Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________

FORM 10-Q

_____________

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

For the quarterly period ended: March 31, 2015

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File No. 333-178037

PAZOO, INC.

(Exact name of registrant as specified in its charter)

Nevada		27-3984713
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

760 State Route 10, Suite 203 Whippany, NJ		07981
(Address of Principal Executive Offices)		(Zip Code)

(973) 884-0136

(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 preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§230.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated file,” “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	x

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

Yes o No x

660,811,645 shares of common stock, par value $0.001 per share, outstanding as of June 22, 2015.

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Pazoo, Inc.

Form 10-Q

Table of Contents

			Page
Part I	Financial Information		1
	Item 1	Financial Statements	1
		Balance Sheets (Unaudited)	2
		Statements of Operations (Unaudited)	3
		Statements of Cash Flow (Unaudited)	4
		Notes to Financial Statements (Unaudited)	5
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	13
	Item 4	Controls and Procedures	13

Part II	Other Information		14
	Item 1	Legal Proceedings	14
	Item 1A	Risk Factors	14
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	14
	Item 3	Defaults Upon Senior Securities	14
	Item 4	(Reserved)	14
	Item 5	Other Information	14
	Item 6	Exhibits	14

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Part I – FINANCIAL INFORMATION

Item 1 Consolidated Financial Statements (Unaudited)

The results reflected in the unaudited Consolidated Statement of Operations for the three month period ended March 31, 2015 may not be indicative of results expected for the full year. The following unaudited Consolidated financial Statements should be read in conjunction with the Notes to the Financial Statements, Management’s Discussion and Analysis of Financial Condition and Results of Operations shown in Item 2 of Part I of this report, as well as the audited financial statements and related notes to the financial statements in the Company’s Annual Report on Form 10-K filed on May 13, 2015 with the Securities and Exchange Commission (SEC) for the year ended December 31, 2014. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to these rules.

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PAZOO, INC
CONSOLIDATED BALANCE SHEETS
(Unaudited)


	March 31, 2015			December 31, 2014

ASSETS
Current assets:
Cash and cash equivalents	$	17,209		$	733,637
Accounts receivable		88,770			87,949
Stock subscription receivable		12,999			18,253
Inventories		2,668			2,668
Prepaid expenses		1,465			6,181

Total current assets		123,111			848,688

Intangible assets		200,000			-

Total assets	$	323,111		$	848,688

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	89,347		$	84,189
Loans payable		3,000			3,000
Interest payable		62,602			46,862
Convertible debt, net of unamortized discounts of $242,308 and $413,898		621,133			895,664
Derivative liabilities		1,191,670			2,576,025

Total current liabilities		1,967,752			3,605,740

Long-term liabilities:
Long-term portion of convertible debt, net of unamortized discounts of $690,124 and $783,668		62,625			28,832

Total long-term liabilities		62,625			28,832

Total liabilities	$	2,030,377		$	3,634,572

Stockholders' deficit
Common stock, $0.001 par value; 980,000,000 shares authorized, 501,850,585 and 193,030,398 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively		501,850			193,031
Convertible preferred stock, Ser. A, $0.001 par value, 10,000,000 shares authorized, 1,478,526 shares and 1,203,526 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively.		1,479			1,204
Preferred stock, Ser. B, $0.001 par value, 2,500,000 shares authorized, 1,637,500 and 1,187,500 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively		1,637			1,187
Convertible Preferred stock, Ser. C, $0.001 par value, 7,500,000 shares authorized, 580,000 and no shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively		580			-
Additional paid-in capital		7,131,665			4,438,643
Accumulated deficit		(9,344,477	)		(7,419,949	)

Total stockholders' deficit		(1,707,266	)		(2,785,884	)

Total liabilities and stockholders' equity deficit	$	323,111		$	848,688

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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PAZOO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended
	March 31,
	2015			2014

Revenues
Merchandise sales	$	-		$	218
Advertising sales		20,233			17,109
Total revenues		20,233			17,327
Cost of goods sold
Merchandise sales		-			325
Total cost of goods sold		-			325
Gross profit		20,233			17,002

Selling, general and administrative expenses		1,080,862			206,458
Professional fees		228,521			35,433
Website setup		57,120			22,408
Total operating expenses		1,366,503			264,299

Loss from operations		(1,346,270	)		(247,297	)

Other expenses:
Gain/(loss) on derivative liability		439,113			(376,187	)
Impairment loss on investments		(499,000	)		-
Interest expense		(518,371	)		(23,804	)

Net loss	$	(1,924,528	)	$	(647,288	)
Series A preferred stock dividend		(8,962	)		(5,672	)
Net loss attributable to common stockholders		(1,933,490	)		(652,960	)

Weighted average common shares outstanding - Basic and diluted		294,471,692			105,994,083

Net loss per common share - Basic and diluted	$	(0.01	)	$	(0.01	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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PAZOO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Three Months Ended
	March 31,
	2015			2014

Cash flows from operating activities:
Net loss	$	(1,924,528	)	$	(647,288	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		862,800			110,991
(Gain)/loss on derivative liabilities		(439,113	)		376,187
Impairment loss on equity method investment		499,000			-
Amortization of debt discounts		451,693			17,804
Loss on true-up of convertible notes		34,383			-
Additional common shares issued for true-up of convertible notes		51,470			-
Changes in operating assets and liabilities:
Accounts receivable		(821	)		(7,537	)
Stock subscription receivable		5,254			-
Inventories		-			1,565
Prepaid expenses and other current assets		4,716			(22,147	)
Accounts payable and accrued liabilities		5,159			12,076
Interest payable		66,679			6,000
Net cash used in operating activities		(383,308	)		(152,349	)

Cash flows from investing activities:
Deposit made on acquisition of investment		-			(50,000	)
Cash paid for intangible asset		(200,000	)		-
Equity investment in equity method investee		(499,000	)		-
Net cash used in investing activities		(699,000	)		(50,000	)

Cash flows from financing activities:
Borrowings on convertible note, net of original issue discounts		82,500			55,000
Proceeds from issuing common stock		48,380			-
Proceeds from exercise of Series A preferred warrants		-			40,000
Proceeds from sale of Series A preferred stock and warrants		235,000			100,000
Net cash provided by financing activities		365,880			195,000

Net increase in cash and cash equivalents		(716,428	)		(7,349	)
Cash and cash equivalents beginning of period		733,637			35,848
Cash and cash equivalents end of period	$	17,209		$	28,499

Supplemental Disclosure of Cash Flows Information
Cash paid for interest	$	-		$	-
Cash paid for income taxes		-			-

Noncash Investing and Financing Activities
Common stock issued for the conversion of Series A preferred stock	$	60,000		$	1,700
Debt discounts due to derivative liabilities		181,803			60,500
Payments of accounts payable by third party		-			2,075
Original issue discount on convertible note		-			5,500
Resolution of derivative liabilities		1,126,245			-
Common shares issued for conversion of debt and interest		679,251			-

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Pazoo, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Financial Presentation

The unaudited Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows of Pazoo, Inc. (“we”, “our”, “Pazoo” or the “Company”) reflect all normal recurring adjustments nature which are, in the opinion of management, necessary for a fair presentation of financial position and the results of operations for the interim periods presented. Certain prior-year amounts have been reclassified to conform to the current period presentation.

Description of Business

We are an early growth stage health and wellness company. Presently, our primary business is pazoo.com, an online, content driven, ad supported health and wellness web site for people and their pets. Additionally, this site has e-commerce functionality which allows pazoo.com to be an online retailer of nutritional foods/supplements, wellness goods, and fitness apparel. Pazoo, Inc. does not have any brick and mortar establishments.

We entered the pharmaceutical testing laboratory market with our acquisitions of MA & Associates, which will operate pharmaceutical testing laboratories in Nevada, and Harris Lee which will operate pharmaceutical testing laboratories in other states. These pharmaceutical testing laboratories focus on providing quality control services to the medical cannabis industry. The mission is to protect the public health by providing infrastructure and analytical services to legally-authorized cannabis producers and distributors as well as to regulators. States that have legalized cannabis are developing cannabis health and safety criteria that we will fulfill through our testing laboratories.

Principles of Consolidation

The accompanying consolidated financial statements include the amounts of the Company and its wholly-owned subsidiary Harris Lee LLC, a Nevada limited liability company. All intercompany accounts and transactions have been eliminated as of March 31, 2015.

Intangible Assets

Intangible assets as of March 31, 2015 consisted of a license agreement acquired for $200,000 during March 2015 from Steep Hill Labs for the right to take the Steep Hill software and methodology to states above and beyond Nevada. The cost basis of the intangible asset will be amortized over the initial 9-year term of the license. Amortization expense during the three months ended March 31, 2015 was zero as the amount was nominal.

Impairment of Long-Lived Assets

The Company’s intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exeeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. The license was evaluated for impairment and no impairment loss was incurred as of March 31, 2015.

Note 2—GOING CONCERN

From inception of November 16, 2010 through March 31, 2015, the Company has incurred net losses of $9,344,477 and the Company has a working capital deficit as of March 31, 2015. These factors, among others, raise significant doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s 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 attain profitability. Management believes that we can alleviate the facts and circumstances which indicate a going concern by expanding our services, expert advice and online products. We aim to become more than a web based company by providing information, services and products through direct response, retail, and advertising revenue, in addition to our website.

