Rogue One, Inc. - Quarter Report: 2014 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended: September 30, 2014

or

For the transition period from __________ to __________

Commission File Number: 00-24723

FRESH PROMISE FOODS, INC.

(Exact Name of registrant as specified in its charter)

1111 Alderman Drive, Suite 210

Alpharetta, Georgia 30005

(Address of Principal Executive Offices)

(770) 521-9826

(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 Exchange Act 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 [  ]

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 [  ]

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

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

As of October 29, 2014, there were 637,190,087 shares outstanding of the registrant’s common stock. 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

Fresh Promise Foods, Inc.

Consolidated Balance Sheet

See accompanying notes to unaudited consolidated financial statements.

Fresh Promise Foods, Inc.

Consolidated Statement of Operations

Unaudited

See accompanying notes to unaudited consolidated financial statements.

Fresh Promise Foods, Inc.

Consolidated Statements of Cash flows

Unaudited

See accompanying notes to unaudited consolidated financial statements.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

NOTE 1 – Nature of Business and Summary of Significant Accounting policies

Nature of Business

Fresh Promise Foods is a consumer products and marketing company focused on the high-margin multi-billion dollar health and wellness food and beverage sectors. Under its wholly owned subsidiary, Harvest Soul Inc., the Company is building a production facility in Atlanta, Ga. and will be launching a new brand and category in the organic, all-natural juice category.

On March 15, 2013 all officers and directors resigned from the Company and Mr. Joseph C. Canouse was appointed President, Chief Executive Officer, and Director.

On April 17, 2013 Mr. Kevin P. Quirk joined the Company and was appointed President, Chief Executive Officer. Mr. Canouse, who continued as a Director, assumed the title of Chief Financial Officer.

Effective August 5, 2013 the Company completed a 1 for 100 reverse stock split, which reduced the number of issued and outstanding common shares from 2,903,888,889 to approximately 29,039,066. Fractional shares produced as a result of this reverse stock split were rounded up to the next whole share. The consolidated financial statements have been retroactively adjusted to reflect this reverse stock split.

On September 26, 2013 the name of the Company was changed to Fresh Promise Foods, Inc. and the Company also reduced the number of authorized shares of common stock from four billion (4,000,000,000) to four hundred seventy five million (475,000,000).

On May 28, 2014, the Company increased the number of authorized shares of common stock to nine hundred seventy five million shares (975,000,000) from four hundred seventy five million (475,000,000).

On June 2, 2014, Joseph C. Canouse resigned as Chairman of the Board of Directors (the “Board”) of Fresh Promise Foods, Inc., a Nevada corporation (the “Company”), and as Chief Financial Officer of the Company. Mr. Canouse informed the Company that his decision to resign was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

On June 4, 2014, the Board approved by unanimous written consent the appointment of Scott Martin as a member of the Board and Secretary of the Company, effective as of such date.

On June 4, 2014, the Board also approved by unanimous written consent the appointment of Mr. Kevin P. Quirk as Chairman of the Board. Mr. Quirk currently serves as Chief Executive Officer & Chief Financial Officer of the Company and a director and will retain his current positions.

On September 1, 2014, the Company increased the number of authorized shares of common stock to two billion shares (2,000,000,000) from nine hundred seventy five million shares (975,000,000).

ACCOUNTING BASIS

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP accounting”). The Company has adopted a December 31 fiscal year end.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of Fresh Promise Foods Inc. and its wholly-owned subsidiary Harvest Soul Inc. All significant inter-company balances and transactions within the Company and subsidiary have been eliminated upon consolidation.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

NOTE 1 – Nature of business and summary of significant accounting policies (continued)

CASH AND CASH EQUIVALENTS

Fresh Promise Foods Inc. considers all highly liquid investments with maturities of three months or less to be cash equivalents.

CASH FLOWS REPORTING

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net loss to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments are carried at the approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.

