You should carefully consider the risksfollowing risk factors, in addition to the other information contained in this report on Form 10-K, including the section of this report titled “Management’s Discussion and uncertainties described below.Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in the following risk factors and the risks actually occur,described elsewhere in this report occurs, our business, operating results and financial condition could be harmedseriously harmed. This report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward¬looking statements as a result of factors that are described below and elsewhere in this report.

Risks Related to our Activities in the Legal Hemp Industry

We will be subject to a myriad of different laws and regulations governing hemp and our inability to comply with such laws in a cost-effective manner may have an adverse effect on our business and result of operations.

Laws and regulations governing the use of hemp in the United States are broad in scope; subject to evolving interpretations; and subject to enforcement by a myriad of regulatory agencies and law enforcement entities. Under the Agriculture Improvement Act of 2018, also known as the 2018 Farm Bill, a state or Indian tribe that desires to have primary regulatory authority over the production of hemp in the state or territory of the Indian tribe must submit a plan to monitor and regulate hemp production to the Secretary of the USDA. The Secretary must then approve the state or tribal plan after determining if the plan complies with the requirements set forth in the Agriculture Improvement Act of 2018. The Secretary may also audit the state or Indian tribe’s compliance with the federally-approved plan. If the Secretary does not approve the state or Indian tribe’s plan, then the production of hemp in that state or territory of that Indian tribe will be subject to a plan established by USDA. USDA has not yet established such a plan. We anticipate that many states will seek to have primary regulatory authority over the production of hemp. States that seek such authority may create new laws and regulations that limit or restrict the use of hemp.

Federal and state laws and regulations on hemp may address production, monitoring, manufacturing, distribution, and laboratory testing to ensure that that the hemp has a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis. Federal laws and regulations may also address the transportation or shipment of hemp or hemp products, as the Agriculture Improvement Act of 2018 prohibits states and Indian tribes from prohibiting the transportation or shipment of hemp or hemp products produced in accordance with that law through the state or territory of the Indian tribe, as applicable. We may be subject to many different state-based regulatory regimens for hemp, all of which could require us to incur substantial costs associated with compliance requirements. Our operations will be restricted to only where such operations are legal on the local, state and federal levels.

In addition, it is possible that additional regulations may be enacted in the future in the United States and globally that will be directly applicable to research and development operations.

We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

We have no operating history in the legal hemp or cannabis industry, which makes it difficult to accurately assess our future growth prospects.

The legal hemp and cannabis industry is an evolving industry that may not develop as expected. Furthermore, our operations will continue to evolve as we continually assess new strategic opportunities for our business within this industry. Assessing the future prospects of this industry is challenging in light of both known and unknown risks and difficulties we may encounter.

Growth prospects in the legal hemp and cannabis industry can be affected by a wide variety of factors including:

We may not be able to successfully address the above factors, which could negatively impact our intended business plans.

Because we have only recently begun our legal hemp operations, we anticipate our operating expenses will increase prior to earning revenue from these operations.

As we identify and develop strategic opportunities, conduct any necessary research and development with respect to legal hemp, and expand our operations, we anticipate significant increases in our operating expenses, and we may not realize significant revenues from such operations. As a result, the Company may incur significant financial losses with respect to such operations in the foreseeable future. There is no history upon which to base any assumption as to the likelihood that these operations will prove successful.

Negative press from being in the hemp/cannabis space could have a material adverse effect on our business, financial condition, and results of operations.

The hemp plant and the valuecannabis/marijuana plant are both part of the same cannabis sativa genus/species of plant, except that hemp, by definition, has less than 0.3% THC content, but the same plant with a higher THC content is cannabis/marijuana, which is legal under certain state laws, but which is not legal under federal law. The similarities between these plants can cause confusion, and our activities with legal hemp may be incorrectly perceived as us being involved in federally illegal cannabis. Also, despite growing support for the cannabis industry and legalization of cannabis in certain U.S. states, many individuals and businesses remain opposed to the cannabis industry. Any negative press resulting from any incorrect perception that we have entered into the cannabis space could result in a loss of current or future business. It could also adversely affect the public’s perception of us and lead to reluctance by new parties to do business with us or to own our common stock. We cannot assure you that additional business partners, including but not limited to financial institutions and customers, will not attempt to end or curtail their relationships with us. Any such negative press or cessation of business could have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to Our Business

The impact of the COVID-19 pandemic, or the impact of any future pandemic, is uncertain and difficult to predict, but the COVID-19 pandemic and the measures taken to contain it has had a material adverse effect on our business and revenues to date and may have a material adverse effect on our business, financial condition, results of operations, stock price, and liquidity in the future.

The COVID-19 pandemic has materially and adversely impacted the U.S. economy and financial markets, with legislative and regulatory responses including unprecedented monetary and fiscal policy actions across all sectors, and there is significant uncertainty as to timing of stabilization and recovery. Our business, results of operations and financial condition were adversely affected by the COVID-19 pandemic in the first quarter of 2020, especially beginning in mid-March, and such impact has materially worsened to date in the second quarter. The COVID-19 pandemic and measures taken to contain it have subjected our business, results of operations, financial condition, stock price and liquidity to a number of material risks and uncertainties, all of which may continue or worsen.

The extent of the potential effect of the COVID-19 pandemic will depend on future actions and outcomes, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the short-term and long-term economic impact of the outbreak (including the effect on consumer discretionary spending and our employees in the markets in which we operate), the actions taken to mitigate the impact of the virus, and the pace of economic and financial market recovery when the COVID-19 pandemic subsides, among others.

Many of the Risk Factors described in this report are more likely to occur and be further intensified as a result of the impact of the COVID-19 pandemic.

Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A global financial crisis or a global or regional political disruption could cause extreme volatility in the capital and credit markets. For example, outbreaks of epidemic, pandemic, or contagious diseases, such as the recent COVID-19 outbreak, could disrupt our business. Business disruptions could include disruptions to the productivity of our stockemployees working remotely and restrictions on their travel may hinder their ability to meet with potential customers and close transactions, as well as temporary closures of the facilities of suppliers or contract growers as we try to develop our supply chain. In addition, the COVID-19 outbreak may result in a severe economic downturn and has already significantly affected the financial markets of many countries. A severe or prolonged economic downturn or political disruption could go down. This means you could lose all orresult in a partvariety of your investment.

There is substantial doubt that we will be able to continue as a going concern

Our independent registered public accounting firm’s auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

We have a history of significant losses, which we expect to continue, and we may never achieve nor maintain profitability.

We have incurred significant net losses since our Cannabis Holdings Subsidiary is dependent on laws pertainingformation and expect to the marijuana industry.

We carefully vettvet prospective tenants, and we obtain their personal guarantees as to payment and performance under the lease terms.

Under terms of the leases now in effect, if we do not receive rent payments as such payments become due and payable under lease terms, we may first utilize the sums we hold as tenant security deposits to collect the late rent payments with penalty. Under the terms of the leases in place, tenants then are required, within five days, to replace such security deposit sums such that the full tenant security deposit is restored. There is no assurance that such replacements of deposit sums will actually occur.

In any event, if tenants do not comply with lease terms, and no workable arrangement can be achieved, we may be forced to evict one or more tenants. This has occurred in the past and could occur again. Unfavorable developments of this nature could contribute to or cause us to fall behind on our obligations to make monthly mortgage payments as such payments become due.

Several years ago Mr. Wiegand contributed his property management entity known as CW Properties and we have taken over operations.  We currently manage 96 rental units and as of December 31, 2016 and the date of this report they generate a healthy net revenue from management fees.  In the future we may undertake additional activities in property management as well as those in connection with our ongoing business plan or we may elect to sell our property management business.

As a public company, our expenses include, but are not limited to, annual audits, legal costs, SEC reporting costs, costs of a transfer agent and the costs associated with fees and compliance. Further, our management will need to invest significant time and energy to stay current with the public company responsibilities of our business and will thereforemay from time to time have diminished time available to apply to other tasks necessary to our survival and growth.

It is therefore possible that the financial and time burdens of operating as a public company will cause us to fail to achieve profitability. If we exhaust our funds, our business will fail and our investors will lose all money invested in our stock.

If we fail to pay public company costs, as such costs are incurred; we could become delinquent in our reporting obligations and face the delisting of our shares.

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It is essential that we grow our overall business, achieve significant profits and maintain adequate cash flow in order to pay the cost of remaining public. 

We have recently expanded brokerage and property management. We now operate in Colorado Springs

a public entity which includes but is not limited the costs of remaining current with SEC reporting obligations.

The issuance of additional shares of our common stock may be necessary for the implementation of our growth strategy.

A limited private placement of restricted shares of our common stock washas been completed several years ago.when deemed necessary. Cash generated in prior years was used to acquire cannabis zoned real property, finance our new office space and provide working capital.  Issuance of any additional securities pursuant to future fundraising activities undertaken may significantly dilute the ownership of existing shareholders and may reduce the price of our common stock.

Our subsidiary, HMTF Cannabis Holdings has

We acquired, improved and leased aour Denver warehouse to a licensed third party grower, rent ishemp seed grower. Rental payments are current and the warehouse is showingpresently reflecting positive cash flow.

However, activation of our warehouse project was accomplished primarily through an owner-carry purchase arrangement and funds invested by the tenant to improve the property. To acquire additional properties suitable to the cultivations of cannabis may require sale of additional restricted shares in a private placement. Alternately, a debt financing could be utilized; however any debt financing will require payment of interest and may involve offering security interests in our planned properties and possibly issuing warrants to purchase our common stock. Future financings, if undertaken, could impose limitations on our operating flexibility and may involve the issuance of additional shares of our common stock, or warrants to purchase shares of common stock and may be dilutive to our existing shareholders.

flow.

While we have been able to acquire a warehouse in Denver, Colorado with 99% owner finance,financing, future acquisitions may require financial resources well in excess of our present balance sheet. Failure to successfully obtain additional funding would likely jeopardize our ability to expand our cannabishemp business and related operations.

Further, we need to raise money for working capital and to finance new opportunities presented by legalization of on-site consumption. To these ends, we may file a Memorandum with the Colorado Division of Securities to pursue an Intra-State Offering  of additional shares of our common stock over the internet. There is no assurance that the Colorado Division of Securities will approve our offering or that any shares will be sold under the terms of our proposed offering.

As a full reporting public company, we have no access to Reg A Plus or Reg CF as a means to generate cash from the sale of our shares.

The loss of our current executive officer or key management personnel or inability to attract and retain the necessary personnel could have a material adverse effect upon our business, financial condition or results of operations

Our success is heavily dependent on the continued active participation of our current executive officer, largest shareholder, and sole director listed under "Management."“Management.” Loss of the services of Corey WiegandMr. Evans, would have a material adverse effect upon our business, financial condition or results of operations. Further, our success and achievement of our growth plans depend on our ability to recruit, hire, train and retain other highly qualified technical, professional, clerical, administrative and managerial personnel. Competition for qualified buyer agents among companies in the real estate industry is intense, and the loss of any of such persons, or an inability to attract, retain and motivate any additional highly skilled realtors required for the expansion of our activities, could have a materially adverse effect on our future financial performance.  Inability to attract and retain the necessary personnel, consultants and advisors could have a material adverse effect on our business, financial condition or results of operations.

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We are controlled by our current officer

Our Chief Executive Officer and director. 

Corey Wiegand, our sole director whowill have significant influence over us.

Our Chief Executive Officer is ourcurrently the sole executive officer, beneficially owns approximately 50.7%member of our outstanding shares of Common Stock. Mr. Wiegand consequently controls the election of our Board of Directors and have the outcome of issues submittedability to influence our stockholders.

Since webusiness affairs.

We have only one director who serves as our president, chief executive officer, chief financial officerChairman, President, Chief Executive Officer, and secretary,Chief Financial Officer, decisions which affect the company will be made by only one individual

Since we have only one director who serves as our Chairman, President, Chief Executive Officer, and Chief Financial Officer, decisions which affect the company will be made by only one individual.

It is likely that conflicts of interest willmay arise in the day-to- day operations of our business.  Such conflicts, if not properly resolved, could have a material negative impact on our business.

In the past, the Company has issued shares for cash and services at prices which were solely determined by Corey Wiegand.prior management. At that time, Mr. Wiegandmanagement made a determination of both the value of services exchangedthe exchange for our shares, and, as well, the price per share used as compensation.in the capital raising effort.   Transactions of this nature were not made at arm'sarm’s length and were made without input from a knowledgeable and non-interested third party.  Future transactions of a like nature could dilute the percentage ownership of the company owned by a given investor. While the company believes its past transactions were appropriate, and plans to act in good faith in the future, an investor in our shares will have no ability to alter such transactions as they may occur in the future and, further, will not be consulted by the company in advance of any such transactions. An investor who is unwilling to endure such potential dilution should not purchase our shares.

We have limited financial resources to take advantage of advertising opportunities as they may arise.  

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The inability

Adverse outcomes in future legal proceedings could subject us to pay for press releases, investor road shows or other events intended to expose our shares to institutional investors, couldsubstantial damages and adversely affect our abilityresults of operations and profitability.

We may become party to generate investor support for our common shares.

Our operating results will be subject to fluctuationslegal proceedings, including matters involving personnel and our stock price may decline significantly. 

Our quarterly revenue and operating results from commissions, management fees and lease revenues, if any, will be difficult to predict from quarter to quarter. We derive relatively stable revenue from our property management operations. Nonetheless, it is possible that our net operating results in some quarters will fall below our expectations. Our quarterly operating results will be affected by a number of factors, including: 

	•		trends in the median home values in Colorado;
	•		the availability, pricing and timeliness of web advertising campaigns;
	•		the impact of seasonal variations in demand and/or revenue recognition linked to construction cycles and weather conditions and the retail price of signs, sign riders, telephone services, and Sales Workshops;
	•		timing, availability and changes in government incentive programs;
	•		unplanned additional expenses and/or shortfalls in anticipated rental income at our warehouse property;
	•		logistical costs;
	•		unpredictable volume and  timing of buyer's agent sales;
	•		our ability to establish and expand listing agent relationships;
	•		the number of buyer agents that we are able to recruit;
	•		the timing of new technology announcements or introductions by our competitors and other developments in the competitive environment;
	•		increases or decreases in real estate appreciation rates due to changes in economic growth;
	•		travel costs and other factors causing the mentor training business to become more difficult; and
	•		changes in lending, inspection, appraisal and other factors that result in closing delays or cancellations.

If revenue for a particular quarter is lower than we expect, we likely will be unable to proportionately reduce our operating expenses for that quarter, which would harm our operating results for that quarter. If we fail to meet investor expectations or our own future guidance, even by a small amount, our stock price could decline, perhaps substantially.  

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Existing real estate laws, regulations, land use codes and policies, the rules promulgated by the State of Colorado's Marijuana Enforcement authorities and changes to these regulations and policies may present technical, regulatory and economic barriers to potential buyers and to our tenants at the Company's Garfield Street warehouse. 

The market for homesemployment issues, personal injury, environmental matters, and other real estate is influenced by U.S. federal, state and local government regulations and policies concerning the real estate industry, as well as policies promulgated by local real estate boards. These regulations and policies often relate to realtor compensation, and pricing. In the U.S. and in a numberproceedings. Some of other countries, these regulations and policies are being modified and may continue to be modified. Investment in the real estate could be deterred by these regulations and policies, whichpotential proceedings could result in a significant reductionsubstantial damages or payment awards that exceed our insurance coverage. We will estimate our exposure to any future legal proceedings and establish provisions for the estimated liabilities where it is reasonably possible to estimate and where an adverse outcome is probable. Assessing and predicting the outcome of these matters will involve substantial uncertainties. Furthermore, even if the outcome is ultimately in the potential demand for various types of real property and  for our services. For example, loss of favorable tax treatment, certain government buyer incentive programs, and or government subsidized or backed loan programsfavor, our costs associated with such litigation may resultbe material. Adverse outcomes in loss of sales which would likely harm our financial performance.  

The reduction or elimination of government and economic incentives could cause our revenue to decline.   

Today, we believe consumer confidence is slowly recovering. However buyers are finding it very difficult to qualify for loans and the interest charged on mortgages is rising.   In the past federal, state and local government bodies in many states have provided incentives in the form of rebates, tax credits and other incentives to buyers that are willing to purchase real estate. For example, an eight thousand dollar first time home buyer tax credit was offered and thereafter the credit offering expired.  Future government economic incentives, if any, could be reduced or eliminated altogether. Such home buyer incentives expire, decline over time, are limited in total funding or require renewal of authority. Reductions in, or eliminations or expirations of governmental incentives could result in decreased demand for our services.

Changes in tax laws or fiscal policies may decrease the return on investment for customers of our business which could decrease demand for our services and harm our business. 

We anticipate that a portion of our future revenues will be derived from commissions in connection with the sale of single family residences to individual homebuyers. In deciding whether to purchase or to rent, prospective customers may evaluate their projected return on investment. Such projections are based on current and proposed federal, state and local laws, particularly tax legislation. Changes to these laws, including amendments to existing tax lawslegal proceedings or the introduction of new tax laws, tax court rulings as well as changes in administrative guidelines, ordinancescosts and similar rules and regulations could result in different tax assessments and may adversely affect a homeowner's projected return on investment, whichexpenses associated therewith could have a materialan adverse effect on our business and results of operations.

Problems with service quality

We will seek to expand through acquisitions of and investments in various brands, businesses, and assets in the Hemp sector. These acquisition activities may be unsuccessful or individual buyer agent performancedivert management’s attention.

We will consider strategic and complementary acquisitions of and investments in other brands, businesses or other assets in the hemp sector, and such acquisitions or investments are subject to risks that could affect our business, including risks related to:

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the necessity of coordinating geographically disparate organizations;

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implementing common systems and controls;

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integrating personnel with diverse business and cultural backgrounds;

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integrating acquired manufacturing and production facilities, technology and products;

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unanticipated expenses related to integration, including technical and operational integration;

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increased costs and unanticipated liabilities, including with respect to registration, environmental, health and safety matters, that may affect sales and operating results;

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retaining key employees;

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obtaining required government and third-party approvals;

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legal limitations in new jurisdictions;

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installing effective internal controls and audit procedures;

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issuing common stock that could dilute the interests of our existing stockholders;

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spending cash and incurring debt;

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assuming contingent liabilities; and

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creating additional expenses.

We may include agent error, agent negligencenot be able to identify opportunities or problems withincomplete transactions on commercially reasonable terms, or at all, or actually realize any anticipated benefits from such acquisitions or investments. Similarly, we may not be able to obtain financing for acquisitions or investments on attractive terms. In addition, the mentoring services we plan to provide. The result would likely be fewer customers, reduced revenue, unexpected expenses and losssuccess of market share. 

We are significantly reliant on the abilities and skills of Corey Wiegand and other agents and assistants that actany acquisitions or investments also will depend, in part, on our behalf.  Inability to integrate the past, various clients who received services fromacquisition or investment with our company or who lease our Garfield Street warehouse have filed complaints that allege poor performance, fraud or in some way challenge our performance.  While we believe that these allegations are without meritthen existing operations.

We risk insolvency if revenues decline sharply and we vigorously defend the legalityare unable pay our bills and appropriatenessunable to timely locate and negotiate a suitable business combination or capital injection.

Management is always concerned over potentially unfavorable events and related sharp reductions in revenues. If such problems occur, we will first reduce expenses, conserve cash and endeavor to replace lost revenue. In anticipation of possible problems of this nature, and alternatively to grow our past actions, we may fall victim to regulatory actions or court rulingsbusiness when opportunity presents, management has continued its negotiations in connection with alleged agent errors, omissions orpotential business combinations and continues to explore other issues.  