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Note 3—STOCKHOLDERS’ EQUITY

Common Stock

During the first quarter of 2015, the Company issued 308,820,187 common shares for the following purposes.

	3,858,333		shares for third-party services valued at $15,550
	5,460,125		shares issued for cash for cash proceeds of $48,380
	7,918,528		shares issued for true-up of loan conversion valued and expensed at $51,470
	60,000,000		shares resulting from Series A Preferred Stock holders converting 600,000 shares
	231,583,201		shares resulting from debt holders converting $679,251 of debt into common stock
	308,820,187		shares issued total
	193,030,398		shares at December 31, 2014
	501,850,585		shares at March 31, 2015

Preferred Stock

During the first quarter of 2015, the Company issued 275,000 net shares of Series A preferred stock for the following purposes.

(600,000	)	shares converted into 60,000,000 common shares
875,000		shares issued for $235,000 in cash
275,000		shares total
1,203,526		shares at December 31, 2014
1,478,526		shares at March 31, 2015

During the first quarter of 2015, the Company issued 450,000 net shares of Series B preferred stock and issued 580,000 shares of Series C preferred stock as a part of its investments in Harris Lee and MA investments. The total value of preferred shares at issuance was $847,250.

Warrants

Simultaneous with issuing Series A Preferred Stock in the three month period ended March 31, 2015, and under Investment Agreement No. 5 (October 2014) and Investment Agreement No. 6 (February 2015), we issued 1,750,000 warrants. These warrants allow the holder to purchase one share of Series A Preferred Stock for each Series A Preferred Stock at an exercise price of $0.50, subject to the terms of the warrant agreement between the warrant agent and us. These warrants are exercisable up to five years from the issuance date.

The following table presents the Series A preferred stock warrant activity during the three months ended March 31, 2015:

	Warrants		Weighted Average Exercise Price

Outstanding - December 31, 2014		1,030,226	$	2.23
Granted		1,750,000		0.50
Forfeited/Canceled		-		-
Exercised		-		-
Outstanding - March 31, 2015		2,780,726		1.18
Exercisable - March 31, 2015		2,780,726	$	1.18

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The weighted average remaining life of the outstanding Series A preferred stock warrants as of March 31, 2015 and December 31, 2014 was 4.23 and 3.26 years, respectively.

The following table presents the common stock warrant activity during the three months ended March 31, 2015:

	Warrants		Weighted Average Exercise Price

Outstanding - December 31, 2014		6,130,470	$	0.05
Granted		-		-
Forfeited/Canceled		-		0.05
Exercised		-		-
Outstanding - March 31, 2015		6,130,470		0.05
Exercisable - March 31, 2015		6,130,470	$	0.05

The weighted average remaining life of the outstanding common stock warrants as of March 31, 2015 and December 31, 2014 was 0.23 and 0.48 years, respectively.

Note 4—RELATED PARTY TRANSACTIONS

In July 2013, we entered into a consulting agreement with an affiliate of Mr. Basloe. The agreement provides for consulting on marketing-related services for use in our business operations. The amounts paid under this agreement in the three months ended March 31, 2015 and March 31, 2014 were $15,000 and $14,250, respectively.

In January 2015, we entered into a services agreement with a family member of Mr. Basloe. The agreement provided for consultation services related to the Colorado recreational and medical marijuana marketplace and onsite retail operations studies in Boulder, CO and Denver, CO. The consultant was granted 250,000 common shares under the agreement which vest after six months. The fair value of the award was determined to be $1,500 as of March 31, 2015 of which $750 was recognized during the three months ended March 31, 2015 as stock-based compensation. The shares will be issued upon vesting.

In connection with the investments in Harris Lee and MA Associates, the Company issued Series B and Series C Preferred shares to two current board members, Mr. Del Hierro and Mr. Lierberthal. Mr. Del Hierro was issued 150,000 shares of Series B Preferred shares valued at $150 and 140,000 shares of Series C Preferred shares value at $204,400. Mr. Lieberthal was issued 150,000 shares of Series B Preferred shares valued at $150 and 140,000 shares of Series C Preferred shares value at $204,400.

Note 5—EQUITY METHOD INVESMENTS AND ACQUISITIONS

MA & Associates, LLC

Equity method investees are all entities over which the Company has significant influence, but not control. Significant influence is presumed with a shareholding of between 20% and 50% of the voting rights. Investments in equity method investees are accounted for using the equity method of accounting and are initially recognized at cost. As of March 31, 2015, the Company has significant influence in its investments in, MA & Associates, LLC and subsequently gained control in the second quarter of 2015. (See Subsequent Events.)

As of March 31, 2015, the Company owned a 40% interest in MA. In the first quarter of 2015, the Company paid an additional $499,000 of the $2,000,000 cash portion of the purchase price and issued 100,000 of the 150,000 shares of Series C Preferred Stock. The remaining shares will be issued in the future after the testing laboratory is operational. Subsequent to March 31, 2015, the Company paid an additional $237,638. The fair value of the 100,000 Series C shares was determined to be $146,000 and it was recognized as compensation expense to the sellers of MAIn addition, there are 60,000 additional Series C shares to be issued upon achieving certain milestones in 2015 of which 30,000 were issued valued and expensed at $43,800.

In accordance with the agreement, ICPI is entitled to 500,000 Series C shares of which 300,000 were issued valued and expensed at $438,000. The remaining 200,000 shares will be issued upon achieving certain milestones in 2015.

During the quarter ended March 31, 2015, the Company performed an impairment analysis and determined that due to the fact that MA is a start up with no current cash flows; we impaired 100% of the additional equity method investment resulting in an impairment loss of $499,000.

The Company recognizes its proportionate share of the net income or losses for MA in the Statements of Operations, after adjustments to align the accounting policies with those of the Company. When the Company’s share of losses exceeds its interest in equity method investees, the Company reduces to zero its carrying amount of that interest (including any long-term loans) and discontinues recognizing further losses except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the equity method investees. The Company eliminates unrealized gains on transactions between the Company and its equity method investees and eliminates unrealized losses unless the transaction provides evidence of an impairment of the asset transferred. Re-measurement differences of equity stake resulting from gaining control over the investee previously recorded as an equity method investments are recorded under Results related to investments in equity method investees. During the quarter ended March 31, 2015, the equity method investment loss recognized was zero as it was determined to be nominal.

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Harris Lee Holdings, LLC

At December 31, 2014, the Company owned 45% of Harris Lee Holdings, LLC (“Harris Lee”). Pursuant to an October 2014 agreement, during the first quarter of 2015, the company acquired an additional 10% interest in Harris Lee in exchange for 150,000 shares of the Company’s Series C Preferred stock based on a series of milestone events.

In January 2015, the Company acquired the remaining 45% of Harris Lee in exchange for 450,000 shares of the Company’s Series B Preferred Stock.

The aggregate fair value of the 450,000 Series B and the 150,000 Series C shares was determined to be $219,450 and it was recognized as compensation expense to the sellers of Harris Lee. Harris Lee is now consolidated in the Company’s financial results.

During the quarter ended March 31, 2015, Harris Lee was not operating and its impact on the Company’s Statement of Operations was zero as it was determined to be nominal.

Note 6—CONVERTIBLE NOTES

During the first quarter of 2015, the Company recorded discounts of $186,559 on the notes of which $181,003 resulted from derivative liabilities and $5,556 resulted from original issue discounts. Aggregate amortization of debt discounts was $451,693 for the three months ended March 31, 2015.

The following table summarizes the changes in the convertible notes for the three months ending March 31, 2015:

	Short Term			Long Term			Total

Balance as of December 31, 2014 - Net	$	895,664		$	28,832		$	924,496
Add back: unamortized discount		(413,898	)		(783,668	)		(1,197,566	)
Balance as of December 31, 2014 - Gross	$	1,309,562		$	812,500		$	2,122,062
Cash additions		52,500			30,000			82,500
Non-cash additions		34,383			-			34,383
Cash payments		( -	)		( -	)		( -	)
Conversions		(572,756	)		(55,556	)		(628,312	)	(a)
Original issue discount		5,556			-			5,556
Total		829,245			786,944			1,616,189
Less: unamortized discount		(208,113	)		(724,319	)		(932,432	)
Balance as of March 31, 2015	$	621,132		$	62,625		$	686,757

(a)	The Statement of Cash Flows shows $679,251 which consists of $628,312 in principal plus $50,939 in interest. Both were converted into common shares.

The Company uses the Black Scholes Option Pricing Model to value its convertible debt and warrant derivative liabilities based upon the following assumptions during the three months ended March 31, 2015:

	March 31, 2015

Dividend yield:		0
Expected volatility	144.0% to 219.0%
Risk free interest rate	0.03% to 1.37%
Expected life (years)	0.25 to 4.91

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Note 7—DERIVATIVE LIABILITIES

The following table summarizes the changes in the derivative liabilities during the period ending March 31, 2015:

Balance as of December 31, 2014	$	2,576,025

Debt discount		181,003
Original issuance discount		-
Extinguished		(1,126,245	)
Change in fair value		(439,113	)

Ending balance as of March 31, 2015	$	1,191,670

Note 8—FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILIITY

The Company evaluates all of it financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Under ASC-815 the conversion options embedded in the notes payable described in Note 5 require liability classification because they do not contain an explicit limit to the number of shares that could be issued upon settlement.

