Annual Report (10-k)

Date : 04/16/2019 @ 7:56PM
Source : Edgar (US Regulatory)
Stock : Futureland Corp. (PC) (FUTL)
Quote : 0.000001  -0.000099 (-99.00%) @ 8:04PM

Annual Report (10-k)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-K

 

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

 

For the fiscal year ended December 31, 2018

 

OR

 

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

 

Commission file number: 000-53377

 

FUTURELAND, CORP.

(Exact name of registrant as specified in its charter)

 

10901 Roosevelt, Blvd, Suite 1000c

St. Petersburg, FL 

33716
(Address of principal executive offices) (Zip Code)

 

 

(720) 370-3554
(Registrant’s telephone number, including area code)

 

 

Securities registered under Section 12(b) of the Act: None

 

Securities registered under Section 12(g) of the Act: Common Stock, no par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

 

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

 

Large accelerated filer ☐ Accelerated filer ☐
   

Non-accelerated filer ☐

(Do not check if a smaller reporting company)

Smaller reporting company ☒
   
 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act . 

 

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

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold as of the last business day of the registrant's most recently completed 2nd fiscal quarter.

 

The number of shares of the registrant's Common Stock issued and outstanding was 6,716,255,754 shares as of April 15, 2019

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None. 

 

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Table of Contents  

    Page
  PART I  
     
Item 1. Business 3
Item 1A. Risk Factors 6
Item 1B. Unresolved Staff Comments 22
Item 2. Properties 22
Item 3. Legal Proceedings 22
Item 4. Mine Safety Disclosures 22
     
  PART II  
     
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22
Item 6. Selected Financial Data 23
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 23
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 28
Item 8. Financial Statements and Supplementary Data 29
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 30
Item 9A. Controls and Procedures 30
Item 9B. Other Information 32
     
  PART III  
     
Item 10. Directors, Executive Officers and Corporate Governance 33
Item 11. Executive Compensation 35
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 37
Item 13. Certain Relationships and Related Transactions, and Director Independence 38
Item 14. Principal Accountant Fees and Services 38
     
  PART IV  
     
Item 15. Exhibits, Financial Statement Schedules (Unaudited) 39
  Signatures 40

  

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FORWARD-LOOKING STATEMENTS

 

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. This report and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management's plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. Factors that could cause our actual results of operations and financial condition to differ materially are discussed in greater detail under Item 1A – "Risk Factors" of this report.

 

We caution that the factors described herein and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.   

PART 1

ITEM 1. BUSINESS

 

The Company

 

FUTURELAND, CORP. (formerly known as AEGEA, Inc.) ("we", "us", the "Company") was incorporated in Colorado on November 29, 2007 under the name Forever Valuable Collectibles, Inc. We changed our name effective July 1, 2014 in connection with our July 22, 2014 acquisition of AEGEA, LLC which is in the planning stages of developing an international community and mega-resort destination in the heart of South Florida called AEGEA. Prior to the acquisition of AEGEA, LLC, we were been engaged in the business of buying and reselling commemorative professional and college sports memorabilia.

 

On March 10, 2015, an Exchange Agreement was entered (the "Agreement"), by and among certain shareholders and debt holders of the Company, representing the majority of the outstanding shares of the Company ("the AEGA Holders"), and FutureWorld, Corp. (hereafter referred to as "FWDG"), a Delaware Corporation which is the owner of the wholly owned subsidiary, FutureLand Properties, LLC, (hereafter referred to as "FLP"), a Colorado Limited Liability Corporation. Additionally, on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated March 10, 2015, FWDG sold all rights, title and ownership of FLP to the Company, including all member units, assets, intellectual property, contracts, leases, and real property which includes 200 acres in La Vita, Colorado,

 

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In connection with the Exchange Agreement, we issued an aggregate of 27,845,280 shares of our common stock to FWDG and or its assignee. FWDG and the AEGA Holders entered into the purchase and exchange agreement where the AEGA Holders agreed to deliver to FutureWorld their shareholdings in the Company in exchange for certain actions, including AEGEA Holders resignation as directors and officers of the Company and the simultaneous appointment of two directors as designated by FLP. In return for the AEGEA Holders shares of the Company, in combination with certain debt forgiveness totaling $100,000 by the AEGEA Holders, the AEGA Holders shall receive, an amount of shares to be equal to 4.9% (27,845,280} of the outstanding shares of the Company calculated after the reverse stock split which became effective on May 1, 2015. Such shares as held by the AEGA Holders which are surrendered in return for the new exchange shares to be issued, shall be cancelled in such exchange and returned to treasury. Such exchange shares when issued shall contain certain anti-dilutive rights whereby the AEGEA Holders shall receive additional shares for a period of one year from the date of issuance in order to retain 4.9% of the outstanding shares of the Company, issuable within ten days of the end of each fiscal quarter following such initial issuance. Pursuant to the Agreement, all assets of the Company, including all intellectual property, contractual rights, business plans, architectural works, property rights, and other valuable matters, shall be sold to the AEGA Holders, into a new private entity formed at their direction, control and benefit, in settlement for another $100,000 in debt due to AEGEA Holders by the Company and certain liabilities will be assumed by the new private entity. This transaction is expected to be accounted for as a reverse recapitalization of FLP with the business of FLP being the continuing business since the member of FLP will have voting and management control of the combined entity.

 

In May 2015, we changed our name to FutureLand, Corp. and effected a 1 for 400 reverse stock split of our common stock. All share and per share data in this annual report have been retroactively restated to reflect the reverse stock split.

 

Description of Business

 

FutureLand Properties LLC. was originally formed as a wholly-owned subsidiary of FutureWorld Corp. On October 6, 2014 FutureWorld entered into a Contribution Agreement with FutureLand, a wholly-owned subsidiary of the Company. In accordance with this agreement, FutureLand, in return for contribution of intellectual property, cash, and web development services by the Company, has exchanged 40,000,000 shares of its common stock representing 100% of the shares outstanding. On March, 10th, FutureLand Properties LLC did a merger agreement with Aegea Inc. (FutureLand Corp), ensuing FutureLand Properties LLC to become Aegea Inc. (FutureLand Corp) wholly owned subsidiary. The agreement resulted in the FutureLand Properties LLC’s shareholders (FutureWorld Corp) to be issued 27,845,280 shares of Aegea Inc. (FutureLand Corp). This will result in FutureLand Corp’s shares being held for investment on FutureWorld’s balance sheet.

 

FutureLand Corp. operates its presented business through its subsidiary, FutureLand Properties, is an agricultural land lease company catering to the industrial hemp, legal medical marijuana and recreational cannabis market. Future Land was started to capitalize upon the distinct separation of the cultivation grows from the dispensaries, specifically with respect to Colorado. In the State of Colorado, which has become the quintessential poster-child for what the industry may look like for the rest of America, at least temporarily, as other states determine what exact direction they will choose to go, there are residency laws that must be adhered to. For instance, in order to get a license to grow or profit from cannabis in Colorado you must be a 2 year resident. The laws are very specific; anyone who is not a 2 year resident cannot profit from the sale of the cannabis flower or infused products. Because of this mandate, Future Land Corp must be a land owner and leaser in order to effectively participate in the cannabis grow industry, which we believe is essential in order to gain a competitive advantage. We also must own the structures on the land to control the lease and our future position in the industry.

 

The business model is simple; offer growers the opportunity to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility. Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from our associated company, HempTech Corp, in order to capture additional revenue.

 

Our current asset will comprise of 240 acres of prime property in southern Colorado and two signed lease agreements for grow facilities on its land. Our business plan is to continue attracting legal license holders to lease land and grow facilities on our 240 acres.  We have other developmental land use plans for other projects being pursued as well.

 

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On, October 30, 2014, FLP closed on 239.96 Acres in La Vita, Colorado in Huerfano County for $60,000.  FLP entered into a lease agreement contract with a lease with Colorado Flower Company, LTD on Dec 1, 2014 allotting 37 acres for their grow facilities.  FLP was formed as a Colorado State company on October 6, 2014 by FutureWorld Corp.

 

Prior to FLP being formed, the State of Colorado amended their laws allowing cannabis grow facilities to be separated from cannabis dispensaries effectively opening up an entirely new business opportunity that FLP entered into at that time. At such time, FLP pursued the business plan to secure a cannabis or hemp grower to execute their business plan of leasing the land, the structures, the technologies and provide maintenance contracts associated with the grow. Integral to its strategy is to provide the financing for the entire grow operation so as to establish a position by which to harness a competitive advantage in striking the right kind of lease in conjunction with Colorado State laws that would allow FLP to make above average returns.  On Jan 20, 2015 FLP entered a contract with GPS, La Vita, Inc. allotting 5 acres for their immediate grow facilities.  All of these contracts, and land ownings are currently in FLP.

 

FutureLand’s Land and Operations in Grants Pass, Oregon

 

FutureLand Oregon, LLC closed on 50% ownership on 78 acres in Grants Pass, Oregon on July 7, 2016 for $125,000. Recent changes in the laws allowing outside residents to own cannabis licenses from cultivation, labs, extracts and dispensing signaled an immediate and necessary response for FL to engage. This is primary to our business model. We look to own and control the cannabis product by growing it first for the recreational market and expanding to the medical one. Currently our partners in the project are HSPendleton, LLC and Johnny Miller (Groovy Groves). The project has several phases it needs to go through. Phase 1 is clearing the land and making space to set up the grow (This is currently being completed.) Phase 2 will involve making application for the recreational license and getting the build out done for growing including greenhouse, cameras, fencing, well and power. Phase 3 will be putting the plants in the ground and growing our first harvest expected to be quarterly but we may opt for a rotation that allows harvests year-round every week. Phase 4 will be expansion as we envision starting out with only a couple thousand square feet of greenhouse growing space. We will be applying for a Tier II commercial outdoor license which allows for 40,000 square feet of flowering plants at any one time. It is canopy based and does not matter how many plants we choose to grow nor does it matter how many plants we keep in a vegetative state which is crucial to maximize future yields. We do intend to make use of greenhouses upon the property during colder months but we will not be using supplemental lighting on the flowering section. We will use supplemental lighting on the vegging areas to keep them from flowering until they are moved to the 40,000 square foot canopy. It is also possible that we may ask for a variance for even more space to grow as some other Oregon licensees have received approval for more space. FutureLand continues to spend development dollars to outfit the site.

 

FutureLand Oregon, LLC also purchased 50% ownership on another 265 acre site in Wolfs Creek, Oregon with a purchase price of $250,000 to HSPendleton, LLC. This property already has a Tier II recreational license to grow cannabis and is owned by Groovy Groves, LLC. FutureLand Oregon, LLC is contracted to purchase 50% of the Oregon Recreational Grow license from John Miller of Groovy Groves, LLC and is currently in the transfer of ownership cycle with the state of Oregon. Upon transfer FutureLand Corp will complete the sale with $100,000 of FutureLand stock at an exercise price of .01 per share to John C Miller. Groovy Groves, LLC has product on hand from the last harvest that has yet to be sold and will provide money to the company upon the sale and completion of the license transfer of ownership.

 

Research and Development

 

In accordance with ASC 730-10, expenditures for research and development are expenses when incurred and are included in operating expenses. The Company had no research and development costs for the years ended December 31, 2018 or December 31, 2017.

 

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Patents and Trademarks

 

We have trademarked “FutureLand Corp”.

 

Employees

 

FutureLand has 3 full-time employees and one full time independent contractor. 

 

ITEM 1A. RISK FACTORS

 

The risk factors in this section describe the material risks to our business, prospects, results of operations, financial condition or cash flows, and should be considered carefully. In addition, these factors constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995 and could cause our actual results to differ materially from those projected in any forward-looking statements (as defined in such act) made in this Annual Report on Form 10-K. Investors should not place undue reliance on any such forward-looking statements. Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements.

 

Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

RISKS RELATING TO OUR FINANCIAL CONDITION

 

We have a limited operating history, which may make it difficult for investors to predict future performance based on current operations. 

 

We have a limited operating history upon which investors may base an evaluation of our potential future performance. In particular, we have not proven that we can maintain and lease properties associated with FutureLand grow operations, locations, leaseholds, placements, supply hydroponic growing equipment or sell our hydroponic produce in a manner that enables us to be profitable and meet customer requirements, develop intellectual property to enhance FutureLand leased grow facilities, obtain the necessary permits and/or achieve certain milestones to develop leased facilities, FutureLand’s line of products cigarettes, develop and maintain relationships with key manufacturers and strategic partners to extract value from our intellectual property, raise sufficient capital in the public and/or private markets, or respond effectively to competitive pressures. As a result, there can be no assurance that we will be able to develop or maintain consistent revenue sources, or that our operations will be profitable and/or generate positive cash flows.

 

Any forecasts we make about our operations may prove to be inaccurate. We must, among other things, determine appropriate risks, rewards, and level of investment in our product lines, respond to economic and market variables outside of our control, respond to competitive developments and continue to attract, retain, and motivate qualified employees. There can be no assurance that we will be successful in meeting these challenges and addressing such risks and the failure to do so could have a materially adverse effect on our business, results of operations, and financial condition. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in the early stage of development. As a result of these risks, challenges, and uncertainties, the value of your investment could be significantly reduced or completely lost.