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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

INVENTORIES

Inventories consist of bottles, closures, labels and boxes as well as certain raw materials that go into the production of the final product. Inventory is stated at the lower of the cost or market. Cost is determined on the average cost method. Inventories are reviewed and reconciled periodically.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTS RECEIVABLE

The Company’s has no Accounts Receivables. The Company charges off receivables if they determine that the amount is no longer collectible. The allowance for doubtful accounts was zero at September 30, 2014 and December 31, 2013. Bad debt expense related to customer receivables for the period ended September 30, 2014 and 2013 was zero and zero respectively.

NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at September 30, 2014 and 2013. Diluted earnings per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. At September 30, 2014 and 2013, the Company had convertible notes and warrants outstanding that could be converted into approximately 567,425,057 common shares based up the closing bid price of the company’s common stock at September 30, 2014.

REVENUE RECOGNITION

The Company derives revenue from the sale of its products. The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

SHARE-BASED EXPENSE

ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

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

Share-based expense for the 9 months ended September 30, 2014 and 2013 totaled $2,950 and $29,570, respectively.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

POLICY ON WEBSITE DEVELOPMENT COST TO BE INCLUDED 

Website Development Costs

The Company accounts for website development costs in accordance with Accounting Standards Codification 350-50 “Website Development Costs”. Accordingly, all costs incurred in the planning stage are expensed as incurred, costs incurred in the website application and infrastructure development stage that meet specific criteria are capitalized and costs incurred in the day to day operation of the website are expensed as incurred.

The Company placed into service its main website (www.freshpromisefoods.com) in 2013. All costs associated with these websites are subject to straight-line amortization over there expected useful life, a five year period. 

RECENT ACCOUNTING PRONOUNCEMENTS

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company’s present or future financial statements.

NOTE 2 – PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost. The Company depreciates the equipment using the straight-line method over the useful lives of the equipment. The useful lives are estimated to be between 3 and 7 years. Depreciation expense amount for 9 months ended was zero and $100 for the quarters ended September 30, 2014 and 2013, respectively. Property and equipment consisted of the following at September 30, 2014 and September 30, 2013:

NOTE 3 – RELATED PARTY TRANSACTIONS

At the time of his appointment Mr. Canouse received the 1 share of convertible Preferred B stock previously issued to a director. Also, during the three months ended June 30, 2013, the Company issued 1 additional shares of convertible preferred B stock to Mr. Quirk when he joined the Company. The stock has no par value and is not traded publicly.

On January 28, 2014, the Company converted $11,000 of a $22,000 convertible note to 3,666,667 common shares from a related party. The note had been purchased from a former officer of the Company based on the contractual conversions terms per agreement.

NOTE 4 – STOCK PAYABLE

On April 26, 2012, The Company entered into an agreement with Ironridge Global to settle $284,917 in liabilities. Pursuant to an order approving stipulation for settlement of claims between Ironridge and the Company, Ironridge is entitled to receive 1 million common shares plus that number of shares with an aggregate value equal to $332,748, divided by 70% of the following: the volume weighted average price of the issuer’s common stock over that number of consecutive trading days following the date of receipt required for the aggregate trading volume to exceed $1.75 million, not to exceed the arithmetic average of the individual daily volume weighted average prices of any five trading days during such period.

Ironridge is prohibited from receiving any shares of common stock that would cause it to be deemed to beneficially own more than 9.99% of the Company’s total outstanding shares at any one time. Ironridge received an initial issuance of 97,150 shares, and may be required to return or be entitled to receive shares, based on the calculation summarized in the prior paragraph. For purposes of calculating the percent of class, the initial issuance to Ironridge was based upon a total of 875,491 shares of common stock outstanding immediately prior to the issuance of shares to Ironridge, such that 97,150 shares issued would represent approximately 9.99% of the outstanding common stock after such issuance.