As defined in FASB ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

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The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value at the period ending March 31, 2015.

Recurring Fair Value Measurements	Level 1		Level 2		Level 3		Total

LIABILITIES:
Derivative liabilities - March 31, 2015		-		-		1,191,670		1,191,670
Derivative liabilities - December 31, 2014		-		-		2,576,025		2,576,025

Note 9—SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10-50-1 we evaluated our subsequent events from the May 15, 2015 filing date of our 2014 Form 10-K with the U. S. Securities and Exchange Commission through June 17, 2015. During this period, we entered into the following debt and equity transactions:

●	Investors converted $282,067 of Convertible Promissory Notes into 115,461,060 common shares.

●	Investors converted $435,000 of Convertible Preferred Series A Stock into 43,500,000 shares of common stock.

●	We issued 1,437,500 of Series A Preferred Stock for $225,000 in accordance with Investment Agreement No. 5 and No. 6.

●

The Company acquired the remaining 60% of MA & Associates in exchange for an aggregate total of 1,000,000 shares of the Company’s Preferred C shares of stock. The Company now owns 100% of MA & Associates and is consolidating this investment. In 2014, the company accounted for this investment under the equity method. The Agreement is attached here as Exhibit 99.3.

●	The Company formed a wholly owned subsidiary called CannabisKing Distribution LLC. This subsidiary will distribute ancillary non-regulated products at various testing laboratories across the country.

●	The Company borrowed an aggregate of $780,000 under convertible notes with the following terms: Interest rates 8.0% to 12.0% Conversion rates $0.0065 to $0.02 Maturity dates November 2015 to April 2020

●	The Company paid back an aggregate total of $373,382 in Convertible Notes.

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

This Quarterly Report on Form 10-Q contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements in this Quarterly Report that are not statements of historical facts are forward-looking statements, which involve risks and uncertainties. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. Our actual results may differ materially from those indicated in the forward-looking statements as a result of the factors set forth elsewhere in this Quarterly Report on Form 10-Q, including under “Risk Factors.” You should read the following discussion and analysis together with our unaudited financial statements for the periods specified and the related notes included herein. Further reference should be made to our Registration Statement on Form S-1 filed with the Securities and Exchange Commission.

This Quarterly Report on Form 10-Q contains terminology referring to Pazoo, Inc., such as “us,” “our,” and “the Company.”

Management intends the following discussion to assist in the understanding of our financial position and our results of operations for the three months ended March 31, 2015 and March 31, 2014.

Overview

Pazoo (“Pazoo”) was incorporated in Nevada on November 16, 2010 under the name “IUCSS, Inc.” A name change from IUCSS, Inc. to Pazoo occurred on May 9, 2011. We are a health and wellness company. Presently, our primary business is Pazoo.com, an online, content driven, ad supported health and wellness web site for people and their pets. Additionally, this site has e-commerce functionality which allows Pazoo.com to be an online retailer of nutritional foods/supplements, wellness goods, and fitness apparel. Pazoo, Inc. does not have any brick and mortar establishments. At present our only revenue source is www.pazoo.com which generates product sales and online advertising revenue. As of March 31, 2015, we had total assets of $323,111 and plan to make additional investments in online content.

The primary mission of pazoo.com is to deliver health and wellness content in the form of media, articles, blogs, videos and other media/content. Additionally, www.pazoo.com delivers healthy cost-effective nutritional products based on relationships with leading manufacturers in the health improvement industry. In other words, pazoo.com is a user-friendly, attractively designed web site and e-commerce portal for total health and wellness information and health products for individuals and their pets. We seek to enhance visitors’ experiences to our website by providing total health content and health products including foods, drinks, supplements, wellness merchandise, and health/wellness advice. Pazoo.com’s primary target demographic is health conscious adults ages 24 - 54 seeking to better their personal well-being and complement their daily lifestyles with consumer products items that are part of and promote a healthy lifestyle.

Our principal executive offices are located at 760 Route 10, Suite 203, Whippany, New Jersey 07981. Our telephone number is (855) PAZOO-US. Our internet address is www.pazoo.com.

Sources of Revenue

We currently have three lines of business relating to and revolving around the health and wellness arena:

●

Advertising Revenue from Our Website, www.pazoo.com. Through advertising providers and agencies, pazoo.com is paid for every ad impression that appears on a page for which a visitor goes to. As we build our visitor base, ad revenue will increase. However, just having the traffic does not effectively increase advertising revenue. To get the full value of each visitor, the time on site must be long enough so that a visitor is interested in going to multiple pages for which there are ads on each page. The only way this will transpire is if the visitor’s experience is gratifying. This is why pazoo.com is so focused on quality content that’s interesting and informative. A bad visitor experience will result in a low time on site and fewer page views. Internet tracking tools have much improved over the past decade and will continue to improve in the coming years, especially when it comes to advertising and overall website analytics. Pazoo continues to constantly improve is this area at all times. Pazoo.com has seen a strong increase in its viewership as shown by the recent average time spent on site for the period March 2014 to May 2014 of five minutes and forty seconds versus three minutes and twenty-seven seconds for the same time period from December 2013 to February 2014 with the same amount of page views.

Pazoo.com has a unique and compelling online marketing platform. Pazoo.com offers the following important marketing advantages to its target audiences:

A comprehensive solution as a content source – information on a full spectrum of disciplines within the health and wellness marketplace;

Health and wellness experts that have expertise in these varied disciplines and write about their areas expertise; and

Content that is both for the health and wellness of people as well as their pets (over 60% of American homes have pets).

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E-commerce. Our e-commerce offerings will increase as we build the traffic coming to pazoo.com. In this way we could establish a revenue source over and above advertising to increase the value of each visitor. We have the following e-commerce elements ready for an activated marketing program:

An e-commerce platform that is functional;

Relationships with manufacturers, distributors and other e-commerce companies so that increasing product offerings will not be time consuming;

Members on the pazoo.com content team with merchandising experience: i.e. a Pazoo expert is buyer of pet products for a large pet retailer; and

Members on the pazoo.com content team that are experienced in e-commerce marketing; i.e. we will look to offer our consumers low cost and timely delivery of product by negotiating with shipping companies to offer a flat rates on various products.

●

Pharmaceutical Testing Facilities. We entered this arena through our recent acquisition of a 40% minority equity stake in MA & Associates, LLC. MA & Associates was launched in September of 2013 to provide quality control services to the medical cannabis industry. MA & Associates’ primary mission is to protect the public health by providing infrastructure and analytical services to legally authorized distributors and producers of cannabis and to regulators tracking their operations.

The company will provide the medical cannabis industry guidelines on how the regulation and inspection by public health authorities is to be implemented. MA & Associates’ primary customer base includes all of the licensed cannabis cultivators, in the State of Nevada, and their customers are required by law to have their products tested before they can be transferred to the dispensaries. As such, we are in a unique position to provide the mandated health and safety testing upon which this burgeoning industry must hinge.

Critical Accounting Policy and Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements 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. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Results of Operations

Comparison of the three months ended March 31, 2015 to the three months ended March 31, 2014

Net Sales. We had net sales of $20,233 and $17,327 in the three months ended March 31, 2015 and March 31, 2014, respectively.

Cost of Goods Sold. We had cost of goods sold of zero and $325 in the three months ended March 31, 2015 and March 31, 2014, respectively.

Operating Expenses. Operating expenses consisted primarily of selling, general and administrative expenses and professional fees. Total operating expenses increased to $1,366,503 for the three month period ended March 31, 2015 from $264,299 for the three month period ended March 31, 2014. The components of operating expenses are detailed below.

Selling, General and Administrative expenses in the first three months of 2015 increased to $1,080,862 from $206,458 in the first three months of 2014. The increase was mainly comprised of stock compensation, and marketing & advertising.

Professional fees increased to $228,251 in the first three months of 2015 from $35,433 in the first three months of 2014. The increase in professional fees was attributed to an increase in investor relations and investor consultants.

Net Loss. Our net loss increased to $1,924,528 for the three months ended March 31, 2015 from $647,288 for the same period in 2014. The increase is primarily attributable to higher operating expense, as outlined above.

Liquidity and Capital Resources. In the three month period ended March 31, 2015, we had outstanding 501,850,585 common shares, 1,478,526 Series A Preferred Stock shares, 1,637,500 Series B preferred stock, and 580,000 shares of Series C Preferred Stock shares to fund business operations and invest in companies.

Our total assets were $323,111 as of March 31, 2015, which primarily consisted of intangible assets and $88,770 accounts receivable primarily for advertising revenue.

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We had negative working capital of $1,844,641 as of March 31, 2015.

Our total liabilities were $2,030,377 which was mainly comprised of derivative liability of $1,191,670 for our convertible notes and convertible debt of $621,133.

Our total stockholder’s deficit as of March 31, 2015 was $1,707,266 and we had a retained deficit of $9,344,477 through the same period.

We used $383,308 in net cash for operating activities for the three months ended March 31, 2015, which included a net loss of $1,924,528 and loss on derivative liability of $439,113.