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Our independent auditor’s report from inception to the fiscal years ended December 31, 2016 is qualified as to our ability to continue as a going concern.

Due to the uncertainty of our ability to meet our current operating and capital expenses, in our audited annual financial statements as of and for the year ended December 31, 2016, our independent auditors included a note to our financial statements regarding concerns about our ability to continue as a going concern. Recurring losses from operations raise substantial doubt about our ability to continue as a going concern. The presence of the going concern note to our financial statements may have an adverse impact on the relationships we are developing and plan to develop with third parties as we continue the commercialization of our products and could make it challenging and difficult for us to raise additional financing, all of which could have a material adverse impact on our business and prospects and result in a significant or complete loss of your investment. 

 

We have incurred significant losses in prior periods, and losses in the future could cause the quoted price of our Common Stock to decline or have a material adverse effect on our financial condition, our ability to pay our debts as they become due, and on our cash flows.

We have incurred significant losses in prior periods. For the year ended December 31, 2018, the Company had a net loss of $740,908, net cash used in operations of $29, working capital deficit of $326,995, and accumulated deficit of $17,212,933 The Company had revenue of $11,043. These matters raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan, raise additional capital, and generate revenues. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 

We will likely need additional capital to sustain our operations and will likely need to seek further financing, which we may not be able to obtain on acceptable terms or at all. If we fail to raise additional capital, as needed, our ability to implement our business model and strategy could be compromised. 

We have limited capital resources and operations. To date, our operations have been funded entirely from the proceeds of debt and equity financings. We expect to require substantial additional capital in the near future to expand our product lines, develop our intellectual property base, and establish our targeted levels of commercial production. We may not be able to obtain additional financing on terms acceptable to us, or at all.

 

Even if we obtain financing for our near-term operations, we expect that we will require additional capital thereafter. Our capital needs will depend on numerous factors including: (i) our profitability; (ii) the release of competitive products by our competition; (iii) the level of our investment in research and development; and (iv) the amount of our capital expenditures, including acquisitions. We cannot assure you that we will be able to obtain capital in the future to meet our needs. 

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If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership held by our existing stockholders will be reduced and our stockholders may experience significant dilution. In addition, new securities may contain rights, preferences, or privileges that are senior to those of our Common Stock. If we raise additional capital by incurring debt, this will result in increased interest expense. If we raise additional funds through the issuance of securities, market fluctuations in the price of our shares of Common Stock could limit our ability to obtain equity financing.

We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. If we are unable to raise capital when needed, our business, financial condition, and results of operations would be materially adversely affected, and we could be forced to reduce or discontinue our operations.

RISKS RELATING TO OUR BUSINESS AND INDUSTRY

We face intense competition and many of our competitors have greater resources that may enable them to compete more effectively.

The industries in which we operate in general are subject to intense and increasing competition. Some of our competitors may have greater capital resources, facilities, and diversity of product lines, which may enable them to compete more effectively in this market. Our competitors may devote their resources to developing and marketing products that will directly compete with our product lines. Due to this competition, there is no assurance that we will not encounter difficulties in obtaining revenues and market share or in the positioning of our products. There are no assurances that competition in our respective industries will not lead to reduced prices for our products. If we are unable to successfully compete with existing companies and new entrants to the market this will have a negative impact on our business and financial condition.

  If we fail to protect our intellectual property, our business could be adversely affected.

Our viability will depend, in part, on our ability to develop and maintain the proprietary aspects of our technology to distinguish our products from our competitors’ products. We rely on copyrights, trademarks, trade secrets, and confidentiality provisions to establish and protect our intellectual property.  

Any infringement or misappropriation of our intellectual property could damage its value and limit our ability to compete. We may have to engage in litigation to protect the rights to our intellectual property, which could result in significant litigation costs and require a significant amount of our time. In addition, our ability to enforce and protect our intellectual property rights may be limited in certain countries outside the United States, which could make it easier for competitors to capture market position in such countries by utilizing technologies that are similar to those developed or licensed by us.

Competitors may also harm our sales by designing products that mirror the capabilities of our products, grow operations, leasing strategies, sources of products and sales or technology without infringing on our intellectual property rights. If we do not obtain sufficient protection for our intellectual property, or if we are unable to effectively enforce our intellectual property rights, our competitiveness could be impaired, which would limit our growth and future revenue.

We may also find it necessary to bring infringement or other actions against third parties to seek to protect our intellectual property rights. Litigation of this nature, even if successful, is often expensive and time-consuming to prosecute and there can be no assurance that we will have the financial or other resources to enforce our rights or be able to enforce our rights or prevent other parties from developing similar technology or designing around our intellectual property.

Although we believe that our technology does not and will not infringe upon the patents or violate the proprietary rights of others, it is possible such infringement or violation has occurred or may occur, which could have a material adverse effect on our business.

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We are not aware of any infringement by us of any person’s or entity’s intellectual property rights. In the event that products we sell are deemed to infringe upon the patents or proprietary rights of others, we could be required to modify our products, obtain a license for the manufacture and/or sale of such products, or cease selling such products. In such event, there can be no assurance that we would be able to do so in a timely manner, upon acceptable terms and conditions, or at all, and the failure to do any of the foregoing could have a material adverse effect upon our business.

There can be no assurance that we will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action. If our products or proposed products are deemed to infringe or likely to infringe upon the patents or proprietary rights of others, we could be subject to injunctive relief and, under certain circumstances, become liable for damages, which could also have a material adverse effect on our business and our financial condition.

Our trade secrets may be difficult to protect.

Our success depends upon the skills, knowledge, and experience of our scientific and technical personnel, our consultants and advisors, as well as our licensors and contractors. Because we operate in several highly competitive industries, we rely in part on trade secrets to protect our proprietary technology and processes. However, trade secrets are difficult to protect. We enter into confidentiality or non-disclosure agreements with our corporate partners, employees, consultants, outside scientific collaborators, developers, and other advisors. These agreements generally require that the receiving party keep confidential and not disclose to third parties confidential information developed by the receiving party or made known to the receiving party by us during the course of the receiving party’s relationship with us. These agreements also generally provide that inventions conceived by the receiving party in the course of rendering services to us will be our exclusive property, and we enter into assignment agreements to perfect our rights.

These confidentiality, inventions, and assignment agreements may be breached and may not effectively assign intellectual property rights to us. Our trade secrets also could be independently discovered by competitors, in which case we would not be able to prevent the use of such trade secrets by our competitors. The enforcement of a claim alleging that a party illegally obtained and was using our trade secrets could be difficult, expensive, and time consuming and the outcome would be unpredictable. In addition, courts outside the United States may be less willing to protect trade secrets. The failure to obtain or maintain meaningful trade secret protection could adversely affect our competitive position.

Our business, financial condition, results of operations, and cash flows have been, and may in the future be, negatively impacted by challenging global economic conditions.

The recent global economic slowdown has caused disruptions and extreme volatility in global financial markets, increased rates of default and bankruptcy, and declining consumer and business confidence, which has led to decreased levels of consumer spending. These macroeconomic developments have and could continue to negatively impact our business, which depends on the general economic environment and levels of consumer spending. As a result, we may not be able to maintain our existing customers or attract new customers, or we may be forced to reduce the price of our products and not be able to source new grow operations in selected states or expand such abilities. We are unable to predict the likelihood of the occurrence, duration or severity of such disruptions in the credit and financial markets and adverse global economic conditions. Any general or market-specific economic downturn could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel.

Our future success largely depends upon the continued services of our executive officers and management team. If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Additionally, we may incur additional expenses to recruit and retain new executive officers. If any of our executive officers joins a competitor or forms a competing company, we may lose some or all of our customers. Finally, we do not maintain “key person” life insurance on any of our executive officers. Because of these factors, the loss of the services of any of these key persons could adversely affect our business, financial condition, and results of operations, and thereby an investment in our Common Stock.

Our continuing ability to attract and retain highly qualified personnel will also be critical to our success because we will need to hire and retain additional personnel as our business grows. There can be no assurance that we will be able to attract or retain highly qualified personnel. We face significant competition for skilled personnel in our industry. This competition may make it more difficult and expensive to attract, hire, and retain qualified managers and employees. Because of these factors, we may not be able to effectively manage or grow our business, which could adversely affect our financial condition or business. As a result, the value of your investment could be significantly reduced or completely lost.

Our success depends, in part, on the adoption of FutureLand Technology, facilities and products by several segments, including local available licensed cannabis or hemp farmers, and greenhouse growers, and if these segments do not adopt our products and plans, then our revenue will be severely limited.

The major groups to whom we believe may hire FutureLand for leases, leaseholds, operations, and business plan may not continue to embrace its products. Acceptance of FutureLand grow operations will depend on several factors, including cost, ease of use, familiarity of use, convenience, timeliness, strategic partnerships, and reliability. If we fail to meet FutureLand’s customers’ needs and expectations adequately, its product offerings may not be competitive and our ability to commence or continue generating revenues could be reduced. We also cannot ensure that our business model will gain wide acceptance among all targeted groups. If the market fails to continue to develop, or develops more slowly than we expect, our ability to commence or continue generating revenues could be reduced.

A drop in the retail price of commercially grown produce may negatively impact FutureLand’s business.

The demand for FutureLand grown produce depends in part on the price of commercially grown produce and crops to be produced on such land, and for such products produced. Fluctuations in economic and market conditions that impact the prices of commercially grown produce, such as increases in the supply of such produce and the decrease in the price of commercially grown produce, could cause the demand for hydroponic grown produce to decline, which would have a negative impact on our business.

We may not be able to effectively manage our growth or improve our operational, financial, and management information systems, which would impair our results of operations.

In the near term, we intend to expand the scope of our operations activities significantly. If we are successful in executing our business plan, we will experience growth in our business that could place a significant strain on our business operations, finances, management and other resources. The factors that may place strain on our resources include, but are not limited to, the following:

  The need for continued development of our financial and information management systems;
     
  The need to manage strategic relationships and agreements with manufacturers, customers and partners;
     
  Difficulties in hiring and retaining skilled management, technical, and other personnel necessary to support and manage our business; and
     
  Financial abilities to accumulate additional grow properties for cultivation facilities.

 

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Additionally, our strategy envisions a period of rapid growth that may impose a significant burden on our administrative and operational resources. Our ability to effectively manage growth will require us to substantially expand the capabilities of our administrative and operational resources and to attract, train, manage, and retain qualified management and other personnel. There can be no assurance that we will be successful in recruiting and retaining new employees, or retaining existing employees.  

We cannot provide assurances that our management will be able to manage this growth effectively. Our failure to successfully manage growth could result in our sales not increasing commensurately with capital investments or otherwise materially adversely affecting our business, financial condition, or results of operations. 

If we are unable to adopt or incorporate technological advances into FutureLand products, our business could become less competitive, uncompetitive, or obsolete and we may not be able to compete effectively with competitors’ products.

We expect that technological advances in the processes and procedures for hydroponic growing equipment will continue to occur. As a result, there are risks that products that compete with FutureLand grow operations could be improved or developed. If we are unable to adopt or incorporate technological advances, FutureLand grow operations could be less efficient or cost-effective than methods developed and sold by its competitors, which could cause FutureLand grow operations to become less competitive, uncompetitive or obsolete, which would have a material adverse effect on FutureLand Technology’s financial condition, and to a much lesser extent, on our financial condition.

Competing forms of specialized agricultural equipment may be more desirable to consumers or make FutureLand grow operations obsolete.

There are currently several different specialized agricultural equipment technologies being deployed in farming operations. Further development of any of these competitive technologies may lead to advancements in farming techniques that will make some of our methods of farming obsolete. Both Growers and Consumers may prefer alternative technologies and products. Any developments that contribute to the obsolescence of certain technologies and advances may substantially impact our business, reducing our ability to generate revenues.

  Litigation may adversely affect our business, financial condition, and results of operations.

From time to time in the normal course of our business operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage for any claims could adversely affect our business and the results of our operations.

Our major shareholders have significant control over stockholder matters and the minority stockholders will have little or no control over our affairs.

Our major shareholders, being FutureWorld Corp. and Talari Industries currently own approximately 75% of our outstanding Common Stock, and, through the ownership of preferred stock, have approximately 97% of stockholder voting power, and thus significant control over stockholder matters, such as election of directors, amendments to the Articles of Incorporation, and approval of significant corporate transactions. As a result, our minority stockholders will have little or no control over its affairs. 

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If we fail to implement and maintain proper and effective internal controls and disclosure controls and procedures pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, our ability to produce accurate and timely financial statements and public reports could be impaired, which could adversely affect our operating results, our ability to operate our business, and investors’ views of us.

