing the current business model. The Company continues to expect to be successful in this new venture, but there is no assurance that its business plan will be economically viable. The ability of the Company to continue as a going concern is dependent on that plan’s success. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern (see Note 2—Going Concern).

Cash–The balance in Cash consists of cash reserves held in checking accounts.

Notes Receivable – The Company has three notes receivable; the portions that the Company expects to collect during the 12 months subsequent to September 30, 2013 are classified as “Notes receivable, current portion” and the balance of the notes receivable is classified as “Notes receivable, net of current portion” in the financial statements. See further discussion and disclosure in Note 4.

Agricultural Land and Lease Acquisition Costs–The Company expenses all costs relating to land and lease acquisition activities until the actual acquisition or until the lease has been executed. The land purchase price is then capitalized and re-evaluated periodically for any valuation allowance required. Lease payments are capitalized and amortized over the appropriate lease period. Costs of land clearing and preparation are expensed as incurred.

Table of Contents

Equipment – Equipment is stated at cost less accumulated depreciation. At the time equipment is disposed of or traded in, the assets and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to operations. Major renewals and betterments that extend the life of the property and equipment are capitalized. Maintenance and repairs are expensed as incurred. Depreciation of equipment is calculated using the straight-line method.

Development Stage Company – The Company has not earned any revenue from operations. Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Enterprise” as set forth in ASC Topic 914. Among the disclosures required by ASC 914 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, cash flows and stockholders’ deficit disclose activity since the date of the Company’s inception.

Foreign Currency Translation – The financial statements are presented in United States dollars. In accordance with ASC Topic 830, “Foreign Currency Translation”, foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the periods presented. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations. All financial activity during the periods ended September 30, 2013 and 2012 were denominated in United States dollars, therefore no translation of currency was required and there were no gains or losses on foreign currency transactions during the years then ended. All material accounts of cash were being held in US dollar accounts at September 30, 2013.

Basic and Diluted Loss Per Share – Basic loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period giving no effect to potentially dilutive issuable common shares. For the period ended September 30, 2013, there were 7,460,000 unexercised options, 182,933 shares related to the secured convertible notes payable to related parties, and 500,000 shares that may be issued for the consummation of another unrelated lease, that were excluded from the net loss per common share calculation.

Income Taxes – The Company accounts for income taxes pursuant to ASC 740, Income Taxes, which requires the use of the asset and liability method of accounting for deferred income taxes. We recognize deferred tax liabilities and assets based on the differences between the tax basis of assets and liabilities and their reported amounts in the condensed consolidated financial statements that will result in taxable or deductible amounts in future years.

All allowances against deferred income tax assets are recorded in whole or in part, when it is more likely than not those deferred income tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance is required to the extent it is more-likely-than-not that a deferred tax asset will not be realized. ASC 740 also requires reporting of taxes based on tax positions that meet a more-likely-than-not standard and that are measured at the amount that is more-likely-than-not to be realized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits. ASC 740 also provides guidance on the presentation of tax matters and the recognition of potential IRS interest and penalties. The Company classifies penalty and interest expense related to income tax liabilities as an income tax expense. There is no interest or penalties recognized in the statement of operations or accrued as of September 30, 2013. Tax years that remain subject to examination include 2009 through the current year.

Table of Contents

Share-Based Compensation – The Company recognizes compensation expense for share-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value. The Company estimates the fair value of stock options using a lattice model that values the options based on probability weighted projections of the various potential outcomes. The intrinsic value, stock performance, stock volatility, vesting or exercise factors, and forfeiture variables, are all considerations under this model. If stock grants are related to a future performance condition, the Company recognizes compensation expense when the performance condition, leading to the issuance, becomes probable of occurring.