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The Realtors we plan to recruit may not deliver consistent and professional mentor and "buyer agent" services and thus our business plan may not gain market acceptance, which would prevent us from achieving sales and market share 

The developmentmeans of a successful market for our mentor services and lead generation techniques  may be adversely affected by a number of factors: 

●	failure to compete favorably against other services and techniques on the basis of cost, quality and performance;
●	failure to  compete favorably against conventional sales agents and realtors and alternative lead-generation technologies, such as text and e-mail spamming on the basis of cost, quality and performance.

If the services and techniques we offer fail to gain market acceptance, we will be unable to achieve significant sales and market share.

The real estate industryraising cash. Our goal is rapidly evolving and highly competitive. A variety of competing lead generation technologies are in use or under development now that could result in lower buyer agent costs or higher conversion rates than those lead generation technologies selected by us. These development efforts may render obsolete the lead generation services we have to offer. 

Existing telephone and web advertising regulations and changes to such regulations may present regulatory and economic barriers to our real estate lead generation activities. 

Lead generation activity is heavily influenced by federal, state and local government regulations and policies concerning the tech based marketing industry, as well as internal policies and regulations promulgated by "national do not call lists." These regulations and policies often relate to public privacy. In the United States these regulations and policies are being modified and may continue to be modified. We anticipate that our lead generation channels and activity will be subject to oversight and regulation in accordance with national and local ordinances relating to privacy protection, and related matters.  Any new government regulations or utility policies pertaining to our lead generation services may result in significant additional expenses to us and as a result, could cause a significant reduction in sales referrals and related commission revenue. 

If our services are not suitable for widespread adoption, or a sufficient demand for trained buyer agents or leads does not develop, or takes longer to develop thancash reserves, either for expansion, or to cover shortfalls in revenue. Management believes that ultimately, consummation of one or more such transactions would serve the best interests of shareholders; however, there is no assurance that we anticipate, we would be unable to achieve sufficient revenue growth. 

The marketcan locate or consummate a suitable business combination or otherwise provide for residential real estate is rapidly evolvingliquidity, expanded working capital and its future is uncertain. We have begun offering free seminars on real estate investing. These are proving useful to finding new clients; however, if real estate proves unsuitable for widespread ownership or if demand for our seminars and related services fails to develop sufficiently, we would be unable to achieve sales and market share. Many factors will influence our revenues: 

a stronger balance sheet.

·

success of alternative lead generation technologies such as web-casts, text messaging, email spamming;

·

fluctuations in economic and market conditions, such as decreases in available inventory, that impact the viability of real estate purchases;

·

increases or decreases in the costs associated with obtaining a residential home loan;

·

capital expenditures by customers, which tend to decrease when the domestic or foreign economies slow;

·

continued regulation of the real estate and lending industries; and

·

availability and effectiveness of government subsidies and incentives.11

 

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The reduction in home loan availability could prevent us from achieving sales and market share. 

The reduction or elimination of government lending incentives may adversely affect the growth of this market or result in increased price competition, which could prevent us from achieving sales and market share. 

Today, over 70% of home loans are insured by the federal housing administration (FHA loans). These loans are popular because they have lower down payment requirements and lower credit score requirements.  Should FHA raise their down payment or credit requirements the result could be reduced home purchases which would significantly harm our business.  

We face intense competition from other real estate brokerages and other discount real estate companies. If we fail to compete effectively, we may be unable to increase our market share and sales. 

Most of our competitors are substantially larger than we are, have longer operating histories and have substantially greater financial, technical, marketing and other resources than we do. We compete with a growing number of discount brokers. Our competitors' greater size in some cases provides them with competitive advantages with respect to marketing costs due to their ability to allocate fixed costs across a greater volume of marketing channels and purchase signs and services at lower prices. They also have far greater name recognition, an established network of past customers. In addition, many of our competitors have well-established relationships with current and potential home sellers. As a result, our competitors will be able to devote greater resources to prospecting, relationship development, and promotion and may be able to respond more quickly to evolving industry standards and changing customer requirements than we can. 

A substantial number of our issued shares are, or are being made available for sale on the open market. The resale of these securities might adversely affect our stock price. 

The sale of a substantial number of shares of our common stock, or the market's anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise obtain.

Availability of these shares for sale in the public market could also impair our ability to raise capital by selling equity securities.

There is presently a limited trading market for our shares.  This is a recent development.  An investment in our shares may be or become totally illiquid and any investor purchasing our shares may be unable to resell their shares.  There can be no assurance that market interest in our shares will develop or continue.  Therefore, investors who purchase our shares could lose their entire investment.

Even if significant trading activity involving our shares continues, the volume of trading may be small and on some days the volume may be zero. Our share price will likely be volatile and will likely fall rapidly should an investor attempt to liquidate a significant number of shares.  These conditions are likely to persist and could prevent resale of our shares on desirable terms.  

We are subject to corporate governance and internal control reporting requirements, and our costs related to compliance with, or our failure to comply with existing and future requirements, could adversely affect our business.

We face corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as new rules and regulations subsequently adopted by the SEC and the Public Company Accounting Oversight Board. These laws, rules and regulations continue to evolve and may become increasingly stringent in the future. In particular, under new SEC rules we will be required to include management'smanagement’s report on internal controls as part of our annual report pursuant to Section 404 of the Sarbanes-Oxley Act. Furthermore, under the proposed rules, an attestation report on our internal controls from our independent registered public accounting firm will be required as part of our annual report. We are in the process of evaluating our control structure to help ensure that we will be able to comply with Section 404 of the Sarbanes-Oxley Act. The financial cost of compliance with these laws, rules and regulations is expected to be substantial. We cannot assure you that we will be able to fully comply with these laws, rules and regulations that address corporate governance, internal control reporting and similar matters. Failure to comply with these laws, rules and regulations could materially adversely affect our reputation, financial condition and the value of our securities.

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We are

Natural and other disasters, information technology system failures and network disruptions and cybersecurity breaches and attacks could adversely affect our business.

Our business and results of operations could be negatively affected by general economic conditions. 

Whilecertain factors beyond our control, such as natural disasters and/or climate change-related events (such as hurricanes, earthquakes, fires, and floods); civil unrest; negative geopolitical conditions and developments; war, terrorism, or other man-made disasters; and information technology system failures, network disruptions and cybersecurity breaches and attacks. Any of these events could result in, among other things, damage to or the Denver area economy is diversifiedtemporary closure of our facilities; a temporary lack of an adequate work force in one or more markets; an interruption in power supply; a temporary or long-term disruption in our supply chain; and short- or long-term damage to our prospective customers’ businesses (which would adversely impact demand for our products and services). ∙ We rely on our own information systems, as well as those of our third-party business partners and suppliers. Despite the introduction of system backup measures and engage in information system redundancy planning and processes, such measures, planning and processes may be ineffective or inadequate to address all eventualities.

Further, our information systems and our business partners’ and suppliers’ information systems may be vulnerable to attacks by hackers and other security breaches, including computer viruses and malware, through the internet (including via devices and applications connected to the internet), email attachments and persons with access to these information systems, such as our employees or third parties with whom we do business. As information systems and the use of software and related applications by us, our business partners, suppliers, and customers become more cloud-based and connected to the internet, there has recently been an increase in global cybersecurity vulnerabilities and threats, including more sophisticated and targeted cyber-related attacks that pose a risk to the security of our information systems and networks and the confidentiality, availability and integrity of data and information. Any such attack or breach could compromise our networks and the information stored thereon could be accessed, publicly disclosed, lost, or stolen.

If we or our business partners or suppliers were to experience rapid growtha system disruption, attack or security breach that impacts any of our critical functions, or our customers were to experience a system disruption, attack or security breach via any of our connected products and services, it could result in a period of shutdown of information systems during which we may not be able to operate, the loss of sales and customers, financial misstatement, potential liability for damages to our customers, reputational damage and significant incremental costs, which could adversely affect our business, results of operations and profitability. Furthermore, any access to, public disclosure of, or other loss of data or information (including any of our confidential or proprietary information or personal data or information) as a result of an attack or security breach could result in governmental actions or private claims or proceedings, which could damage our reputation, cause a loss of confidence in our products and services, damage our ability to develop (and protect our rights to) our proprietary technologies and adversely affect our business.

12

Failure to comply with U.S. federal, state and international laws and regulations relating to privacy or data protection, or the Legalizationexpansion of Cannabiscurrent or the enactment of new laws or regulations relating to privacy or data protection, could adversely affect our business and our financial condition.

Failure to comply with U.S. federal, state and international laws and regulations relating to privacy or data protection, or the expansion of current or the enactment of new laws or regulations relating to privacy or data protection, could adversely affect our business and our financial condition . ∙ A variety of U.S. federal, state and international laws and regulations govern the collection, use, retention, sharing and security of data. Laws and regulations relating to privacy and data protection are evolving and subject to potentially differing interpretations. These requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other factors,rules or our practices. As a sustained economic recovery is uncertain. In particular, terrorist acts and similar events, continued turmoilresult, our practices may not have complied or may not comply in the Middle Eastfuture with all such laws, regulations, requirements and obligations. Any failure, or warperceived failure, by us to comply with our posted privacy policies or with any federal, state or international privacy or data protection related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy or data protection could adversely affect our reputation and business, and may result in generalclaims, proceedings or actions against us by governmental entities or others or other liabilities or require us to change our operations and/or cease using certain data sets. Any such claim, proceeding or action could contributehurt our reputation and business, force us to incur significant expenses in defense of such proceedings, distract our management, increase our costs of doing business, result in a slowdownloss of customers.

We are delinquent in our filings with the SEC.

Delays in combining the financial reporting of HTF and EHR has caused us to be delinquent in our SEC filings since the quarter ended October 31, 2019. We intend to rectify this situation as soon as possible.

Our failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital.

We did not file this Annual Report within the timeframe required by the SEC; thus, we have not remained current in our reporting requirements with the SEC. We are not currently eligible to use a registration statement on Form S-3 that would allow us to continuously incorporate by reference our SEC reports into the registration statement, or to use “shelf” registration statements to conduct offerings, until approximately one year from the date we regained and maintain status as a current and timely filer. If we wish to pursue an equity or debt offering within the next year, we would be required to conduct the offering on an exempt basis, such as in accordance with Rule 144A, or file a registration statement on Form S-1. Using a Form S-1 registration statement for a public offering would likely take significantly longer than using a registration statement on Form S-3 and increase our transaction costs, and could, to the extent we are not able to conduct offerings using alternative methods, adversely impact our liquidity, ability to raise capital or complete acquisitions in a timely manner.

The Company will incur expenses in connection with its SEC filing requirements and may not be able to meet such costs, which could jeopardize its filing status with the SEC.

As a public reporting company, the Company is required to meet the filing requirements of the market demand for real estate investments that require significant initial capital expenditures, including demand for fixSEC. The Company may see an increase in its legal, accounting, auditing and flips, rental properties,fees and new residential and commercial buildings. In addition, increases in interest rates may increase financing costs to customers, which in turn may decrease demand for real estate investment. If the economic recovery slowsexpenses as a result of such requirements. Our costs will increase significantly as the recentCompany expands operations. Our filings are subject to comment from the SEC on its filings and/or it is required to file supplemental filings for transactions and activities. If the Company is not compliant in meeting the filing requirements of the SEC, it could lose its status as a 1934 Act Company, which could compromise its ability to raise funds.

13

Risks Related to Ownership of Our Common Stock

Our stock price has been and may continue to be volatile, and you could lose all or part of your investment.

The market price of our common stock is subject to wide fluctuations in response to various risk factors, some of which are beyond our control and may not be related to our operating performance, including:

●

addition or loss of significant customers, suppliers, or distributors;

●

changes in laws or regulations applicable to our industry ;

●

additions or departures of key personnel;

●

the failure of securities analysts to cover our common stock after an offering;

●

actual or anticipated changes in expectations regarding our performance by investors or securities analysts;

●

price and volume fluctuations in the overall stock market;

●

volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;

●

share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

●

our ability to protect our intellectual property and other proprietary rights;

●

sales of our common stock by us or our stockholders;

●

the expiration of contractual lock-up agreements;

●

litigation involving us, our industry, or both;

●

major catastrophic events; and

●

general economic and market conditions and trends.

Further, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. In addition, the stock prices of many cannabis-related companies have experienced wide fluctuations that have often been unrelated to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and social turmoil,market conditions such as recessions, interest rate changes, or if there are further terrorist attacksinternational currency fluctuations, may cause the market price of our common stock to decline. If the market price of our common stock fluctuates or declines, you may not realize any return on your investment and may lose some or all of your investment.

Our operating results will be subject to fluctuations and our stock price may decline significantly.

Our quarterly revenue and operating results will be difficult to predict from quarter to quarter. We derive relatively stable revenue from our property leased industrial warehouse. Nonetheless, it is possible that our net operating results in the United States or elsewhere,some quarters will fall below our expectations. Our quarterly operating results will be affected by a number of factors, including:

●

Timing, availability and changes in government incentive programs;

●

Unplanned additional expenses and/or shortfalls in anticipated rental income at our warehouse property;

●

Logistical costs;

●

The timing of new technology announcements or introductions by our competitors and other developments in the competitive environment;

●

Increases or decreases in real estate appreciation rates due to changes in economic growth;

14

●

Travel costs and other factors; and

●

State and federal government regulations

If revenue for a particular quarter is lower than we expect, we may experience decreases in the demandnot be unable to proportionately reduce our operating expenses for that quarter, which would harm our mentoring services.

Compliance with real estate law and local regulations can be expensive, and non-compliance with these regulations may result in adverse publicity and potentially significant monetary damages and finesoperating results for us 

The Company as well as its tenants must comply with all foreign, U.S. federal, state and local laws and regulations regarding licensing and insurance requirements. In addition, under some statutes and regulations, a government agency, or other parties, may seek recovery and response costs from an agent where warrantees have been made, even if the agent was not responsible for such a warrantee or is otherwise at fault. In the course of future business we may inadvertently refer business to an agent who does not comply with local laws and regulations.  Any failure by us to shift responsibility onto that agent, and thus restrict our liability in connection with the incident, could subject us to potentially significant monetary damages and fines or suspensions in our business operations. In addition, if more stringent laws and regulations are adopted in the future, the costs of compliance with these new laws and regulations could be substantial. We have recently found it necessary to revise elements of our advertising and bookkeeping to comply with DORA regulations. We have also had to spend significant time to respond to letters received from DORA in connection with complaints from clients who claim to have experienced problems with our brokerage and management services. To date these have created only minor annoyance or the need to pay small settlements to dispose of a claim, whether the claim had merit or not. In any case, ifquarter. If we fail to comply with presentmeet investor expectations or our own future real estate laws and regulations we may be required to pay substantial fines, suspend, or cease operations.

guidance, even by a small amount, our stock price could decline, perhaps substantially.

There are restrictions on the transferability of the securities.

Until registered for resale, investors must bear the economic risk of an investment in the Shares for an indefinite period of time. Rule 144 promulgated under the Securities Act ("(“Rule 144"144”), which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions,a six month holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. There can be no assurance that we will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning us.

A substantial number of our issued shares are or are being made available for sale on the open market. The resale of these securities might adversely affect our stock price.

The sale of a substantial number of shares of our common stock, or the market’s anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise obtain.

Availability of these shares for sale in the public market could also impair our ability to raise capital by selling equity securities.

There is presently a limited trading market for our shares. An investment in our shares may be or become totally illiquid and any investor purchasing our shares may be unable to resell their shares. There can be no assurance that market interest in our shares will develop or continue. Therefore, investors who purchase our shares could lose their entire investment.

Even if significant trading activity involving our shares continues, the volume of trading may be small and on some days the volume may be zero. Our share price will likely be volatile and will likely fall rapidly should an investor attempt to liquidate a significant number of shares. These conditions are likely to persist and could prevent resale of our shares on desirable terms.

If the Company uses its stock in acquisitions of other entities there may be substantial dilution at the time of a transaction.

The offering price of the common stock we sold under our prospectus, and more recently as a private placement of restricted shares of our common stock to raise working capital, was arbitrarily set. The price did not bear any relationship to our assets, book value, earnings or net worth and it is not an indication of actual value. You may also suffer additional dilution in the future from the sale of additional shares of common stock or other securities or if the Company'sCompany’s shares are issued to purchase other assets or to raise additional working capital.

The laws

Trading on the OTC Markets may be volatile and sporadic, which govern merger transactions provide that since our sole director and officer owns over 50%could depress the market price of our outstanding shares, we may enter into a share exchange, reverse merger or other similar transaction with a private company in an unrelated business without the prior approval of unaffiliated shareholders. 

The various securities laws applicable to our company provide that our management may elect to enter and consummate a transaction to enter new or additional businesses. In that event, our shareholders might receive only an information statement with certain disclosures as required by law and would likely not be in a position to approve or disapprove the transaction. Investors who are unwilling to accept the uncertainty of new management, a new business plan, likely dilution and all the numerous related uncertainties that may materialize in the event such a transaction is consummated should not purchase our shares. 

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There is presently a very limited market for our common stock.  Failure to maintain a trading market could negatively effect the value of our sharesstock and make it difficult or impossible for youour stockholders to sell yourresell their shares.

As of the date of this report,December 31, 2019, our common stock has been assigned a trading symbol, "HMTF." Our common shares are quoted on the OTCQB. TheOTC Pinks Current. There is no cost of such quotation and related services from OTC Markets, IncInc. Trading in stock quoted on the OTC Markets is $10,000 per year. Whileoften thin and characterized by wide fluctuations in trading activity inprices due to many factors that may have little to do with our shares has periodically accelerated, there can be no assurance as tooperations or business prospects. This volatility could depress the liquidity of any markets for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock. 

Failure to maintain an active trading market could negatively affect the value of our shares and make it difficult for you to sell your shares or recover any part of your investment in our shares. The market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like the New York Stock Exchange. Accordingly, our stockholders may have difficulty reselling any of their shares.

15

The Company currently plans move to a more advantageous trading market and then potentially uplist, to a national exchange, however, there is no assurance that we will be able to successfully move trading markets or uplist to a national exchange.

We have completed our application and paid the required fees to graduate from the OTCPK market to the OTCQX Market. OTCQX provides investors with aU.S. public market to research and trade the shares of investor-focused companies. Graduating to the OTCQX Market would mark an important milestone for the Company. Once certain financial reporting forms are filed, the Company believes that all OTCQX requirements will have been met.

The Company has also paid fees necessary to uplist to NASDAQ. Following the currently planned graduation to OTCQX and execution on certain company milestones, management believes it will meet all currently applicable requirements to uplist to NASDAQ. There is no assurance, however, that we will meet the necessary milestones and achieve an uplisting to NASDAQ or other national exchange.

Because we do not expect to pay any dividends for the foreseeable future, investors may be highly volatile.forced to sell their stock to realize a return on their investment.

We do not anticipate that we will pay any dividends to holders of our common stock for the foreseeable future. Any payment of cash dividends will be at the discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions including compliance with covenants under our debt agreements, and other factors that our board of directors may deem relevant. Our ability to pay dividends might be restricted by the terms of any indebtedness that we incur in the future. In addition, certain of our current outstanding debt agreements prohibit us from paying cash dividends on our common stock. Consequently, you should not rely on dividends to receive a return on your investment.

Our common stock is presently subject to the uncertainties relating“Penny Stock” rules of the SEC.

We are subject now to the “Penny Stock” rules since our future operating performanceshares of common stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the profitabilitynature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation. ∙ In addition, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce the trading activity for shares of our operations, factorscommon stock. As long as our shares of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.

If we fail to remain current on our reporting requirements, we could be removed from the OTC Pinks Current which would limit the ability of broker-dealers to sell our securities in the secondary market.

Companies trading on the Over the Counter Pinks Current must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as variationsamended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Pinks Current. As a result, the market liquidity for our interim financial results,securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get relisted on the OTC Pinks Current or various, and as yet unpredictable factors, many ofon the OTCQX, which are beyond our control, may have a negativean adverse material effect on the Company.