We had $699,000 net cash used in investing activities in the three month period ended March 31, 2015 due primarily to investment in MA & Associates.

We had $365,880 net cash provided by financing activities in the three month period ended March 31, 2015 due primarily to borrowings on convertible notes and proceeds from sale of Series A preferred stock and warrants.

As of March 31, 2015, we had no formal long-term lines of credit or bank financing arrangements.

Off-Balance Sheet Arrangements. We have no off-balance sheet arrangements.

Subsequent Events.

In accordance with FASB ASC 855-10-50-1 we evaluated our subsequent events through June 17, 2015. Refer to Note 9, Subsequent Events, for detailed information.

Item 3 Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, as defined by Item 10(f) of Regulation S-K, we are not required to provide the information required by Item 3.

Item 4 Controls and Procedures

Evaluation of disclosure controls and procedures.

We carried out an evaluation, under the supervision of and with our executive officers, David M. Cunic in his role as Chief Executive Officer and Ben Hoehn in his role as Chief Operating Officer and Acting Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934). Based upon that evaluation, the officers concluded that because of the limited size of our organization our disclosure controls and procedures are not effective as of March 31, 2015.

We have not made any changes in our internal control over financial reporting during the three months ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1 Legal Proceedings

No updates for the period ending March 31, 2015

Item 1A Risk Factors

As a “smaller reporting company” as defined by Item 10(f) of Regulation S-K, we are not required to provide information required by this item.

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3 Defaults Upon Senior Securities

None.

Item 4 (Reserved)

Item 5 Other Information

None.

Item 6 Exhibits

Exhibit Number		Description

31.1		Certification of David Cunic, Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2		Certification of Ben Hoehn, Acting Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1		Certification of David Cunic, Chief Executive Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Ben Hoehn, Acting Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1		ICPI Investment Agreement No. 4
99.2		3-17-14 Board Resolution
99.3		MA & Associates Limited Liability Company Membership Interest Purchase Agreement

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SIGNATURE

In accordance with 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.

June 23, 2015	PAZOO, INC.

	/s/ David M. Cunic
	David M. Cunic
	Chief Executive Officer


June 23, 2015	PAZOO, INC.

	/s/ Ben Hoehn
	Ben Hoehn,
	Chief Operating Officer, Acting Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION

I, David Cunic, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Pazoo, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant is made known to me by others within the Company, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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 of America;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 23, 2015

/s/ David M. Cunic
Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Benjamin Hoehn, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Pazoo, Inc.;

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant is made known to me by others within the registrant, particularly during the period in which this report is being prepared;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 23, 2015

/s/ Benjamin Hoehn
Acting Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Pazoo, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David M. Cunic, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted by the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ David M. Cunic
Chief Executive Officer June 23, 2015

This certification is made solely for purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Pazoo, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Benjamin Hoehn, Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted by the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Benjamin Hoehn
Acting Chief Financial Officer June 23, 2015

This certification is made solely for purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

Exhibit 99.1

INVESTMENT AGREEMENT No. 4

BY AND BETWEEN

INTEGRATED CAPITAL PARTNERS, INC.

AND

PAZOO, INC.

INVESTMENT AGREEMENT

THIS INVESTMENT AGREEMENT made as of, and effective, on this 13th day of March, 2014 by and between PAZOO, Inc., a Nevada corporation (the “Company”) and Integrated Capital Partners, Inc., a Nevada corporation, (the “Investor” or “ICPI”, and together with the Company each a “Party” and collectively, the “Parties”).

WITNESSETH

WHEREAS, PAZOO is a corporation organized and existing under the laws of the State of Nevada which manages an overall health and wellness internet site and sells and distributes health and fitness related products thereon; and

WHEREAS, the Investor desires to invest up to a maximum sum of $500,000, as set forth herein, (the “Investment”) into PAZOO;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

The Investment.

The Investor shall tender, by bank check, cashiers check or wire transfer, the Investment, in one or more installments, to PAZOO for the acquisition of up to 5,000,000 shares (i.e at a rate of $0.10 per share) of Series A Convertible Preferred Stock of PAZOO on the terms and conditions as set forth in the Certificate of Designations, as amended, of Series A Convertible Preferred Stock (the “Certificate”). The Investor shall have until June 30, 2014 to make up to the maximum investment. Thereafter, no further funds will be accepted by PAZOO and a new Investment Agreement will need to be entered into

The use of the Investment shall be restricted so as to be utilized only for the betterment of PAZOO and for the furtherance of the business and the financial improvement of PAZOO. PAZOO warrants and represents that upon each Investment made by ICPI, PAZOO will cause to have issued the appropriate number of shares of the Series A Convertible Preferred Stock of PAZOO in accordance with the Certificate.

Series A Convertible Preferred Stock Warrant.

As further consideration for the Investor making the Investment as set forth herein, simultaneous with the ICPI tendering any potion of the Investment, and PAZOO issuing the appropriate number of shares of Series A Convertible Preferred Stock, PAZOO will issue to ICPI a Series A Convertible Preferred Stock Warrant, in substantially the same form as set forth in the Series A Convertible Preferred Stock Warrant (the “Warrant”) attached hereto as Exhibit A, wherein ICPI shall have the right to acquire one share of Series A Convertible Preferred Stock for each share of Series A Convertible Preferred Stock acquired hereunder in accordance with the terms of the Certificate and Warrant, at a rate of $0.20 per share.

Representations of Investor.

The Investor represents as follows:

(a) That the Investor has had the opportunity to review all relevant material of PAZOO to the satisfaction of the Investor and that the Investor is not relying upon the verbal representation made by any officer, employee or agent of PAZOO; and

(b) That the Investor is an accredited investor as defined by SEC Rule 501 and have sufficient net worth and/or income to be able to bear the economic risk of such an investment; and

(c) That the Investor has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of such an investment or have access to advisors, consultants or other counsel who have such knowledge; and

(d) That the Investor has determined that the Investment is a suitable investment for it and meets its investment objectives and financial needs, and that the Investor has adequate means for providing for current financial needs and contingencies and has no need for liquidity if the Investment is rendered worthless; and

(e) That the Investor recognizes PAZOO is a start up company and that the Investment is highly speculative and involves a high degree of risk, including the possible insolvency of PAZOO.

(f) That the Investor will execute a Subscription Agreement, for each portion of the Investment and that PAZOO may rely upon any representations made in any Subscription Agreement.

(g) That the Investor acknowledges that at no time shall investor beneficially own (whether through conversion of the Series A Preferred Stock, exercise of any common stock Warrant, or the acquisition of the common stock of PAZOO through public or private transactions) more than 4.99% of the outstanding common stock of PAZOO, or such lesser amount in the event the definition of “Affiliate” be changed, modified or revised.

No Right to Demand Return of Investment / Retirement of Investment.

The Investor acknowledges that it has no right to demand a return of the Investment and the entire Investment is subject to risk of loss.

Insolvency.

The Investor acknowledges that in the event of the insolvency of PAZOO, including without limitation of any bankruptcy filing or assignment for the benefit of creditors, the Investment is in the form of equity and shall be subordinate to the claims of all creditors of PAZOO.

Partial Invalidity.

The invalidity of any portion of this Agreement shall not be deemed to render the remainder of this Agreement invalid.

Entire Agreement

This Agreement, and the Exhibits attached hereto, contain the entire agreement among the Parties with respect to subject matter hereof, and this Agreement can be amended only by an instrument in writing signed by the Parties hereto.

Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.

Dispute Resolution.

The Parties agree that should any dispute arise under this Agreement that the Parties will submit such dispute to binding arbitration to be administered by the New Jersey office of the American Arbitration Association and in accordance with the American Arbitration Association’s General Commercial Rules.

10.

Signatures.

The Parties agree that this Agreement shall be signed in duplicate and may be signed in counterparts and that such counterparts, when taken together shall constitute one and the same agreement. The Parties further agree that facsimile signatures and signatures delivered by electronic means shall have the same force and effect as originals thereof.

11.

Additional Documents.

Simultaneous with the execution of this Agreement, PAZOO will provide the Investor with a corporate resolution authorizing the execution and performance of Agreement.

IN WITNESS WHEREOF, the undersigned have hereunto set their hands the day first written above.

	INTEGRATED CAPITAL PARTNERS, INC.


	/s/ James M. Farinella
	James M. Farinella / President



	PAZOO, INC.


	/s/ Steven Basloe
	Steven Basloe / President

Exhibit 99.2

	/s/ David Cunic
	David Cunic


	/s/ Steve Basloe
	Steve Basloe


	/s/ Gregory Jung
	Gregory Jung

COMPANY SECRETARY

/s/ Ben Hoehn

Ben Hoehn

Exhibit 99.3

LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST

PURCHASE AGREEMENT

This LIMITED LIABILITY COMPANY MEMBERSHIP INTEREST PURCHASE AGREEMENT entered into this 3rd day of June 2015 (“Agreement”) by and between Pazoo, Inc., a corporation organized and existing under the laws of the State of Nevada, and having its principal place of business at 760 Route 10, Suite 203, Whippany, New Jersey 07981 (“Buyer”), and the current Members of MA & Associates, LLC a limited liability company organized and existing under the laws of the state of Nevada, and having its principal place of business at 200 W. Sahara Avenue, Unit 407, Las Vegas, Nevada 89102 (the “Company”), as set forth on the signature page hereof (collectively, the “Sellers”), pursuant to the following facts:

W I T N E S S E T H:

WHEREAS, Buyer currently owns, pursuant to a Limited liability Company Purchase Agreement executed on or about April 9, 2014, forty percent (40%) of the limited liability company membership interest of the Company

WHEREAS, Buyer wishes to buy and the Sellers wish to sell to Buyer, on the terms and for the consideration hereinafter provided, the remaining sixty percent (60%) of the limited liability company membership interest of the Company.