NOTE 4 – NOTES RECEIVABLE

On August 31, 2010, the Company sold its wholly-owned subsidiary, Commission River Corporation. As part of the payment for the sale, the Company was issued a secured negotiable promissory note receivable, in the amount of $490,000, with varying interest rates beginning at 6% and required monthly payments of $10,000 until its maturity on September 12, 2014, when the remaining principal balance of the note is due. The note is secured by all of the assets of Commission River Corporation. As of September 30, 2013 and June 30, 2013, the note was current and had a remaining principal balance of $203,297 and $227,461, of which the current balance was $203,297 and $98,804 respectively.

On April 24, 2013, the Company advanced Waterfall Mountain LLC, an unrelated party, $50,000 in the form of a short-term unsecured note receivable with a maturity date of September 15, 2013, which was extended to November 15, 2013, and on August 5, 2013 advance $3,000 to an unrelated party in the form of a short-term loan with a maturity date of February 5, 2014, to fund their future participation in Agricon related projects in Ghana. The total of these two notes are classified as “Notes receivable, current portion” on the balance sheet.

NOTE 5 – RECAPITALIZATION

On March 31, 2012, Agricon, formerly BayHill Capital Corporation, and CPGL, and CPGL’s shareholders, Global Green Capacity Limited and Invest in Ghana Co Limited, entered into a share exchange agreement pursuant to which Agricon agreed to issue an aggregate of 12,000,000 shares of common stock to CPGL stockholders and designees, in return for 100% of the 75,000 issued and outstanding shares of CPGL stock (the “Share Exchange”). As a result, CPGL became a wholly-owned subsidiary of Agricon, and for accounting purposes, Agricon began operations on July 5, 2011 (date of inception of CPGL), as reflected in the condensed consolidated financial statements. The Share Exchange resulted in a change in control of the Company. The former CPGL stockholders, and designees, now own in the aggregate 62% of the outstanding shares of the Company’s common stock. In conjunction with the share exchange the Company changed its name from BayHill Capital Corporation to Agricon Global Corporation.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) section 805, “Business Combinations”, CPGL is considered the accounting acquiror in the Share Exchange. Under current accounting guidance Agricon is not a business for purposes of determining whether a business combination would occur upon the acquisition of the outstanding stock of CPGL. The acquisition was accounted for as the recapitalization of CPGL since, at the closing of the Share Exchange, Agricon was a non-operating public shell corporation with no significant assets and liabilities. Accordingly, the assets and liabilities and the historical operations that are reflected in the Company’s condensed consolidated financial statements are those of CPGL, restated for the effects of the capital restructure.

Table of Contents

The accounting transactions required to accomplish the Share Exchange are recognized as follows: (1) the recapitalization of CPGL by recognizing the Agricon common shares issued in exchange for the CPGL shares in a manner equivalent to a 160 for 1 stock split, and (2) the Agricon common shares that remain outstanding are recognized as the issuance of common shares by CPGL—as the acquirer for accounting purposes-for the assets less liabilities of BayHill Capital Corporation, the predecessor to Agricon, are recorded at fair value which approximates the book value.

NOTE 6 – UNSECURED NOTES PAYABLE TO RELATED PARTIES

The unsecured notes payable to present and past affiliates of the Company are related to legal fees, director fees, and unpaid salaries that were converted into notes payable with interest rates ranging from 12% to 18%. The notes were not paid at their maturity dates and the Company is in default on the notes. Interest accrues at 18% while the notes are in default. No affiliate has demanded payment. The notes are classified as current liabilities. These notes consist of the following at September 30, 2013 and June 30, 2013:

	September 30,		June 30,
Note Holder	2013		2013
ClearWater Law and Governace Group, LLC	$	57,518	$	3,783
James U Jensen		41,960		31,960
Soren Jonassen		20,400		12,900
Rene Mikkelsen		25,300		17,800
Robert K Bench		110,000		85,000
Lars Nielsen		70,000		50,000
Stephen Abu		50,000		27,000
Robyn Farnsworth		47,750		40,250
John M Knab		5,500		5,500
John D Thomas		6,000		6,000
Total	$	434,428	$	280,193