If we decide to implement a reverse stock split, a reverse stock split may decrease the liquidity of the shares of our common stock.

The liquidity of the shares of our common stock may be affected adversely by a reverse stock split given the reduced number of shares that will be outstanding following a reverse stock split, especially if the market price of our common stock.

stock does not increase as a result of the reverse stock split.

16

 

Investors will find additional information on day-to-day trading activity of our common shares, updated in real time and including level two market information on the web site maintained by OTC Markets.  The web address is:  www.otcmarkets.com.  The trading symbol of our common shares is "HMTF."

Our common stock is still presently subject to the "Penny Stock" rules of the SEC.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

·

that a broker or dealer approve a person's account for transactions in penny stocks; and   the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

·

obtain financial information and investment experience objectives of the person; and   make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

	·	sets forth the basis on which the broker or dealer made the suitability determination; and
	·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. DESCRIPTION OF PROPERTY

DESCRIPTION OF PROPERTY

PROPERTIES

We own a 5,600 square foot warehouse located at 4430 Garfield Street, Denver, CO 80216. The facility is leased to a licensed grower for cannabis cultivation.

We currently maintain administrative and real estate operations in office space of approximately 850 square feet located at 4316 Tennyson Street, Denver, CO 80212 at a monthly rent of $1,300. This space is larger, has more rooms  and  a higher level of tenant finish than our prior space next door.

We see no present need for additional office space. We are evaluating opportunities to acquire additional properties zoned for cannabis cultivation.

hemp seeds.

ITEM 3.  LEGAL PROCEEDINGS

There

As a normal incident of the businesses in which the Company is noengaged, various claims, charges and litigation are asserted or regulatory proceeding pending or threatened by or against us other than litigation, in the normal course of business. A former tenant of our Garfield Street warehouse, evicted for failurecommenced from time to pay rent, initiated litigation claiming damages allegedly suffered prior to eviction. The court has recently dismissed this suit. While our legal defense proved successful, we incurred significant costs. We believe we are entitled to recover our expenses from the plaintiff.  On March 28, 2017,  the court issued a judgementtime against the plaintiffCompany. With respect to claims and litigation currently asserted or commenced against the Company, it is the opinion of management that final judgments, if any, which might be rendered against the Company are adequately reserved for, our are covered by insurance, or are not likely to have a material adverse effect on the Company’s financial condition or results of operations. Nevertheless, given the uncertainties of litigation, it is possible that certain types of claims, charges and litigation could have a material adverse impact on the Company; see Item 1A, “Risk Factors.” See Note 9 to the consolidated financial statements included in this annual report for additional information relating to legal expenses amounting to approximately $21,000. In any case, in the short term, legal expenses have significantly depleted our working capital. There is no assurance that we will succesfully collect our past expenses or that future legal costs will not be incurred .

matters.

ITEM 4.  MINE SAFETY DISCLOSURE

DISCLOSURES

Not applicable.

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

Market Information

As of December 31, 2016 and the date of this report2019 our shares arewere quoted on the OTCBB/OTCQBOTC Pinks Current under the symbol HMTF.“GENH.” In the future, should we meet stringent qualifications and pay the required fee, we may seek to have our shares quoted on Capital Markets tier of NASDAQ, however here is no assurance that our shares will continue to be quoted on any market.

Since inception of a trading market in our shares activity have been unpredictable and highly volatile. ClosingFor the years ending December 31, 2018 and 2017, closing prices have ranged from $0.02$0.03 to $5.34. The closing price on June 30, 2016 was $0.027.

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The following table contains data from OTC Markets, Inc. and summarizes our past share price:

		High		Low
Fiscal Year ended December 31, 2016
First quarter		0.4		0.02
Second quarter		0.27		0.25
Third quarter		0.25		0.25
Fourth quarter		0.43		0.05
Fiscal Year ended December 31, 2015
First quarter		0.2		0.07
Second quarter		0.24		0.05
Third quarter		0.15		0.08
Fourth quarter		0.14		0.03

SHAREHOLDERS

$0.26.

Shareholders

As of the date of this report, there were approximately 5651 direct holders of our common stock certificates as shown on the list maintained by our transfer agent. AdditionalWe may have a substantial number of additional shareholders have recentlywho purchased their shares on the OTCBB,OTCQB or Pink Current who hold shares in street namename. These additional shareholders and are not included in the tallylist maintained by our transfer agent.

DIVIDENDS

Dividends

We have not declared or paid any cash dividends on our common stock nor dostock. To date we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earningshave utilized all available cash to finance our operations and expansion. The paymentoperations. Payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.

17

 

WARRANTS OR OPTIONS

We

Warrants or Options

At December 31, 2019, there were 14,488,638 warrants outstanding for the purchase of Company common stock. The warrants have no outstandingan exercise price of $0.352 per share and expire on November 27, 2021. The warrants may be redeemed beginning October 1, 2020 for $0.0001 per warrant at the Company’s option with 30 days advanced notice should the weighted average price exceed $1.00 for any five out of seven consecutive trading days with a minimum average daily trading volume for such seven day period of at least 25,000 shares of common stock. One-half of the warrants have a cashless exercise feature.

Equity Compensation Plans

The Company has not adopted an equity-based management incentive compensation plan

Recent Sales of Unregistered Securities

Since January 1, 2019, we have sold securities without registering the securities under the Securities Act as shown below:

EHR Series C Preferred Stock – In the third quarter of 2019, EHR raised $850,000 of additional funding through the issuance of 34,000 shares of EHR Series C Preferred Stock. The EHR Series C Preferred Stock converted into 2,414,773 shares of EHR’s common stock upon completion of the Transaction. These common shares were initially accounted for as noncontrolling interests in EHR.

In an exchange transaction effective November 27, 2019, the Company acquired these noncontrolling interests representing approximately 26% of the ownership of EHR through the issuance of 2,414,773 shares of Company common stock and 14,488,638 warrants for the purchase of Company common stock. The warrants have an exercise price of $0.352 per share and expire on November 27, 2021. The warrants may be redeemed beginning October 1, 2020 for $0.0001 per warrant at the Company’s option with 30 days advanced notice should the weighted average price exceed $1.00 for any five out of seven consecutive trading days with a minimum average daily trading volume for such seven day period of at least 25,000 shares of common stock. One-half of the warrants have a cashless exercise feature.

The common stock issued in the exchange was valued using the traded price of the common stock on November 27, 2019.

Issuance of Common Stock – In February 2020, Generation Hemp sold 250,000 units for $100,000 to accredited investors. Each unit consists of one share of common stock and one warrant to purchase sharesone common share at $0.40 per share. The warrant expires in March 2022 and is exercisable for one share of our common stock.

EQUITY COMPENSATION PLANS

We currently have no equity compensation plans.

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RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED SECURITIES

None.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

stock at an exercise price of $0.40 per share. Proceeds of this issuance were used for general corporate purposes.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We made no purchases of our equity securities norsecurities.

Between January and June 2020, our CEO made a series of purchases of Series A preferred shares totaling 546,667 shares for $205,000. Each share of the Series A Preferred (a) converts into 12 shares of common stock of the Company, (b) possesses full voting rights, on an as-converted basis, with the common stock of the Company, and (c) has no dividend rate. Proceeds of these issuances were any such purchases made by any purchaser affiliated with us.used for general corporate purposes.

18

 

OUR TRANSFER AGENT

Our Transfer Agent

We have retained Standard Registrar and Transfer Agency, Albuquerque, New Mexico, as transfer agent for our Common shares. Shareholders are responsible to contact Standard to update their address. This may be done by writing:

Standard Registrar and Transfer Agency

P.O. Box 14411

Albuquerque, NM 87191

Phone : 505-828-2839

Or by e-mail to:  mary@standardregistrarta.com

mary_standardreg@comcast.net

Standard is responsible for all record-keeping and administrative functions in connection with our common shares.

ITEM 6. SELECTED FINANCIAL DATA- NOT APPLICABLE

DATA

Not applicable.

ITEM 7.  MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward-looking statements

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with theour financial statements of Home Treasure Finders, Inc. (the "Company"), which areand related notes included elsewhere in this Form 10-K. This Annual Report on Form 10-Kwithin “Item 8. Financial Statements and Supplementary Data.” In addition to historical consolidated financial information, the following discussion contains forward-looking information. Forward-looking information includes statements relating to future actions, future performance, costs and expenses, interest rates, outcome of contingencies, financial condition,that reflect the Company’s plans, estimates, or beliefs. Actual results of operations, liquidity, business strategies, cost savings, objectives of management, and other such matters of the Company. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projecteddiscussed in the information. Forward-looking information may be includedforward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, on Form 10-K or may be incorporated by reference from other documents filed withincluding, without limitation, those described in the Securitiessections titled “Cautionary Note Regarding Forward Looking Statements” and Exchange Commission (the "SEC") by the Company. You can find manyPart I, Item 1A “Risk Factors” of these statements by looking for words including, for example, "believes", "expects", "anticipates", "estimates" or similar expressions in this Annual Report on Form 10-K or in documents incorporated by reference in this Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.

We have based the forward-looking statements relating to our operations on our management's current expectations, estimates and projections about our Company and the industry in which we operate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In particular, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual results may differ materially from those contemplated by these forward-looking statements. Any differences could result from a variety of factors, including, but not limited to general economic and business conditions, competition, and other factors. 

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Limited Operating History

Report.

There is limited historical financial information about our Company upon which to base an evaluation of our future performance.  We cannot guarantee that we will be successful in our mainstream real estate business and furthermore we have recently entered a new and untested industry in Colorado.hemp businesses. We are subject to risks inherent in a small company, including limited capital resources, delays and cost overruns due to price and cost increases. There is no assurance that future financing will be available to our company on acceptable terms. Additional equity financing could result in dilution to existing shareholders.

Company Description and

Overview

Generation Hemp was initially incorporated on July 28, 2008 in the State of Colorado. On November 27, 2019, we completed the Transaction with EHR. As part of the Transaction, we changed our name from Home Treasure Finders, Inc. to Generation Hemp, Inc. We own approximately 94% of the issued and outstanding common stock of EHR.

EHR held an 8.0% interest in certain oil and gas and/ or oil, gas and mineral leases, lands interests, and other properties located in Cochran County and a 28.125% interest in certain oil and gas and/or oil, gas and mineral leases, lands interests, and other properties located in Karnes County. EHR’s oil & gas activities are currently held for sale and are presented in the consolidated financial statements as discontinued operations for each of the periods presented.

The Transaction was formed on July 28, 2008. The founder, sole directoraccounted for as a reverse merger, whereby EHR is considered to be the accounting acquirer and officerbecame a majority-owned subsidiary of the Company. Accordingly, the Company’s historical financial statements prior to the reverse merger were and will be replaced with the historical financial statements of EHR prior to the reverse merger and in this and all future filings with the U.S. Securities and Exchange Commission (the “SEC”) There is limited historical financial information about our Company upon which to base an evaluation of our future performance. We cannot guarantee that we will be successful in the hemp businesses. We are subject to risks inherent in a small company, including limited capital resources, delays and cost overruns due to price and cost increases. There is Corey Wiegand.

Our web site is a key aspect ofno assurance that future financing will be available to our business. As of the date of this report, our site is 100% functional. You may view the site at www.hometreasurefinders.com

Our website supports three divisions:

1.	Real estate listing and sales
2.	Property Management
3.	Commercial real estate for cannibas

Real Estate Investment Seminars

We offer seminars for:

Company on acceptable terms. Additional equity financing could result in dilution to existing shareholders.

·

Purchase, rent and hold till retirement

·

Fix and Flip 19

 

Present third party listing agents/buyer agents/referrals

As

How the Company Generates Revenue

We presently generate revenue from rental of our “Cannabis Zoned” (Hemp) warehouse property located in Denver, Colorado leased to a hemp seed company.

Our Costs and Expenses of Conducting Business

The principal costs and expenses involved in conducting our business are real estate holding costs (interest, taxes, depreciation and maintenance costs). We incur general and administrative expenses for our management, contract labor, professional fees and other costs of being a public company. We also incur costs in seeking acquisitions and financings of our business.

Results of Operations

Years Ended December 31, 20162019 and the date of this report, the majority of listings and resulting sale commissions were generated by our officer and founder, Corey Wiegand.  Commissions generated by recently hired licensed Real Estate Agents are increasing.

Mr. Wiegand is also routinely and actively assisted by various unlicensed professionals who are compensated by the Company on an hourly basis.  In the event that Mr. Wiegand closes a sale which generates a commission and which results from a referral from another licensed real estate broker,  a "referral commission" or "commission split" may be due and payable to the referring broker at closing. Recently we completed out of state sales on which we split commission:

·

Arizona- Eight units

·

Ohio- One unit

·

Montana- One unit

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As previously stated, we believe our business and the role within it for trained and licensed buyer's agents will always be timely. As our business grows we plan to aggressively hire licensed listing agents and buyer agents.

Integrated Voice Response, Call Capture System, Signs and Website

We may place our IVR SIGN in the yards of the homes on which we have a signed listing.  We may, in the future, place similar IVR signs at additional properties as such placements are authorized by listing contract.  Our IVR signs may direct calls from potential buyers to our database, and to the mobile phone of our founder or an assigned buyer agent.

Each time a home buyer sees a FOR SALE sign and the Home Treasure Finder's IVR sign in front of it, the prospective buyer may choose to:

1.	Call the listing agent directly by calling the number, if any, displayed on the larger FOR SALE sign and/or;

2.	Call the 1-800 number displayed on our smaller IVR sign.

If they elect to call the third party listing agent directly, Home Treasure Finders will not acquire the lead.

Presently we operate our website, WWW.HMTFrealty.com under a short term contract with a third party service. This arrangement provides us a functional generic IVR service for a monthly fee. Ultimately, we plan to integrate our IVR system into our website. This will aid us in tracking the incoming leads and potentially save us annually, thousands of dollars in monthly fees.

In either case, our IVR system seamlessly transfers the lead to Mr. Wiegand or a designated Licensed Real Estate Agents buyer agent

As of the date of this report we are negotiating a supplier agreement to purchase additional signs. We believe additional signs can be purchased from a variety of sources without difficulty.  Our new sign inventory will be stored indoors at our business address, and as of the date of this report, we are planning to deploy our new signs on specific properties, as appropriate. 

Recruitment and Retention of listing agents and buyer's agents

A key element of the Home Treasure Finders business plan is to recruit and train both listing agents and buyer's agents. By marketing to new agents in online job forums, and placing small classified ads on sites like Craiglist.com, we have recruited and hired agents who would like to have access to more prospects. Presently we offer a desk fee of $100 per month and we charge the broker $300 for each completed transaction.

As of December 31, 2016, there were three agents generating commissions which were Corey Wiegand and two others.  Presently, as of the date of this report there are four agents generarating commissions comprised of Mr. Wiegand and three others.

We have used the services of a part time consultant to locate and screen prospective agents. 2018

The consultant is compensated for each licensed Real Estate Agents we hire. To date, this approach has been only modestly successful.  

PLAN OF OPERATIONS AND PROJECTIONS

During 2016 and 2015 our cash flow has been generally sufficient to sustain operations.

We have no present arrangement for financing and we cannot predict if or when funds will become available to us.

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Our Potential for Growth.

We have fully commenced real estate sales and property management operations and generated significant revenues.

During 2016 we generated $216,400 in commission revenue and $235,659 in management fees and rental income at our Denver warehouse. Our plan is to continue to expand commission revenue and thereby generate increased cash from our operating activities.

During 2015 we generated $192,415 in commission revenue and $198,326 in management fees and rental income at our Denver warehouse. Our plan is to continue to expand commission revenue and thereby generate increased cash from our operating activities.

Our operating expenses include significant legal, consulting, accounting services.  As a consequence, our net losses for the years December 31, 2016 and 2015 total $19,007 and $10,476, respectively.

Financial Projection for Garfield Street Warehouse under presently performing leases:

Rent		$	144,000			Note 1
Less Interest			(64,582	)		Note 2
Less Insurance			(2,032	)		Note 3
Less Taxes			(8,524	)		Note 4
Less Depreciation			(20,874	)		Note 5
Income		$	48,028			Note 6

Notes:

1.

Lease at 4430 is $12,000/ month.   We anticipate rental revenue during 2017 will total $144,000.

2.

Interest for 2016 computed from loan amortization table. Assumes $836,870 starting principle balance.

3.

Insurance. Policy purchased on 1/3/2016. Annual premium of $2,032 paid in full.

4.

Property Tax is $8,524.

5.

Depreciation is based upon 39 year straight line applied to combined value of building $803,100 plus architect and engineer documents valued at $11,000.

6.

Income per GAAP

We continue to evaluate the acquisition of additional cannabis zoned properties.

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 Results of Operations

See the Financial Statements for comparison data to prior periods.

We have financed our operations since inception primarily through loans from our founder, cash raised in our completed IPO and Private Placements.  Additionally, we have benefited from the property management company known as CW Properties contributed by Corey Wiegand, our founder, officer and director.

As of December 31, 2016, we had $60,202 in cash, and a working capital deficit of $72,866.

The following table sets forth our statements of operations dataloss for the year ended December 31, 2016 and 2015. 

Summary Statement of Operations

		Year Ended December 31, 2016				Year Ended December 31, 2015
Revenues, net		$	452,059			$	390,741
Gross profit			452,059				390,741
Selling, general and administrative expenses			305,328				227,463
Commission expense			57,088				82,111
Professional fees			49,475				32,594
Total operating expenses			411,891				342,168
Profit from operations			40,168				48,573
Other Income (expense)			(59,175	)			(59,049	)
Loss from operations before income taxes			(19,007	)			(10,476	)
Net loss		$	(19,007	)		$	(10,476	)

Revenues

For the year ended December 31, 2016 we have generated $452,059 in revenues.  Revenue consisted of $216,400 in commission income and $235,659 in management fees and rent.

Total Operating Expenses

Our2019 was $7.9 million as compared with a net loss increasedof $5.1 million for 2018. The larger loss in 2019 was principally caused by $8,531higher impairment expenses as discussed further below.

The Company reports its oil & gas activities as discontinued operations. The loss from discontinued operations was $1.0 million in 2019 as compared with $791 thousand in 2018.

The Company’s continuing operations were limited in 2019 to merger and acquisition activities including preparing for and closing the Transaction. We are active within the “hemp” space and intent to grow by acquisition of businesses and assets within the hemp industry.

Revenue. Revenue from continuing operations was limited in 2019. The Company leases its Denver warehouse under a lease for $7,500 per month. We recognized one month of rental revenue since closing of the Transaction on November 27, 2019.

Impairment Expense. Goodwill totaling $5.0 million was recorded in the Transaction. An impairment analysis performed as of the date of closing showed that the recorded goodwill was fully impaired. As such, goodwill impairment expense of $5.0 million was recorded subsequent to the Transaction. The Company also recognized a $247 thousand impairment of its right-to-use asset for leased office space.

Merger and Acquisition Costs. We incurred $512 thousand of costs in evaluating acquisition opportunities in 2019 and $1.5 million in 2018. The amount of future expenses of this type that we incur will depend upon our future acquisition activities.

General and Administrative Expense. General and administrative expenses totaled $1.0 million in 2019 as compared with $2.6 million in 2018. We had a larger administrative staff in previous years to support our operations and activities.

Depreciation and Amortization. Total depreciation and amortization expense was not significant in 2019 or 81% to $19,007 from $10,4762018. We expect higher levels of depreciation expense as our asset base grows.

Other Income/Expense. Other expense, net totaled $394 thousand for the year ended December 31, 20162019 as compared with $218 thousand for 2018 and includes interest income, interest expense and the priorchange in fair value of marketable securities. Higher net expense recognized in 2019 was due principally to recognition of the decline in value of a marketable equity security we hold for investment of $217 thousand.