Management has assessed the effectiveness of our internal controls over financial reporting. Management concluded, for the year ended December 31, 2017, that our internal controls and procedures were not effective to detect the inappropriate application of U.S. GAAP rules. Management concluded that our internal controls were adversely affected by deficiencies in the design or operation of our internal controls, which management considered to be material weaknesses. These material weaknesses include the following:

  Lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our Board, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;
     
  Inadequate segregation of duties consistent with control objectives; and ineffective controls over period end financial disclosure and reporting processes;
     
  The failure to implement and maintain proper and effective internal controls and disclosure controls could result in material weaknesses in our financial reporting such as errors in our financial statements and in the accompanying footnote disclosures that could require restatements. Investors may lose confidence in our reported financial information and disclosure, which could negatively impact our stock price.

   

We do not expect that our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our insurance coverage may be inadequate to cover all significant risk exposures.

We will be exposed to liabilities that are unique to the products and land holdings we provide. While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, and results of operations. We do not have any business interruption insurance. Any business disruption or natural disaster could result in substantial costs and diversion of resources.

Because we do not have an audit or compensation committee, stockholders will have to rely on our officers and directors, most of whom are not independent, to perform these functions.

Because we do not have an audit or compensation committee, stockholders will have to rely on our officers and directors, most of whom are not independent, to perform these functions. Thus, there is a potential conflict of interest in that our officers and directors have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.

Federal regulation and enforcement may adversely affect the implementation of medical marijuana laws and regulations may negatively impact our revenues and profits.

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Currently, there are 28 states plus the District of Columbia that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, under the Controlled Substance Act (the “CSA”), the policies and regulations of the Federal government and its agencies are that cannabis has no medical benefit and a range of activities including cultivation and the personal use of cannabis is prohibited. Unless and until Congress amends the CSA with respect to medical marijuana, as to the timing or scope of any such potential amendments there can be no assurance, there is a risk that federal authorities may enforce current federal law, and we may be deemed to be producing, cultivating, or dispensing marijuana in violation of federal law with respect to the licensed and leased activities of FutureLand and its subsidiary FutureWorld Holdings, Inc. current or proposed business operations or we may be deemed to be facilitating the sale or distribution of drug paraphernalia in violation of federal law with respect to our use of proprietary technologies in our business operations. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely affect our revenues and profits. The risk of strict enforcement of the CSA in light of Congressional activity, judicial holdings, and stated federal policy remains uncertain. 

The U.S. Supreme Court declined to hear a case brought by San Diego County, California that sought to establish federal preemption over state medical marijuana laws. The preemption claim was rejected by every court that reviewed the case. The California 4th District Court of Appeals wrote in its unanimous ruling, “Congress does not have the authority to compel the states to direct their law enforcement personnel to enforce federal laws.” However, in another case, the U.S. Supreme Court held that, as long as the CSA contains prohibitions against marijuana, under the Commerce Clause of the United States Constitution, the United States may criminalize the production and use of homegrown cannabis even where states approve its use for medical purposes. 

In an effort to provide guidance to federal law enforcement, the DOJ has issued Guidance Regarding Marijuana Enforcement to all United States Attorneys in a memorandum from Deputy Attorney General David Ogden on October 19, 2009, in a memorandum from Deputy Attorney General James Cole on June 29, 2011, and in a memorandum from Deputy Attorney General James Cole on August 29, 2013. Each memorandum provides that the DOJ is committed to the enforcement of the CSA, but, the DOJ is also committed to using its limited investigative and prosecutorial resources to address the most significant threats in the most effective, consistent, and rational way. The August 29, 2013 memorandum provides updated guidance to federal prosecutors concerning marijuana enforcement in light of state laws legalizing medical and recreational marijuana possession in small amounts.

The memorandum sets forth certain enforcement priorities that are important to the federal government:

  Distribution of marijuana to children;
     
  Revenue from the sale of marijuana going to criminals;
     
  Diversion of medical marijuana from states where it is legal to states where it is not; Using state authorized marijuana activity as a pretext of other illegal drug activity; Preventing violence in the cultivation and distribution of marijuana;
     
  Preventing drugged driving;
     
  Growing marijuana on federal property; and
     
  Preventing possession or use of marijuana on federal property.

 

The DOJ has not historically devoted resources to prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but has relied on state and local law enforcement to address marijuana activity. In the event the DOJ reverses its stated policy and begins strict enforcement of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there may be a direct and adverse impact to our business and our revenue and profits. Furthermore, H.R. 83, enacted by Congress on December 16, 2014, provides that none of the funds made available to the DOJ pursuant to the 2015 Consolidated and Further Continuing Appropriations Act may be used to prevent certain states, including Colorado and California, from implementing their own laws that authorized the use, distribution, possession, or cultivation of medical marijuana.

We could be found to be violating laws related to medical cannabis.

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Currently, there are 23 states plus the District of Columbia that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, under the CSA, the policies and regulations of the federal government and its agencies are that cannabis has no medical benefit and a range of activities including cultivation and the personal use of cannabis is prohibited. Unless and until Congress amends the CSA with respect to medical marijuana, as to the timing or scope of any such amendments there can be no assurance, there is a risk that federal authorities may enforce current federal law. The risk of strict enforcement of the CSA in light of Congressional activity, judicial holdings, and stated federal policy remains uncertain. This would cause a direct and adverse effect on our subsidiaries’ intended businesses and on our revenue and profits.

Variations in state and local regulation and enforcement in states that have legalized medical cannabis that may restrict marijuana-related activities, including activities related to medical cannabis, may negatively impact our revenues and profits.

Individual state laws do not always conform to the federal standard or to other states laws. A number of states have decriminalized marijuana to varying degrees, other states have created exemptions specifically for medical cannabis, and several have both decriminalization and medical laws. Four states, Colorado, Washington, Oregon, and Alaska, have legalized the recreational use of cannabis. Variations exist among states that have legalized, decriminalized, or created medical marijuana exemptions. For example, Alaska and Colorado have limits on the number of marijuana plants that can be homegrown. In most states, the cultivation of marijuana for personal use continues to be prohibited except for those states that allow small-scale cultivation by the individual in possession of medical marijuana needing care or that person’s caregiver. Active enforcement of state laws that prohibit personal cultivation of marijuana may indirectly and adversely affect our business and our revenue and profits.

It is possible that federal or state legislation could be enacted in the future that would prohibit us or potential customers from selling FutureLand grow operations, and if such legislation were enacted, our revenues could decline, leading to a loss in your investment.

We are not aware of any federal or state regulation that regulates the sale of indoor cultivation equipment to medical or recreational marijuana growers. The extent to which the regulation of drug paraphernalia under the CSA is applicable to our business and the sale of FutureLand products is found in the definition of “drug paraphernalia.” Drug paraphernalia means any equipment, product, or material of any kind that is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful. 

Our understanding of federal or state regulation is that the sale of indoor cultivation equipment to medical or recreational cannabis growers is prohibited if the primary intent or design of the equipment is for indoor cultivation of medical or recreational cannabis. Our products are primarily designed for general agricultural use. There are no direct or indirect design features in our equipment specifically or primarily for the cultivation of medical marijuana. Although it is possible that medical marijuana may be grown with our equipment, we make no inquiry of our customers as to their intended agricultural use of our technology products. If federal and/or state legislation is enacted which prohibits the sale of our growing equipment to medical cannabis growers, our revenues would decline, which could lead to a loss of a material portion of your investment.

Prospective customers may be deterred from doing business with a company with a significant nationwide online presence because of fears of federal or state enforcement of laws prohibiting possession and sale of medical or recreational marijuana.

Our website is visible in jurisdictions where medicinal and/or recreational use of marijuana is not permitted and, as a result, we may be found to be violating the laws of those jurisdictions. We could lose potential customers as they could fear federal prosecution for growing marijuana with FutureLand’s equipment, reducing our revenue. In most states in which the production and sale of marijuana have been legalized, there are additional laws or licenses required and some states altogether prohibit home cultivation, all of which could make the loss of potential customers more likely. 

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Marijuana remains illegal under federal law.

Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana preempts state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in our inability to proceed with our business plans, especially in respect of FutureLand.

We may not obtain or maintain the necessary permits and authorizations to operate licensed marijuana grow businesses.

FutureLand may not be able to obtain or maintain the necessary licenses, permits, authorizations, or accreditations, or may only be able to do so at great cost, to operate their respective medical marijuana business. In addition, we may not be able to comply fully with the wide variety of laws and regulations applicable to the medical marijuana industry. Failure to comply with or to obtain the necessary licenses, permits, authorizations, or accreditations could result in restrictions on our ability to operate the medical marijuana business, which could have a material adverse effect on our business.

If we incur substantial liability from litigation, complaints, or enforcement actions, our financial condition could suffer.

FutureLand participation in the medical marijuana industry may lead to litigation, formal or informal complaints, enforcement actions, and inquiries by various federal, state, or local governmental authorities against these subsidiaries. Litigation, complaints, and enforcement actions involving these subsidiaries could consume considerable amounts of financial and other corporate resources, which could have a negative impact on our sales, revenue, profitability, and growth prospects. As FutureLand, we are dependent upon existing license holders as lessees on their properties in Colorado, or other states in the future and will itself only be able to start the process of obtaining final licenses to cultivate and sell medical marijuana in Colorado, and are not as such presently engaged in the cultivation or distribution of marijuana, our subsidiaries have not been, and are not currently, subject to any material litigation, complaint, or enforcement action regarding marijuana (or otherwise) brought by any federal, state, or local governmental authority.

We may have difficulty accessing the service of banks, which may make it difficult for us to operate.

Since the use of marijuana is illegal under federal law, there is a strong argument that banks cannot accept for deposit funds from businesses involved in the marijuana industry. Consequently, businesses involved in the marijuana industry often have difficulty finding a bank willing to accept their business. The inability to open bank accounts may make it difficult for us to operate our contemplated medical marijuana businesses in the case FutureLand Properties marijuana growing and leasing land business.

FutureLand business activities in some states is dependent upon obtaining certain licenses for grow operations. 

FutureLand’s business model includes helping licensees get their licenses from both the county and the state in order to grow on our land. In the state of Colorado, in order to be able to grow cannabis you must be a two year resident and be approved both from the county in which you want to grow and also at the state level. The county and state have non-refundable costs associated with applying to get a license. They vary some from county to county. In Huerfano County there is a $1,300 fee due at the time of application and a $10,000 refundable retainer that is given back in a year’s time, with the assumption that they don’t need to use it for some legal purpose. At the state level there is a $5,000 fee associated with making an application. Other factors include potential moratoriums instituted from time to time either from the state or the counties for getting licenses in certain areas. Currently you cannot be a convicted felon and get a grow license. Additionally, the individual grow licenses need to be attached to a particular location. It is possible, however, to get a locational license transferred to a different property but there is an application process that goes along with the request that may or may not get approved.

We are dependent on appropriate zoning and variances for our grow operations. The lack of such zoning and needed variances could materially impact our business and production.

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The zoning for being able to grow cannabis seems to be a bit of a moving target right now. On the one hand it is agricultural so you might expect it to be able to be grown on agricultural permitted land, but there seems to be push backs at the county level to have cannabis properties designated as commercial to keep them from being able to reach out for special grants and subsidies typically only offered only to agriculturally zoned products. There seems to be resistance from farmers to not allow cannabis an agricultural designation which could cause some zoning problems going forward.

We are dependent upon Water supplies and sourcing. The lack of water from grow facilities could materially impact our business .

The entire state of Colorado is over-appropriated for water. This means that every ounce of water, even water that does not exist yet, from say a future flood, is already accounted for by people making claim to the water and having been given those claims by the state. The state reserves the right to make modifications regularly concerning these matters for things like priority of the water, abatement of water to other users of water, and reallocation of water to different parties or expanding area allotments for water and many other such determinations. This often involves water consultants, water attorneys, water selling, and lengthy water courts. However, while growers of cannabis will often need to go down this path, the state has provided a substitutionary water plan application to allow for growing during the period the licensee must go through the courts. That being said, there are still risks associated with getting approval for the amount of water needed. The amount will vary too whether there is a hydroponic grow versus a potted grow. In Colorado water is calculated on acre feet of water, which come up to approximately 325,000 gallons per year per acre. It is important to attach your ballot to the right race horse going in.

 

FL is arranging to purchase water from the city of Walsenburg who already has a very large supply of water rights. They are parceling out a portion of those rights and will be applying to the state to expand its allocation out to our 240 acres along with many other properties. It makes sense to attach our ticket alongside the goals of a municipality that already has ample water rights available, and desires to sell a portion of those rights to us. This minimizes our risk to get them, on the one hand, and increases the chance for us to get more water from an abundant and ready supply while not needing to go back to water court in order to obtain such sourcing.

 

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RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES

We may allocate net proceeds from this offering in ways which differ from our estimates based on our current plans and assumptions discussed in the section entitled “Use of Proceeds” and with which you may not agree. 

The allocation of net proceeds of the offering set forth in the “Use of Proceeds” section below represents our estimates based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of our actual expenditures will depend on numerous factors, including access to new business ventures, land deals, success of our FutureLand for Business initiatives, cash generated by our operations and business developments. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes. Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used are discussed in the section entitled “Use of Proceeds” below. You may not have an opportunity to evaluate the information on which we base our decisions on how to use the proceeds and may not agree with the decisions made. Additional information is available in the “Use of Proceeds” section of this Registration Statement of which this Prospectus is a part of.