WHEREAS, after the closing of this Agreement, Buyer will own one hundred percent (100%) of the limited liability company membership interest of the Company and the Company will be a wholly owned subsidiary of the Buyer.

NOW, THEREFORE, in consideration of the promises and the respective agreements hereinafter set forth, the Buyer and the Company hereby agree as follows:

1. PURCHASE OF THE MEMBERSHIP INTERST OF THE COMPANY.

1.1 Sale of Membership Interest. Upon the terms and subject to the provisions of this Agreement the Sellers agree that they will sell, convey, transfer, assign and deliver to Buyer at the Closing provided for in Article 2, except as otherwise set forth herein, free and clear of all claims, liens, pledges, encumbrances, mortgages, charges, security interests, options, preemptive rights or other interests or equities whatsoever, sixty percent (60%) of the limited liability company membership interest (the, “Purchased Interest”) of the Company and any and all outstanding membership interests, or the rights to acquire same, of the Company, other than those of the Buyer, shall be terminated and/or cancelled. After the closing of this Agreement, the Buyer shall own one hundred percent (100%) of the Company and no other party shall own, or have the right to acquire, any membership interest in the Company.

1.2 Consideration for Sale and Transfer of the Purchased Interest. Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and covenants of Company herein contained, and in full consideration of such sale, conveyance, transfer, assignment and delivery of the Purchased Interest to Buyer, Buyer agrees to deliver to the Sellers, in proportion to the percentage that each Seller owns of the Purchased Interest, an aggregate total of 1,000,000 shares of the Buyer’s Series C Preferred stock structured as an “assets-over” transaction qualifying as a tax-free contribution to Buyer under §351 of the Internal Revenue Code (the purchase price for the Purchased Interest is hereinafter referred to as the “Purchase Price”).

2. THE CLOSING AND DELIVERY OF PURCHASE PRICE.

2.1 Closing. The closing (“Closing”) with respect to the acquisition of the Purchased Interest under this Agreement and all other transactions contemplated hereby shall take place at 10 a.m. Eastern Standard Time on June 1, 2015 at the offices of Buyer (or on such later time and date or place as the parties may agree). The time and date of the Closing is hereinafter called the “Closing Date.”

2.2 Payment of the Purchase Price. At the Closing, the Buyer shall deliver the fifty percent (50%) of the Purchase Price (i.e. 500,000 shares of Buyer’s Series C Preferred stock) with the remaining fifty percent (50%) of the Purchase Price (i.e. 500,000 shares of Buyer’s Series C Preferred stock) within ten (10) days of Buyer’s amendment to its Articles of Incorporation to increase it authorized voting stock, but in no event later than September 30, 2015.

2.3 Transfer of Purchased Interest. At the Closing, the Sellers shall transfer to Buyer or its nominee the Purchased Interest, free and clear of all claims, liens, pledges, encumbrances, mortgages, charges, security interests, options, preemptive rights, restrictions or any other interests or imperfections of title whatsoever. The Company acknowledges that the Purchased Interest is unique and not otherwise available, and agree that, in addition to any other available remedies, Buyer may seek any equitable remedies to enforce performance by the Sellers hereunder, including, without limitation, an action for specific performance. Sellers and the Company shall take all reasonable efforts to ensure that all notifications regarding the transfer of the Purchased Assets is properly recorded with any state or local regulatory agency. Antonio Del Hierro and David Lieberthal, on behalf of the Sellers, shall agree, if necessary, to remain as interim officers and or directors of the Company if needed to ensure the Company’s state and local licenses remain unaffected. Antonio Del Hierro and David Lieberthal shall be reasonably compensated for their services, if any, during this transition period.

2.4 Certificates of Good Standing. At the Closing, the Buyer and the Company shall deliver Certificates of Good Standing, each from the State of Nevada.

3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.

The Company hereby represents, warrants and agrees as of the date hereof and as of the date of the Closing as follows:

3.1 Organization and Qualification of Company. The Company is duly organized, validly existing and in good standing under the laws of Nevada. The Company has all requisite corporate power and authority to own or lease all of its properties and assets and to conduct its business in the manner and in the places where such properties are owned or leased or such business is now conducted by it. Company is duly qualified, licensed and authorized to do business as a foreign corporation and is in good standing as a foreign corporation in the jurisdictions in which it conducts business and is not required to be so licensed, qualified or authorized to conduct its business or own its property in any other jurisdiction.

As set forth in Section 2.4 above, the Company shall deliver at Closing a Certificate of Good Standing for the Company. The Company represents that the minute books of the Company are current and contain correct and complete copies of the Certificate of Formation, any Limited Liability Company Operating Agreement and Bylaws of the Company, including all amendments thereto and restatements thereof, transfer ledgers reflecting the ownership interests of the Company, and of all minutes of meetings, resolutions and other actions and proceedings of its members and board of directors and all committees thereof, duly signed by the Secretary or an Assistant Secretary, all directors or all general and limited partners (the “Company Organizational Documents”).

3.2 Authority of Company and the Sellers. This Agreement and each of the agreements and other documents and instruments delivered or to be delivered to Buyer pursuant to or in contemplation of this Agreement will constitute, when so delivered, the valid and binding obligations of the Company and shall be enforceable in accordance with their respective terms. The execution, delivery and performance of this Agreement and each of the agreements and other documents and instruments delivered or to be delivered to Buyer or the Company have been duly authorized by all necessary action of the Company, are within Company’s corporate powers.

The execution, delivery and performance of any such agreement, document or instrument by the Company and the execution, delivery and performance of this Agreement or any other agreement, document or instrument by the Company does not, and will not, with the passage of time or the giving of notice or both:

(i) result in a breach of or constitute a default or result in any right of termination or other effect adverse to the Company under any indenture or loan or credit agreement of any of the Company, or any other agreement, lease or instrument to which the Company is a party or by which the property of the Company is bound or affected;

(ii) result in, or require, the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance or claim of any nature whatsoever on the Purchased Interest or any property or assets now owned, leased or used by the Company;

(iii) result in a violation of or default under any law, rule, or regulation, or any order, writ, judgment, injunction, decree, determination, award, now in effect having applicability to the Sellers or the Purchased Stock;

(iv) violate any provisions of the Certificate of Formation, Limited Liability Company Operating Agreement or By-Laws of the Company, or

(v) require any approval, consent or waiver of, or filing with, any entity, private or governmental.

3.3 Subsidiaries and Investments. Except as specifically disclosed to the Buyer, the Company has no subsidiaries and does not own any securities of or other interests or interests in, any firm, corporation, partnership, joint venture, trust, association, estate, joint stock company, organization, enterprise or entity, except temporary investments in the ordinary course of business.

3.4 Valid Title to Purchased Interest. The Sellers will deliver to Buyer, valid and marketable title to the Purchased Interests at the Closing, free and clear of any claims, liens, pledges, charges, encumbrances, mortgages, security, interests, options, preemptive or other rights, restrictions on transfer or other interest or equities or any other imperfections of title whatsoever. The Company and the Sellers represent and warrant that they have full power and lawful authority to execute and deliver this Agreement and to consummate and perform the transactions contemplated hereby; and that the execution and delivery of this Agreement by it and the consummation and performance of the transactions contemplated hereby by it are and will be the legal, valid and binding obligation of the Company and the Sellers, enforceable against them in accordance with their terms.

3.5 Intentionally Omitted.

3.6 Assets.

(a) Physical Assets, Cash, Equipment. All assets of the Company included in Company’s Balance Sheet (as hereinafter defined), other than those disposed of since the date of its preparation in the ordinary course of business, are at the date of the Closing, as described in Schedule 3.6(a),

(b) Liens. Except as listed on Schedule 3.6(b) hereto, Company has good and marketable title to all its assets (including, without limiting the generality of the foregoing, those reflected in the Balance Sheet (as hereinafter defined), except as has been since sold or otherwise disposed of in the ordinary and normal course of business on commercially reasonable terms), free and clear of all claims, liens, pledges, charges, mortgages, security interests, encumbrances, equities or other imperfections of title of any nature whatsoever, except for liens for current taxes and assessments not yet due and payable.

(c) Real Estate. Except as set forth in Schedules 3.6(c) and documents, the Company is not liable for any of the obligations, including, but not limited to, rent, common area expenses, expenses or fees arising from any lease other than for the office space located at 200 W. Sahara Avenue, Unit 407, Las Vegas, Nevada 89102.