Loss from Discontinued Operations. In 2019, we recognized a loss from discontinued operations of $1.0 million as compared with $791 thousand in 2018. The major classes of line items constituting the loss on discontinued operations is presented in Item 8 of Part II, “Financial Statements and Supplementary Data—Note 4—Discontinued Operations.”

During the year ended December 31, 2015. This2019, the Company’s oil and gas properties became impaired due to the market decline and the Company’s determination to exit the oil and gas business. Accordingly, impairment expense totaling $3.7 million was primarily attributedrecorded within the net effectloss from discontinued operations. The Company recorded $89 thousand for impairments of oil and gas properties during the year ended December 31, 2018.

20

On March 1, 2019, the Company entered into a Termination, Repurchase and Release Agreement (the “Agreement”) with LEP wherein the Company reassigned a 52% working interest in the oil & gas assets acquired in the San Andres Acquisition #1 back to LEP (with the Company continuing to hold an 8% working interest in those assets) in exchange for the return and cancellation of 412,500 shares of the following factors:

Company’s Series A Preferred Stock plus all accrued and unpaid dividends thereon and LEP’s assumption of the Company’s obligations under its Senior Subordinated Debentures totaling $400,000. Operatorship of the oil & gas assets was transferred by the Company to LEP, and amounts owed by the Company to LEP and all trade payables associated with the assets were memorialized in the form of a non-recourse promissory note totaling $1.1 million. The Company and LEP also entered into certain financial arrangements and mutual releases in order to settle all existing disputes relating to the assets arising prior to the effective date. The promissory note was due March 1, 2020, bore interest at 5% per annum and required no payments until maturity. The Company recognized a gain on disposal of $1.6 million within the loss from discontinued operations. In June 2020, the $1.1 million non-recourse promissory note and accrued interest thereon was settled upon LEP’s foreclosure of the Company’s Gap Band property interest.

We recognized other income of $1.2 million as part of discontinued operations in 2019 for option and promote fees on oil & gas property interest transactions with third parties. We do not expect such activities in the future.

Until we fully dispose of our remaining oil & gas property interests, we expect that future revenues and costs will be substantially lower than incurred in previous periods as our ownership interests are lower and production activities have declined substantially. We do not anticipate making future investment of growth capital into these properties.

Liquidity and Capital Resources

Our primary source of cash from continuing operations is limited presently to rental income for the lease of our hemp warehouse in Denver, Colorado. Our primary uses of cash include general and administrative expenses and merger and acquisition expenses.

Cash flow information from continuing operations was as follows:

1.

General●

Cash used in operating activities during 2019 was $1.7 million; an improvment from the prior year primarily resulting from lower overall costs and administrative expenses increased by $77,865, or 34%, to $305,528expenses. The Company used $2.6 million of cash for operating activities in 2018.

●

Net cash used in investing activities was $135 thousand for the year ended December 31, 20162019 as compared with $44 thousand for 2018. Investing activities each year was principally for purchases of property and equipment.

	●	Cash flows from $227,463 for the prior year ended December 31, 2015. This was due to increases in salary expense, office expense and property management expenses all connected to increase in activity and revenue.
2.	Professional fees increased by $16,881 or 52% to $49,475financing activities were $1.3 million for the year ended December 31, 20162019, which was primarily due to net borrowings and private placements of common and preferred stock during the period. Cash flows from $32,594financing activities were $530 thousand for 2018, which was due to the private placement of equity.

Cash flow information from discontinued operations was as follows:

●

Cash flows from operating activities totaled $162 thousand during 2019 as compared with $2.2 million in 2018. The decline from the prior year ended December 31, 2015.  This is attributable to increased legal fees. primarily resulting from the lower oil & gas operating results.

3.●	Commission expense decreased by $25,023 or 30% to $57,088Net cash used in investing activities was $17 thousand for the year ended December 31, 20162019 as compared with $1.7 million for 2018. Investing activities each year was for capital expenditures. We significantly curtailed oil & gas development efforts in 2019 as we were making our decision to exit this business.

●

There were no cash flows from $82,111financing activities in 2019. In 2018, cash flows from financing activities were $400 thousand.

21

Funding Requirements

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we grow our hemp business and add operational and financial personnel to handle the public company reporting and other requirements to which we will be subject.

We expect that we will require additional capital to fund operations, including hiring additional employees and completing acquisitions during the next twelve (12) month period.

Because of the numerous risks and uncertainties associated with the development and commercialization of our business, we are unable to estimate the amounts of increased capital outlays and operating expenses. Our future capital requirements will depend on many factors, including:

●

our success in identifying and making acquisitions of profitable operations;

●

our ability to negotiate operating contracts with growers and others within the prior year ended December 31, 2015.  This decrease was primarily due to hemp industry on favorable terms, if at all;

●

deriving revenue from our assets and operations; and

●

the Company no longer working with specific realtors in the current year that they had been paying commissions to in the prior year.cost of such operations and costs of being a public company.

Until such time, if ever, as we can generate substantial revenues, we expect to finance our cash needs through a combination of equity offerings and debt financings. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common shareholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our growth plans and future commercialization efforts.

Off-Balance Sheet Arrangements

As of December 31, 2019, we had no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the amounts of revenue and expenses reported for the period then ended.

Asset retirement obligations. We recognize as a liability an asset retirement obligation, or ARO, associated with the retirement of a tangible long-lived asset in the period in which it is incurred or becomes determinable, with an associated increase in the carrying amount of the related long-lived asset. The initially recognized asset retirement cost is amortized using the same method and useful life as the long-lived asset to which it relates. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value.

Estimating the future ARO requires management to make estimates and judgments regarding timing and existence of a liability, as well as what constitutes adequate restoration. Inherent in the fair value calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the related asset.

Impairment of Long-lived Assets. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These events and circumstances include, but are not limited to, a current expectation that a long-lived asset will be disposed of significantly before the end of its previously estimated useful life, a significant adverse change in the extent or manner in which we use a long-lived asset or a change in its physical condition.

22

When such events or changes in circumstances occur, a recoverability test is performed comparing projected undiscounted cash flows from the use and eventual disposition of an asset or asset group to its carrying amount. If the projected undiscounted cash flows are less than the carrying amount, an impairment is recorded for the excess of the carrying amount over the estimated fair value.

We make various assumptions, including assumptions regarding future cash flows in our assessments of long-lived assets for impairment. The assumptions about future cash flows and growth rates are based on the current and long-term business plans related to the long-lived assets.

Recent Accounting Pronouncements. See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 2—Summary of Significant Accounting Policies—Recent Accounting Pronouncements.”

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

23

 

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Cash Flow, Liquidity and Capital Resources

For the year ended December 31, 2016, our cash flow provided by operating activities was $34,858, as compared to cash flow provided by operating activities of $22,449 for the prior year ended December 31, 2015. The increase in net cash provided by operating activities of $12,409 was primarily due to an increase payables and accrued wages in the current year.

Cash flow used in investing activities was $940 and $1,584 for the year ended December 31, 2016 and 2015. The decrease of $644 in investing activities was primarily due to fewer fixed assets purchased in the current year.

Cash flow used in financing activities was $18,926 for the year ended December 31, 2016, as compared to cash used in financing activities of $12,503 during the year ended December 31, 2015. The increase in cash flow used in financing activities was primarily the result of an increase in payments on the related party payables.

At December 31, 2016, we had $60,202 in cash. The cash held in our checking account is usable by the Company. The cash held in our savings account, representing segregated tenant deposits, is not usable.

At year end our working capital deficit was $72,866. 

ITEM 8. FINANCIAL STATEMENTS.

The financial statements and supplementary data required by this item are submitted on page 21 of this report.

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Index to Financial Statements

STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-2
Consolidated Balance SheetsStatements of Operations	F-3
Consolidated Statements of Operations.Equity (Deficit)	F-4
Consolidated Statements of Changes in Shareholders' Equity (Deficit)Cash Flows	F-5
Notes to Consolidated Financial Statements of Cash Flows	F-6

Notes to the Consolidated Financial Statements	F-724

 

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

Home Treasure Finders, of

Generation Hemp, Inc. and Subsidiaries

Denver, Colorado

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Home Treasure Finders,Generation Hemp, Inc. (the “Company”) as of December 31, 2016,2019 and 2015, and2018, the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the two years in the two period ended December 31, 20162019, and 2015. Home Treasure Finder's management is responsiblethe related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Notes to Consolidated Financial Statement. The consolidated financial statements.statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audits.

audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The companyCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits we are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,

/s/ Marcum LLP

We have served as the financial statements referred to above present fairly, in all material respects, the financial position of Home Treasure Finder, Inc. as of Company’s auditor since 2019.

Houston, Texas

December 31, 2016, and 2015, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2016 and 2015, in conformity with accounting principles generally accepted in the United States of America.

15, 2020

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements, the Company has not yet generated sufficient cash flow and net income. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 7 to the financial statements.

F-1

 

Haynie & Company
Salt Lake City, Utah

March 31, 2017

F-2

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Generation Hemp Inc.

Consolidated Balance Sheets

		December 31,				December 31,
		2016				2015
Assets
Current Assets:
Cash		$	60,202			$	45,210
Rent receivable			500				500
Prepaid expenses			1,737				706
Total current assets			62,439				46,416
Property and equipment, net			820,203				843,106
Other assets:
Security deposits			1,400				1,050
Total assets		$	884,042			$	890,572
Liabilities and Shareholders' Equity (Deficit)
Liabilities:
Accounts payable		$	18,336			$	-
Accrued wages			28,612				18,612
Accrued liabilities			56,672				68,187
Accrued interest - related party			3,305				2,781
Note payable, current portion			10,790				13,265
Related party note payable			17,590				9,193
Total current liabilities			135,305				112,038
Long term debt			800,864				811,654
Total liabilities			936,169				923,692
Shareholders' equity (deficit):
Common stock, no par value; 100,000,000 shares authorized,
13,205,450 and 13,205,450 shares issued and outstanding, respectively			215,267				215,267
Additional paid in capital			96,476				96,476
Accumulated deficit			(363,870	)			(344,863	)
Total shareholders' equity (deficit)			(52,127	)			(33,120	)
Total liabilities and shareholders' equity (deficit)		$	884,042			$	890,572

		December 31,
		2019				2018
Assets
Current Assets
Cash		$	101,337			$	426,952
Prepaid expenses			-				188,567
Current assets of discontinued operations held for sale			20,835				437,125
Total Current Assets			122,172				1,052,644
Property and Equipment
Property and equipment, other			1,223,353				75,269
Accumulated depreciation			(32,322	)			(16,713	)
Total Property and Equipment, Net			1,191,031				58,556
Noncurrent assets of discontinued operations held for sale			1,196,161				15,206,750
Deposits			-				10,690
Investment in common stock, at cost			32,959				250,000
Total Assets		$	2,542,323			$	16,578,640
Liabilities and Equity (Deficit)
Current Liabilities
Accounts payable		$	685,692			$	814,506
Accrued liabilities			269,410				-
Accrued interest – related party			247,500				97,500
Senior secured promissory note – related party			1,500,000				1,500,000
Convertible note payable – related party			208,874				-
Current liabilities of discontinued operations held for sale			1,315,581				4,236,956
Mortgage payable			626,086				-
Total Current Liabilities			4,853,143				6,648,962
Lease liability			44,333				-
Long term liabilities of discontinued operations held for sale			119,657				1,357,270
Total Liabilities			5,017,133				8,006,232
Commitments and Contingencies
EHR Series A Redeemable Preferred stock, $0.0001 par value, 500,000 shares authorized, 412,500 shares issued and outstanding at December 31, 2018			-				9,118,691
Equity (Deficit)
Series A preferred stock, no par value; $1.00 stated value; 6,500,000 shares authorized, 6,328,948 shares issued and outstanding at December 31, 2019 and 2018, respectively			4,975,503				4,975,503
Common stock, no par value; 100,000,000 shares authorized, 17,130,317 and 418,342 shares issued and outstanding at December 31, 2019 and 2018, respectively			6,029,328				889,697
Common stock warrants			3,426,946				-
Accumulated deficit			(16,722,036	)			(6,411,483	)
Generation Hemp equity			(2,290,259	)			(546,283	)
Noncontrolling interest			(184,551	)			-
Total Equity (Deficit)			(2,474,810	)			(546,283	)
Total Liabilities and Equity (Deficit)		$	2,542,323			$	16,578,640

See accompanying notes to consolidated financial statementsstatements.

F-2

 

Generation Hemp Inc.

F-1

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

		For the Year Ended
		December 31,
		2016				2015
Commission income		$	216,400			$	192,415
Property and rental management income			235,659				198,326
Total revenue			452,059				390,741
Operating expenses:
Commission expense			57,088				82,111
Professional fees			49,475				32,594
General and administrative			305,328				227,463
Total operating expenses			411,891				342,168
Operating profit			40,168				48,573
Other Income (expense)
Interest expense			(59,175	)			(59,049	)
Total other (expense)			(59,175	)			(59,049	)
Loss before income taxes			(19,007	)			(10,476	)
Income tax expense			-				-
Net loss		$	(19,007	)		$	(10,476	)
Basic and diluted loss per share		$	(0.00	)		$	(0.00	)
Basic and diluted weighted average
common shares outstanding			13,205,450				13,205,450

		For the year ended December 31,
		2019				2018
Revenue		$	7,500			$	-
Costs and Expenses
Depreciation and amortization			15,609				10,640
Impairment expense			5,203,621				-
Merger and acquisition costs			512,801				1,458,450
General and administrative			997,348				2,593,435
Total costs and expenses			6,729,379				4,062,525
Operating loss			(6,721,879	)			(4,062,525	)
Other expense (income)
Interest and other income			(2,696	)			(3,121	)
Change in fair value of marketable security			217,041				-
Interest expense			179,986				220,798
Total other expense			394,331				217,677
Loss from continuing operations			(7,116,210	)			(4,280,202	)
Loss from discontinued operations			(1,004,853	)			(791,132	)
Net loss		$	(8,121,063	)		$	(5,071,334	)
Less: net loss attributable to noncontrolling interests			(212,124	)			-
Net loss attributable to Generation Hemp		$	(7,908,939	)		$	(5,071,334	)
Earnings (loss) per common share:
Loss from continuing operations - basic and diluted		$	(3.60	)		$	(58.17	)
Loss from discontinued operations - basic and diluted		$	(0.41	)		$	(9.60	)
Loss per share - basic and diluted		$	(4.01	)		$	(67.76	)
Weighted average number of common shares used in computing earnings (loss) per share:
Basic and diluted			1,973,662				82,421

See accompanying notes to consolidated financial statementsstatements.

F-3

 

F-2

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Consolidated

Generation Hemp Inc.

Statements of Changes in Shareholders' Equity (Deficit)

										Additional								Total
		Common Stock								Paid In				Accumulated				Equity
		Shares				Amount				Capital				Deficit				(Deficit)
Balance at January 1, 2015			13,205,450			$	215,267			$	96,476			$	(334,387	)		$	(22,644	)
Net loss for the year ended December 31, 2015			—				—				—				(10,476	)			(10,476	)
Balance at December 31, 2015			13,205,450			$	215,267			$	96,476			$	(344,863	)		$	(33,120	)
Net loss for the year ended December 31, 2016			—				—				—				(19,007	)			(19,007	)
Balance at December 31, 2016			13,205,450			$	215,267			$	96,476			$	(363,870	)		$	(52,127	)

Stockholders’ Deficit

		EHR Series A Redeemable Preferred Stock								Preferred Stock								Common Stock								Common Stock				Accumulated				Noncontrolling				Total Stockholders’ Equity
		Shares				Amount				Shares				Amount				Shares				Amount				Warrants				Deficit				Interest				(Deficit)
Balance at January 1, 2018			412,500			$	8,604,803				6,029,460			$	3,727,561				240,510			$	148,689			$	-			$	(826,261	)		$	-			$	3,049,989
Private placement of common stock			-				-				73,800				307,500				53,520				223,000				-				-				-				530,500
Common shares issued for VCAB merger			-				-				225,688				940,442				124,312				518,008				-				-				-				1,458,450
Accrued preferred stock dividend			-				513,888				-				-				-				-				-				(513,888	)			-				(513,888	)
Net loss			-				-				-				-				-				-				-				(5,071,334	)			-				(5,071,334	)
Balance at December 31, 2018			412,500				9,118,691				6,328,948				4,975,503				418,342				889,697				-				(6,411,483	)			-				(546,283	)
Cancellation of Series A preferred stock in disposal of oil & gas property interests			(412,500	)			(9,118,691	)			-				-				-				-				-				-				-				-
Private placement of common stock			-				-				-				-				165,611				125,000				-				-				-				125,000
Series C convertible preferred stock issuance			-				-				34,000				850,000				-				-				-				-				-				850,000
Conversion of Series C preferred stock			-				-				(34,000	)			(850,000	)			2,414,773				850,000				-				-				-				-
Distribution of promissory note to shareholders			-				-				-				-				-				-				-				(208,099	)			-				(208,099	)
Reverse acquisition of EHR			-				-				-				-				13,653,574				5,051,822				-				-				-				5,051,822
Noncontrolling interest in consolidated subsidiary			-				-				-				-				(2,998,726	)			(1,864,697	)			-				1,723,102				141,595				-
Acquisition of noncontrolling interests			-				-				-				-				2,414,773				603,693				3,426,946				(3,916,617	)			(114,022	)			-
Conversion of shareholder note to common stock			-				-				-				-				1,061,970				373,813				-				-				-				373,813
Net loss			-				-				-				-				-				-				-				(7,908,939	)			(212,124	)			(8,121,063	)
Balance at December 31, 2019			-			$	-				6,328,948			$	4,975,503				17,130,317			$	6,029,328			$	3,426,946			$	(16,722,036	)		$	(184,551	)		$	(2,474,810	)

See accompanying notes to consolidated financial statementsstatements.

F-4

 

F-3

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HOME TREASURER FINDERS, INC. AND SUBSIDIARIES

Generation Hemp Inc.

Consolidated Statements of Cash Flows

		For the Year Ended
		December 31,
		2016				2015
Cash flows (to) from operating activities:
Net loss		$	(19,007	)		$	(10,476	)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Depreciation and amortization			23,843				26,025
Changes in operating assets and liabilities:
(Increase) in rent receivable			-				(500	)
(Increase) decrease in prepaid expense and other asset			(1,381	)			47
Increase (decrease) in accounts payable			18,336				(9,462	)
Increase (decrease) in accrued salary			10,000				-
Increase (decrease) in accrued liabilities			(2,543	)			16,059
Increase (decrease) in accrued interest			524				756
Net cash provided by operating activities			34,858				22,449
Cash flows used in investing activities:
Cash paid for fixed assets			(940	)			(1,584	)
Net cash used in investing activities:			(940	)			(1,584	)
Cash flows used in financing activities:
Payment of long term debt			(13,265	)			(13,003	)
Proceeds from related party payable			5,032				1,500
Payment of related party payable			(10,693	)			(1,000	)
Net cash used in financing activities			(18,926	)			(12,503	)
Net change in cash			14,992				8,362
Cash, beginning of year			45,210				36,848
Cash, end of year		$	60,202			$	45,210
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes		$	—			$	—
Interest		$	58,651			$	58,293

		For the year ended December 31,
		2019				2018
Cash Flows From Operating Activities
Net loss		$	(8,121,063	)		$	(5,071,334	)
Loss from discontinued operations			(1,004,853	)			(791,132	)
Net loss from continuing operations			(7,116,210	)			(4,280,202	)
Adjustments to reconcile net loss from continuing operations to net cash from operating activities:
Depreciation expense			15,609				10,639
Impairment expense			5,203,621				-
Noncash VCAB acquisition costs			-				1,458,450
Change in fair value of marketable securities			217,041				-
Changes in operating assets and liabilities:
Prepaid expenses and other assets			(18,757	)			(103,612	)
Deposits			-				(3,990	)
Accounts payable and accrued liabilities			23,545				365,534
Net cash from operating activities – continuing operations			(1,675,151	)			(2,553,181	)
Net cash from operating activities – discontinued operations			161,680				2,238,613
Net cash from operating activities			(1,513,471	)			(314,568	)
Cash Flows From Investing Activities
Additions to property and equipment			(136,584	)			(44,355	)
Proceeds from disposal of property and equipment			1,000				-
Reverse merger with Home Treasure Finders, Inc., net of acquired cash			291				-
Net cash from investing activities – continuing operations			(135,293	)			(44,355	)
Net cash from investing activities – discontinued operations			(17,333	)			(1,717,686	)
Net cash from investing activities			(152,626	)			(1,762,041	)
Cash Flows From Financing Activities
Series C convertible preferred stock issuance			850,000				-
Private placement of equity			125,000				530,500
Payment of note payable			(5,288	)			-
Proceeds from related party note payable			370,770				-
Net cash from financing activities – continuing operations			1,340,482				530,500
Net cash from financing activities – discontinued operations			-				400,000
Net cash from financing activities			1,340,482				930,500
Net change in cash			(325,615	)			(1,146,109	)
Cash, beginning of period			426,952				1,573,061
Cash, end of period		$	101,337			$	426,952

See accompanying notes to consolidated financial statementsstatements.