We expect to experience volatility in the price of our Common Stock, which could negatively affect stockholders’ investments.  

The trading price of our Common Stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with securities traded in those markets. Broad market and industry factors may seriously affect the market price of companies’ stock, including ours, regardless of actual operating performance. All of these factors could adversely affect your ability to sell your shares of Common Stock or, if you are able to sell your shares, to sell your shares at a price that you determine to be fair or favorable.

The market price for our common stock will be particularly volatile given our status as a relatively unknown company, with a limited operating history and lack of profits which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price, which may result in substantial losses to you.

 

Our stock price will be particularly volatile when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats.  The volatility in our share price will be attributable to a number of factors.  First, our common stock will be compared to the shares of such larger, more established companies, sporadically and thinly traded.  As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction.  The price for our shares could decline precipitously in the event that a large number of our common stock are sold on the market without commensurate demand.  Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products.  As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that trades on a national securities exchange and has a large public float.  Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance.  We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time. Moreover, the OTC MARKET is not a liquid market in contrast to the major stock exchanges. We cannot assure you as to the liquidity or the future market prices of our common stock if a market does develop. If an active market for our common stock does not develop, the fair market value of our common stock could be materially adversely affected.

 

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Our Common Stock is categorized as “penny stock,” which may make it more difficult for investors to sell their shares of Common Stock due to suitability requirements.

Our Common Stock is categorized as “penny stock.” The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The price of our Common Stock is significantly less than $5.00 per share, and is therefore considered “penny stock.” This designation imposes additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker- dealer buying our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser, and determine that the purchaser is reasonably suitable to purchase the securities given the increased risks generally inherent in penny stocks. These rules may restrict the ability and/or willingness of brokers or dealers to buy or sell our Common Stock, either directly or on behalf of their clients, may discourage potential stockholders from purchasing our Common Stock, or may adversely affect the ability of stockholders to sell their shares.

Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our Common Stock, which could depress the price of our Common Stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that the investment is suitable for that customer before recommending an investment to a customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. Thus, the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may limit your ability to buy and sell our shares of Common Stock, have an adverse effect on the market for our shares of Common Stock, and thereby depress our price per share of Common Stock.

The elimination of monetary liability against our directors, officers, and employees under Colorado law and the existence of indemnification rights for our obligations to our directors, officers, and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers, and employees.

Our Articles of Incorporation contain a provision permitting us to eliminate the personal liability of our directors to us and our stockholders for damages for the breach of a fiduciary duty as a director or officer to the extent provided by Colorado law. We may also have contractual indemnification obligations under any future employment agreements with our officers. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and our stockholders.

We may issue additional shares of Common Stock or preferred stock in the future, which could cause significant dilution to all stockholders.

Our Articles of Incorporation authorize the issuance of up to 7,990,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, with no par value. As of December 31, 2018, we had 6,300,165,454 shares of Common Stock, 0 shares of Series A Preferred Stock, and 3,000 shares of Series B Preferred Stock outstanding; however, we may issue additional shares of Common Stock or preferred stock in the future in connection with a financing or an acquisition. 

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Anti-takeover effects of certain provisions of Colorado state law hinder a potential takeover of us.

Colorado has a business combination law which prohibits certain business combinations between Colorado corporations and “interested stockholders” for three years after an “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Colorado law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then-outstanding shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders. 

The effect of Colorado’s business combination law is to potentially discourage parties interested in taking control of us from doing so if it cannot obtain the approval of our Board. Both of these provisions could limit the price investors would be willing to pay in the future for shares of our Common Stock.

Because we do not intend to pay any cash dividends on our Common Stock, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. Declaring and paying future dividends, if any, will be determined by our Board, based upon earnings, financial condition, capital resources, capital requirements, restrictions in our Articles of Incorporation, contractual restrictions, and such other factors as our Board deems relevant. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired. 

We are classified as an “emerging growth company” as well as a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

 

We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.  We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.  If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 

Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.  In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.  We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

 

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We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.

 

Notwithstanding the above, we are also currently a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings.

 

Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.

The application of Rule 144 creates some investment risk to potential investors; for example, existing shareholders may be able to rely on Rule 144 to sell some of their holdings, driving down the price of the shares you purchased.

The SEC adopted amendments to Rule 144 which became effective on February 15, 2008 that apply to securities acquired both before and after that date. Under these amendments, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that: (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding a sale, (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time of sale. 

Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

  1% of the total number of securities of the same class then outstanding (67,162,557 shares of common stock as of the date of this Report); or
     
  the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale; provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

 

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NOTE ABOUT FORWARD-LOOKING STATEMENTS

Statements under, “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Business” and elsewhere in this prospectus may be "forward-looking statements." Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements include, among other things, statements regarding:

the growth of our business and revenues and our expectations about the factors that influence our success;

 

our plans to continue to invest in systems, facilities, and infrastructure, increase our hiring and grow our business;

 

our plans for FutureLand to purchase more lands for lease to the cultivators;

 

our ability to attain funding and the sufficiency of our sources of funding;

 

our expectation that our cost of revenues, development expenses, sales and marketing expenses, and general and administrative expenses will increase;

 

fluctuations in our capital expenditures;

 

our plans for potential business partners and any acquisition plans;

 

as well as other statements regarding our future operations, financial condition and prospects, and business strategies.

 

These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this registration statement, of which this prospectus is a part, including the risks described under "Risk Factors.” Any forward- looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances that occur in the future.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we may have projected. Any forward-looking statements you read in this prospectus reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, financial condition, growth strategy and liquidity. You should specifically consider the factors identified in this prospectus that could cause actual results to differ before making an investment decision.

  TAX CONSIDERATIONS

We are not providing any tax advice as to the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are strongly encouraged to consult their own tax advisor to determine the U.S. Federal, state and any applicable foreign tax consequences relating to their investment in our securities.

GENERAL RISK STATEMENT

 

Based on all of the foregoing, we believe it is possible for future revenue, expenses and operating results to vary significantly from quarter to quarter and year to year. As a result, quarter-to-quarter and year-to-year comparisons of operating results are not necessarily meaningful or indicative of future performance. Furthermore, we believe that it is possible that in any given quarter or fiscal year our operating results could differ from the expectations of public market analysts or investors.

21  
 

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

 None.

 

ITEM 2. PROPERTIES

 

Our executive offices are located at 10901 Roosevelt Blvd N, Bldg C 1000, Saint Petersburg, FL 33716 where we lease a shared office facility with FutureWorld Corp. at a monthly rental of $500.  Our lease term is month to month. We believe our current space is adequate for our operations at this time. We also have a location in Denver Colorado.

 

ITEM 3. LEGAL PROCEEDINGS

 

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us that may materially affect us.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

  

PART II

 

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES 

Our common stock is quoted on the OTC Pink Current Reporting and has traded under the symbol "FUTL." Previously our stock was quoted under the symbol "AEGA" which was changed on May 29, 2015 to FUTL. Prior to July 19, 2014, our symbol was "FVBC" and our stock was thinly traded. On May 1, 2015, our common stock was subject to a 400 to 1 reverse split. On June 1, 2015, the closing sale price for our common stock was $4.50 on the OTCQB. The following table sets forth the range of high and low prices for our common stock for the periods indicated. The information reflects inter-dealer prices, without retail mark-ups, mark-downs or commissions and may not necessarily represent actual transactions.

 

High and Low Bid Prices on Our Common Stock

 

       
Year Quarter Ended High Low
2018 December 31 $ 0.0002 $ 0.0001
2018 September 30 $ 0.0003 $ 0.0002
2018 June 30 $ 0.0004 $ 0.0002
2018 March 31 $ 0.0004 $ 0.0002
2017 December 31 $ 0.03 $ 0.005
2017 September 30 $ 0.07 $ 0.007
2017 June 30 $ 0.39 $ 0.05
2017 March 31 $ 0.50 $ 0.15

 

As of December 31, 2018, there were approximately 132 record holders, an unknown number of additional holders whose stock is held in "street name" and 28,144,092 shares of common stock issued and outstanding.

 

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.

 

22  
 

 

Recent Sales of Unregistered Securities

 

N/A

 

ITEM 6. SELECTED FINANCIAL DATA

 

Not applicable to a smaller reporting company.

 

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

We define our accounting periods as follows:

 

● January 1, 2018 through December 31, 2018

 

Our History

 

FutureLand, CORP. (formerly known as AEGEA, Inc.) ("we", "us", the "Company") was incorporated in Colorado on November 29, 2007 under the name Forever Valuable Collectibles, Inc. We changed our name effective July 1, 2014 in connection with our July 22, 2014 acquisition of AEGEA, LLC which is in the planning stages of developing an international community and mega-resort destination in the heart of South Florida called AEGEA. Prior to the acquisition of AEGEA, LLC, we were been engaged in the business of buying and reselling commemorative professional and college sports memorabilia.

 

On March 10, 2015, an Exchange Agreement was entered (the "Agreement"), by and among certain shareholders and debt holders of the Company, representing the majority of the outstanding shares of the Company ("the AEGA Holders"), and FutureWorld, Corp. (hereafter referred to as "FWDG"), a Delaware Corporation which is the owner of the wholly owned subsidiary, FutureLand Properties, LLC, (hereafter referred to as "FLP"), a Colorado Limited Liability Corporation. Additionally, on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated March 10, 2015, FWDG sold all rights, title and ownership of FLP to the Company, including all member units, assets, intellectual property, contracts, leases, and real property which includes 200 acres in La Vita, Colorado,

 

In connection with the Exchange Agreement, we issued an aggregate of 27,845,280 shares of our common stock to FWDG and or its assignee. FWDG and the AEGA Holders entered into the purchase and exchange agreement where the AEGA Holders agreed to deliver to FutureWorld their shareholdings in the Company in exchange for certain actions, including AEGEA Holders resignation as directors and officers of the Company and the simultaneous appointment of two directors as designated by FLP. In return for the AEGEA Holders shares of the Company, in combination with certain debt forgiveness totaling $100,000 by the AEGEA Holders, the AEGA Holders shall receive, an amount of shares to be equal to 4.9% (27,845,280} of the outstanding shares of the Company calculated after the reverse stock split which became effective on May 1, 2015. Such shares as held by the AEGA Holders which are surrendered in return for the new exchange shares to be issued, shall be cancelled in such exchange and returned to treasury. Such exchange shares when issued shall contain certain anti-dilutive rights whereby the AEGEA Holders shall receive additional shares for a period of one year from the date of issuance in order to retain 4.9% of the outstanding shares of the Company, issuable within ten days of the end of each fiscal quarter following such initial issuance. Pursuant to the Agreement, all assets of the Company, including all intellectual property, contractual rights, business plans, architectural works, property rights, and other valuable matters, shall be sold to the AEGA Holders, into a new private entity formed at their direction, control and benefit, in settlement for another $100,000 in debt due to AEGEA Holders by the Company and certain liabilities will be assumed by the new private entity. This transaction is expected to be accounted for as a reverse recapitalization of FLP with the business of FLP being the continuing business since the member of FLP will have voting and management control of the combined entity.

 

23  
 

 

In May 2015, we changed our name to FutureLand, Corp. and effected a 1 for 400 reverse stock split of our common stock. All share and per share data in this annual report have been retroactively restated to reflect the reverse stock split.

 

Description of Business

 

FutureLand Properties LLC. was originally formed as a wholly-owned subsidiary of FutureWorld Corp. On October 6, 2014 FutureWorld entered into a Contribution Agreement with FutureLand, a wholly-owned subsidiary of the Company. In accordance with this agreement, FutureLand, in return for contribution of intellectual property, cash, and web development services by the Company, has exchanged 40,000,000 shares of its common stock representing 100% of the shares outstanding. On March, 10th, FutureLand Properties LLC did a merger agreement with Aegea Inc. (FutureLand Corp), ensuing FutureLand Properties LLC to become Aegea Inc. (FutureLand Corp) wholly owned subsidiary. The agreement resulted in the FutureLand Properties LLC’s shareholders (FutureWorld Corp) to be issued 27,845,280 shares of Aegea Inc. (FutureLand Corp). This will result in FutureLand Corp’s shares being held for investment on FutureWorld’s balance sheet.

 

FutureLand Corp. operates its presented business through its subsidiary, FutureLand Properties, is an agricultural land lease company catering to the industrial hemp, legal medical marijuana and recreational cannabis market. Future Land was started to capitalize upon the distinct separation of the cultivation grows from the dispensaries, specifically with respect to Colorado. In the State of Colorado, which has become the quintessential poster-child for what the industry may look like for the rest of America, at least temporarily, as other states determine what exact direction they will choose to go, there are residency laws that must be adhered to. For instance, in order to get a license to grow or profit from cannabis in Colorado you must be a 2 year resident. The laws are very specific; anyone who is not a 2 year resident cannot profit from the sale of the cannabis flower or infused products. Because of this mandate, Future Land Corp must be a land owner and leaser in order to effectively participate in the cannabis grow industry, which we believe is essential in order to gain a competitive advantage. We also must own the structures on the land to control the lease and our future position in the industry.