NOTE 7 – SECURED CONVERTIBLE NOTES PAYABLE TO RELATED PARTIES

On April 29, 2013, the Company borrowed $67,000 from two companies that are affiliates of two of the Company’s officers. One of the note holders is a company which is owned and controlled by an officer of the Company and the other note holder is controlled by adult children of an officer of the Company. The Notes bear interest at 10% per quarter, with an original maturity date of October 30, 2013; the notes are classified as current liabilities on the balance sheets. The notes are secured by the assets of the Company. The notes and accrued interest are payable, at the Company’s option, in cash or by the issuance of shares of common stock of the Company at $0.30 per share for payment of the principal of the notes and $0.50 per share for the payment of accrued but unpaid interest. The fair value of the stock at the commitment date was $1.00 per share. The conversion price is not subject to re-pricing, and as such, these notes were deemed to be conventional convertible debt. As a result, a beneficial conversion feature was recorded in additional paid-in capital for $67,000 and the secured convertible notes payable was reduced by a debt discount of $67,000. The debt discount is accreted over the six-month term. During the period ended September 30, 2013 the Company made net principal payments of $18,000 on the notes. For the period ended September 30, 2013, accretion expense on the debt discount was $33,500. As of September 30, 2013 and June 30, 2013, the convertible notes payable, net of the discount of $10,924 and $44,424, was $38,076 and $22,576 respectively. On November 11, 2013 the Company issued 182,933 shares of its common stock in full payment of the notes principal and accrued interest of both secured convertible notes payable to related parties.

Table of Contents

NOTE 8 – CAPITAL LEASE OBLIGATIONS

In December 2012 the Company acquired approximately 8,000 acres of agricultural land in the Shai Hills area of Ghana, West Africa. The lease requires total payments over nine (9) years of $1,954,840. The Company paid the first year payment of $129,032, which included a payment at the acquisition date of $119,000 and a credit for $10,032 of costs and expenses advanced to the lessee by the Company during lease negotiations, which were expensed in prior periods. The lease has been accounted for as a capital lease. On the lease acquisition date, the present value of the minimum lease payments, calculated at a discount rate of 18%, was $1,055,575, which was booked as Land under capital lease. The following is a schedule by year of future minimum lease payments under the capital lease, together with the present value of the minimum lease payments as of September 30, 2013:

	Amount
2014	$	200,000
2015		256,452
2016		248,387
2017		240,323
2018		232,258
Thereafter		648,388
Total minimum lease payments		1,825,808
Less: amount representing interest		(889,233	)
Present value of lease payments		936,575
Less: current portion		(31,416	)
Long-term portion	$	905,159

NOTE 9 – STOCKHOLDERS’ DEFICIT

The Company conducted a private placement offering to a limited number of foreign investors under which the Company issued a total of 2,620,000 shares, of its common stock, at a price of fifty cents ($0.50) per share for the period from inception (July 5, 2011) through September 30, 2013.

The Company issued 500,000 shares of common stock, at the then current market price of $1.25 per share, as part of its Shai Hills lease acquisition costs during the year ended June 30, 2013. The Company expensed this payment in the amount of $625,000, which is included in Lease acquisition costs.

In June 30, 2013, the Company issued 200,000 shares under a subscription agreement at $0.50 per share and received the cash during July 2013.

Table of Contents

NOTE 10 – SHARE BASED COMPENSATION

As part of our board of director’s compensation plan, we granted non-qualified options to outside directors, during the quarter ended September 30, 2013, as follows:

		Option		Exercise		Years to
Name	Grant Date	Shares		Price		Exercise
James Jensen	July 10, 2013		40,000	$	0.32		5
Rene Mikkelsen	July 10, 2013		30,000	$	0.32		5
Soren Jonassen	July 10, 2013		30,000	$	0.32		5
Peter Opata	July 10, 2013		30,000	$	0.32		5
Allen Kronborg	July 10, 2013		30,000	$	0.32		5

The Exercise Price, $0.32 per share, for these options was based on the volume weighted average closing price per share for the five trading days prior to the Grant Date. These non-qualified options have a vesting schedule as follows: 33% of the optioned shares will vest on January 30, 2014 and 33% will vest on January 30, 2015 and 2016.