F-5

 

Generation Hemp Inc.

F-4

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2016 and 2015

NOTE 1 -ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.  Organization

1. Description of the Business

Generation Hemp, Inc. (the “Company”), formerly known as Home Treasure Finders, Inc. (the "Company"(“HTF”), was initially incorporated on July 28, 2008 in the State of Colorado.

The Company is in the business of operating a real estate business and operates in Colorado as a State Licensed "Employing Broker" number 1000021235 issued on February 13, 2012.

Effective April 1, 2013, all property management activities, revenues and expenses in connection with CW Properties, a property management company owned by the CEO, were transferred to a wholly owned subsidiary of Home Treasure Finders, Inc.  All net revenue earned by CW Properties has been booked as consolidated revenue of Home Treasure Finders, Inc.  

On March 3, 2014, the Company formed a whollywholly-owned subsidiary, HMTF Cannabis Holdings, Inc. The purpose of the subsidiary is to purchase Colorado properties that qualify for legal cultivation of cannabis. The properties will then be improved and leased to licensed third party growers.

The Company generates income from its real estate holdings.

On SeptemberNovember 27, 2019, HTF completed the purchase of approximately 68% of the common stock of Energy Hunter Resources, Inc. (“EHR”) through the issuance of 6,328,948 shares of the Company’s Series A Preferred Stock (“Series A Preferred”). Each share of the Series A Preferred; (a) converts into 12 shares of common stock of the Company, (b) possesses full voting rights, on an as-converted basis, with the common stock of the Company, and (c) has no dividend rate. The acquisition, together with the other transactions contemplated by the Stock Purchase Agreement, dated August 15, 20142019 are referred to herein as the “Transaction”. In connection with the closing of the Transaction, HTF changed its name to Generation Hemp, Inc.

In an exchange transaction also effective November 27, 2019, the Company acquired an additional 26% of the common stock of EHR through the issuance of common stock and warrants (see Note 11).

The Company owns approximately 94% of the issued and outstanding common stock of EHR. Thus, EHR is a vacant warehouse propertymajority-owned subsidiary of the Company. EHR is an oil and gas exploration and production company whose core properties as of December 31, 2019 were located in Denver zoned(a) Cochran County, Texas within the Slaughter-Levelland Field of the San Andres formation in the Northwest Shelf of West Texas and (b) certain areas of the Eagle Ford Shale Trend in Karnes County, Texas. EHR held an 8.0% interest in certain oil and gas and/ or oil, gas and mineral leases, lands interests, and other properties located in Cochran County and a 28.125% interest in certain oil and gas and/or oil, gas and mineral leases, lands interests, and other properties located in Karnes County. EHR’s oil & gas activities are currently held for cannabis cultivation. On November 5sale and December 1, 2014are presented in these consolidated financial statements as discontinued operations for each of the periods presented.

Going Concern and Management’s Plans – The Company is dependent upon obtaining additional funding to continue ongoing operations, pursue its new strategy and execute its acquisition plans.

Management plans to continue to pursue additional funding opportunities, in order for the Company leasedto meet its obligations as they become due and may not be successful in obtaining additional financing. In the warehouseevent financing cannot be obtained, the Company may not be able to unrelated licensed grower.satisfy its obligations as they become due.

Based on these factors, there is substantial doubt about the Company’s ability to continue as a going concern. The Company's tenant invested cashfinancial statements do not include any adjustments that might result from the outcome of this uncertainty.

2. Summary of Significant Accounting Policies

Basis of Presentation – The acquisition of EHR by HTF has been accounted for as a reverse merger. Under this method of accounting, EHR is treated as the acquirer, and HTF is treated as the acquired party. Therefore, the consolidated financial statements presented are those of EHR prior to improve their respective leaseholdsthe closing date as the Company’s predecessor entity and of the Company subsequent to the closing date. The financial statements reflect the Transaction as the equivalent of the issuance of stock by EHR for the net monetary assets of HTF. The accounting for the Transaction did not affect the carrying values of the assets and liabilities of EHR.

Stockholders’ deficit of the accounting acquirer, EHR, has been retroactively restated for the equivalent number of shares issued to the accounting acquirer.  Similarly, shares outstanding and earnings per lease terms utilizing architectural and engineering documents we procured and provided.share have also been also retroactively restated based on the equivalent number of shares issued to the accounting acquirer. 

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

F-6

 

b. Accounting Method

Principles of Consolidation – The Company'sconsolidated financial statements comprise the financial statements of the Company, its wholly-owned subsidiaries, and subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared usingfor the accrualsame reporting period as the Company. All significant intercompany balances and transactions are eliminated upon consolidation.

Business Combinations – The Company accounts for business combinations under the acquisition method of accounting. Under this method, acquired assets, including separately identifiable intangible assets, and any assumed liabilities are recorded at their acquisition date estimated fair value. Determining the fair value of assets acquired and liabilities assumed involves the use of significant estimates and assumptions. The Company has elected a December 31 year-end.

c.excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition.

Use of Estimates

–The preparation of financial statements in conformity with generally accepted accounting principles in the United States of AmericaGAAP 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. Significant items subject to such estimates and assumptions include the (i) impairment of long-lived assets and goodwill, (ii) valuation allowances for deferred income tax assets, (iii) oil and gas reserves and (iv) estimates of accrued liabilities. Actual results could differ from those estimates.

Cash –The Company maintains its deposits of cash in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits.

Accounts Receivable – Accounts receivable consists primarily of accrued oil and gas production receivables and joint interest receivables from outside working interest owners. Management routinely assesses accounts receivable balances to determine their collectability and accrues an allowance for uncollectible receivables, when, based on the judgment of management, it is probable that a receivable will not be collected.

Investment in Common Stock – For periods before March 2019, the investment in common stock did not have readily determinable fair value. The Company held less than a 20% voting interest and therefore the investment was accounted for at cost. The investment was reviewed for impairment when factors indicate that a decrease in value of the investment is other than temporary. As of December 31, 2018, there were no factors indicating other than temporary impairments of the Company’s investment.

In February 2019, the investee was acquired by a public company whose common stock has a readily determinable market value. As such, the Company began accounting for the investment in common stock at its fair value with unrealized gains and losses included in income. The Company recognized an unrealized loss of $217,041 in 2019.

Property and Equipment - property and equipment consists of a warehouse, computer equipment, office furniture and fixtures, recorded at cost and depreciated using the straight-line method. The warehouse is depreciated over a useful life of 30 years. The remaining items are depreciated over a range of three to five years. Upon disposition, the cost and accumulated depreciation are removed and any gain or loss on the disposal is reflected in the statements of operations.

Oil and Gas Properties –The Company follows the successful efforts method of accounting for its oil and gas properties. Costs to acquire mineral interests in oil and gas properties and to drill and equip new development wells and related asset retirement costs are capitalized. Costs to acquire mineral interests and drill exploratory wells are also capitalized pending determination of whether the wells have proved reserves or not. These capitalized costs are amortized using the unit-of-production method based on estimated proved reserves. Proceeds from sale of properties are generally credited to property costs, and a gain or loss is recognized when a significant portion of an amortization base is sold or abandoned.

F-7

d.  Income Taxes

Deferred taxes

Exploration costs, including geological and geophysical expenses and delay rentals, are providedcharged to expense as incurred. Exploratory drilling costs, including the cost of stratigraphic test wells, are initially capitalized but are charged to exploration expense if the well is determined to be nonproductive at that time. The determination of an exploratory well’s ability to produce must be made within one year from the completion of drilling activities. The acquisition costs of unproved acreage are initially capitalized and carried at cost, net of accumulated impairment provisions, until such leases are transferred to proved properties or charged to exploration expense as impairments of unproved properties.

The Company computes its provision for depreciation, depletion & amortization (“DD&A”) on its proved producing properties under the unit-of-production method. Acquisition costs of proved properties are depleted based on total proved reserves while well costs are depleted based on proved developed reserves. Reserve estimates are expected to have a significant impact on the DD&A rate.

The Company reviews its unproved oil and gas properties at least annually to determine if there has been impairment. To the extent that the carrying cost of a property exceeds its estimated fair value, the Company makes a provision for impairment that is recorded in the statement of operations.

When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on estimates of future oil and gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in the ASC 820. If applicable, the Company utilizes prices and other relevant information generated by market transactions involving assets and liabilities that are identical or comparable to the item being measured as the basis for determining fair value. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments of future production volumes, commodity prices, operating costs, and capital investment plans, considering all available information at the date of review. These assumptions are applied to develop future cash flow projections that are then discounted to estimated fair value, using a discount rate believed to be consistent with those applied by market participants. These fair value measurements are classified as Level 3 in the fair value hierarchy.

Asset Retirement Obligations – The Company records a liability for the plugging, abandonment and remediation of its properties at the end of their productive lives. The Company computes the liability for asset retirement obligations by calculating the present value of estimated future cash flows related to each property. This requires the Company to use significant assumptions, including current estimates of plugging and abandonment costs, annual inflation of these costs, the productive lives of wells and its risk-adjusted interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligations.

Asset retirement obligations are recorded as a liability at their estimated present value at the asset’s inception, with an offsetting increase to producing properties in the accompanying balance sheet which is amortized to expense on a unit-of-production basis. Periodic accretion of the discount on asset retirement obligations is recorded as expense.

Noncontrolling Interest – Noncontrolling interests represent the portion of net assets in consolidated entities that are not owned by the Company. As of December 31, 2019, minority investors owned approximately 6% of EHR.

Revenue Recognition – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. This new standard supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective method. Before adoption of the new standard, revenue was recognized when production was sold to a purchaser at a fixed or determinable price, when delivery occurred and title transferred, and if collectability of the revenue was probable. The timing of revenue recognition remained consistent between the new and previous standards. There was no material impact on our consolidated financial statements from adopting the new standard.

F-8

For periods subsequent to adoption of the new standard, sales of oil and gas are included in revenue when production is sold to a customer in fulfillment of performance obligations under the terms of agreed contracts. Performance obligation primarily comprise delivery of oil and gas at a delivery point. Each barrel of oil, million Btu (MMBtu) of gas, or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated. Performance obligations are satisfied at a point in time once control of the product has been transferred to the customer. The term between delivery and when payments are due is not significant.

The Company uses the sales method of accounting for gas production imbalances. The volumes of gas sold may differ from the volumes to which the Company is entitled based on its interests in the properties. These differences create imbalances that are recognized as a liability method whereby deferredonly when the properties’ estimated remaining reserves net to the Company will not be sufficient to enable the under-produced owner to recoup its entitled share through production. The Company’s recorded liability is generally reflected in other non-current liabilities. There were no significant gas imbalances at December 31, 2019 or 2018.

Rental income is recognized based on the contractual cash rental payments for the period.

Earnings (loss) per share – Basic earnings (loss) per share amounts are calculated by dividing income available to common shareholders, after deducting preferred stock dividends, by the weighted average number of shares of common stock outstanding. Diluted earnings per share amounts are calculated by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding. Common stock equivalents represent shares issuable upon the assumed conversion of preferred stock outstanding and the assumed exercise of common stock warrants outstanding.

Fair Value Measurement – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels related to fair value measurements are as follows:

Level 1 —

Observable inputs such as quoted prices in active markets for identical assets or liabilities.

Level 2 —

Observable inputs other than quoted prices included in Level 1, such as 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 or other inputs that are observable or can be corroborated by observable market data.

Level 3 —

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The estimated fair value of cash, accounts receivable, and accounts payable approximate the carrying amount due to the relatively short maturity of these instruments.

The Company’s non-financial assets measured at fair value on non-recurring basis include impairment measurements of oil and gas properties and the Company’s investment in common stock before it became publicly traded. These are considered Level 3 measurements as they involve significant unobservable inputs.

Fair value of the investment in common stock is determined based on a level 1 input for periods after February 2019 after it became publicly traded.

Income Taxes – Deferred tax assets and liabilities are recognized for deductible temporarythe future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards and deferredcarryforwards. Deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and theirare measured using enacted tax bases.  Deferredrates. The effect on deferred tax assets are reduced byand liabilities of a valuation allowance when,change in tax rates is recognized in income in the opinionperiod that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than notmore-likely-than-not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effectsThe ultimate realization of changes in tax laws and rates on the date of enactment.

F-5

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2016 and 2015

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

d.  Income Taxes (Continued)

Net deferred tax assets consistis dependent upon the generation of future taxable income during the following componentsperiods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax asset (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. A valuation allowance for deferred tax assets is recorded when it is more likely than not that the benefit from the deferred tax asset will not be realized.

F-9

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. The Company had no material uncertain tax positions as of December 31, 2019 and 2018.

The Company is subject to the Texas margin tax; however, tax expense was zero for the years ended December 31, 2019 and 2018.

Major Customer and Concentration of Credit Risk – We have a limited number of customers. We estimate an allowance for doubtful accounts based on an analysis of specific customers, taking into consideration the age of past due accounts and an assessment of the customer’s ability to pay. An allowance for doubtful accounts was not needed as of December 31, 2019 or 2018.

During 2019, our rental income was derived from a single lessee. There were no amounts due from this customer at December 31, 2019.

Recent Accounting Pronouncements –In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows — Classification of Certain Cash Receipts and 2015:Cash Payments, to clarify how eight specific cash receipt and cash payment transactions should be presented in the statement of cash flows. We adopted the new standard on January 1, 2018. Adoption of this standard had no material impact on our consolidated statements of cash flows and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases, which aims to make leasing activities more transparent and comparable and requires substantially all leases be recognized by lessees on their balance sheet as a night-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases, Leases of mineral reserves and related land leases are exempted from the standard. The Company adopted ASU 2016-02 on January 1, 2019 and elected the package of practical expedients within the standard which permits the Company not to reassess prior conclusions about lease identification, lease classification and initial direct costs, The Company made an accounting policy election to not separate lease and non-lease components for all leases. The adoption of this standard resulted in the recognition of right-of-use assets and lease liabilities for the Company’s office lease totaling $279,111.

3. Merger with Home Treasure Finders

On November 27, 2019, HTF completed the purchase of approximately 68% of the common stock of EHR through the issuance of 6,328,948 shares of the Company’s Series A Preferred.

F-10

 

		2016				2015
Deferred tax assets:
NOL carryover		$	76,600			$	122,100
Related party accruals			3,500				1,100
Accrued payroll			7,100				24,800
Deferred tax liabilities:
Depreciation			5,000				(5,400	)
Valuation allowance			(92,200	)			(142,600	)
Net deferred tax asset		$	-			$	-

As discussed above, the acquisition of EHR by HTF has been accounted for as a reverse merger. The income tax provision differs fromfair value of the amountassets acquired and liabilities assumed are based on management’s estimates. The following table summarizes the estimated fair value of income tax determined by applying the U.S. income tax rateassets acquired and liabilities assumed at the date of acquisition:

Assets acquired:
Cash		$	291
Property and equipment			1,012,500
Liabilities assumed:
Accounts payable			(78,226	)
Convertible note payable			(208,099	)
Mortgage payable			(630,691	)
Net assets acquired			95,775
Purchase consideration paid -
Common stock			5,051,822
Goodwill		$	4,956,047

An impairment analysis performed as of the date of closing showed that the acquired goodwill was fully impaired. As such, goodwill impairment expense of $4,956,047 was recorded subsequent to pretax income from continuingthe Transaction.

The consolidated statement of operations for the year ended December 31, 20162019 includes $7,500 of HTF revenue and 2015HTF losses of $4,952,563 since the acquisition date.

The following unaudited pro forma consolidated results of operations have been prepared as if the Transaction had occurred as of January 1, 2018:

		Year ended December 31,
		2019				2018
Revenue, continuing operations		$	69,381			$	82,508
Loss from continuing operations		$	(7,176,631	)		$	(4,357,748	)
Earnings (loss) per common share:
Basic and diluted		$	(4.04	)		$	(68.71	)

Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the period presented and is not intended to be a projection of future results.

Sale of HTF’s Legacy Business – On December 20, 2019, the Company entered the Legacy Business Bill of Sale, Assignment and Assumption Agreement (“Bill of Sale”) with Corey Wiegand, HTF’s former CEO. Under the Bill of Sale, we agreed to sell to Mr. Wiegand HTF’s property management and residential real estate sales business (the “Legacy Business”) for $160,000.

As alternative consideration to paying the purchase price in cash, the Bill of Sale provided that Mr. Wiegand had the right to redeem a portion of his existing common stock ownership in the Company as consideration for purchase of the Legacy Business, in lieu of paying cash. Based on an agreed upon reference price of $0.37 per share of common stock of the Company, Mr. Wiegand redeemed ownership equivalent to 432,432 shares to satisfy the required payment of the Legacy Business sale price. Pursuant to certain provisions set forth in the Stock Purchase Agreement entered into at the time of the Transaction, the shares of common stock utilized by Mr. Wiegand for payment of the Legacy Business purchase price were returned to the Company’s treasury and have been re-issued on a pro rata basis to the shareholders of record of the Company (other than Mr. Wiegand) as of the day immediately preceding the date of closing under the Stock Purchase Agreement. The Company recognized no gain or loss on the Legacy Business sale.

F-11

4. Discontinued Operations

In connection with the Transaction, management determined to fully divest of EHR’s oil and gas activities. These activities are presented as discontinued operations for each of the periods presented and are being actively marketed for sale.