For the nine months ended September 30, 2014 and 2013, Ironridge received 24,378,310 and 7,400,000 shares respectively, which were recorded at $170,648 and $21,000 respectively. For the same periods the Company recorded a gain of $93,097 on the shares issued in the nine months ended September 30, 2014 and a loss of $ 48,100 on the shares issued in the nine months ended September 30, 2013. At September 30, 2014 and 2013, the balance of shares due Ironridge Global was -0- and 34,778,310 respectively, which was recorded at values of $0 and 243,448, respectively. Carrying value of amounts due under this agreement are computed by multiplying the percentage of total shares due issued to Ironridge times the initial value of the obligation recorded in 2012. In connection with the transaction, Ironridge agreed not to hold any short position in the issuer’s common stock, and not to engage in or affect, directly or indirectly, any short sale until at least 180 days after the end of the calculation period.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

NOTE 5 – NOTES AND CONVERTIBLE NOTES PAYABLE

Convertible notes payable consist of the following at September 30, 2014 and 2013. All common share data in this table has been adjusted for the reverse stock split.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

NOTE 5 – NOTES AND CONVERTIBLE NOTES PAYABLE (CONTINUED)

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

NOTE 5 – NOTES AND CONVERTIBLE NOTES PAYABLE (CONTINUED)

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

NOTE 5 – NOTES AND CONVERTIBLE NOTES PAYABLE (CONTINUED)

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

NOTE 6 – STOCKHOLDERS’ EQUITY (DEFICIT)

The authorized common stock of the Company consist of 2,000,000,000 shares with a par value $0.00001. The Company also has 100,000,000 shares of par value $0.00001 Preferred C stock authorized and 10 shares of par value $0.00001 Preferred B stock authorized and 30,000,000 par value $0.00001 par value Preferred C stock authorized. The Company adjusted the par value and additional paid in capital accounts on its balance sheet at March 30, 2013 for common and Preferred A stocks.

The Company also issued 500,000 shares of common stock to a service provider which was recorded at fair market value of $2,950.

During the period ended September 30, 2014, the Company issued 5,400,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $562. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 10,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,824. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 6,378,310 shares of common stock in conjunction with the settlement agreement with Ironridge Global, previous discussed. The stock was recorded at $44,648 but had a fair market value of $2,551. The Company recorded a loss on this issuance of $42,096. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 10,058,140 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,278. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 5,556,500 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $25,000 plus accrued interest of $210. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 6,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $884. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 9,071,459 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $896. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 16,377,049 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $604. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 5,858,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $25,000 plus accrued interest of $63. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 6,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $4,488 plus accrued interest of $25. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 6,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,291 plus accrued interest of $1,446. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 7,792,453 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $113. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 5,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,143. This was exempt from registration under rule 144.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

During the period ended September 30, 2014, the Company issued 21,486,456 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $2,276. This was exempt from registration under

During the period ended September 30, 2014, the Company issued 11,297,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $39,709 plus accrued interest of $2,480. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 9,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,570. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 21,486,486 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $2,024. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 12,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,717. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 21,461,538 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,756. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 12,150,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $39,709 plus accrued interest of $1,622. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 15,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,791. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 21,470,588 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,602. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 17,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,978. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 16,979,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $39,709 plus accrued interest of $1,358. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 19,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,972. This was exempt from registration under rule 144.

All the above conversions were generally done based on the contractual terms within the agreements. 

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

The following table sets forth common share purchase warrants outstanding as of September 30, 2014:

NOTE 7 – GOING CONCERN

The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 8 – INCOME TAXES

The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities

A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions will be highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

FRESH PROMISE FOODS, INC.

NOTES TO THE Unaudited CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2014

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. Management has not filed tax returns for the year ended December 31, 2013.

As of September 30, 2014, the Company had net operating loss carry forwards of approximately $8,355,780 that may be available to reduce our tax liability in future years. We estimate the benefits of this loss carry forward at $3,042,780 if the Company produces sufficient taxable income. No adjustments to the financial statements have been recorded for this potential tax benefit.

The provision for Federal income tax consists of the following for the years 2014 and 2013:

A reconciliation of the federal statutory rate of 34% to the Company’s effective tax rate is as follows:

The Company’s valuation allowance increased by $175,823 in 2013. Tax net operating loss carryforwards may be limited pursuant to the IRS Section 382 in the event of certain ownership changes.