During the quarter ended September 30, 2013 the Company’s board of directors also approved 6,000,000 non-qualified options for management to purchase 6,000,000 shares, as follows:

		Option		Exercise		Years to
Name	Grant Date	Shares		Price		Exercise
Allan Kronborg	August 19, 2013		2,000,000	$	0.68		5
Robert Bench	August 19, 2013		2,000,000	$	0.68		5
Lars Nielsen	August 19, 2013		1,000,000	$	0.68		5
Stephen Abu	August 19, 2013		1,000,000	$	0.68		5

The Exercise Price, $0.68 per share, for these options was based on the volume weighted average closing price per share for the five trading days prior to the Grant Date. On October 31, 2013 the board of directors modified the restrictive events-based vesting terms to a time-based vesting schedule, and reissued the options; other terms and conditions, including the original grant date and exercise price, remain the same as the original grants.

As part of our board of director’s compensation plan, we granted non-qualified options to our three outside directors, during the year ended June 30, 2012, as follows:

		Option		Exercise		Years to
Name	Grant Date	Shares		Price		Exercise
James Jensen	March 6, 2012		40,000	$	0.50		5
Rene Mikkelsen	March 6, 2012		30,000	$	0.50		5
Soren Jonassen	May 9, 2012		30,000	$	0.50		5

The exercise price, $0.50 per share, for these options was based on the same price per share as our $610,000 private placement of 1,220,000 shares that were sold in arms-length transactions to non-affiliated third parties. These non-qualified options have a vesting schedule with the following major vesting components: 25% vest on July 1, 2012, 3% vest on the last day of each calendar quarter thereafter, accelerated vesting occurs upon the following events: 50% upon the Company closing one or more rounds of financing of $7 million or more, 25% on the last day of each quarter that the Company’s common stock trades, for a three month rolling average, above $1.50 per share, and 25% for each 5,000 hectares of property put into production. None of these acceleration events has occurred to date and there can be no assurance that any such event will occur in the future.

Table of Contents

As part of our compensation plan, we granted non-qualified options to management, during the period ended June 30, 2012, as follows:

		Option		Exercise		Years to
Name	Grant Date	Shares		Price		Exercise
Peter Moeller	March 6, 2012		400,000	$	0.50		5
Robert Bench	March 6, 2012		600,000	$	0.50		5
Lars Nielsen	June 19, 2012		300,000	$	0.50		5
Stephen Abu	June 19, 2012		300,000	$	0.50		3

On March 31, 2012, Peter Moeller’s position as CEO of the Company was terminated and his options to purchase 400,000 common shares were forfeited.

The fair value of the stock option grants is estimated on the date of grant using a lattice based option pricing model in accordance with proper accounting treatment and valuation as set forth in the Statement of Financial Accounting Standard No. ASC 718 for Share-based Payments. The Company had granted 7,860,000 options during the period from inception (July 5, 2011) through September 30, 2013, of which 400,000 were forfeited. The aggregate fair value at the time the options were granted will be amortized over the life of the options and expensed as share-based compensation in the Company’s Statement of Operations.

Share-based compensation, from issuance of stock and granted stock options, recorded during the three month periods ended September 30, 2013 and 2012 was $39,422 and 9,142 respectively, and is reported as general and administrative expense in the accompanying condensed consolidated statements of operations. As of September 30, 2013 and June 30 2013, there was $688,176 and $107,596, respectively, of unrecognized compensation cost related to stock-based payments that will be recognized over the life of the options.

NOTE 11 – INCOME TAXES

In evaluating the realizability of the net deferred tax assets, we take into account a number of factors, primarily relating to the ability to generate taxable income. Where it is determined that it is likely that we will be unable to realize deferred tax assets, a valuation allowance is established against the portion of the deferred tax asset. Because it cannot be accurately determined when or if we will become profitable, a valuation allowance was provided against the entire deferred income tax asset balance.