3.7 Conduct of the Business. The Company is not a party to, or subject to or bound by nor are any of its assets subject to or bound by any agreement, oral or written, or any judgment, law, rule, regulation, order, writ, injunction or decree of any court or governmental or administrative body which prohibits or adversely affects or upon the consummation of the transactions contemplated hereby would prohibit or adversely affect: (i) the use of any or all of the assets and property of Company necessary for operation in the ordinary and usual course of business; or (ii) the conduct of its business and operations, in each case, in all respects in the same manner as such business has been conducted by it. Except as disclosed on the Schedule of Consents, Permits, Authorizations and Licenses attached hereto as Schedule 3.7(a), neither Sellers nor the Company is required by any person or governmental authority to obtain any consents, authorizations, licenses, permits, orders, certificates, registrations, qualifications or security clearances for the conduct of Company's business (including qualifications to transact business as a foreign corporation in various states); and, except as set forth on Schedule 3.7(a), the Company has obtained all such consents, authorizations, licenses, permits, orders, certificates, registrations, qualifications and security clearances; the same are valid and subsisting; and, except as set forth on Schedule 3.7(a), the consummation of this Agreement will not invalidate the same. The business and operations of the Company have been conducted in compliance with all applicable statutes, ordinances, orders, rules and regulations of any federal, state or local governmental authority (including without limitation those relating to fair labor practices and standards, equal employment practices and occupational safety and health and federal procurement). Except as set forth in Schedule 3.7(b), if any, the Company has not failed in any material way to comply with any law, order or regulation, in any way applicable to or affecting the Company's business of any governmental commission, board or agency or instrumentality, domestic or foreign, having jurisdiction over the Company or its operations, including, without limitation, laws, orders and regulations thereof relating to zoning, building codes, antitrust, occupational safety and health, consumer product safety, product liability, hiring, wages, employee benefit plans and programs, collective bargaining and the payment of withholding and Social Security taxes, and the Company has not received any actual written or oral notices or other communication from any such agency with respect to an alleged, actual or potential violation and/or failure of Company to comply with any of the foregoing.

3.8 Financial Statements and Undisclosed Liabilities.

(a) The Company shall deliver prior to closing to the Buyer its unaudited financial statements of the Company for the period ended May 31, 2013 (all of which financial statements are collectively referred to as "Interim Financial Statements"). The Interim Financial Statements and similar balance sheets and statements for periods subsequent to those covered by the Interim Financial Statements are hereinafter referred to as "Financial Statements."

(b) All of the Financial Statements: (i) are true and correct in all material respects and present fairly the financial position of the Company as of the dates thereof and the results of operations and changes in financial position for the respective periods covered by such statements, and (ii) have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with Company's past practices.

(c) The Company does not have any indebtedness, liability, claim or obligation of any nature, fixed or contingent, choate or inchoate, liquidated or unliquidated, secured or unsecured or otherwise of any kind or nature whatsoever, except: (i) as shown dollar for dollar on the Balance Sheet or incurred in the ordinary course of business on commercially reasonable terms subsequent to the Interim Financial Statements; or (ii) commercial obligations to perform pursuant to executory obligations not in default as disclosed pursuant to this Agreement. To the Best Knowledge of the Company, there is no existing condition, situation or set of circumstances which will result in any such liabilities.

3.9 Taxes. To the Best of the Company’s knowledge, any amounts stated as provisions for taxes on the Balance Sheet are sufficient for the payment of all federal, state, local and foreign taxes, assessments and other governmental charges or levies, and all employment and payroll-related taxes, including any penalties and interest (collectively referred to in this Agreement as "taxes") thereon, whether or not based upon or measured by, in whole or in part, net income, and whether or not disputed, of the Company accrued for or applicable to all periods ended on or prior to the Interim Financial Statements. The Sellers are unaware of any federal or state tax liens assessed as against the Company. To the best of Sellers knowledge the Company last filed federal, state and local tax returns was for the period ending December 31, 2014.

3.10 Patents, Trade Names, Trademarks and Copyrights.

Except as set forth on Schedule 3.10, the Company has no patents, patent applications, trade names, registered or common law trademarks, trademark applications and copyrights owned by or licensed to it.

3.11 List of Contracts. Except as set forth on Schedule 3.11, the Company is not a party to, nor is any of its properties or assets subject to or otherwise bound by, any:

(a) Contract with any present or former partner, director, officer or employee, agent or consultant;

(b) Collective bargaining agreement (or any side agreement, local understanding or settlement agreement relating to any such collective bargaining agreement) or any agreement or contract with any labor union or other employees' association;

(c) Lease or similar agreements regarding any real property, or personal property, involving annualized payments or potential payments by or to the Company are nothing now or in the future.

(d) Any contract for the future purchase of commodities, materials, inventory, ingredients, supplies, products, merchandise, services or equipment;

(e) Bonus, pension, profit-sharing, retirement or any hospitalization, or insurance or similar plan or practice, formal or informal, in effect with respect to employees of the Company or any other person or entity;

(f) Franchise, dealer, distribution, sales or agency contract or commitment;

(g) Any other outstanding contract of sale, or any distribution agreement, representative or sales agency agreement, creating any obligation of Company to sell or distribute products;

(h) Guarantees or indemnities, direct or indirect, current or contingent, of the obligations of customers of the Company or any other person or entity;

(i) Contracts with suppliers, vendors, distributors, clients, customers or others for the future performance of services or provision of goods by or for Company;

(j) Insurance policy;

(k) Advertising contract or commitment;

(l) Bank account, lock box or similar depository arrangements;

(m) Any license or franchise agreement (as licensor/franchisor or licensee/franchisee);

(n) Any real estate mortgage, loan or credit agreement with any lender, any indenture, pledge, conditional sale or title retention agreement, equipment obligation or lease, or lease purchase agreement;

(o) Any agreement restricting the freedom of the Company or of its employees, to compete in any line of business, in any geographic area or with any person or entity.

(p) Any other material contracts affecting the Company.

(q) Any contract of the Company to which the United States government or any agency thereof is a party.

All the contracts and commitments listed in said Schedule 3.11 are valid and binding obligations of the Company and of the other parties thereto in accordance with their respective terms and conditions except as set forth on Schedule 3.11.

There has been no breach or default of any provisions of any such contract, commitment, lease or other agreement by the Company, or to the best knowledge of the Company and nothing has occurred which, with lapse of time or the giving of notice or both, would constitute a breach or default by the Company, or to the best knowledge the Company, by any other party thereto with respect to any such contract or commitment or which would cause acceleration of any obligation of any party thereto or the creation of any lien, encumbrance, security interest in or upon the Purchased Interest, or the assets of Company. Buyer has been furnished with true and complete copies of all scheduled contracts and commitments.

3.12 Litigation. There is no action, suit, proceeding or investigation pending against the Company, and, to the best knowledge of the Company, there is no threatened action, suit, proceeding or investigation against the Company, nor have Sellers received any written or oral actual notice of any such action, suit, proceeding or investigation. No judgment, order, writ, injunction or decree or award has been issued by or, to the best knowledge of the Company requested of any court or governmental agency which might result in an adverse change in the business, property or assets, or in the condition, financial or otherwise, of Company or which might adversely affect the transactions contemplated by this Agreement. The Company has never been subject to any bankruptcy or other insolvency proceedings.

3.13 Absence of Changes. Since the Interim Financial Statements, the Company has conducted no business other than in the course of ordinary business.

3.14 Insurance. The Schedule of Insurance attached hereto as Schedule 3.14 contains a correct and complete list of all policies (including binders of insurance and including policies that have expired in the last 12 months) held by or on behalf of the Company or relating to its business or any of its assets (specifying the insurer, the amount of coverage, type of insurance, risks insured, any pending claims thereunder and claims history in the last 12 months). To the best knowledge of the Company such policies are valid and enforceable in accordance with their respective terms and are outstanding and duly in force as of the date hereof. Except as set forth in Schedule 3.14, there is no default with respect to any provision contained in any such policy, nor has there been any failure to give any notice or present any claim under any such policy in a timely fashion or in the manner or detail required thereby, which has had or reasonably might have a material adverse effect on the enforceability of substantial rights of the Company under any such policy. There are no claims that are not accrued on the Balance Sheet, and there are no unusual provisions for retroactive or retrospective premium adjustments or cancellation or non-renewal. No notice of cancellation or non-renewal with respect to, or disallowance of any claim under, any policy has been received by the Company. No policy of the Company has been cancelled by the issuer within the last three (3) years. Except, as set forth on any Schedule hereto, to the Company’s best knowledge, there is no state of facts and no event has occurred which reasonably might form the basis of any claim against or relating to the Company or its business or operations or any of its assets which are covered by any of such policies, or which might materially increase the premiums (other than general increases and additions to assets covered) payable under any such policy. Schedule 3.14 also contains a true and complete description of all outstanding bonds and other surety arrangements issued or entered into in connection with the Company or its business.

3.15 Insider Indebtedness. There is no insider indebtedness to the Company.

3.16 Employee Benefit Plans. Schedule 3.16 sets forth a complete and accurate description of all employee contracts, employee benefit plans and all collective bargaining agreements relating to employee benefits with respect to which the Company has or may incur any future or contingent obligations, including, without limitation, all plans, agreements, arrangements, or policies relating to deferred compensation, incentive compensation, holiday, vacation, pensions, profit sharing, retirement income or other benefits, stock purchase and stock option plans, bonuses, severance arrangements, health benefits, insurance benefits and all other employee benefit or fringe benefits, including any employee welfare benefit plans and employee pension benefit plans within the meaning of Sections 3(1) and 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (collectively referred to as the "Plans").