 

The business model is simple; offer growers the opportunity to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility. Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from our associated company, HempTech Corp, in order to capture additional revenue. 

  

EXCHANGE AGREEMENT AND SALE OF AEGEA ASSETS

 

As discussed above, on March 10, 2015, an Exchange Agreement was entered, by and among certain shareholders and debt holders of the Company, representing the majority of the outstanding shares of the Company ("the AEGA Holders"), and FWDG and its wholly-owned subsidiary, FLP. Additionally, on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated March 10, 2015, FWDG sold all rights, title and ownership of FLP to the Company, including all member units, assets, intellectual property, contracts, leases, and real property which includes 200 acres in La Vita, Colorado.

 

Our current asset will comprise of 240 acres of prime property in southern Colorado and two signed lease agreements for grow facilities on its land. Our business plan is to continue attracting legal license holders to lease land and grow facilities on our 240 acres.  We have other developmental land use plans for other projects being pursued as well. 

On, October 30, 2014, FLP closed on 239.96 Acres in La Vita, Colorado in Huerfano County for $60,000.  FLP entered into a lease agreement contract with a lease with Colorado Flower Company, LTD on Dec 1, 2014 allotting 37 acres for their grow facilities.  FLP was formed as a Colorado State company on October 6, 2014 by FutureWorld Corp.

 

24  
 

 

Prior to FLP being formed, the State of Colorado amended their laws allowing cannabis grow facilities to be separated from cannabis dispensaries effectively opening up an entirely new business opportunity that FLP entered into at that time. At such time, FLP pursued the business plan to secure a cannabis or hemp grower to execute their business plan of leasing the land, the structures, the technologies and provide maintenance contracts associated with the grow. Integral to its strategy is to provide the financing for the entire grow operation so as to establish a position by which to harness a competitive advantage in striking the right kind of lease in conjunction with Colorado State laws that would allow FLP to make above average returns.  On Jan 20, 2015 FLP entered a contract with GPS, La Vita, Inc. allotting 5 acres for their immediate grow facilities.  All of these contracts, and land ownings are currently in FLP.

 

Results of Operations

 

The following comparative analysis on results of operations was based primarily on the comparative financial statements, footnotes and related information for the years identified below and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. The results discussed below are for the years ended December 31, 2018 and 2017. For comparative purposes, we are comparing the year ended December 31, 2018 to the year ended December 31, 2017.

 

The following information represents our results of operations for the years ended December 31, 2018 and 2017.

 

2018 Compared to 2017

 

Increase/(Decrease)           2018  vs.  2017
    2018   2017   $   %
Total revenue   $ 11,043     $ 0     $ 11,043     $ 100 %
                                 
Operating expenses:                                
General and administrative     46,588       126,291       (79,703 )     (63 %)
Salaries and benefits     260,000       516,113       (256,113 )     (50 %)
Professional fees     7,766       49,522       (41,756 )     (84 %)
Total operating expenses     314,354       691,926       (377,572 )     (55 %)
                                 
Net operating loss     (303,311 )     (691,926 )     (366,529 )     (56 %)
                                 
Other income (expenses):                                
Settlement of liability     —         —         —         —    
Interest expense     (64,630 )     (102,766 )     (38,136 )     (37 %)
Impairment of provisional goodwill     —         —         —         —    
Amortization of debt discount     (372,967 )     (663,167 )     (290,200 )     (44 %)
Bad debt expense     —         —         —         —    
Other income (expense)     (437,597 )     (765,933 )     (328,336 )     (43 %)
Net income (loss)   $ (740,908 )   $ (1,457,859 )   $ (716,951 )     (49 %)
                                 

 

 

Revenue

 

$11,042.82 was generated for the years ended December 31, 2018 and 2017.

 

25  
 

 

Total Operating Expenses

 

For the year ended December 31, 2018, total operating expenses amounted to $314,354 as compared to $691,926 for the year ended December 31, 2017, a decrease of $366,529. This 56% decrease was primarily due to significant decrease in Salaries & benefits.  In an effort to curtail our expenses we were able to reduce our operating loss by $ 366,529.

 

Total Other Expenses

 

For the year ended December 31, 2018, total other expenses amounted to $437,597 as compared to $765,933 for the year ended December 31, 2017, a decrease of $ 328,336. The decrease was due to the fact that some of our convertible notes were satisfied in full in 2018 which reduced our interest and amortization expenses by 43%.

 

Net Loss

 

For the year ended December 31, 2018 and 2017, net loss amounted to $ 740,907 and $1,457,859, respectively.

 

Liquidity and Capital Resources

 

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. The Company had a negative working capital of working capital deficit of $248,705 and $136,149 of cash as of December 31, 2017. As a result, the Company's current cash position is not sufficient to fund its cash requirements during the next twelve months, including operations and capital expenditures.

 

Net cash used in operating activities was $136,120 for the year ended December 31, 2018, compared to $73,692 for the same period in 2017. Net cash used by investing activities during the year ended December 31, 2018 was $0 compared to net cash used in investing activities of $64,857 for the year ended December 31, 2017. Net cash provided by financing activities during the year ended December 31, 2018, was $0 compared to net cash provided by financing activities of $741,000 for the year ended December 31, 2017.

 

Cash Requirements

 

Our future capital requirements will depend on numerous factors, including the extent we continue development of our planned resort community and our ability to control costs. We will be reliant upon shareholder loans, private placements or public offerings of debt and equity to fund our resort development plans. There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. While we are in discussions with investors and our investment banker who have shown an interest in investing in or raising capital for our company, we have no arrangements or plans currently in effect and our inability to raise funds for the above purposes will have a severe negative impact on our ability to carry out our plans to develop FutureLand Corp.

 

26  
 

 

Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. As of December 31, 2018 we have no off-balance sheet arrangements.

 

Going Concern

 

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.   At December 31, 2018 and December 31, 2017, the Company had $29 and $136,149 in cash, respectively, and $136,120 and $602,451 in negative working capital, respectively.  For the years ended December 31, 2018 and 2017, the Company had a net loss of $740,908 and $1,457,859, respectively. Continued losses may adversely affect the liquidity of the Company in the future. Therefore, the factors noted above raise substantial doubt about our ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems.

 

Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new and potentially current investors to alleviate the Company’s working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to translate its user base into sales. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

 

Critical Accounting Policies

 

We have identified the following policies below as critical to our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.

 

Use of Estimates in the Preparation of Financial Statements

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

27  
 

 

Stock-based Compensation

 

ASC 718, "Compensation-Stock Compensation" requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). We measure the cost of employee services received in exchange for an award based on the grant-date fair value of the award. We account for non-employee share-based awards based upon ASC 505-50, "Equity-Based Payments to Non- Employees." ASC 505-50 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete. Generally, our awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple reporting periods, we estimate the fair value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date. When the award vests, we adjust the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date performance is complete.

 

Revenue Recognition

 

We had $11,042.82 of revenue generated during the year ending December 31, 2018 from our relationship to Amps Electric Holdings, Inc.. Anticipated future operating revenue will represent revenue upon admission into our planned parks, provision of our services, or when products are delivered to our customers.

 

Inflation

 

In  the  opinion  of  management,  inflation  has  not  and  will  not  have  a  material  effect  on  our  operations  in  the  immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations. 

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

  

28  
 

 

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

 

FUTURELAND, CORP. AND SUBSIDIARIES

(FORMERLY AEGEA, INC.)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2018

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

Consolidated Balance Sheets at December 31, 2018 (Unaudited) and 2017 (Unaudited)   F-1
     
Consolidated Statements of Operations for the years ended December 31, 2018 (Unaudited) and 2017 (Unaudited)   F-2
     
Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2018 (Unaudited) and 2017 (Unaudited)   F-3
     
Consolidated Statements of Cash Flows for the years ended December 31, 2018 (Unaudited) and 2017 (Unaudited)   F-4
     
Notes to the Consolidated Financial Statements (Unaudited)   F-5

 

29  
 

 

FUTURELAND, CORP. AND SUBSIDIARIES

(FORMERLY AEGEA, INC.)

CONSOLIDATED BALANCE SHEETS

         
    December 31,
    2018   2017
   

(Unaudited)

  (Unaudited)
ASSETS                
Current assets                
Cash   $ 29     $ 136,149  
Related party receivable     495,417       676,626  
Security retainer deposit     6,000       1,108  
Total current assets     501,446       813,883  
                 
Property and equipment                
Land     405,251       405,251  
Land improvements     42,430       42,430  
Buildings and structures     50,000       50,000  
Building improvements     8,337       8,337  
Furniture and fixtures     2,962       2,962  
Accumulated depreciation     (11,764)       (3,716)  
Total property and equipment, net     497,296       505,264  
                 
Other assets                
Investment in entity     5,200       5,200  
Related party receivable (non-current)     3,540,000       3,540,000  
Allowance for uncollectible receivable     (3,290,000)       (3,290,000)  
Total other assets     255,200       255,200  
Total assets   $ 1,253,942     $ 1,574,347  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                
Current liabilities                
Accounts payable   $ 70,280     $ 109,260  
Accrued expenses     539,467       333,967  
Short-term loans - related parties     21,738       459,809  
Convertible debenture payable, net of premium and discount     318,766       83,951  
Accrued interest     96,622       55,881  
Convertible notes - Oregon properties     38,000       19,720  
Total current liabilities     1,084,873       1,062,588  
                 
Stockholders' equity (deficit)                
                 

Preferred stock, No par value; 10,000,000 shares authorized; Series A convertible preferred Stock, no par value; 200,000 designated; No shares issued & outstanding at December 31, 2017 and 2016, respectively

Series B convertible preferred Stock, no par value; 20,000 designated 3,000 shares issued & outstanding at December 31, 2018 and 2017, respectively

    6,450       6,450  
Common stock, no par value; 7,990,000,000 shares authorized, and 6,300,165,454 shares issued and 3,705,468,957 outstanding at December 31, 2018 and 2017, respectively     7,648,157       7,249,939  
Additional paid-in capital     9,727,395       9,727,395  
Accumulated deficit     (17,212,933)       (16,472,025)  
Total stockholders' equity (deficit)     169,069       511,759  
Total liabilities and stockholders' equity (deficit)   $ 1,253,942     $ 1,574,347  

  

The accompanying notes are an integral part of these financial statements

 

F- 1  
 

 

FUTURELAND, CORP. AND SUBSIDIARIES

(FORMERLY AEGEA, INC.)

CONSOLIDATED STATEMENTS OF OPERATIONS

 

    For the Years Ended
    December 31,
    2018   2017
    (Unaudited)   (Unaudited)
         
Revenues     11,043       —    
                 
Operating expenses:                
General and administrative     46,588       126,291  
Salaries and benefits     260,000       516,113  
Professional fees     7,766       49,522  
Total expenses     314,354       691,926  
                 
Net operating (loss)     (303,311 )     (691,926 )
                 
Other income (expense):                
Settlement of liability     —         —    
Interest expense     (64,630 )     (102,766 )
Amortization of debt discount     (372,967 )     (663,167 )
Loss on impairment of provisional goodwill     —         —    
Bad debt expense     —         —    
Total other income (expense)     (437,597 )     (765,933 )
                 
Net (loss)   $ (740,908 )   $ (1,457,859 )
                 
Weighted number of common shares outstanding, basic     752,807,489       752,807,489  
Net loss per common share, basic   $ (0.00 )   $ (0.00 )

  

The accompanying notes are an integral part of these financial statements

 

F- 2  
 

 

 

FUTURELAND, CORP. AND SUBSIDIARIES

(FORMERLY AEGEA, INC.)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

 

    Preferred Stock   Common Stock   Additional Paid in   Accumulated    
    Shares   Amount   Shares   Amount   Capital   (Deficit)   Total
                             
Balances, December 31, 2015     3,000     $ 6,450       32,397,930     $ 1,019,597     $ 9,727,395     $ (3,666,864 )   $ 7,086,578  
                                                         
Common stock issued to non-employees for services                     213,819,893       2,673,213                       2,673,213  
                                                         
Common stock issued to officers for services                     13,780,000       557,450                       557,450  
                                                         
Common stock issued to settle accounts payable                     3,000,000       30,089                       30,089  
                                                         
Debt converted into common stock                     136,152,967       561,627                       561,627  
                                                         
Amortization of debt discount                             418,157                       418,157  
                                                         
Net loss for the year ended December 31, 2016                                             (11,347,303 )     (11,347,303 )
Balances, December 31, 2016     3,000     $ 6,450       399,150,790     $ 5,260,133     $ 9,727,395     $ (15,014,166 )   $ (20,088 )
                                                         
Common stock issued to non-employees for services                     85,438,906       245,124                       245,124  
                                                         
Common stock issued to officers for services                     3,500,000       38,850                       38,850  
                                                         