The 2009 through 2012 tax years remain open to examination by the Internal Revenue Service. These taxing authorities have the authority to examine those tax years until the applicable statute of limitations expire.

The Company did not recognize any interest or penalties related to income taxes for the three months ended September 30, 2013 and 2012.

Table of Contents

NOTE 12 – FAIR VALUE MEASUREMENTS

The Company utilizes an internal valuation model to determine the fair value of the land under capital lease.

The following tables summarize Level 1, 2 and 3 financial assets and financial liabilities measured at fair value on a nonrecurring basis by their classification in the condensed consolidated balance sheet at September 30, 2013 and June 30, 2013:

	September 30,		Fair Value Measurements at Reporting Dates
Description	and June30, 2013		Level 1		Level 2		Level 3
Land under capital lease	$	1,055,575	$	-	$	-	$	1,055,575

Total	$	1,055,575	$	-	$	-	$	1,055,575

The fair value of the land, included under the capital lease, was compared to a number of other properties, with like characteristics, during the Company’s search for appropriate agricultural land within a large radius. Management believes the value is representative of the other properties within the area of interest, is comparable to the value of the two additional properties for which the Company had considered, and is comparable to other land being offered by other third parties.

NOTE 13 – Commitments and Contingencies

In June 2013, as part of its acquisition of the Shai Hills lease, the Company issued 500,000 shares of common stock, and assigned a carried interest, in the Shai Hills property, of two and one-half percent (2.5%) of net farm operations revenue. The Company has agreed to issue 500,000 shares of common stock, and the same carried interest in another property, if it is able to negotiate and consummate a lease before June 30, 2014.

Mr. Allan Kronborg was elected to serve as the Company’s Chief Executive Officer on August 19, 2013 and Mr. Robert Bench agreed to continue serving as President and Chief Financial Officer. The Company entered into employment agreements with Mr. Kronborg and Mr. Bench effective October 1, 2013. The contracts with Mr. Kronborg and Mr. Bench were for periods of one year and three years respectively. Under terms of the contract they will each receive an annual salary of $240,000, of which 50% will be paid monthly and 50% will be accrued until such time as the Company’s operations are cash flow positive.

Table of Contents

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

The following discussion is intended to assist you in understanding our results of operations and our present financial condition. Our condensed consolidated financial statements and the accompanying notes included in this quarterly report on Form 10-Q contain additional information that should be referred to when reviewing this material.

Forward-Looking Information and Cautionary Statements

This quarterly report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Such statements are based on currently available financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Forward-looking statements are predictions and not guarantees of future performance or events. Forward-looking statements are based on current industry, financial and economic information, which we have assessed but which by its nature, is dynamic and subject to rapid and possibly abrupt changes. Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. We hereby qualify all our forward-looking statements by these cautionary statements. We undertake no obligation to amend this report or revise publicly these forward-looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to the Securities Exchange Act of 1934) to reflect subsequent events or circumstances.

Business Review

The Company is in the development stage and its activities to date have been organizing the Company and locating appropriate land that might be leased for cultivating and harvesting agricultural products and acquiring 8,000 acres through a lease purchase agreement. Assuming the Company can raise adequate capital, we plan to continue to locate and then lease undeveloped land in Ghana, at attractive prices, that can be cleared and used for agricultural purposes and prepare the land for cultivation and production of primarily rotation crops such as rice, maize (corn), canola, sunflower, and soya. We plan to begin clearing and cultivating the land, included in the first lease, during 2014.

Table of Contents

In order to execute on this strategy, the Company will need significant capital. There is no assurance that the Company will be successful in raising capital and completing its planned acquisition of leases and farming operations.