The following is a summary of the carrying amounts of major classes of assets and liabilities of the discontinued operations to assets and liabilities held for sale:

		December 31,
		2019				2018
Assets
Accounts receivable -
Current assets of discontinued operations held for sale		$	20,835			$	437,125
Oil and Natural Gas Properties held for sale, at cost, using the successful efforts method			5,285,340				15,712,417
Accumulated DD&A			(4,089,179	)			(505,667	)
Total oil and gas properties, net of discontinued operations held for sale			1,196,161				15,206,750
Total assets of discontinued operations held for sale		$	1,216,996			$	15,643,875
Liabilities
Accounts payable		$	-			$	820,201
Deferred revenue			-				1,076,390
Accrued liabilities			92,196				466,254
Asset retirement obligations			52,776				415,061
Revenue payable			70,609				1,459,050
Note payable			1,100,000				-
Current liabilities of discontinued operations held for sale			1,315,581				4,236,956
Senior subordinated convertible debenture			-				400,000
Asset retirement obligations			119,657				957,270
Net deferred income tax liability			-				-
Long term liabilities of discontinued operations held for sale			119,657				1,357,270
Total liabilities of discontinued operations held for sale		$	1,435,238			$	5,594,226

The following is a summary of the major classes of line items constituting loss on discontinued operations shown in the consolidated statements of operations:

		Year ended December 31,
		2019				2018
Revenue
Oil and gas sales		$	485,655			$	2,527,038
Overhead fees			31,000				144,000
Total revenue			516,655				2,671,038
Costs and Expenses
Lease operating expense			377,486				1,744,009
Exploration expense			-				3,446
Depreciation, depletion & amortization			82,300				470,445
Accretion			32,974				177,282
Gain on disposal of oil & gas property interests			(1,666,790	)			-
Impairment & abandonment			3,730,678				89,411
Mergers & acquisition costs			100,000				977,577
Total costs and expenses			2,656,648				3,462,170
Other income			(1,176,390	)			-
Interest expense			41,250				-
Loss from discontinued operations		$	(1,004,853	)		$	(791,132	)

F-12

San Andres Acquisition #2 – On March 27, 2018, the Company entered into an agreement with Lubbock Energy Partners LLC (“LEP”) to acquire an additional 8,817 gross acres in the San Andres oil play in Cochran County, Texas of the Permian Basin. In a related transaction, the Company received a payment of $881,697 from Brigadier under its option agreement to purchase an interest in these acres. The acquisition was anticipated to close in January 2019. The Company elected not to complete its portion of the acquisition because of market conditions. Brigadier completed its purchase with LEP in 2019 at which time the Company recognized the option fee in income, within the loss from discontinued operations in the consolidated statements of operations.

San Andres Acquisition #3 – On November 5, 2018, the Company made an initial payment of $100,000 for an agreement to acquire another 4,287 acres located in the San Andres oil play of the Permian Basin, adjacent to its existing leasehold position in Cochran County, Texas. The anticipated closing would have been in January 2019. The Company elected not to complete this acquisition because of market conditions. The initial payment was expensed in 2019 within the loss from discontinued operations in the consolidated statements of operations.

Disposal of Oil & Gas Property Interests – On March 1, 2019, the Company entered into a Termination, Repurchase and Release Agreement (the “Agreement”) with LEP wherein the Company reassigned a 52% working interest in the oil & gas assets acquired in the San Andres Acquisition #1 back to LEP (with the Company continuing to hold an 8% working interest in those assets) in exchange for the return and cancellation of 412,500 shares of the Company’s Series A Preferred Stock plus all accrued and unpaid dividends thereon and LEP’s assumption of the Company’s obligations under its Senior Subordinated Debentures totaling $400,000. Operatorship of the oil & gas assets was transferred by the Company to LEP, and amounts owed by the Company to LEP and all trade payables associated with the assets were memorialized in the form of a non-recourse promissory note totaling $1.1 million. The Company and LEP also entered into certain financial arrangements and mutual releases in order to settle all existing disputes relating to the assets arising prior to the effective date. The promissory note was due March 1, 2020, bore interest at 5% per annum and required no payments until maturity. The Company recognized a gain on disposal of $1,666,790 within the loss from discontinued operations in the consolidated statements of operations. In June 2020, the $1.1 million non-recourse promissory note and accrued interest thereon was settled upon LEP’s foreclosure of the Company’s Gap Band property interest.

Impairment of Oil & Gas Property Interests – During the year ended December 31, 2019, the Company’s oil and gas properties became impaired due to the following:market decline and the Company’s determination to exit the oil and gas business. The Company’s interest in the San Andres Acquisition #1 was determined to be fully impaired and its interest in the Gap Band property was determined to have a fair value of $1.2 million. Impairment expense totaling $3,730,678 was recorded within the loss from discontinued operations in the consolidated statements of operations to reduce the carrying values of the Company’s oil and gas property interests to their estimated fair values. The Company recorded no impairments or abandonments of oil and gas properties during the year ended December 31, 2018.

5. Note Payable — Related Party

Senior Secured Promissory Note – On March 31, 2017, the Company entered into a subscription agreement under which we issued a $3,000,000 10% Senior Secured Promissory Note with an initial maturity of September 1, 2017 to Satellite Overseas (Holdings) Limited (“SOHL”), a stockholder of the Company’s common shares. The Senior Secured Promissory Note was funded through three equal monthly draws of $1 million made in April, May, and June 2017. Upon maturity, at the option of the holder, the Senior Secured Promissory Note may either become due and payable or convert into shares of common stock at 75% of the share price in a qualified equity offering. Upon an occurrence of an event of default, the interest rate of the Senior Secured Promissory Note escalates to 12%. The Senior Secured Promissory Note is secured, pursuant to a deed of trust, by a first priority security interest in a 50% working interest in the profits from all oil and gas produced from the Gap Band 2-H well in Karnes County, Texas.

The Company and SOHL agreed to nine interim extensions of the maturity date. As extended, the maturity date was April 30, 2020. The note is currently past due.

F-13

 

		2016				2015
Book income		$	(3,700	)		$	(2,100	)
Depreciation			(1,400	)			(1,200	)
Related party accruals			2,900				100
Meals and entertainment			400				-
Accrued payroll			(5,600	)			-
Valuation allowance			7,400				3,200
		$	-				-

The contingent put option in the Senior Secured Promissory Note is an embedded derivative that is recorded at fair value. The fair value calculation includes Level 3 inputs including the estimated fair value of the Company’s common stock and assumptions regarding the probability that the contingent put will be exercised. Management determined that the probability that the convertible note will be settled in shares was near zero at inception and has remained near zero during the term of the promissory note. The holder has indicated to the Company that they do not intend to exercise the conversion option. Therefore, the Company concluded that the fair value of the embedded derivative was near zero throughout the term of the convertible note.

The provision in the Senior Secured Promissory Note for escalation of interest rates from 10% to 12% is also an embedded derivative that must be recorded at fair value as the escalation of the interest rate is based on factors other than credit risk. The fair value of this derivative is not material because there has not been an escalation of the interest rate on the Senior Secured Promissory Note during the term of the note, the Company has been able to extend the maturity of the Note and any potential escalation of the interest rate would be immaterial to the financial statements.

Accrued interest and fees on the Senior Secured Promissory Note were $247,500 and $97,500 at December 31, 2019 and 2018, respectively.

Senior Subordinated Debentures – On October 10, 2018, the Company issued Senior Subordinated Debentures totaling $400,000 with certain investors. The term of the debentures was 36 months with 10% interest per annum payable quarterly. The Senior Subordinated Debentures were extinguished in March 2019 as part of the disposal of oil & gas property interests (see Note 4).

Convertible Promissory Note – In October 2019, HTF issued a convertible promissory note to EHR in exchange for EHR’s payment of HTF’s accounts payable and Transaction expenses. The convertible promissory note bears interest at 4% per annum and matures on November 1, 2021. Commencing 180 days subsequent to the date of the convertible promissory note, any portion or all of the principal and accrued interest payable is convertible by the holder at any time prior to payment into the common stock of the Company at a rate of $0.352 of principal and/or interest per share.

EHR distributed the convertible promissory note receivable to its shareholders prior to consummation of the Transaction. The outstanding balance owed by the Company under this convertible promissory note at December 31, 2019 was $208,874.

6. Mortgage Payable and Operating Lease

The Company is obligated under a mortgage payable, dated September 15, 2014 and as amended October 1, 2019, secured by its warehouse property located in Denver, Colorado. The note provides for a 25 year amortization period and an initial interest rate of 9% annually. As amended, the note matured on July 15, 2020 but was extended under terms of the amendment to January 15, 2021 after payment by the Company of a extension fee of 1% of the then outstanding principal. The rate during this first extension period is 10% annually and the monthly payment is $5,590.11. The maturity date may be subsequently extended at the Company’s option to July 15, 2021 after payment again of a extension fee of 1% of the then outstanding principal. The interest rate will increase to 11% annually if this extension is made.

As of December 31, 2019, the balance of the mortgage payable was $626,086 and the present maturity is January 15, 2021.

The Company leases the Denver warehouse property to a tenant under an operating leases expiring June 30, 2021 for a monthly rent of $7,500. The lease requires the tenant reimburse us for property taxes and insurance and maintains the interior and exterior of the warehouse (except for the roof). Minimum future rents for 2020 are $90,000 and for 2021 are $45,000.

7. Other Related Party Transactions

The Company had a previous business relationship with Pilatus Hunter, LLC, (“Pilatus Hunter”), a company owned by the Company’s CEO. Pilatus Hunter provides private air travel services, which began in September 2016. Pilatus Hunter was paid or advanced $137,151 for services during the year ended December 31, 2018. No amounts were paid or advanced during the year ended December 31, 2019. At December 31, 2016,2018, accounts receivable – related parties included $54,305 due from Pilatus Hunter. There were no amounts receivable or payable to Pilatus Hunter at December 31, 2019.

F-14

Before completion of the Transaction, the Company had balances due from employees from time to time in the normal course of business. At December 31, 2018, accounts receivable from employees totaled $5,377. No amounts were due from employees at December 31, 2019.

In 2019, our CEO advanced $370,770 under a convertible note bearing interest at 10% per annum. This note, including accrued interest, was converted into 1,061,970 shares of common stock on December 31, 2019.

8. Asset Retirement Obligations

Total asset retirement obligations (“ARO”) consist of amounts for future plugging and abandonment liabilities on our wellbores and facilities based on third-party estimates of such costs, adjusted for inflation at a rate of 2%. These values are discounted to present value using our credit-adjusted risk-free rate of 10% per annum. The following table summarizes the changes in ARO included in discontinured obligations:

Balance at January 1, 2018		$	1,195,049
Accretion expense			177,282
Balance at December 31, 2018			1,372,331
Disposal of oil & gas property interests			(1,232,872	)
Accretion expense			32,974
Balance at December 31, 2019		$	172,433

9. Commitments and Contingencies

Leases –On March 31, 2019, the Company abandoned its office lease. The right of use asset on the balance sheet at this date was fully impaired. The Company recognized impairment expense totaling $247,574 for this abandonment.

This office lease required monthly payments of $10,802 until its expiration on May 31, 2021. No rent payments have been made since abandonment. The lessor has made a claim for rent and the Company has made a counterclaim due to the premises being uninhabitable due to the actions of other tenants located on the floor. At December 31, 2019, the Company had accrued unpaid rent totaling $244,202. The discount rate used in computing the lease obligation was 10%.

Rent expense for 2019 and 2018 totaled $64,323 and $214,411, respectively.

Litigation – From time to time, we are subject to various litigation and other claims in the normal course of business. Below is a discussion of two specific matters. We cannot estimate the ultimate outcome of these matters.

JDONE, LLC v. Grand Traverse Holdings, LLC and John Gallegos, Denver District Court Case No. 2019CV33723

JDONE is a wholly owned subsidiary of the Company and landlord of a commercial warehouse building (“the Property”) that was leased to Grand Traverse on December 31, 2018 for a term of 61 months, with a personal guaranty from Defendant John Gallegos. On April 12, 2019, Grand Traverse presented JDONE with a forged, signed copy of the draft early termination amendment that JDONE had previously rejected. JDONE has suffered damages due to Defendant’s misconduct of approximately $823,504 plus interest and attorney’s fees. A court ordered mediation was held in May 2020 without success. All material defendant motions have been denied by the court. The case is set for jury trial in calendar year 2021.

KBSIII Tower at Lake Carolyn, LLC and Prime US-Tower at Lake Carolyn, LLC (collectively – “KBSIII”) vs. Energy Hunter Resources, Inc.

Plaintiff/Counterdefendant KBSIII is seeking lost rent on office space for periods after EHR vacated office premises located in Las Colinas, Texas. EHR has filed a counter suit alleging specific damages due to uninhabitable premises of the office space due to the intolerable conduct of other tenants located on the same floor. Discovery in the case is complete. The case has not been set for trial.

F-15

Environmental Remediation – Various federal, state, and local laws and regulations covering the discharge of materials into the environment, or otherwise relating to the protection of the environment, may affect the Company’s operations and the costs of its crude oil and gas exploration, development, and production operations. The Company does not anticipate that it will be required in the near future to expend significant amounts due to environmental laws and regulations, and accordingly no reserves have been recorded.

10. Income Taxes

No amounts were recorded for income tax expense during the years ended December 31, 2019 or 2018.

A reconciliation of the expected statutory federal tax and the total income tax expense from continuing operations was as follows:

		Year Ended December 31,
		2019				2018
Federal statutory rate		$	(1,494,404	)		$	(898,842	)
State income taxes, net			(229,304	)			-
Change in valuation allowance			792,853				896,528
Other, net			930,855				2,314
Total income tax expense		$	-			$	-

The tax effect of temporary differences that gave rise to significant components of deferred tax assets and liabilities consisted of the following:

		December 31,
		2019				2018
Assets:
Net operating loss carryforwards		$	1,388,111			$	2,234,623
Property and equipment			76,340
Liabilities:
Other			(310,482	)			(287,801	)
Subtotal			1,153,969				1,946,822
Valuation allowance			(1,153,969	)			(1,946,822	)
Net deferred tax asset (liability)		$	-			$	-

The Company has federal net operating loss (“NOL”) carryforwards of approximately $327,000 that may be offset against future taxable income as long as the "continuity of ownership" test is met.  No tax benefit has been reported in the$6.6 million at December 31, 2016 financial statements since2019, of which about $106,000 begin to expire in 2036 and the potential tax benefit is offset by a valuation allowanceremainder have no expiration.

The Company estimates that approximately $4.4 million of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposesits NOL carry-forwards are subject to annual limitations.  Shouldlimitations under Internal Revenue Code Section 382 as a changeresult of ownership changes at various times including in ownership occur, net operating loss carryforwardsthe Transaction. The Company estimates that approximately $125,000 of these NOL carry-forwards may be limited asutilized annually because of the impact of the Section 382 limitations.

11. Equity

Common Stock Issued for VCAB Acquisition - On May 4, 2018, the Company entered into an “Agreement and Plan of Merger” with VCAB Five Corporation (“VCAB”) to usesubstantially facilitate an increase in future years.

the number of qualified shareholders of the Company. In connection with the merger, the Company issued 350,000 shares of EHR common stock to the holders of Class 5 claims following VCAB’s bankruptcy filing. Noncash costs for this transaction totaled $1,458,450 and were expensed in 2018 within merger and acquisition costs in the consolidated statement of operations.

Common Stock Issued in Private Placement - In 2019, the Company sold 165,611 shares of common stock to three investors for an aggregate of $125,000 in cash through a private placement.

F-16

 

EHR Series A Redeemable Preferred Stock – On December 1, 2017, EHR designated 500,000 shares of Series A 6.00% Perpetual Redeemable Convertible Preferred Stock (the “EHR Series A Preferred Shares”). Of the 500,000 EHR Series A Preferred Shares, (i) 412,500 shares were issued to LEP in the San Andres Acquisition #1 and (ii) 87,500 shares were reserved for the payment of dividends in kind. All of the EHR Series A Preferred Shares had a stated value of $20.00 per share. The EHR Series A Preferred Shares contained a substantive conversion option, were not mandatorily redeemable and converted into a fixed number of common shares. As of December 31, 2018, there were 412,500 EHR Series A Preferred Shares outstanding.

Pursuant to the Certificate of Designation for the EHR Series A Preferred Shares (the “Certificate of Designations”) each EHR Series A Preferred Share was convertible at any time, at the option of the Holder into one share of EHR common stock. If not converted sooner, the Company had the right to repurchase all or any portion of the then outstanding shares of EHR Series A Preferred Shares at a price, in cash, equal to the stated value per share, plus all accrued but unpaid dividends thereon to the date of payment, (i) at any time following the one-year anniversary of the original issue date, or (ii) if (A) the average closing bid price of the corporation’s common stock shall have equaled or exceeded 125% of the stated value for the immediately preceding 20 trading days and (B) the shares of common stock issuable upon conversion. This conversion option was considered clearly and closely related to the EHR Series A Preferred Stock host contract and therefore did not require bifurcation.

Dividends on the EHR Series A Preferred Shares were payable quarterly at the Company’s election in cash, EHR Series A Preferred shares or a combination of cash and shares at an annual dividend rate of 6.00%. The EHR Series A Preferred Stock was presented as “mezzanine equity” in the Company’s consolidated balance sheets because it was mandatorily redeemable.

On March 1, 2019, all outstanding shares of the EHR Series A Preferred Stock and accrued dividends thereon were returned and cancelled in the disposal of oil & gas property interests. Refer to Note 4 for more discussion.

EHR Series C Preferred Stock – In the third quarter of 2019, EHR raised $850,000 of additional funding through the issuance of 34,000 shares of EHR Series C Preferred Stock. The EHR Series C Preferred Stock converted into 2,414,773 shares of EHR’s common stock upon completion of the Transaction. These common shares were initially accounted for as noncontrolling interests in EHR.

In an exchange transaction effective November 27, 2019, the Company acquired these noncontrolling interests representing approximately 26% of the ownership of EHR through the issuance of 2,414,773 shares of Company common stock and 14,488,638 warrants for the purchase of Company common stock. The warrants have an exercise price of $0.352 per share and expire on November 27, 2021. The warrants may be redeemed beginning October 1, 2020 for $0.0001 per warrant at the Company’s option with 30-days advanced notice should the volume weighted average price exceed $1.00 for any five out of seven consecutive trading days with a minimum average daily trading volume for such seven-day period of at least 25,000 shares of common stock. One-half of the warrants have a cashless exercise feature.

Series A Preferred Stock – The Company has analyzed filing positions in all6,328,948 shares of Series A Preferred outstanding. Each share of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions.  The Company has identified its federal tax return and its state tax return in Colorado as "major" tax jurisdictions, as defined.   The years 2013-2015 are open to examination by the IRS.  No reserves for uncertain tax positions have been recorded.

The Company adopted changes issued by FASB which prescribed a recognition threshold and measurement attribute for financial statement recognition and measurement of an uncertain tax position taken or expected to be taken in a tax return. Under the guidance, an uncertain income tax position must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.

F-6

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2016 and 2015

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

e.  Loss per Common Share

The Company reports net loss per share using a dual presentation of basic and diluted loss per share. Basic net loss per share excludes the impactSeries A Preferred; (a) converts into 12 shares of common stock equivalents.  Diluted net loss per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.  At December 31, 2016 and 2015 there were no variances between the basic and diluted loss per share as there were no potentially dilutive securities outstanding.

f.  Revenue Recognition

Revenue is recognized when services are provided and collection is reasonably assured.  Revenue is recognized in a real estate transaction when the closing occurs on the home sale and commissions are received.  For the property management activities, revenue is recognized when rent is received from the tenant.  For rental income, revenue is recognized when the services are provided, and collection is reasonably assured.

g.  Newly Adopted Accounting Pronouncements

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows.  Based on that review, the Company, believes that none of these pronouncements will have a significant effect(b) possesses full voting rights, on its current or future earnings or operations.

h.  Principles of consolidations

The consolidated financial statements includean as-converted basis, with the accountscommon stock of the Company, and its subsidiaries.  All material intercompany accounts and transactions are eliminated in consolidation.(c) has no dividend rate.