Debt converted into common stock                     3,217,379,261       1,023,165                       1,023,165  
                                                         
Amortization of debt discount                             682,667                       682,667  
                                                         
Net loss for the year ended December 31, 2017                                             (1,457,859 )     (1,457,859 )
Balances, December 31, 2017     3,000     $ 6,450       3,705,468,957     $ 7,249,939     $ 9,727,395     $ (16,472,025 )   $ 511,759  
                                                         
Debt converted into common stock                     2,594,696,497       183,002                       183,002  
                                                         
Amortization of debt discount                             215,216                       215,216  
                                                         
Net loss for the year ended December 31, 2018                                             (740,908 )     (740,908 )
Balances, December 31, 2018     3,000     $ 6,450       6,300,165,454     $ 7,648,157     $ 9,727,395     $ (17,212,933 )   $ 169,069  

  

The accompanying notes are an integral part of these financial statements

 

F- 3  
 

 

FUTURELAND, CORP. AND SUBSIDIARIES

(FORMERLY AEGEA, INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

    For the Years Ended
    December 31,
    2018   2017
    (Unaudited)   (Unaudited)
         
Cash flows from operations                
Net (loss)   $ (740,908 )   $ (1,457,859 )
Adjustment to reconcile net loss to net cash:                
Depreciation and amortization     8,047       3,232  
Common stock issued for services     0       283,974  
Amortization of discount and premium associated with convertible debt     345,466       658,425  
Security retainer deposit     (4,892 )     1,108  
Settlement of liability     —         —    
Interest expense from financing fees     64,630       102,766  
Changes in working capital components:                
Related party receivable             (560,875 )
Accounts payable     (36,978 )     279  
Short-term loans - related parties     (17,726 )     271,869  
Accrued expenses     205,500       64,566  
Accrued interest     40,741       30,064  
Net cash provided by (used) for operating activities     (136,120 )     (602,451 )
                 
Cash flows from investing activities                
Investment in entity     —         (5,200 )
Building improvements     —         (8,337 )
Purchase of land     —         (20,000 )
Land improvements             (31,320 )
Purchase of furniture and fixtures     —         —    
Net cash provided by investing activities     —         (64,857 )
                 
Cash flows from financing activities                
Proceeds from issuance of convertible debentures     —         741,000  
Net cash provided by financing activities     —         741,000  
                 
Net increase (decrease) in cash     (136,120 )     73,692  
Cash, beginning of period     136,149       62,457  
Cash, end of period   $ 29     $ 136,149  

   

The accompanying notes are an integral part of these financial statements

 

 

F- 4  
 

 

FUTURELAND, CORP. AND SUBSIDIARIES

(FORMERLY AEGEA, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017

(UNAUDITED)

 

NOTE 1: NATURE OF OPERATIONS, BASIS OF PRESENTATION, RECAPITALIZATION AND GOING CONCERN

 

FutureLand, CORP. (formerly known as AEGEA, Inc.) ("we", "us", the "Company") was incorporated in Colorado on November 29, 2007 under the name Forever Valuable Collectibles, Inc. We changed our name effective July 1, 2014 in connection with our July 22, 2014 acquisition of AEGEA, LLC which is in the planning stages of developing an international community and mega-resort destination in the heart of South Florida called AEGEA. Prior to the acquisition of AEGEA, LLC, we were been engaged in the business of buying and reselling commemorative professional and college sports memorabilia.

 

On March 10, 2015, an Exchange Agreement was entered (the "Agreement"), by and among certain shareholders and debt holders of the Company, representing the majority of the outstanding shares of the Company ("the AEGA Holders"), and FutureWorld, Corp. (hereafter referred to as "FWDG"), a Delaware Corporation which is the owner of the wholly owned subsidiary, FutureLand Properties, LLC, (hereafter referred to as "FLP"), a Colorado Limited Liability Corporation. Additionally, on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated March 10, 2015, FWDG sold all rights, title and ownership of FLP to the Company, including all member units, assets, intellectual property, contracts, leases, and real property which includes 200 acres in La Vita, Colorado,

 

In connection with the Exchange Agreement, we issued an aggregate of 27,845,280 shares of our common stock to FWDG and or its assignee. FWDG and the AEGA Holders entered into the purchase and exchange agreement where the AEGA Holders agreed to deliver to FutureWorld their shareholdings in the Company in exchange for certain actions, including AEGEA Holders resignation as directors and officers of the Company and the simultaneous appointment of two directors as designated by FLP. In return for the AEGEA Holders shares of the Company, in combination with certain debt forgiveness totaling $100,000 by the AEGEA Holders, the AEGA Holders shall receive, an amount of shares to be equal to 4.9% (27,845,280} of the outstanding shares of the Company calculated after the reverse stock split which became effective on May 1, 2015. Such shares as held by the AEGA Holders which are surrendered in return for the new exchange shares to be issued, shall be cancelled in such exchange and returned to treasury. Such exchange shares when issued shall contain certain anti-dilutive rights whereby the AEGEA Holders shall receive additional shares for a period of one year from the date of issuance in order to retain 4.9% of the outstanding shares of the Company, issuable within ten days of the end of each fiscal quarter following such initial issuance. Pursuant to the Agreement, all assets of the Company, including all intellectual property, contractual rights, business plans, architectural works, property rights, and other valuable matters, shall be sold to the AEGA Holders, into a new private entity formed at their direction, control and benefit, in settlement for another $100,000 in debt due to AEGEA Holders by the Company and certain liabilities will be assumed by the new private entity. This transaction is expected to be accounted for as a reverse recapitalization of FLP with the business of FLP being the continuing business since the member of FLP will have voting and management control of the combined entity.

 

In May 2015, we changed our name to FutureLand, Corp. and effected a 1 for 400 reverse stock split of our common stock. All share and per share data in this annual report have been retroactively restated to reflect the reverse stock split. The transaction has been accounted for using the acquisition method of accounting which requires that, among other things, assets acquired and liabilities assumed be recorded at their fair market values as of the acquisition date. The Company has not finalized the determination of the fair values of the liabilities assumed and assets acquired and therefore the provisional amounts set forth are subject to adjustment when valuations are completed. Under GAAP, companies have up to one year following an acquisition to finalize acquisition accounting.

 

F- 5  
 

The following details the preliminary fair value of the provisional goodwill transferred to effect the acquisition;

 

AEGEA Entertainment stock issuance per merger agreement:        
     1,470,000 shares of common at $3.00 per share   $ 4,410,000  
         
Less: AEGEA Entertainment shareholders stock cancellation        
     202,988 (cancellation of shares per agreement)     (608,964 )
         
Fair value of provisional goodwill transferred   $ 3,801,036  

 

In accordance with ASC Topic 805, Business Combination, the application of purchase accounting requires that the total purchase price be allocated to the fair value of identifiable assets acquired and liabilities assumed based on their fair values at the acquisition date, with amounts exceeding the fair values recorded as goodwill. Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The allocation process requires, among other things, an analysis of acquired fixed completed the determination of the fair value of assets acquired and liabilities assumed, accordingly; management has not made adjustments to the provisional fair values for the assets acquired and liabilities assumed. In addition the Company has not made a determination as to the deductibility of all or a portion of goodwill for tax purposes.

 

Description of Business

 

FutureLand Properties LLC. was originally formed as a wholly-owned subsidiary of FutureWorld Corp. On October 6, 2014 FutureWorld entered into a Contribution Agreement with FutureLand, a wholly-owned subsidiary of the Company. In accordance with this agreement, FutureLand, in return for contribution of intellectual property, cash, and web development services by the Company, has exchanged 40,000,000 shares of its common stock representing 100% of the shares outstanding. On March, 10th, FutureLand Properties LLC did a merger agreement with Aegea Inc. (FutureLand Corp), ensuing FutureLand Properties LLC to become Aegea Inc. (FutureLand Corp) wholly owned subsidiary. The agreement resulted in the FutureLand Properties LLC’s shareholders (FutureWorld Corp) to be issued 27,845,280 shares of Aegea Inc. (FutureLand Corp). This will result in FutureLand Corp’s shares being held for investment on FutureWorld’s balance sheet.

 

FutureLand Corp. operates its presented business through its subsidiary, FutureLand Properties, is an agricultural land lease company catering to the industrial hemp, legal medical marijuana and recreational cannabis market. Future Land was started to capitalize upon the distinct separation of the cultivation grows from the dispensaries, specifically with respect to Colorado. In the State of Colorado, which has become the quintessential poster-child for what the industry may look like for the rest of America, at least temporarily, as other states determine what exact direction they will choose to go, there are residency laws that must be adhered to. For instance, in order to get a license to grow or profit from cannabis in Colorado you must be a 2 year resident. The laws are very specific; anyone who is not a 2 year resident cannot profit from the sale of the cannabis flower or infused products. Because of this mandate, Future Land Corp must be a land owner and leaser in order to effectively participate in the cannabis grow industry, which we believe is essential in order to gain a competitive advantage. We also must own the structures on the land to control the lease and our future position in the industry.

 

The business model is simple; offer growers the opportunity to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility. Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from our associated company, HempTech Corp, in order to capture additional revenue. 

 

F- 6  
 

 

EXCHANGE AGREEMENT AND SALE OF AEGEA ASSETS

 

As discussed above, on March 10, 2015, an Exchange Agreement was entered, by and among certain shareholders and debt holders of the Company, representing the majority of the outstanding shares of the Company ("the AEGA Holders"), and FWDG and its wholly-owned subsidiary, FLP. Additionally, on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated March 10, 2015, FWDG sold all rights, title and ownership of FLP to the Company, including all member units, assets, intellectual property, contracts, leases, and real property which includes 200 acres in La Vita, Colorado.

 

Our current asset will comprise of 240 acres of prime property in southern Colorado and two signed lease agreements for grow facilities on its land. Our business plan is to continue attracting legal license holders to lease land and grow facilities on our 240 acres.  We have other developmental land use plans for other projects being pursued as well.

 

On, October 30, 2014, FLP closed on 239.96 Acres in La Vita, Colorado in Huerfano County for $60,000.  FLP entered into a lease agreement contract with a lease with Colorado Flower Company, LTD on Dec 1, 2014 allotting 37 acres for their grow facilities.  FLP was formed as a Colorado State company on October 6, 2014 by FutureWorld Corp.

 

Prior to FLP being formed, the State of Colorado amended their laws allowing cannabis grow facilities to be separated from cannabis dispensaries effectively opening up an entirely new business opportunity that FLP entered into at that time. At such time, FLP pursued the business plan to secure a cannabis or hemp grower to execute their business plan of leasing the land, the structures, the technologies and provide maintenance contracts associated with the grow. Integral to its strategy is to provide the financing for the entire grow operation so as to establish a position by which to harness a competitive advantage in striking the right kind of lease in conjunction with Colorado State laws that would allow FLP to make above average returns.  On Jan 20, 2015 FLP entered a contract with GPS, La Vita, Inc. allotting 5 acres for their immediate grow facilities.  All of these contracts, and land ownings are currently in FLP.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned inactive subsidiaries, Florida Heartland EB-5 Regional Center LLC and Aegea, LLC. All inter-company balances and transactions have been eliminated in consolidation.

 

Going Concern

 

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.   At December 31, 2018 and December 31, 2017, the Company had $29 and $136,149 in cash, respectively, and $136,120 and $248,705 in negative working capital, respectively.  For the years ended December 31, 2018 and 2017, the Company had a net loss of $740,908 and $1,457,859, respectively. Continued losses may adversely affect the liquidity of the Company in the future. Therefore, the factors noted above raise substantial doubt about our ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems.

 

F- 7  
 

 

The consolidated financial statements include extra ordinary non-cash expense of $ 7,091,032. Following GAAP, management reclassified Provisional Goodwill of $ 3,801,036 to expenses.

 

Although Management is certain that the related party receivable in the amount of $ 3,540,000 will be collectable in the future; it has been decided to set up an allowance for uncollectible debt. In the process, $ 3,290,000 has been written-off as bad debt. The related party receivable ( FutureWorld Corp ) in the amount of $ 250,000 will be retained. Any amounts collected above $ 250,000 will be considered income to the company in the future.

 

Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new and potentially current investors to alleviate the Company’s working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to translate its user base into sales. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

 

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Cash and Cash Equivalents

 

Cash and cash equivalents include highly liquid investments with maturities of three months or less at the time of purchase.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant assumptions and estimates relate to the valuation of equity issued for services, valuation of equity associated with convertible debt, the valuation of derivative liabilities, and the valuation of deferred tax assets. Actual results could differ from these estimates.

 

Fair Value Measurements and Fair Value of Financial Instruments

 

The Company adopted ASC Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

 

Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

 

Level 3: Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

 

The estimated fair value of certain financial instruments, including all current liabilities are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

F- 8  
 

 

Stock-based Compensation

 

ASC 718, "Compensation-Stock Compensation" requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). We measure the cost of employee services received in exchange for an award based on the grant-date fair value of the award.