Results of Operations

Three months ended September 30, 2013 Compared to Three Months Ended September 30, 2012

The Company generated no revenues from operations during the three months ended September 30, 2013 or 2012. Our activities related to our continued search for leases and acquiring the 8,000 acres on which we plan to begin farming operations.

General and Administrative Expenses

General and administrative expenses were $175,474 and $238,295 for the three months ended September 30, 2013 and 2012 respectively, all of which related to our search for land leases and negotiation activities.

Lease acquisition costs were $82,250 and $0 for the three months ended September 30, 2013 and 2012 respectively. These represent costs and expenses relating to finding appropriate land, negotiating land leases, surveying and soil testing prospective land for possible acquisition or lease.

Period from Inception (July 5, 2011) through September 30, 2013

The Company generated no revenues from operations during the period from inception (July 5, 2011) through September 30, 2013. The accumulated general and administrative expenses of $1,297,244 related to its activities in the formation of the Company and its search and negotiation efforts to secure a lease to begin farming and agricultural operations in Ghana.

Lease acquisition costs totaling $1,118,916 relate to direct costs of finding, negotiating land leases, surveying activities and soil testing prospective land for possible acquisition or lease.

Liquidity and Capital Resources and Our Ability to Continue as a Going Concern

As of September 30, 2013 and June 30, 2013, we had cash on hand of $3,204 and $4,770, respectively, and total current liabilities exceeded total current assets by $728,906 and $553,051, respectively.

For the three months ended September 30, 2013 and 2012, we used cash in operating activities of $87,230 and $72,383 respectively.

Our operations do not produce significant cash flow and we rely almost exclusively on external sources of liquidity. As of September 30, 2013, we have a $728,906 working capital deficiency and we need additional funding to pay our current liabilities and execute our business plan. We have historically addressed working capital deficiencies through frequent private sales of stock for cash, exchanges of stock in satisfaction of liabilities or for services, issuing short- term promissory notes and sales of our assets. We will continue to depend on these and other external sources of liquidity for the foreseeable future. If we cannot obtain the necessary capital to pay our current liabilities, we may be subject to litigation and foreclosure proceedings. We will also need to obtain additional funding to make our planned capital expenditures. If we are unable to secure such additional funding, we will be unable to pursue our plans; we may have to cease or significantly curtail our operations, including our plans to acquire additional leases. Our ability to raise additional capital is critical to our ability to continue to operate our business.

Table of Contents

Our ability to secure liquidity in the form of additional financing or otherwise is crucial for the execution of our plans and our ability to continue as a going concern. Our current cash balance, together with cash anticipated to be provided by operations, will not be sufficient to satisfy our anticipated cash requirements for normal operations and capital expenditures for the foreseeable future. Economic conditions continue to be weak and global financial markets continue to experience significant volatility and liquidity challenges. These conditions may make it more difficult for us to obtain financing.

Our independent registered public accounting firm’s report on our June 30, 2013 financial statements expresses doubt about our ability to continue as a going concern. The report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern due to substantial losses from operations, negative working capital, negative cash flow, and the lack of sufficient capital, as of the date the report was issued, to support our planned capital expenditures through 2013 or later. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should we be unable to continue as a going concern.

We are not currently generating revenue, and our cash and cash equivalents will continue to be depleted by our ongoing operations as well as our general and administrative expenses. Until we are in a position to generate significant revenue, we will need to continue to raise additional funds to continue operating as a going concern. We may seek this additional funding through the issuance of debt, preferred stock, equity or a combination of these instruments. We may also seek to obtain financing through the sale of working interests in one or more of our projects. We cannot be certain that funding from any of these sources will be available on reasonable terms or at all. If we are unable to secure adequate funds on a timely basis on terms acceptable to us, we may have to cease or significantly curtail our operations including our plans to acquire additional leases.

Over the next twelve months, we do not expect our existing capital and anticipated funds from operations to be sufficient to sustain our planned expansion. Consequently, we intend to seek additional capital to fund growth and expansion through equity financings, debt financings and/or credit facilities. We have no assurance that such financing will be available, and if available, the terms under which such financing would be given.