F-17

 

F-7

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2016 and 2015

NOTE 2 –PROPERTY AND EQUIPMENT

12. Supplemental Cash Flow Information

		Year ended December 31,
		2019				2018
Cash paid for interest		$	-			$	-
Cash paid for taxes			-				-
Noncash investing and financing activities:
Initial recognition of right to use asset and lease liabilities			279,111				-
Right of use asset amortization			31,537				-
Apply deposit against lease liability			10,690				-
Recognition of noncontrolling interests in reverse merger			95,743				-
Conversion of Series C preferred stock into common stock			850,000				-
Acquisition of noncontrolling interests			(114,022	)
Conversion of shareholder note to common stock			373,813				-
Distribution of promissory note to shareholders			208,099				-
Capital expenditures in accounts payable			-				561,796
Accrual of preferred stock dividends			-				513,888

13. Earnings (Loss) per Share

The Company's capital assets consist of warehouse units, computer equipment, office furniture and leasehold improvements for its offices.  Depreciation and amortizationfollowing table is calculated using the straight-line method over the estimated useful lifea calculation of the asset, ranging from 18 months to 39 years.  Expenditures for additionsearnings (loss) per basic and improvements are capitalized, while repairs and maintenance costs are expensed as incurred.  diluted share:

Amounts attributable to Generation Hemp:
Numerator
Loss from continuing operations		$	(7,102,542	)		$	(4,280,202	)
Less: Preferred stock dividends			-				(513,888	)
Net loss from continuing operations attributable to common stockholders			(7,102,542	)			(4,794,090	)
Loss from discontinued operations			(806,397	)			(791,132	)
Net loss attributable to common stockholders		$	(7,908,939	)		$	(5,585,222	)
Denominator
Weighted average shares used to compute basic EPS			1,973,662				82,421
Dilutive effect of preferred stock			-				-
Weighted average shares used to compute diluted EPS			1,973,662				82,421
Earnings (loss) per share:
Loss from continuing operations - basic and diluted		$	(3.60	)		$	(58.17	)
Loss from discontinued operations - basic and diluted		$	(0.41	)		$	(9.60	)
Loss per share - basic and diluted		$	(4.01	)		$	(67.76	)

The cost and related accumulated depreciationcomputation of any capital assets that are sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.

Fixed assets and related depreciationdiluted earnings per common share for the year ended December 31, 20162019 excludes (i) the assumed conversion of the Series A Preferred Stock and 2015 are(ii) the effect of assumed exercise of approximately 14,488,638 warrants, as follows: their exercise price was greater than the average market value of our common stock for the period, as these would be anti-dilutive.

F-18

 

		2016				2015
Computer equipment		$	5,672			$	5,672
Furniture and fixtures			7,777				6,837
Leasehold improvements			4,000				4,000
Warehouse units			861,000				861,000
Accumulated amortization and depreciation			(58,246	)			(34,403	)
Total fixed assets		$	820,203			$	843,106

Depreciation expense was $23,843 and $23,580 amortization expense was $0 and $2,444

14. Subsequent Events

Issuances of Common Stock – In February 2020, Generation Hemp sold 250,000 units for the years ended December 31, 2016 and 2015, respectively.

 NOTE 3 – LONG-TERM DEBT

On September 15, 2014,  the Company entered into a promissory note for $840,000 on the purchase three warehouse units known as 4420, 4430 and 4440 Garfield Street, Denver, Colorado. The Company is leasing the three separate units$100,000 to a licensed third party grower for cannabis cultivation.  The termsaccredited investors. Each unit consists of the variable interest 25 year amortization note carried by the seller of the property call for payments to seller as follows:

1

First and Second year interest rate at 7% with 25 year amortization payment at $5,937 per month.

2.

Third and Fourth year at 8% with 25 year amortization payment at $6,278 per month.

3.

Fifth year at 9% with 25 year amortization payment at $6,640 per month.

4.

Balloon payment of $777,255 due at end of the fifth year.

The note to seller is secured by the three warehouse units.

F-8

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2016 and 2015

NOTE 3 – LONG-TERM DEBT (continued)

As of December 31, 2016, the balance of the note was $811,654 and the annual maturities of the long-term debt were:

Year Ending December 31,
2017		$	10,790
2018			11,090
2019			789,774
		$	811,654

The three warehouse units are currently leased to one tenant. The Company is leasing each unit for $4,000 per month for the term of the lease which ends on November 1, 2018.

NOTE 4 - COMMON STOCK

The aggregate number of shares the Company has authority to issue is 100,000,000 sharesshare of common stock having no par valueand one warrant to purchase one common share at $0.40 per share. The shares of this classwarrant expires in March 2022 and is exercisable for one share of common stock at an exercise price of $0.40 per share. Proceeds of this issuance were used for general corporate purposes.

Response to the Coronavirus Disease 2019 (COVID-19) Pandemic on Our Business—On March 11, 2020, the World Health Organization declared the current COVID-19 outbreak to be a global pandemic, and on March 13, 2020, the United States declared a national emergency. In an effort to contain COVID-19 or slow its spread, governments around the world have unlimited voting rightsenacted various measures, including orders to close all businesses not deemed “essential,” isolate residents to their homes or places of residence and constitutepractice social distancing when engaging in essential activities. These actions and the sole voting groupglobal health crisis caused by COVID-19 have created significant volatility, uncertainty and economic disruption.

Our business, results of operations and financial condition were adversely affected by the COVID-19 pandemic, especially beginning in mid-March, and such impact has materially worsened to date in the second quarter. The COVID-19 pandemic and measures taken to contain it have subjected our business, results of operations, financial condition, stock price and liquidity to a number of material risks and uncertainties, all of which may continue or worsen.

The extent of the Company.  Each shareholder has one votepotential effect of the COVID-19 pandemic will depend on future actions and outcomes, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the short-term and long-term economic impact of the outbreak (including the effect on consumer discretionary spending and our employees in the markets in which we operate), the actions taken to mitigate the impact of the virus, and the pace of economic and financial market recovery when the COVID-19 pandemic subsides, among others.

Paycheck Protection Program Loan – Congress created the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide forgivable loans to eligible small businesses facing economic hardship to retain U.S. employees on their payroll during the Coronavirus Disease 2019 (“COVID-19”) pandemic.

PPP loan recipients may be eligible to have their loans forgiven if the funds were used for eligible expenses over the eight-week coverage period commencing when the loan was originally disbursed. The amount of forgiveness may be reduced if the percentage of eligible expenses attributed to nonpayroll expenses exceeds 25% of the loan, if employee headcount decreases, or compensation decreases by more than 25% for each shareemployee making less than $100,000 per year, unless the reduced headcount or compensation levels are restored by June 30, 2020.

On April 29, 2020, Generation Hemp, Inc. received disbursement of an approved PPP loan in the amount of $25,200. The company anticipates that this entire disbursement amount will be forgiven under the current program requirements for forgiveness eligibility.

Disposal of Gap Band Property Interest – In June 2020, LEP completed the foreclosure of the Company’s remaining ownership interest in the Gap Band property due to the Company’s default on its $1.1 million non-recourse promissory note and accrued interest thereon. The Company estimates that a gain of approximately $25,000 will be recognized in 2020 as a result of this disposal.

Subordinated Promissory Note—Our CEO made additional advances through 2020 under a subordinated promissory note due September 30, 2021. The total outstanding balance at November 30, 2020 was $440,000.

Pending Acquisition of Halcyon Thruput, LLC– On March 7, 2020, we entered into Definitive Agreements with Halcyon Thruput, LLC (“Halcyon”) to acquire 100% of their assets for total consideration of $5.1 million. The consideration includes $2.5 million of restricted common stock owned.  Cumulative voting shall(valued at $0.50 per share) of Generation Hemp, Inc., restricted from trading for one year, and $2.6 million in cash. Halcyon is a leading emerging company active in the hemp sector that provides postharvest and midstream services to growers by drying and processing harvested hemp directly from the field and wetbaled at their 48,000 square foot facility located in Hopkinsville, Kentucky. The transaction is expected to close in the fourth quarter of 2020.

*  *  *  *  *

F-19

Supplemental Oil and Gas Information

(Unaudited)

Oil and Gas Reserve Information

Proved oil and gas reserves are those quantities of crude oil, natural gas, condensate, and NGLs, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. Estimated proved developed oil and gas reserves can be expected to be recovered through existing wells with existing equipment and operating methods. The Company reports all estimated proved reserves held under production-sharing arrangements utilizing the “economic interest” method.

Proved oil and gas reserves have been estimated by independent, third-party petroleum engineers, Mire & Associates, Inc. These reserve estimates have been prepared in compliance with the Securities and Exchange Commission rules and accounting standards based on the 12-month unweighted first-day-of-the-month average price for the year.

There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures. The reserve data in the following tables only represent estimates and should not be permittedconstrued as being exact.

The following reserves schedule sets forth the changes in estimated quantities of proved crude oil reserves:

		Crude Oil (Bbls)				Natural Gas (mcf)				Total (Boe)
Total proved reserves:
Balance at December 31, 2017			748,100				1,150,100				939,784
Revisions of previous estimates			(271,083	)			(511,140	)			(356,274	)
Production			(82,607	)			(117,210	)			(102,142	)
Balance at December 31, 2018			394,410				521,750				481,368
Revisions of previous estimates			(6,969	)			203,192				26,897
Divestiture of Reserves			(202,187	)			(101,786	)			(219,151	)
Production			(6,815	)			(18,566	)			(9,909	)
Balance at December 31, 2019			178,440				604,590				279,205
Proved developed reserves as of:
December 31, 2017			235,700				276,100				281,717
December 31, 2018			66,610				113,630				85,548
December 31, 2019			30,420				132,800				52,553
Proved undeveloped reserves as of:
December 31, 2017			512,400				874,000				658,067
December 31, 2018			327,800				408,120				395,820
December 31, 2019			148,020				471,790				226,652

The decrease in proved quantities for 2018 was due principally to revisions of previous reserve estimates caused by a decrease in average NYMEX-WTI oil and Henry Hub natural gas prices.

On March 1, 2019, the Company reassigned 52% of its working interest in the electionSan Andres #1 oil & gas assets to LEP (with the Company continuing to hold an 8% working interest in those assets). The decrease in proved quantities for 2019 was due principally to this disposal and revisions of directors or otherwise.previous reserve estimates caused by a decrease in average NYMEX-WTI oil and Henry Hub natural gas prices.

Costs Incurred in Oil and Natural Gas Property Acquisitions and Development Activities

Costs incurred by the Company in oil and natural gas acquisitions and development are presented below:

		For the year ended December 31,
		2019				2018
Acquisitions:
Proved		$	-			$	-
Unproved			-				-
Exploration			-				3,446
Development			17,333				1,222,286
Costs incurred		$	17,333			$	1,225,732

F-20

 

NOTE 5 - RELATED PARTY TRANSACTIONS

During

Capitalized Costs

The following table sets forth the year ended December 31, 2016,capitalized costs and associated accumulated depreciation, depletion, and amortization relating to the related party payable had a net increase of $8,397.  The balance of the related party payable was $17,590Company’s oil and $9,193gas acquisition, exploration, and development activities:

		December 31,
		2019				2018
Proved properties		$	3,685,294			$	5,963,638
Unproved properties			1,600,046				9,748,779
			5,285,340				15,712,417
Accumulated DD&A			(4,089,179	)			(505,667	)
Total		$	1,196,161			$	15,206,750

Future Net Cash Flows

Future cash inflows as of December 31, 20162019 and 2015, respectively.2018 were calculated using an unweighted arithmetic average of oil and gas prices in effect on the first day of each month in the respective year, except where prices are defined by contractual arrangements. Operating costs, production and ad valorem taxes and future development costs are based on current costs with no escalation. Future development costs include abandonment and dismantlement costs.

The following table sets forth unaudited information concerning future net cash flows for proved oil and gas reserves, net of income tax expense. Income tax expense has been computed using expected future tax rates and giving effect to tax deductions and credits available, under current laws, and which relate to oil and gas producing activities. This payable is due on demandinformation does not purport to present the fair market value of the Company’s oil and has an interest rategas assets, but does present a standardized disclosure concerning possible future net cash flows that would result under the assumptions used.

		December 31,
		2019				2018
Future cash inflows		$	11,701,830			$	27,502,600
Future production costs			(3,095,970	)			(6,993,170	)
Future development costs			(3,812,090	)			(8,051,580	)
Future income tax expense			-				-
Future net cash flows			4,793,770				12,457,850
10% annual discount for estimated timing of cash flows			(1,348,110	)			(5,719,100	)
Discounted future net cash flows		$	3,445,660			$	6,738,750

The following table sets forth the principal sources of 8%.  Accrued interest on this payable was $3,305 and $2,781 at December 31, 2016 and 2015, respectively.  In 2015,change in the Company paid base compensation of $6,000 per month to the CEO for his services.  The Company also pays additional override of 10% based upon commission revenue.  Effective April 1, 2016, the base compensation to be paid to the CEO increased to $10,000 per month.  The balance accrued at December 31, 2016 and 2015 was $28,612 and $18,612 respectively.discounted future net cash flows:

		December 31,
		2019				2018
Balance, beginning of period		$	6,738,750			$	6,903,800
Sales, net of production costs			139,169				927,029
Net change in prices and production costs			1,343,106				3,208,773
Changes in future development costs			(3,118,134	)			(1,151,702	)
Previously estimated development costs incurred during the period			(17,333	)			(1,222,286	)
Revision of quantities			376,534				(2,617,244	)
Accretion of discount			673,875				690,380
Sales of minerals in-place			(2,690,307	)			-
Balance, end of period		$	3,445,660			$	6,738,750

*  *  *  *  *

F-21

 

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Operating Lease

The Company leases its office space under a non-cancelable lease agreement accounted for as an operating lease.  We are leasing this facility for $21,000 for the term of the lease which ends on March 31, 2018.  At that time we shall have the option of extending the lease term.

Rent expense was $15,200 and $13,300 for the years ended December 31, 2016, and 2015, respectively.

Minimum rental payments under the non-cancelable operating leases are as follows:

Years ending December 31,	Amount
2018		$	16,800
Thereafter			4,200
		$	21,000

F-9

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2016 and 2015

NOTE 7 -  GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying financial statements, the Company has not yet generated sufficient cash flow and net income.  This factor, among others, indicates that there is substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.

The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability.  The Company intends to seek additional funding through equity offerings to fund its business plan.  There is no assurance that the Company will be successful in raising additional funds. 

NOTE 8 - SUBSEQUENT EVENTS

The Company has evaluated all subsequent events through the date the financial statements were issued, per the requirements of ASC Topic 855, and has determined that there are no additional events to report.

F-10

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

None.

ITEM 9A. CONTROLS AND PROCEDURES.

PROCEDURES 

Evaluation of Disclosure Controls and Procedures

We

Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of ourthe design and operation of its disclosure controls and procedures (as defined inpursuant to Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon thatRules. This evaluation our principal executive officer and principal financial officer concluded that,was done as of the end of the period coveredfiscal year by and under the supervision of the Company’s principal executive officer (who is also the principal financial officer and sole director). There have been no significant changes in this report, ourinternal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. There is only one officer and director of the Company, and as such is solely responsible for evaluating the Company’s disclosure controls and procedures. Based upon that evaluation, the principal executive officer believes that the Company’s disclosure controls and procedures wereare not effective due to the following material weaknesses.

We lacked the ability to have adequate segregation of duties in the financial statement preparation process. Further the Company did not maintain adequate documentation for review and supporting matters impacting financial reporting in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including ourprocessed timely. The principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance thatis directly involved in the objectivesday-to-day operations of the control system are met.  Further, the designCompany.

Plan for Remediation 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, have been detected. To address the material weaknesses, we performed additional analysis and other post closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:

As of December 31, 2016, we did not maintain effective controls over the control environment. Specifically, a lack of segregation of duties, a lack of oversight of financial reporting and inadequate documentation of business transactions.  Material Weaknesses

Since these entity level controls have a pervasive effect across the organization, management has determined that these circumstances constitute a material weaknesses.

Because of these material weaknesses, management has concludedweakness.

We believe that we did not maintain effective internal control over financial reporting as of December 31, 2016, based on the criteria established in "Internal Control-Integrated Framework" issued by the COSO.

No Attestation Report by Independent Registered Accountant

The effectiveness ofhave improved our internal control over financial reporting by taking certain corrective steps that we believe minimize the likelihood of a recurrence. We have designed a disclosure controls and procedures regime pursuant to which our management has, among other things:

(a)

identified the definition, objectives, application and scope of our internal control over financial reporting;

(b)

delineated the duties of each member of the group responsible for maintaining the adequacy of our internal control over financial reporting. This group consists of our Chief Executive Officer and independent consultants who were engaged to prepare and assure compliance with both our internal control over financial reporting as well as our disclosure controls and procedures and review our disclosure controls and procedures on a regular basis, subject to our management’s supervision.

We continue implementation of required key controls, the necessary steps required for procedures to ensure the appropriate communication and review of inputs necessary for the financial statement closing process, as well as for the appropriate presentation of disclosures within the financial statements. The remediation steps taken are subject to the Chief Executive Officer’s oversight. While management believes there have been significant improvements of internal controls over financial reporting since year ended December 31, 2019, management anticipates that further continuing efforts will be needed to effectively remediate the material deficiencies relating to segregation of duties and maintaining adequate supporting documentation to substantiate the information reported in the financial statements which existed as of December 31, 2016,2019, and to assure that complex transactions are properly recorded as the business continues to grow. Our management has not been audited by our independent registered public accounting firm by virtueactively engaged in planning for, designing and implementing the corrective steps described above to enhance the effectiveness of our exemptiondisclosure controls and procedures as well as our internal control over financial reporting. Our management is committed to achieving and maintaining a strong control environment, high ethical standards, and financial reporting integrity, and will take further steps to ensure that personnel are adequate in terms of sophistication and quantity to adequately assure that the financial reporting process is efficient and operated with the sufficient level of integrity to meet and surpass all regulatory standards.

While management is implementing corrective steps to remediate its internal control deficiencies, we cannot assure you that they will be sufficient enough to be free of a material weakness. If we should in the future conclude that our internal control over financial reporting suffers from a material weakness, we will be required to expend additional resources to improve it. Any additional instances of material deficiencies could require a restatement of our financial statements. If such requirement asrestatements are required, there could be a smaller reporting company.

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material adverse effect on our investors’ confidence that our financial statements fairly present our financial condition and results of operations, which in turn could materially and adversely affect the market price of our common stock.

Changes in Internal Control Overover Financial Reporting

There

Other than the remediation activities undertaken by us as disclosed above, there have been no changes in our internal control over financial reporting through the date of this report or during the 2019 fiscal year ended December 31, 2016, that have materially effected,affected, or are reasonably likely to materially effect,affect, our internal control over financial reporting.

Corrective Action

Management plans to seek a candidate who would serve as a consultant to assist management in improvements in our disclosure controls and procedures and in our internal control over financial reporting.  We anticipate that the consultant will help to oversee our financial reporting and tracking documentation of all transactions.

ITEM 9B. OTHER INFORMATION.

None

Part III

INFORMATION

None.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

DIRECTORS AND EXECUTIVE OFFICERS

OurCORPORATE GOVERNANCE

The following persons are our executive officers and directors and hold the offices set forth opposite their respective ages and positions as of the date of this prospectus are as follows:

names.

Name		Age		Position
Corey Wiegand (1)Gary C. Evans		3863		President, Chief Executive Officer, Chief Financial OfficerChairman and Sole Director

_______________

(1)	Our founder, President, CEO CFO and Sole Director

Executive Biography.

Corey Wiegand, age 38, President, is a graduate cum laude from the University of Texas A&M in Corpus Christi.  He is a real estate investor, Colorado licensed Employing Broker, and is certified to work with property management, short sales and bank owned properties.

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             Corey Wiegand's Biography for the last ten years, including dates of Employment, Job Title, Job Description, Employer and Location of employer is detailed in the table below.