3.17 Governmental and Other Approvals. Except as set forth in Schedule 3.2, all requisite consents, authorizations, licenses, permits, orders, certificates and approvals of all governmental authorities or other parties necessary for the Company to consummate the transactions contemplated by this Agreement will be obtained as of the time of Closing. Except as set forth in Schedule 3.2, the Company has all consents, licenses, permits, registrations, approvals and certificates required under applicable law or regulation, federal, state and local, necessary to the ownership of all of the assets of the Company and necessary to the operation of the Company's business as presently conducted and as presently contemplated. The Company and its operations have conformed and presently conform to all laws, ordinances, requirements, regulations or orders, including, without limitation, those relating to fair labor practices and standards, equal employment practices, or occupational safety and health applicable to the conduct of the Company's business and the ownership and management of any of its property.

3.18 Certificate of Formation. The Certificate of Formation of the Company and all amendments thereto have been validly adopted by all of the Members of the Company and the Certificate of Formation, as amended if at all, is in full force and effect and is legal, valid, binding and enforceable in accordance with its terms.

3.19 Bylaws. To the best of the Company’s knowledge, and subject to Section 3.1 above, the Bylaws of the Company, and all amendments to the Bylaws, have been validly adopted, and the Bylaws, as amended, are in full force and effect and are legal, valid, binding and enforceable in accordance with their terms.

3.20 Financial Advisor. The Company has not dealt with any financial advisor, broker or finder in connection with the transactions contemplated herein, and agrees to indemnify and hold the Buyer harmless in connection with any claims for commissions or other compensation made by any financial advisor, broker or finder claiming to have been employed by or on behalf of the Company in connection with the transactions contemplated herein.

3.21 Labor Relations. Except as set forth in Schedule 3.21, (a) the Company is in compliance in all respects with all federal, state and local laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and is not engaged in any unfair labor practice; (b) there is no unfair labor practice complaint against the Company pending or, to the best knowledge of the Company, threatened. There are no proceedings pending or, to the best knowledge of the Company, threatened before the National Labor Relations Board with respect to the Company; (c) there are no discrimination charges (relating to sex, age, race, national origin, handicap or veteran status) pending before any federal or state agency or authority; (d) there is no labor strike or similar material dispute pending or, to the best knowledge of the Company, threatened against or involving the Company; (e) there is no pending representation question involving an attempt to organize a bargaining unit including any employees of the Company and no labor grievance has been filed within the past twelve (12) months with the Company which has had or will have a material adverse effect on the Company; (e) there is no arbitration proceeding under any collective bargaining agreement pending or, to the best knowledge of the Company, threatened.

3.22 Disclosure. No representation or warranty in this and no statement contained elsewhere in this Agreement or in any Schedule, Exhibit, Certificate or other document furnished or to be furnished to Buyer pursuant hereto or in connection with the transactions contemplated under this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact or any fact necessary to make the statements contained therein not materially misleading. There is no fact, which materially and adversely affects, or, to the best knowledge of Sellers, or Company, in the future may materially and adversely affect, the condition of the Company which has not been set forth herein. With respect to all representations and warranties herein which are made "to the best knowledge of the Company," the Company shall be deemed to have knowledge of any matter or fact (a) if the Company has actual knowledge of such matter or fact, (b) if the Company has information from which a person of reasonable intelligence would infer that the matter or fact in question exists, (c) if any person should have

ascertained such matter or fact in the performance of any duty he may have as an officer, director or employee of the Company, if and only to the extent that the failure by such persons who are officers, directors or employees of the Company to so ascertain such matter of fact in the performance of any duty he may have as an officer, director or employee of the Company would constitute gross negligence, or (d) if any of the Company's senior management, which shall mean any person at or above the office of Vice President, has actual personal knowledge of such matter or fact.

4. REPRESENTATIONS AND WARRANTIES BY BUYER.

As of the date hereof and as of the date of the Closing, Buyer represents and warrants as follows:

4.1 Organization and Qualification of Buyer. Buyer is duly organized, validly existing and in good standing under the laws of the state of Nevada. Buyer has full corporate power and authority to own or lease all of its properties and assets and to conduct its business in the manner and in the places where such properties are owned and leased or such business is now conducted by it. Buyer is duly qualified, licensed and authorized to do business as a foreign corporation and is in good standing as a foreign corporation in the jurisdictions, if any, shown on the Schedule of Jurisdictions attached hereto as Schedule 4.1 and is not required to be so licensed, qualified or authorized to conduct its business or own its property in any other jurisdiction.

4.2 Authority of Buyer. This Agreement and each of the agreements and other documents and instruments delivered or to be delivered by Buyer pursuant to or in contemplation of this Agreement will constitute, when so delivered, the valid and binding obligation of Buyer and shall be enforceable in accordance with their respective terms. The execution, delivery and performance of this Agreement and each such agreement, document and instrument has been duly authorized by all necessary corporate action of Buyer and is within Buyer's corporate powers. The execution, delivery and performance of any such agreement, document or instrument by Buyer and the execution, delivery and performance of this Agreement or any other agreement, document or instrument by the Buyer does not and will not with the passage of time or the giving of notice or both:

(i) result in a breach of or constitute a default under any indenture or loan or credit agreement or under any agreement of the Buyer, or any other material agreement, lease or instrument to which Buyer is a party or by which the property of Buyer is bound or affected;

(ii) result in a violation of or default under any law, rule, or regulation, or any order, writ, judgment, injunction, decree, determination, award, indenture, material agreement, lease or instrument now in effect having applicability to Buyer;

(iii) violate any provisions of the Certificate of Incorporation or Bylaws of Buyer; or

(iv) except as set forth in Schedule 3.2 require any approval, consent or waiver of, or filing with, any entity, private or governmental, which has not been obtained.

4.3 Governmental Approvals. Except as set forth on Schedule 4.3, all requisite consents, authorizations, licenses, permits, orders, certificates and approvals of all third parties and/or governmental agencies, including without limitation any governmental agency or authority of the United States, or other jurisdiction whose approval is necessary for Buyer to consummate the transactions contemplated by this Agreement have been obtained.

4.4 Financial Advisors. The Buyer has not dealt with any financial advisor/consultant in connection with the transactions contemplated herein and agrees to indemnify and hold the Company harmless in connection with any claims for commissions or other compensation made by any financial advisor, broker or finder claiming to have been employed by or on behalf of the Buyer in connection with the transactions contemplated herein.

4.5 Assumption of Guarantees. The Buyer will take all reasonable efforts to the remove, within sixty (60) days of the Closing. any Seller from the any guaranty of any financial obligation of the Company.

4.6 Disclosure. No representation or warranty in this Article 4, and no statement contained elsewhere in this Agreement or in any schedule, exhibit, certificate or other document furnished or to be furnished by Buyer to Sellers pursuant hereto or in connection with the transactions contemplated under this Agreement contains any untrue statement of a material fact or omits or will omit to state a material fact or any fact necessary to make the statements contained therein not materially misleading.

4.7 Acknowledgment of Disclaimer of Profits. Buyer expressly acknowledges and agrees that neither the Sellers nor the Company have made any representation or warranty with respect to the future profitability or financial prospects of the Company after the Closing Date.

5. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER TO CLOSE.

The obligation of Buyer to acquire the Purchased Interest as contemplated hereby, and to perform its other obligations hereunder to be performed on or after the Closing, shall be subject to the fulfillment, on or prior to the Closing Date, unless otherwise waived in writing by Buyer, of the following conditions:

5.1 Representations and Warranties. The representations and warranties of the Company set forth in Article 3 hereof shall be true and correct in all material respects on the Closing Date as if made on and as of such date, and Buyer shall have received a certificate to such effect, executed by the Company and dated as of the Closing Date, in form satisfactory to Buyer.

5.2 Performance of Covenants. The Company shall have performed all of its covenants and obligations contained in this Agreement to be performed on or prior to the Closing Date, and Buyer shall have received a certificate to such effect, executed by the Company and dated as of the Closing Date, in form satisfactory to Buyer.

5.3 Threatened or Pending Proceedings. No proceedings shall have been initiated or threatened by any governmental department, commission, bureau, board, agency or instrumentality, foreign or domestic, or any other bona fide third party seeking to enjoin or otherwise restrain or to obtain an award for damages in connection with the consummation of the transactions contemplated hereby.

5.4 Delivery of Certificates and Documents to Buyer. The Company shall have delivered, or cause to be delivered, to the Buyer certificates as to the legal existence and good standing of the Company and copies of its Certificate of Incorporation, as amended, issued or certified by the Secretary of State of Nevada and/or such other appropriate official thereof.

5.5 Employment Agreements for Directors and Officers. The only employment agreements maintained by the Company are those set forth in Schedule 5.5. All other employees of the Company are employees at will.

5.6 Consents. Except as otherwise provided in Schedule 3.2, the Sellers and Buyer shall have obtained the approvals, consents and authorizations of all third parties and/or governmental agencies necessary for the consummation of the transactions contemplated hereby in accordance with the requirements of applicable laws and agreements.