Our lack of significant operating history makes predictions of future operating results difficult. Our projects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in an early stage of development. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. We have no assurance that we will be successful in addressing such risks, and the failure to do so would have a material adverse effect on our business prospects, financial condition and results of operations.

Table of Contents

Off-Balance Sheet Financing Arrangements

The Company had no off-balance sheet financing arrangements at September 30, 2013 and June 30, 2013.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting standards generally accepted in the United States requires management to make estimates and assumptions that affect both the recorded values of assets and liabilities at the date of the financial statements and the revenues recognized and expenses incurred during the reporting period. Our estimates and assumptions affect our recognition of deferred expenses, bad debts, income taxes, the carrying value of our long-lived assets and our provision for certain contingencies. We evaluate the reasonableness of these estimates and assumptions continually based on a combination of historical information and other information that comes to our attention that may vary our outlook for the future. Actual results may differ from these estimates under different assumptions.

We suggest that our Summary of Significant Accounting Policies, as described in Note 3 to our condensed consolidated financial statements in our most recent Report on Form 10-Q be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations. We believe the critical accounting policies that most impact our condensed consolidated financial statements are described below.

Fair Value of Financial Instruments

The carrying amounts reported in the accompanying condensed consolidated financial statements for the notes receivable, accounts payable and accrued expenses approximate fair values because of the immediate nature of short-term maturities of these financial instruments. The carrying amount of long-term debt approximates fair value due to the stated interest rates approximating prevailing market rates.

Item 3. Qualitative and Quantitative Disclosures About Market Risk

As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

Table of Contents

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act.”)) and based upon this evaluation, and the engagement of a qualified outside third party review of our controls and procedures, concluded that as of September 30, 2013, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In addition, our management, under direction from the board of directors has engaged a qualified outside third party to participate in the review of our controls and procedures.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act, is a process designed by, or under the supervision of, the company’s principal executive officer and principal financial officer and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that:

•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Table of Contents

Management of the Company conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework. As part of this assessment management has taken into consideration that we are a small company, and due to the fact that we have a limited number of employees, we are not able to have proper segregation of duties and have limited technical accounting research capabilities. In addition, the recent expanding of our international activities has put an additional strain on the limited financial staff. Based on this assessment, management concluded that as of September 30, 2013, we had a material weakness in our internal control over financial reporting because of the lack of segregation of duties and the limited technical accounting capabilities. In July 2013 we engaged a third party service provider with the necessary financial expertise to provide an independent review and additional oversight of financial reporting. Additionally, in August 2013, the Company hired a Chief Executive Officer, which added another layer of segregation of duties. Management believes these changes, once fully implemented, and additions to its staff will enhance our effectiveness over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2013, The Company hired a Chief Executive Officer, and engaged a third party service provider to provide an independent review of financials as described above. There were no other changes in our internal control over financial reporting during the three months ended September 30, 2013 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The company had no legal proceedings as of September 30, 2013.

Item 1A. Risk Factors

During the three months ended September 30, 2013 there were no material changes in the risk factors previously described in Form 10-K filed with the SEC on October 14, 2013.

Item 6. Exhibits

Exhibits. The following exhibits are included as part of this report:

	Exhibit No.		Description of Exhibit

	Exhibit 31.1		Certification of Principal Executive Officer Pursuant to
			Section 302 of the Sarbanes Oxley Act of 2002

	Exhibit 31.2		Certification of Principal Financial Officer Pursuant to
			Section 302 of the Sarbanes Oxley Act of 2002

	Exhibit 32.1		Certification Pursuant to Section 906 of the Sarbanes-
			Oxley Act of 2002

	Exhibit 32.2		Certification Pursuant to Section 906 of the Sarbanes-
			Oxley Act of 2002

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:	November 14, 2013	By:	/s/ Robert K Bench
			Robert K Bench
			President, Chief Financial Officer