NOTE 9 – FAIR VALUE MEASUREMENTS

The Company has adopted the guidance under ASC Topic 820 for financial instruments measured on a fair value on a recurring basis. ASC Topic 820 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data and requires disclosures for assets and liabilities measured at fair value based on their level in the hierarchy. Further authoritative accounting guidance (ASU No. 2009-05) under ASC Topic 820, provides clarification that in circumstances in which a quoted price in an active market for the identical liabilities is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update.

The standard describes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Input other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the over- all fair value of the financial instruments. In addition, the fair value of free standing derivative instruments such as warrant and option derivatives are valued using the Black-Scholes modes.

The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair value were determined by using the Black Scholes option-pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

NOTE 10 – SUBSEQUENT EVENTS

As of October 29, 2014 the Company issued 212,302,506 shares of common stock in conjunction with the partial conversion of certain promissory notes. The company has 637,511,771 outstanding shares.

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 2014 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements.

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

Forward-Looking Statements

This quarterly report on Form 10-Q and other reports filed by Fresh Promise Foods, Inc. f/k/a StaKool, Inc. (“we,” “us,” “our,” or the “Company”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements (collectively the “Filings”) and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”, or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial consolidated statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Plan of Operations

Under the direction of Kevin Quirk, the Company’s Chief Executive Officer, the Company is continuing its efforts to leverage management’s experience and knowledge of the natural and organic food and beverage industry to better deploy the Company’s product lines through our wholly-owned subsidiary and to allow for a more comprehensive understanding of the distribution channels and retail positioning. In addition, the natural food and beverage market continues to grow at a relatively substantial pace and allows for the introduction of many functional food and beverage products.

Our management team is continuing to explore all aspects of the all-natural functional food and beverage industry, in efforts to effectively integrate and develop products tailored to those markets. The management team feels confident that its understanding of the market will allow for the addition of several functional food and beverage products within the next 24-36 months that effectively capitalize on our knowledge and experience, and are capable of developing velocity throughout the all-natural retail market space. The Company has access to a talented packaging and design team that will assist in the future development of well-conceived products and the appropriate consumer packaging that will allow for consumer interest, appeal and rapid adoption.

The Company’s primary goal is to participate in the fast growing and high margin all-natural and organic consumer products market, specifically organic fruit and vegetable juices that are both blended and pressed. We will launch our own line under the brand name Harvest Soul through our wholly owned subsidiary, Harvest Soul Inc. Further to this, we will continue to look for acquisition opportunities among companies that share our values and our vision.

Current developments include the following:

Results of Operations

Summary of Statements of Operations for the Nine Months Ended September 30, 2014 and 2013

Revenue

Total revenue for the nine months ended September 30, 2014 was $0 compared to $64 for the same period in 2013. Decrease is due to ceasing operations of Anthus Life.

Gross Margin

Gross margin for the nine months ended September 30, 2014 was ($3,008) representing an decrease from ($2,451) for same period last period ending September 30, 2013.

Operating Expenses

For the nine month period ending September 30, 2014, operating expenses increased from $342,804 in 2013 to $684,691 for same period 2014. This increase is mainly due to accrued salaries of executive officers and consultants. Stock based compensation was reduced dramatically as the company is utilizing more convertible debt instruments versus stock. We also incurred charges related to the opening of our PREP facility which increase rent expenses.

Loss from Operations

Loss from operations for the nine months ended on September 30, 2014 was $687,699 representing an increase from $345,255 for same period in 2013. The loss was primarily due to expenses due to launching Harvest Soul and professional services associated with building the juice pilot production facility and certification cost.

Other Income (Expense)

For the nine month periods ended September 30, 2014, Other Expenses increased from $102,247 in 2013 to $1,089,780 in 2014. In 2014, Other Expenses included a larger then expect loss on change in value of our derivative liabilities of $850,080 as stock volatility and conversions greatly impacted derivative liability values. The increased number of notes converted contribated to interest expense increase from $162,302 in 2013 to $348,520 for the nine months ending September 30, 2014.

Net Loss

Net Loss for the nine months ended September 30, 2014, was $1,777,479. The net loss was primarily attributable to a lack of revenue and the operating expenses and other expenses as described above.