5.7 Damage or Destruction. The property owned or leased by the Company shall not have suffered prior to the Closing Date any loss on account of fire, flood, accident or any other calamity to an extent that would materially interfere with the conduct of its business or materially impair the value of the Company as a going concern, regardless of whether any such loss or losses have been insured against.

5.8 Satisfactory Due Diligence. Unless waived by the Buyer in writing, the Buyer shall, no later than May 31, 2015, complete its due diligence of the Company to the satisfaction of the Buyer.

6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS TO CLOSE.

The obligation of the Sellers to sell the Purchased Interest as contemplated hereby, and to perform their other obligations hereunder to be performed on or after the Closing, shall be subject to the fulfillment, on or prior to the Closing Date, unless otherwise waived in writing by the Sellers, of the following conditions:

6.1 Representations and Warranties. The representations and warranties of Buyer set forth in Article 4 hereof shall be true and correct in all material respects on the Closing Date as if made on and as of such date, and the Sellers shall have received a certificate to such effect, executed by the President or any Vice President of Buyer and dated as of the Closing Date, in form satisfactory to the Company.

6.2 Performance of Covenants. Buyer shall have performed all of its covenants and obligations contained in this Agreement to be performed on or prior to the Closing Date, and the Sellers shall have received a certificate to such effect, executed by the President or any Vice President of the Buyer and dated as of the Closing Date, in form satisfactory to Sellers.

6.3 Corporate Action. All corporate action necessary to authorize (i) the execution, delivery and performance by Buyer of this Agreement and any other agreements or instruments contemplated hereby to which Buyer is a party and (ii) the consummation of the transactions and performance of its other obligations contemplated hereby and thereby shall have been duly and validly taken by Buyer, and the Sellers shall have been furnished with copies of all applicable resolutions adopted by the Board of Directors of Buyer, certified by the Secretary or Assistant Secretary of Buyer.

6.4 Threatened or Pending Proceedings. No proceedings shall have been initiated or threatened by any governmental department, commission, board, bureau, agency or instrumentality, foreign or domestic, or any other bona fide third party seeking to enjoin or otherwise restrain or to obtain an award for damages in connection with the consummation of the transactions contemplated hereby.

6.5 Delivery of Certificates and Documents to the Company. The Buyer shall have delivered, or cause to be delivered, to the Company certificates as to the legal existence and good standing of Buyer.

6.6 Consents. Except as otherwise provided in Schedule 3.2, Buyer and Sellers shall (i) each have timely filed all information, reports, applications or notices and satisfied all requests for additional information pursuant to the HSR Act and the 1988 Trade Act and the applicable waiting periods shall have expired and (ii) have obtained the approvals, consents and authorizations of all third parties and/or governmental agencies necessary for the consummation of the transactions contemplated hereby in accordance with the requirements of applicable laws and agreements.

7. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.

7.1 Survival of Representations and Warranties. All representations, warranties, covenants and obligations herein or in any Exhibit, Schedule, certificate or financial statement delivered by either party to the other party incident to the transactions contemplated hereby shall be deemed to have been relied upon by the other party, shall survive the execution and delivery of this Agreement, any investigation at any time made by any party hereto, and the issuance, sale and purchase of the Purchased Interest and payment therefor until one (1) year after the Closing Date (the “Cut-off Date”); provided, however, that (a) the representations and warranties of the Company contained in Sections 3.1, 3.2, 3.3, and 3.4 shall survive indefinitely after the Closing Date, (b) the representations and warranties of the Company contained in Section 3.9 shall survive until the expiration of the applicable statutes of limitation as the same may be extended by the Company or Buyer, and (c) the covenants and obligations of the parties contained herein shall be enforceable after the Cut-Off Date subject to any limitations therein set forth. No claim of misrepresentation or breach of any representation, warranty, covenant or obligation may be made by any party hereunder unless notice of such claim is given to the party claimed against on or before the Cut-off Date, or such later survival date as is prescribed for such representation, warranty or covenant in the proviso of the immediately preceding sentence.

7.2 Further Assurances. From time to time after the Closing and without further consideration, the parties will execute and deliver, or arrange for the execution and delivery of such other instruments of conveyance and transfer and take such other action or arrange for such other actions as may reasonably be requested to more effectively complete any of the transactions provided for in this Agreement or any document annexed hereto.

8. INDEMNIFICATION AND SETOFF.

8.1 Indemnification by the Sellers. The Sellers and the Company hereby agree, to defend, indemnify and hold Buyer and its respective officers, directors, shareholders, employees, agents, attorneys and representatives, harmless from and against any damages, liabilities, losses and expenses (including, without limitation, reasonable attorneys’ fees) which may be sustained or suffered by Buyer arising out of, based upon, or by reason of a breach of any representation or warranty, or a failure to perform any agreement or covenant made by the Company in this Agreement. The Buyer has conducted sufficient due diligence regarding this transaction and waives any claims for actions which occurred prior to the closing which could have reasonably been discovered during due diligence. The foregoing notwithstanding, no claims shall be waived if the Sellers or the Company have intentionally concealed any material fact.

8.2 Indemnification by the Buyer. The Buyer hereby agrees to defend, indemnify and hold the Company and its respective employees, agents, attorneys, and representatives, harmless from and against any damages, liabilities, losses and expenses (including, without limitation, reasonable attorneys' fees) which may be sustained or suffered by the Company arising out of, based upon, or by reason of a breach of any representation or warranty, or a failure to perform any agreement or covenant, made by the Buyer in this Agreement. The Sellers and the Company have conducted sufficient due diligence regarding this transaction and waive any claims for actions which occurred prior to the closing which could have reasonably been discovered during due diligence. The foregoing notwithstanding, no claims shall be waived if the Buyer has intentionally concealed any material fact.

8.3 Notice; Defense of Claims. Each party to this Agreement shall give prompt written notice to the other party or parties to this Agreement under each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. Each party to this Agreement has the right to participate at its own expense in the defense of any such matter or its settlement, or the indemnified party may direct the indemnifying party to take over the defense of such matter so long as such defense is expeditious. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of the indemnified party to collect such claims from the indemnifying party so long as such failure to so notify does not materially adversely affect the indemnifying party's ability to defend such claim against a third party. No indemnifying party, in the defense of any claim or litigation shall, except with the consent of an indemnified party, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such indemnified party is to be bound and which judgment or settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

9. MISCELLANEOUS.

9.1 Taxes. Any taxes in the nature of sales or transfer tax, payable on the sale or transfer of all or any portion of the Purchased Interest or the consummation of any other transaction contemplated hereby shall be paid by Buyer.

9.2 Assignability. Neither this Agreement nor any rights or obligations hereunder, are assignable by the Company. The rights of Buyer under this Agreement are assignable in part or wholly to any company controlled by, controlling or under common control with Buyer and any assignee of Buyer shall succeed to and be possessed of the rights of Buyer hereunder to the extent of the assignment made;

provided, however, that and such assignment by Buyer shall not relieve Buyer of its obligations hereunder. In addition, after the Closing, Buyer may assign all of its rights and/or obligations under this Agreement; provided, however, that any such assignment by Buyer shall not relieve Buyer of its obligations hereunder.

9.3 Publicity. Except as otherwise required by law, none of the parties hereto shall issue any press release or make any other public statement relating to or connected with, or arising out of, this Agreement or the matters contained herein, without obtaining the prior approval of the Company to the contents and the manner of presentation and publication thereof; provided, however, the parties shall issue a mutually agreed joint press release or statement after the close.

9.4 Section Headings. The Section and paragraph headings in this Agreement are for convenience of reference only and shall not be deemed to alter or affect provisions thereof. All Exhibits and/or Schedules hereto shall be initialed for identification or may be physically annexed hereto, but in either event such Exhibits or Schedules shall be deemed to be a part hereof.

9.5 Waiver. Neither the failure nor any delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, or of any other right, power or remedy or preclude any further or other exercise thereof, or the exercise of any other right, power or remedy.

9.6 Expenses. Except as otherwise provided herein, the Buyer and the Company shall pay the fees and expenses of their respective accountants and legal counsel incurred in connection with the transactions contemplated by this Agreement.

9.7 Notices. Any notices required or permitted to be given hereunder shall be given in writing and delivered in person or sent certified mail, postage prepaid, return receipt requested, to the respective parties at their addresses set forth at the beginning of this Agreement or at such other addresses as may hereinafter be designated by such party in writing to other parties.

9.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Nevada.

9.9 Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the transaction contemplated herein and shall not be modified or amended except by an instrument in writing signed by the parties hereto.

9.10 Validity. The invalidity or unenforceability of any particular provision of this Agreement shall not affect any other provisions hereof, and this Agreement shall be construed in all other respects as if such invalid and unenforceable provisions were omitted.

9.11 Counterparts. This Agreement may be signed in any number of counterparts each of which shall be deemed to be an original and all of which together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, we have set our hands and seals as of the date first above written.

Pazoo, Inc.

/s/ David Cunic

By: David Cunic / C.E.O

MA and Associates, LLC

/s/ Antonio Del Hierro

By: Antonio Del Hierro / President

[Sellers’ Signatures Contained on Following Page]