 

We account for non-employee share-based awards based upon ASC 505-50, "Equity-Based Payments to Non-Employees." ASC 505-50 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete. Generally, our awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple reporting periods, we estimate the fair value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date. When the award vests, we adjust the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date performance is complete.

 

Derivative Liability

 

We evaluate convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, "Derivatives and Hedging."  The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability.  In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.  Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date.

 

Income Taxes

 

The Company has adopted FASB ASC 740-10, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually from differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

  Net Loss per Common Share

 

The Company computes net earnings (loss) per share in accordance with ASC 260-10, "Earnings per Share." ASC 260-10 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. At December 31, 2018 and 2017, we excluded 1,000 shares of Series B Preferred Stock convertible into 1,000 shares of common stock and 18,955 and 2,995, respectively, shares of the Company's common stock were reserved for issuance upon conversion of convertible notes as their effect was anti-dilutive. As of April 14, 2016, the Company has common shares reserved for issuance upon conversion of convertible notes.

 

F- 9  
 

 

Research and Development

 

In accordance with ASC 730-10, expenditures for research and development are expensed when incurred and are included in operating expense. There were no R&D expenses

 

Recent Accounting Pronouncements

 

ASU 2014-10, "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements". ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, however early adoption is permitted. The Company evaluated and adopted ASU 2014-10 during the year ended December 31, 2016.

 

In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern." The provisions of ASU No. 2014-15 require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of this ASU on the Company's consolidated financial statements.

 

Other accounting standards which were not effective until after December 31, 2016 are not expected to have a material impact on the Company's consolidated financial position or results of operations.

 

NOTE 3: CONCENTRATIONS

 

Concentrations of Credit Risk

 

The Company maintains accounts with financial institutions. All cash in checking accounts is non-interest bearing and is fully insured by the Federal Deposit Insurance Corporation (FDIC). At times, cash balances in money market accounts may exceed the maximum coverage provided by the FDIC on insured depositor accounts. The Company believes it mitigates its risk by depositing its cash and cash equivalents with major financial institutions. There were no cash deposits in excess of FDIC insurance at December 31, 2018.

 

F- 10  
 

 

NOTE 4: FIXED ASSETS

 

Fixed assets consist of the following at December 31, 2018 and 2017:

 

    December 31,   December 31,
    2018   2017
         
Land   $ 405,251     $ 385,251  
Land improvements     42,430       42,430  
Buildings and structures     50,000       50,000  
Building improvements     8,337       8,337  
Furniture and fixtures     2,962       2,962  
      508,980       508,980  
Less: Accumulated depreciation     (11,764 )     (3,716 )
Fixed Assets - net   $ 497,216     $ 505,264  

 

Depreciation expense was $8,047 and $3,716 for the years ended December 31, 2018 and 2017, respectively.

 

NOTE 5: RELATED PARTIES

 

The Company has advances to and from related parties. The advances were to and from directors of the Company or corporations in which the directors have significant ownership. The balance of advances from related parties for the year ended December 31, 2018 and 2017 amounted to $495,417 and $459,809 respectively. The advances are non-interest bearing and are due on demand (see Note 10).

 

NOTE 6: CONVERTIBLE DEBENTURES AND NOTES

 

At December 31, 2018 and 2017, the Company had convertible debt consisting of the following: 

    December
2018
  December
2017
         
Convertible debt   $ 356,766     $ 449,138  
Less: debt discount     —         (365,187 )
Convertible debt, net   $ 356,766     $ 83,951  

 

Convertible debt principal payments of $356,766 were in default on maturity date as of the issuance date of these consolidated financial statements.

 

On January 04, 2016, the Company issued a $30,000 face value debenture. The debenture accrues interest at 10% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2016, the holder converted the full $30,000 in principal and $5,720 in accrued interest into 7,283,802 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0, respectively.

 

F- 11  
 

 

On January 28, 2016, the Company issued a $93,750 face value debenture. The debenture accrues interest at 10% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2016, the holder converted the full $93,750 in principal and $6,941 in accrued interest into 34,728,758 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0, respectively.

 

On February 16, 2016, the Company issued a face value $80,000 debenture. The debenture accrues interest at 8% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2016, the holder converted the full $80,000 in principal and $4,114 in accrued interest into 21,796,841 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0, respectively.

 

On April 07, 2016, the Company issued a face value $25,000 debenture for an advanced fee on an equity line of credit for $1,000,000. The debenture accrues interest at 8% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2016, the holder converted the full $25,000 in principal and $6,238 in accrued interest into 8,247,840 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0, respectively.

 

On April 15, 2016 the Company issued a face value $80,750 debenture to Auctus. The debenture accrues interest at 10% per annum and is convertible into the company’s common stock at 45% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2016, the holder converted $34,599 in principal and $5,221 in accrued interest into 18,100,000 shares of common stock. During the year ended December 31, 2017, the holder converted the remaining balance of $46,151 in principal and $17,127 in accrued interest into 25,107,050 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0, respectively.

 

On June 17, 2016, the Company issued a face value $92,000 debenture to EMA. The debenture accrues interest at 10% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2016, the holder converted $22,050 in principal and $270 in accrued interest into 9,000,000 shares of common stock. During the year ended December 31, 2017, the holder converted the remaining balance of $69,950 in principal and $5,157 in accrued interest into 30,441,675 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0 respectively.

 

On July 8, 2016, the Company issued a face value $120,000 debenture to EMA. The debenture accrues interest at 10% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2017, the holder converted the remaining balance of $120,000 in principal and $15,690 in accrued interest into 380,826,777 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0, respectively. 

 

F- 12  
 

 

On December 14, 2016, the Company issued a face value $87,500 debenture to EMA. The debenture accrues interest at 8% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2017, the holder converted the remaining balance of $87,500 in principal and $10,410 in accrued interest into 436,646,222 shares of common stock. As of December 31, 2017 and 2016, the outstanding balance of the debenture was $0 and $87,500, respectively.

 

On December 30, 2016, the Company issued a face value $85,000 debenture to Auctus. The debenture accrues interest at 10% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2017, the holder converted the remaining balance of $85,000 in principal and $5,633 in accrued interest into 407,712,768 shares of common stock. As of December 31, 2018 and 2017, the outstanding balance of the debenture was $0 and $0, respectively.

 

On March 21, 2017, the Company issued a face value $180,000 debenture to EMA. The debenture accrues interest at 8% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2017, the holder converted $177,488 in principal and $6,000 in accrued interest into 824,250 shares of common stock. The carryover balance of $2,513 from 2017 was converted to stock. As of December 31, 2018, the outstanding balance of the debenture was $0.

 

On March 28, 2017, the Company issued a face value $180,000 debenture to Auctus. The debenture accrues interest at 8% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. During the year ended December 31, 2017, the holder converted $134,094 in principal and $12,686 in accrued interest into 841,392,600 shares of common stock. As of December 31, 2018, the outstanding balance of the debenture was $0.

 

On September 21, 2017, the Company issued a face value $300,000 debenture to Auctus. The debenture accrues interest at 8% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. As of December 31, 2017, the outstanding balance of the debenture was $300,000. $36,509 was converted in 2018. The remaining balance as of 12/31/2018 is $ 263,491.

 

On October 19, 2017, the Company issued a face value $81,000 debenture to EMA. The debenture accrues interest at 8% per annum and is convertible into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company after the conversion. As of December 31, 2017, the outstanding balance of the debenture was $81,000. The remaining balance as of 12/31/2018 is $55,275.  

 

F- 13  
 

 

NOTE 7: STOCKHOLDERS' DEFICIT

 

Description of Series B Convertible Preferred Stock

 

The 2,000 shares of Series B Convertible Preferred Stock have the following the designations, rights and preferences: The Company is not permitted to pay or declare dividends or other distributions to the holders of the Series B Preferred Stock, whether in liquidation or otherwise, The holder of the shares will be entitled to vote, on a one million-for-one basis, with the holders of our common stock on all corporate matter on which common shareholders are entitled to vote, and Each share is convertible into one share of our common stock.

 

C ommon Stock

 

Of the authorized common stock, 33,867,930 shares are outstanding as of immediately after the closing of the Acquisition and after giving effect to the shares to be issued to the former FutureLand shareholders as a result of the Acquisition. The holders of our common stock are entitled to receive dividends from our funds legally available therefor only when, as and if declared by our Board, and are entitled to share ratably in all of our assets available for distribution to holders of our common stock upon the liquidation, dissolution or winding-up of our affairs. Holders of our common stock do not have any preemptive, subscription, redemption or conversion rights. Holders of our common stock are entitled to one vote per share on all matters which they are entitled to vote upon at meetings of stockholders or upon actions taken by written consent pursuant to Colorado corporate law. The holders of our common stock do not have cumulative voting rights, which mean that the holders of a plurality of the outstanding shares can elect all of our directors. All of the shares of our common stock currently issued and outstanding are fully-paid and non-assessable. No dividends have been paid to holders of our common stock since our incorporation, and no cash dividends are anticipated to be declared or paid in the reasonably foreseeable future.

 

Pursuant to the Acquisition Agreement, upon consummation of the Acquisition, AEGEA assumed all of FutureLand's options and warrants issued and outstanding immediately prior to the Acquisition. Prior to and as a condition to the closing of the Acquisition, each then-current AEGEA stockholder agreed to surrender certain shares of common stock held by such holder to AEGEA and the then-current AEGEA stockholders will retain or be issued additional shares to be an aggregate of 4.9% of common stock. Therefore, following the Acquisition, FWDG designated holders now hold 27,845,280 shares of AEGEA common stock which is approximately 98.93% of the Company Common Stock outstanding. The percentage ownership by FWDG designated holders will drop to around 94% of common shares after the issuance of the 4.9% new issuance of common shares to the AEGEA stockholders.

 

NOTE 8: INCOME TAXES

 

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has net operating losses of $17,212,933 since inception. The Company computes tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. The net operating loss can be carried forward indefinitely. 

 

F- 14  
 

 

The components of the net deferred tax asset at December 31, 2018 and December 31, 2017 and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:

 

    December 31,   December 31,
    2018   2017
         
Net Operating Losses   $ 740,908     $ 1,457,859  
Statutory Tax Rate     21 %     21 %
Effective Tax Rate     —         —    
Deferred Tax Asset     155,590       306,150  
Valuation Allowance     (155,590 )     (306,150 )
Net Deferred Tax Asset   $ —       $ —    

 

The tax years ended December 31, 2015, 2018 and 2017 are open for audit by both federal and state taxing authorities.

 

Income tax benefit resulting from applying statutory rates in jurisdictions in which we are taxed (Federal and State of Florida) differs from the income tax provision (benefit) in our financial statements. The following table reflects the reconciliation for the years ended December 31, 2016 and 2016: 

    Year Ended December 31,
    2018   2017
         
Benefit at federal and statutory rate     (35 )%     (35 )%
Change in valuation allowance     35 %     35 %
Effective tax rate     0 %     0 %

 

 

F- 15  
 

 

NOTE 9: SUBSEQUENT EVENTS

 

On September 6, 2017 GreenLeaf Holdings, LLC went into contract with FutureLand to purchase 80% of Amps Electric, Inc., a Massachusetts company, of which FutureLand owned 32%. Later, on the 25th of October, 2017, FutureLand acquired 19% more of Amps from GreenLeaf Holdings, LLC making them majority owners in the company. Sometime after this, there became various disputes between parties associated with Amps and GreenLeaf Holdings, LLC where expectations regarding funding and roles and other things were not being met. This created a volatile and delicate business environment. Then FutureLand came to understand that Amps Electric, Inc. in Massachusetts was an S Corporation and needed to be changed into a C Corporation or an LLC for us to have a legal voting interest in the entity. But, the climate at this time provided an opportunity for Amps Electric, Inc. to back out or rather not cooperate unless we could find a solution between the parties that enabled us to proceed. FutureLand did not want to let go of the opportunity, so we entered into protracted negotiations to solve it. This has taken some measure of time to get to an agreement between the parties. In April 2018 a new Florida C Corporation was filed named Amps Electric Holdings, Inc. where John Bianchi of Amps Electric, Inc. of Massachusetts will be 49% owner and FutureLand Corp. is 51%. The other agreement with Amps Electric, Inc. S Corporation and GreenLeaf Holdings LLC will be made null and void with the new agreement, but Amps Electric Holdings, Inc. will be still tied to the S Corporation via insurance and bonding through John Bianchi. Bi-Directional Amplifiers department.

 

Presently, the Bi-Directional Amplifier business has slowed for the company and it is not evident that there will continue to be an ongoing opportunity for FutureLand Corp. to generate revenue from this sector.

 

F- 16  
 

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company is currently in a dispute with its current accountants (i.e. Turner Stone) over claims of prior fees owed. As a result, these financial statements (2018 and 2017) have not been audited. The Company hopes to resolve this dispute and retain the current accountants. However, if the Company is not able to resolve this dispute in a timely manner, we will be looking for new accountants.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management conducted an evaluation, with the participation of our Chief Executive Officer who is our principal executive officer and our Chief Financial Officer who is our principal financial and accounting officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as a result of the material weakness in our internal control over financial reporting described below, our disclosure controls and procedures were not effective as of December 31, 2018.