Inflation did not have a material impact on the Company’s operations for the period. Other than the foregoing, management knows of no trends, demands, or uncertainties that are reasonably likely to have a material impact on the Company’s results of operations.

Liquidity & Capital Resources

The following table summarizes total current assets, liabilities and working capital at September 30, 2014 and

December 31, 2013.

At September 30, 2014, we had a working capital deficit of $2,401,985 as compared to a working capital deficit of $903,232 at December 31, 2013 an increase in the deficit of $1,498,753. The increase is primarily related to an increase in convertible notes payable issued in order to fund operating activities.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

The Company sustained a loss of $1,777,479 for the nine months ended September 30, 2014. Because of the absence of positive cash flows from operations, the Company requires additional funding for continuing the building of facilities and the development and marketing of products. These factors raise doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

At September 30, 2014 we had minimal assets and a working capital deficit of $2,401,985. Our working capital deficit is due to the results of operations. However we are building long-term assets as a result of building a pilot production facility and are presently able to meet our short term obligations through the sale of convertible notes.

Net cash used in operating activities for the nine months ended September 30, 2014 was ($391,387). Net cash provided by financing activities for the nine months ended September 30, 2014 was $399,435. Net cash provided by financing activities for this period consists primarily of the issuance of a convertible notes. Net cash used in investing activities was ($29,058), which represented funds advanced to Harvest Soul, our new subsidiary company.

We anticipate that our future liquidity requirements will arise from the need to fund operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated raising additional funds from the private equity sources and debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. In addition, our Plan of Operation for the next twelve months is to raise capital to continue to expand our operations. We are presently engaged in capital raising activities through several private offering of our company’s securities. See “Note 6 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

Off-Balance Sheet Arrangements

As of September 30, 2014, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, our Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our PEO and PFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Changes in Internal Control over Financial Reporting.

No significant changes, other than the change in CFO, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting were made in our internal control over financial reporting during the three month period ended September 30, 2014, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We, together with certain other parties (collectively, the “Defendants”), are currently involved in litigation against Kyle Gotshalk, Leonard Gotshalk, Clinton Hall, LLC, Richard Maher and Patrick O’Loughlin (collectively, the “Plaintiffs”). On April 25, 2013, the Plaintiffs filed a complaint with the United States District Court for the District of Nevada alleging claims including securities fraud and breach of contract. The Company believes these claims to be unfounded and the Company has filed an answer with the United States District Court for the District of Nevada, together with counterclaims against the Plaintiffs. The Company is continuing to vigorously defend itself against this lawsuit.

Except as described above, we are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations and there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, selfregulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on April 15, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the period ended September 30, 2014, the Company issued 10,058,140 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,278. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 5,556,500 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $25,000 plus accrued interest of $210. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 6,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $884. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 9,071,459 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $896. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 16,377,049 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $604. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 5,858,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $25,000 plus accrued interest of $63. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 6,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $4,488 plus accrued interest of $25. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 6,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,291 plus accrued interest of $1,446.86. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 7,792,453 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $113. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 5,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,143. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 21,486,456 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $2,276. This was exempt from registration under

During the period ended September 30, 2014, the Company issued 11,297,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $39,709 plus accrued interest of $2,480. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 9,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,570. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 21,486,486 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $2,024. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 12,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,717. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 21,461,538 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,756. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 12,150,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $39,709 plus accrued interest of $1,622. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 15,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,791. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 21,470,588 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,602. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 17,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,978. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 16,979,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $39,709 plus accrued interest of $1,358. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 19,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $1,972. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 5,400,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $86,000 plus accrued interest of $562. This was exempt from registration under rule 144.

During the period ended September 30, 2014, the Company issued 10,000,000 shares of common stock in conjunction with the partial conversion of promissory note with a face value of $53,000 plus accrued interest of $1,824. This was exempt from registration under rule 144.

Item 3. Defaults upon Senior Securities.

There were no defaults upon senior securities during the quarter ended September 30, 2014.

Item 4. Mine Safety Disclosure.

Not applicable

Item 5. Other Information.

There is no other information required to be disclosed under this item which was not previously disclosed

Item 6. Exhibits.

*Filed Herewith.

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.