 

Management's Annual Report on Internal Control over Financial Reporting

 

Management is responsible for the preparation of our consolidated financial statements and related information. Management uses its best judgment to ensure that the consolidated financial statements present fairly, in material respects, our financial position and results of operations in conformity with generally accepted accounting principles. Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in the Securities Exchange Act of 1934. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls including the possibility of human error and overriding of controls. Consequently, an ineffective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.

 

Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that, in reasonable detail, accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and that the receipts and expenditures of company assets are made in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention of or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.

 

30  
 

 

Under the supervision of management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission published in 1992 and subsequent guidance prepared by the Commission specifically for smaller public companies. Based on that evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2016. We have identified the following material weaknesses as of December 31, 2016:

 

1. Management does not have procedures implemented to timely close its books in order to meet compliance requirements.

 

2. Management has not implemented procedures to identify and properly monitor the identification of liabilities that required to be accrued at the end of a reporting period.

 

Remediation of Material Weakness in Internal Control

 

We believe the following actions we have taken and are taking will be sufficient to remediate the material weaknesses described above.

 

New management has begun the development and implementation of policies and procedures which include use of a checklist that will be monitored and reviewed on a periodic basis to identify and record liabilities on a timely basis as they occur to make sure they are recorded accurately. The procedures will include a search for unrecorded liabilities on a quarterly basis.  New management currently monitors liabilities by checking them against the accounts payable register to make sure they are legitimate and recorded properly.

 

The new management of the Corporation believes the actions described above will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting. We expect the material weaknesses have been remediated by December 31, 2018.

 

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's Report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only Management's Report in this annual report.

 

31  
 

 

Changes in Internal Controls over Financial Reporting

 

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

In connection with a convertible note dated August 13, 2014 in the amount of $58,000 (see Note 6), on May 29, 2015 the Company received a notice of default from the Lender. In connection with the notice of default, the Company failed to file its annual report on Form 10-K by the due date (the "10-K Default") and the Company failed to pay its required installment payment due on April 13, 2015 (the "Payment Default") and has not paid all remaining outstanding principal and interest balances due prior to May 13, 2015 (the "Maturity Default"). Pursuant to the default terms in the agreement, the Lender has elected to increase the outstanding balance by applying the Default Effect (the "Default Effect") and accelerate the outstanding balance. The Default Effect for Major Defaults is equal to the outstanding balance multiplied by 115%. The 10-K Default is a Major Default and the Default Effect is equal to $7,585 ($50,565 x 15%). The Payment Default is a Major Default and the Default Effect is equal to $8,791 ($58,609 x 15%). The Maturity Default is a Major Default and the Default Effect is equal to $10,296 ($68,641 x 15%). The debt agreement also provides that the Default Effect may be applied for up to three Major Defaults and three Minor Defaults. The Lender hereby demanded that the outstanding balance of principal, interest and Default Effect aggregating $12,500 be paid to Lender no later than May 10, 2016.

 

32  
 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Set forth below are the names and ages of our directors and executive officers and their principal occupations at present and for at least the past five years.

 

Name   Age   Positions and Offices to be Held
Cameron Cox   44   Chief Executive Officer and Director
Sam Talari   56   Chairman, Director and Principal Accounting Officer

 

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board. All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. Our Board of Directors appoints officers annually and each Executive Officer serves at the discretion of our Board of Directors.

 

Sam Talari -Chairman of the Board and Principal Accounting Officer

 

Mr. Talari, born and raised as an entrepreneur, found his calling in incubating exciting leading-edge technology companies in private and public sector, with a unique business plan merging the boundaries between a hedge fund and a VC. Mr. Talari has been the Chief Executive Officer of FutureWorld Energy, Inc. since November 21, 2005. Mr. Talari served as the Acting Chief Executive Officer at Infrax Systems, Inc. since November 21, 2008 and Chief Operating Officer until October 2009 and served as its Interim President. Mr. Talari founded and manages FutureTech since 2001 and Talari Industries since 2008. He serves as a Director at PowerCon Energy Systems, Inc, and Chairman & CEO of Lockwood Technology. He studied Computer Science and Mathematics at the University of New Hampshire. Mr. Talari holds a Bachelor's Degree in Computer Science, Engineering, and Mathematics from University of Lowell and has a Master's Degree in Finance from Trinity.

 

33  
 

 

Cameron Cox - President and CEO

 

  Mr. Cox is a business entrepreneur with a wide bastion of knowledge to draw upon from many different walks of life.  A real estate expert and developer he brings ground level pragmatism to the field of dreams.  Consummate venture capitalist and advocate of the oncoming Greenrush.  A U.S. Army Vet, and graduate of Michigan State University with a BA in Communication he also attended Westminster Theological Seminary for a MDIV and University of South Florida, St. Petersburg for a MBA.

 

Committees of our Board of Directors

 

Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include "independent" directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.

 

The Board does not have standing audit, compensation or nominating committees. The Board does not believe these committees are necessary based on the size of our company, the current levels of compensation to corporate officers and voting control lies with our current board of directors. The Board will consider establishing audit, compensation and nominating committees at the appropriate time.

 

The entire Board of Directors participates in the consideration of compensation issues and of director nominees. Candidates for director nominees are reviewed in the context of the current composition of the Board and our operating requirements and the long-term interests of our stockholders. In conducting this assessment, the Board of Directors considers skills, diversity, age, and such other factors as it deems appropriate given the current needs of the Board and our company, to maintain a balance of knowledge, experience and capability.

 

The Board's process for identifying and evaluating nominees for director, including nominees recommended by stockholders, will involve compiling names of potentially eligible candidates, conducting background and reference checks, conducting interviews with the candidate and others (as schedules permit), meeting to consider and approve the final candidates and, as appropriate, preparing an analysis with regard to particular recommended candidates.

 

Through their own business activities and experiences each of our directors have come to understand that in today's business environment, development of useful products and identification of undervalued real estate, along with other related efforts, are the keys to building our company. The directors will seek out individuals with relevant experience to operate and build our current and proposed business activities.

 

Director Compensation

 

Our directors do not receive compensation as directors and there is no other compensation being considered at this time.

 

34  
 

 

Compliance with Section 16(a) of the Securities Exchange Act of 1934

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file. Based on our review of the copies of such forms received by us, or written representations that no other reports were required, and to the best of our knowledge, we believe that all of our officers, directors, and owners of 10% or more of our common stock

filed all required Forms 3, 4, and 5.

 

ITEM 11. EXECUTIVE COMPENSATION

 

The following table sets forth certain compensation information for: (i) our principal executive officer or other individual serving in a similar capacity during fiscal 2018; (ii) our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at December 31, 2018 whose compensation exceed $100,000; and (iii) up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer at December 31, 2017. Compensation information is shown for the fiscal years ended December 31, 2018 and 2017:

 

SUMMARY COMPENSATION TABLE

 

        All Other  Total
Fiscal  Salary   Compensation
Name and Principal Position Year ($) Option Awards ($)  ($)
Cameron Cox, Chief Executive Officer 2017 130,000 0 0 130,000
  2018 130,000 0 0 130,000
           
           
Sam Talari, Chief Accounting Officer 2017 130,000 0 0 130,000
  2018 130,000 0 0 130,000

                           


  Employment Agreements with Executive Officers

 

We have employment agreements with any of our new executive officers.

 

35  
 

 

Outstanding Equity Awards at Fiscal Year-End

 

The following tables set forth, for each person listed in the Summary Compensation Table set forth above, as of December 31, 2018: With respect to each option award:

the number of shares of our common stock issuable upon exercise of outstanding options that have been earned, separately identified by those exercisable and un-exercisable;
the number of shares of our common stock issuable upon exercise of outstanding options that have not been earned;
the exercise price of such option;
the expiration date of such option;
with respect to each stock award;
the number of shares of our common stock that have been earned but have not vested;
the market value of the shares of our common stock that have been earned but have not vested;
the total number of shares of our common stock awarded under any equity incentive plan that have not vested and have not been earned; and
the aggregate market or pay-out value of our common stock awarded under any equity incentive plan that have not vested and have not been earned

 

 

                         
Name

Number of

Securities

Underlying

Unexercised

Options

Exercisable

 

Number of Securities Underlying

Unexercised

Options

Un-exercisable

   

Equity

Incentive

Plan Awards:

Number of

Securities

Underlying

Unexercised

Unearned Options

   

Weighted

Average

Exercise

Price

   

Expiration

Date

 
                           
Cameron Cox  0     0       0       $       0          
                                   
Sam Talari  0     0       0       $       0          
                                   

Stock Awards  

Name    

Number

of

Shares

That 

Have Not

Vested

   

Market

Value

of Shares

That

Have Not Vested

   

Number

of

Unearned

Shares

That

Have Not

Vested

   

Equity Incentive

Plan Awards:

Market or

Pay-Out

Value of

Unearned

Shares

Have Not

Vested

 
                                 
Cameron Cox           $          -       0       $          -  
                                 
Sam Talari           $          -       0       $          -  

 

36  
 

 

ITEM  12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following tables set forth certain information, as of December 31, 2018 with respect to the beneficial ownership of our outstanding common stock and preferred stock by (i) any holder of more than five percent, (ii) each of our executive officers and directors, and (iii) our directors and executive officers as a group.

 

Unless otherwise indicated, the business address of each person listed is in care 10901 Roosevelt Blvd, Suite, 1000c Saint Petersburg, FL 33716. The information provided herein is based upon a list of our shareholders and our records with respect to the ownership of common stock. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.

 

 

    Common Stock
   

Number of Shares

Beneficially Owned (1)

 

Percentage

Outstanding (2)

Directors and Officers                
Cameron Cox     6,971,550 (2)      .0011%  
                 
Sam Talari     45,406,730 (2)      .0072%  
                 
All directors and named executive 
officers as a group (2 persons)
    52,378,28 0       .0083%  
                 
5% Stockholders                
                 

 

1. The Company believes that each stockholder has sole voting and investment power with respect to the shares of common stock listed, except as otherwise noted. The number of shares beneficially owned by each stockholder is determined under rules of the SEC, and the information is not necessarily indicative of ownership for any other purpose. Under these rules, beneficial ownership includes (i) any shares as to which the person has sole or shared voting power or investment power and (ii) any shares which the individual has the right to acquire within 60 days after December 31, 2016 through the exercise of any stock option, warrant, conversion of preferred stock or other right, but such shares are deemed to be outstanding only for the purposes of computing the percentage ownership of the person that beneficially owns such shares and not for any other person shown in the table. The inclusion herein of any shares of common stock deemed beneficially owned does not constitute an admission by such stockholder of beneficial ownership of those shares of common stock.
2. Based on 6,300,165,454 shares of common stock outstanding as of December 31, 2018.
3. Sam Talari own the shares under the corporate name of Talari Industries, LLC. Mr. Talari hold 100% control of the Talari Industries, LLC. The address of Talari Industries, LLC is as follows:  Talari Industries, LLC 3637 4 th Street North, #330, ST. Pete FL 33704.

 

37  
 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

Related Party Transactions

 

       N/A

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

       The following table shows the fees that were billed in 2017 for the audit and other services provided by Turner, Stone & Company for December 31, 2016.

 

    2018   2017
 Audit Fees   $ —       $ 12,000  
 Audit-Related Fees     10,482       —    
 Tax Fees     —         —    
 All Other Fees     —         —    
Total   $ 10,482     $ 12,000  


 

Audit Fees  —  This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

 

Audit-Related Fees  —  This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees." The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission, other accounting consulting and other audit services.

 

Tax Fees   — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

 

All Other Fees  — This category consists of fees for other miscellaneous items.

 

Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre- approval by the Board, or, in the period between meetings, by a designated member of Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting.

 

38  
 

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibits required by Item 601 of Regulation S-K:

 

No. Description
   
31.1* Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002  
31.2* Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002  
32.1* Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002  
101.INS* XBRL INSTANCE DOCUMENT  
101.SCH* XBRL TAXONOMY EXTENSION SCHEMA  
101.CAL* XBRL TAXONOMY EXTENSION CALCULATION LINKBASE  
101.DEF* XBRL TAXONOMY EXTENSION DEFINITION LINKBASE  
101.LAB* XBRL TAXONOMY EXTENSION LABEL LINKBASE  
101.PRE* XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE  

 

* Filed herewith.

39  
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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. 

 

  FutureLand, Corp.
   
Date: April 16, 2018  
   
  By:    /s/ Cameron Cox
 

Cameron Cox,

Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature   Title   Date
         
/s/ Cameron Cox   President, Chief Executive Officer, Director   April 16,  2018
Cameron Cox        

 

/s/ Sam Talari   Chairman, Director, Principal Accounting Officer), Director   April 16,  2018
Sam Talari        

 

40  
 

 

FutureLand Corp. (USOTC:FUTL)
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1 Year : From Oct 2018 to Oct 2019

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Today : Tuesday 22 October 2019

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