Dates of Employment		Job Title		Job Description		Employer/Location
August, 2006- September, 2008 Melissa M. Pagen		Real Estate Investor45		Located Fix and Flip Deals for a small investor Group		Info-Foreclosure LLC Denver Metro Area Colorado
November, 2007-March 31, 2012		Realtor		Buyer and Investor Sales Specialist		RE/MAX Alliance, Boulder, Colorado
July 2008- Present		Founder, President		Build Shareholder Value		Home Treasure Finders Inc. Denver Metro Area Colorado Managing Director, Chief Branding Officer, Corporate Secretary

The following is a brief account of the business experience of each of our directors and executive officers:

Gary C. Evans, Chairman of the Board and Chief Executive Officer. Mr. Evans previously led Energy Hunter Resources, Inc. and Magnum Hunter Resources Corporation, a public energy company specializing in unconventional resource plays predominately in the Appalachian Basin, for seven years, from 2009 to May 2016. Mr. Evans was also founder and CEO of Eureka Hunter Holdings, LLC, a mid-stream gas gathering company transporting and managing up to 1 Bcf of daily natural gas volumes from production in West Virginia and Ohio on approximately 200 miles of newly constructed pipeline during the similar seven-year period. Additionally, Mr. Evans previously founded and served as the Chairman and Chief Executive Officer of Magnum Hunter Resources Inc. (MHRI), a NYSE listed company, for 20 years before MHRI was acquired by Cimarex Energy for approximately $2.2 billion in June 2005. Later that year, Mr. Evans formed Wind Hunter Energy, LLC, a renewable energy company which was subsequently acquired in December 2006 by GreenHunter Energy, Inc., an emerging water resource company focusing on oil field water management and clean water technologies active in the Marcellus and Utica resource plays in Appalachia. As founder, Mr. Evans served as Chairman and Chief Executive Officer of GreenHunter Energy, Inc. from December 2006 until May 2016. Its assets were sold to a private equity fund.

Mr. Evans serves as an Individual Trustee of TEL Offshore Trust, a publicly listed oil and gas trust, and is a Director of Novavax Inc., a NASDAQ listed clinical-stage vaccine biotechnology company, where he previously served as Chairman, CEO and Lead Director. Mr. Evans was recognized by Ernst & Young as the Southwest Area 2004 Entrepreneur of the Year for the Energy Sector and was subsequently inducted into the World Hall of Fame for Ernst & Young Entrepreneurs. Mr. Evans was also recognized as the Energy Industry Leader of the year in 2013 and chosen by Finance Monthly in 2013 as one of the most respected CEOs. Mr. Evans was chosen as the Best CEO in the “Large Company” category by Texas Top Producers in 2013. He additionally won the Deal Maker of the Year Award in 2013 by Finance Monthly. Mr. Evans serves on the board of the Maguire Energy Institute at Southern Methodist University and speaks regularly at energy industry conferences around the world and on national television networks on the current affairs of the oil and gas industry.

Melissa M. Pagen has over eighteen years of professional and executive experience in managerial and officer positions in several industries - both in the private and public sectors, and with a demonstrated history in consumer goods, business development, investor relations, and industrial technologies. Ms. Pagen brings a unique combination of talents. She has also developed and launched several start-up companies, in ecommerce, nutraceuticals, and the energy sector. Ms. Pagen earned a Bachelor of Arts degree from University of California, Los Angeles where she graduated summa cum laude, and in 2014 was honored with a WING Award (Women In Natural Gas), by Shale Media Group.

Involvement in Certain Legal Proceedings

In March 2016, during Mr. Evans’ tenure as interim CEO of GreenHunter Resources, Inc. that company and certain of its subsidiaries (namely, GreenHunter Water, LLC; Hunter Disposal, LLC; Ritchie Hunter Water Disposal, LLC; Hunter Hauling, LLC; White Top Oilfield Construction, LLC; Blackwater Services, LLC; Virco Realty, LLC; Little Muskingum Drilling, LLC; Blue Water Energy Solutions, LLC; GreenHunter Wheeling Barge, LLC; GreenHunter Environmental Solutions, LLC; and MAG Tank Hunter, LLC) filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. Similar to Magnum Hunter Resources Corporation discussed immediately below, GreenHunter Resources, Inc. sought protection in large part because of the cyclical downturn in the commodity prices of both oil and natural gas. GreenHunter Resources, Inc.’s assets were subsequently sold to a private equity group, which allowed predominately all secured indebtedness to be fully repaid.

In December 2015, during Mr. Evans’ tenure as CEO of Magnum Hunter Resources Corporation, that company filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code in Delaware (In re Magnum Hunter Resources Corporation, et al., included the following debtors in addition to Magnum Hunter Resources Corporation, each of which was a directly or indirectly owned subsidiary of Magnum Hunter Resources Corporation: Alpha Hunter Drilling, LLC; Bakken Hunter Canada, Inc.; Bakken Hunter, LLC; Energy Hunter Securities, Inc.; Hunter Aviation, LLC; Hunter Real Estate, LLC; Magnum Hunter Marketing, LLC; Magnum Hunter Production, Inc.; Magnum Hunter Resources GP, LLC; Magnum Hunter Resources, LP; Magnum Hunter Services, LLC; NGAS Gathering, LLC; NGAS Hunter, LLC; PRC Williston LLC; Shale Hunter, LLC; Triad Holdings, LLC; Triad Hunter, LLC; Viking International Resources Co., Inc.; and Williston Hunter ND, LLC). This filing was due in large part to the precipitous commodity cycle downturn which saw the price of natural gas and crude oil reach lows not seen for over a decade. Magnum Hunter Resources Corporation subsequently emerged from bankruptcy with no indebtedness in May 2016 under Mr. Evans’ leadership.

ITEM 11. EXECUTIVE COMPENSATION.

Director and Officer Compensation

COMPENSATION

Narrative Disclosures

Employment, Severance or Change in Control Agreements

We currently do not maintain any employment, severance or change in control agreements with our named executive officers. In addition, our named executive officers are not entitled to any payments or other benefits in connection with a termination of employment or a change in control.

Retirement Benefits

We have no directornot maintained, and do not currently intend to maintain, a defined benefit pension plan or nonqualified deferred compensation policy. Directors may be reimbursed for their expenses incurred for attending each boardplan.

Compensation of directors meeting and may be paid a fixed sum for attendance at each meeting of the directors or a stated salary as director. No policy or payment precludes any director from serving us in any other capacity and being compensated for the service. Members of special or standing committees may be allowed reimbursement and compensation for attending committee meetings. During the years ended December 31, 2016 and 2015 and the period from inception until December 31, 2015 and the date of this report, none of our directors were paid any fees to attend director meetings.

EXECUTIVE COMPENSATION

Beginning January 2012 we agreed to pay Mr. Wiegand a salary of $2,500 per month plus an additional override of 15% based on sales. However, during much of 2012, we experienced a cash shortage and were unable to pay salary to Mr. Wiegand as it became due.  Effective April 1, 2013 we increased Mr. Wiegand's salary to $5,500 per month plus an additional over-ride of 10% based upon commission revenue. Subsequently, we increased that amount by $500 per month and during December 31, 2015 we were paying Mr. Wiegand $6,000 per month.  Effective April 1, 2016, Mr. Wiegand's salary increased to $10,000 a month plus he receives the additional override of 10% based upon commission revenue.  As of December 31, 2016 Mr. Wiegand is owed accrued salary totaling $28,612. 

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Summary Compensation Table

Named Executive Officers

The following table sets forth certain information concerningcontains compensation paiddata for our officer duringnamed executive officers for the fiscal years ended 2016, 2015, 2014ending December 31, 2019 and 2013. Mr. Wiegand received no compensation prior. Going forward, Mr. Wiegand will receive a salary plus a commission based upon a percentage of gross sales, however, no written compensation agreement has been executed.

2018 and for the current fiscal year through June 30, 2020.

Name and Principal Position		Fiscal Year		Salary(1)				Bonus				Stock Awards				All Other Compensation				Total Received(2)
Gary C. Evans		2018		$	—			$	—			$	—			$	—			$	—
Chief Executive Officer		2019		$	360,000
		2020		$	360,000
Melissa M. Pagen		2018		$	—			$	—			$	—			$	—			$	—
Managing Director, Chief Branding		2019		$	120,000			$				$				$				$
Officer, Corporate Secretary		2020		$	120,000			$				$				$				$

Name and principal position (1)		Year		Salary and Commissions     ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				reflects annual amount. Salary was prorated in 2019, see Total ($) Received column.
(2)
Corey Wiegand, OfficerFor 2018 and Sole Director		2016 2015 2014 2013			125,520 91,242 70,000 74,738				— — — —				— — — —				— — — —				— — — —				— — — —				— — — —				125,520 91,242 70,000 74,738	2019, amount reflects total compensation received for calendar year. For 2020, amount reflects total compensation received through June 30, 2020.

Option Grants in Last Fiscal Year

None.

Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values

No stock options were exercised or held for exercise.

Equity

Compensation Plan Information

There is currently no stock option executive compensation plan in place.

Employment and Consulting Agreements

We presently pay Corey Wiegand a salary of $10,000 monthly plus an override of 10% based upon commission revenue. During periods when we did not have available cash, we have accrued unpaid salary and plan to pay these amounts at a future date when and if cash becomes available. We have not executed a written agreement in connections with this arrangement and we may change the arrangement at any time.

Board of Directors

Our Director

We currently have one director, Mr. Evans. Since Mr. Evans is elected by the vote of a majority in interest of the holders of our voting stock and hold office until the expiration of the term for whichalso an employee he or she was elected and until a successor has been elected and qualified.

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A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business. The directors must be present at the meeting to constitute a quorum.  However,does not receive any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board individually or collectively consent in writing to the action.

Directors may receiveadditional compensation for their services and reimbursement for their expenses as shall be determined from time to time by resolution of the Board. Presently our sole director receives no compensation for histhis service on our Boardboard of Directors.

directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSMANAGEMENT AND MANAGEMENT

RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding beneficial ownership of our Common Stock, as of March 31, 2020.

We have determined beneficial ownership in accordance with Commission rules. The information does not necessarily indicate beneficial ownership for any other purpose. The applicable percentage ownership is based on 93,077,693 shares of common stock as of December 31, 2016 and as2019 (17,130,317 shares of the date of this report, with respect to the beneficial ownership of the outstanding common stock by (i) any holderoutstanding and 75,947,376 shares issuable upon conversion of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except asSeries A preferred stock outstanding).

Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each ofstockholder named in the stockholders listed below hasfollowing table possesses sole voting and investment power over the shares beneficially owned.

Title of Class	Name of Beneficial Owner	Number of Shares Beneficially Owned	Percentage Ownership
Common Stock	Corey Wiegand	6,700,000	50.7 %
Common Stock	Bristlecone Associates, LLC 16200 West County Road 18E Loveland, CO 80537	3,000,000	22.7%
Common Stock	All Executive Officers and Directors as a Group (1 person)	6,700,000	50.7%

listed. Unless otherwise noted below, the address of each person listed on the table is c/o Generation Hemp, Inc., P.O. Box 540308, Dallas, Texas 75354.

Name of Beneficial Owner(1)		Number of shares beneficially owned				Percentage Ownership
5% Stockholders:
Satellite Overseas (Holdings) Limited(2)			25,263,144				27.1	%
Corey Weigand			6,687,275				7.2	%
Directors and Named Executive Officers:
Gary C. Evans			36,000,000				38.7	%
Directors and Executive Officers as a Group (1 Persons)			40,500,000				38.7	%

(1)	Except as otherwise indicated,The amounts and percentages of Common Stock beneficially owned are reported on the addressbasis of each beneficial owner is c/o Home Treasure Finders, Inc., 4316 Tennyson Street, Denver, CO 80212 .
	Applicable percentage ownership is based on 13,205,450 shares of common stock outstanding as of December 31, 2016 and asregulations of the dateCommission governing the determination of this report. Beneficialbeneficial ownership is determined in accordance withof securities. Under the rules of the Commission, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be the beneficial owner of any securities such person has the right to acquire within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed beneficial owner of the same securities, and Exchange Commissiona person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as discussed in the footnotes to this table, each of the beneficial owners has, to our knowledge, sole voting and generally includes voting or investment power with respect to securities.the indicated shares of Common Stock, except to the extent this power may be shared with a spouse. All shares shown in the table are currently outstanding,

(2)

Satellite Overseas (Holdings) Limited (“SOHL”) is the record holder of these shares of Common Stock. SOHL is a wholly-owned subsidiary of Cadila Pharmaceuticals Ltd. (“Cadila”). Cadila is owned by the IRM Trust. Rajiv I. Modi, Ph. D. and Mrs. Shilaben I. Modi are the trustees of the IRM Trust. As trustees of the IRM Trust, Dr. Modi and Mrs. Modi have shared voting and dispositive power with respect to these shares and, therefore, under rules issued by the Commission may be deemed to be beneficial owners of the shares.

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ITEM 13. CERTAIN RELATIONSHIPSRELATIONSHIP AND RELATED TRANSACTIONS.

CERTAIN RELATIONSHIPSTRANSACTIONS, AND RELATED TRANSACTIONS

     Corey Wiegand has no relationship with any shareholderDIRECTOR INDEPENDENCE

On November 27, 2019, Generation Hemp, Inc. (f/k/a Home Treasure Finders, Inc.) (“HTF”) completed the purchase of approximately 68% of the common stock of Energy Hunter Resources, Inc. (“EHR”) through the issuance of 6,328,948 shares of the Company’s Series A Preferred Stock (“Series A Preferred”). Each share of the Series A Preferred; (a) converts into 12 shares of common stock of the Company, (b) possesses full voting rights, on an as-converted basis, with the common stock of the Company, and (c) has no dividend rate. The acquisition, together with the other than James Wiegand. 

transactions contemplated by the Stock Purchase Agreement, dated August 15, 2019 are referred to herein as the “Transaction”. In connection with the closing of the Transaction, HTF changed its name to Generation Hemp, Inc.

The Transaction was accounted for as a reverse merger, whereby EHR is considered to be the accounting acquirer and became a majority-owned subsidiary of the Company. Accordingly, the Company’s historical financial statements prior to the reverse merger were and will be replaced with the historical financial statements of EHR prior to the reverse merger and in this and all future filings with the U.S. Securities and Exchange Commission (the “SEC”).

Upon completion of the Transaction, Corey Wiegand, who had been the President and sole Director of Home Treasure Finders, Inc. since its founding, resigned from these positions and Gary C. Evans, previous Chairman and Chief Executive Officer of Energy Hunter Resources, Inc., took the helm of the combined entity as Chairman of the Board of Directors and Chief Executive Officer.

In an exchange transaction also effective November 27, 2019, the Company acquired an additional 26% of the common stock of EHR through the issuance of common stock and warrants.

The Company owns approximately 94% of the issued and outstanding common stock of EHR. Thus, EHR became a majority-owned subsidiary of the Company.

Board Leadership Structure

Our Board does not have a policy on whether or not the roles of Chief Executive Officer and Chairman should be separate and, if they are to be separate, whether the Chairman should be selected from the non-employee directors or be an employee. Currently, Gary C. Evans serves as our sole director as Chairman of the Board and our Chief Executive Officer.

Board Role in Risk Oversight

Our Board of Directors is responsible for the oversight of the Company’s risk management efforts. Members of management are responsible for particular areas of risk for the company and provide presentations, information and updates on risk management efforts as requested by our Board. 

Family Relationships

There are no family relationships among our executive officers and directors.

 Other than

Related Transactions

Gary C. Evans Ownership

In November, 2019, in accordance with the stock purchase agreement by HTF, Series A Preferred stock in the Company was issued to our Chief Executive Officer Gary C. Evans for shares held of EHR common stock. Each Series A Preferred stock held converts to 12 shares of common stock of the Company. As of December 31, 2019, Mr. Evans still retains ownership of 1,061,970 shares of EHR common stock (See below Gary C. Evans Convertible Note with EHR).

Gary C. Evans Convertible Note with EHR

In October and December, Mr. Evans advanced EHR $370,770 under a convertible note bearing interest at 10% per annum. This note, including accrued interest, was converted into 1,061,970 shares of common stock of EHR on December 31, 2019.

Satellite Overseas (Holdings) Ltd.

In November, 2019, in accordance with the stock purchase agreement by HTF, Series A Preferred stock in the Company was issued to SOHL for shares held of EHR common stock. Each Series A Preferred stock held converts to 12 shares of common stock of the Company.

Sale of HTF’s Legacy Business

On December 20, 2019, the Company entered the Legacy Business Bill of Sale, Assignment and Assumption Agreement (“Bill of Sale”) with Corey Wiegand, HTF’s former CEO. Under the Bill of Sale, we agreed to sell to Mr. Wiegand HTF’s property management and residential real estate sales business (the “Legacy Business”) for $160,000.

As alternative consideration to paying the purchase price in cash, the Bill of Sale provided that Mr. Wiegand had the right to redeem a portion of his existing common stock ownership in the Company as consideration for purchase of the Legacy Business, in lieu of paying cash. Based on an agreed upon reference price of $0.37 per share of common stock of the Company, Mr. Wiegand redeemed ownership equivalent to 432,432 shares to satisfy the required payment of the Legacy Business sale price. Pursuant to certain provisions set forth above, nonein the Stock Purchase Agreement entered into at the time of the following parties has, duringTransaction, the last two years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

	●	anyshares of common stock utilized by Mr. Wiegand for payment of the Legacy Business purchase price were returned to the Company’s treasury and have been re-issued on a pro rata basis to the shareholders of record of our directors or officers;
	●	any person proposed as a nominee for election as a director;
	●	any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; or
	●	any relative or spouse of any of the foregoing persons who has the same house as such person.

During the year ended December 31, 2016, Corey Wiegand deferred cash collection of $19,090 from the Company to cover current expenses.  $5,193 was paid back to him.

During(other than Mr. Wiegand) as of the year ended December 31, 2015, Corey Wiegand deposited $1,500 inday immediately preceding the Company's bank account to cover expenses.  $1,000 was paid back to him.

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date of closing under the Stock Purchase Agreement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

During

The following table sets forth the fiscal year ended December 31, 2016, we incurred approximately $24,000 in fees to our principal independent accountantspaid or accrued by us for professional services rendered in connection with the audit and reviews ofother services provided by our financial statements for fiscalauditor, Marcum, LLC during the years ended December 31, 2016.

2019 and 2018:

		2019				2018
Audit fees (1)		$	24,000			$	-
Audit related fees (2)			-				-
Tax fees (3)			-				-
All other fees			-				-
Total fees		$	24,000			$	-

(1)

Audit Fees: This category represents the aggregate fees billed for professional services rendered by the principal independent accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years.

(2)

Audit Related Fees: This category consists of the aggregate fees billed for services by our independent consultant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”

(3)

Tax Fees: This category consists of the aggregate fees billed for professional services rendered by the principal independent consultant for tax compliance, tax advice, and tax planning.

During the fiscal year ended December 31, 2015, we incurred approximately $27,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal years ended December 31, 2015.

Audit-Related Fees

The aggregate fees billed during the fiscal years ended December 31, 2016 and 2015 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $0 and $0, respectively. 

Tax Fees

The aggregate fees billed during the fiscal years ended December 31, 2016 and 2015 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning was $350 and $300, respectively.

All Other Fees

The aggregate fees billed during the fiscal years ended December 31, 2016 and 2015 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively.

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ITEM 15. EXHIBITS AND REPORTS OF FORM 8-K

Exhibits

FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Report:

(1) Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of December 31, 2019 and 2018	F-2
Consolidated Statements of Operations for the Years Ended December 31, 2019 and 2018	F-3
Consolidated Statements of Equity (Deficit) for the Years Ended December 31, 2019 and 2018	F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2019 and 2018	F-5
Notes to Consolidated Financial Statements	F-6
(2) Supplemental Oil and Gas Information (Unaudited)	F-20

(b) Exhibits:

Exhibit No.Number		Description
3.1		Certificate of Incorporation
3.2		Bylaws
3.3		Certificate Of Designation of Rights, Preferences And Limitations Of The Series A Convertible Voting Preferred Stock
4.1**		2020 Form of Generation Hemp Warrant
10.1		Deed of Trust, dated September 15, 2014, between  JDONE LLC and Thomas S. Yang.
10.2		Promissory Note, dated  September 15, 2014, made by JDONE LLC in favour Thomas S. Yang.
10.3**		Amendment No. 1 to Promissory Note and Deed of Trust, dated October 1, 2019, between JDONE LLC, Thomas S. Yang, and Gary C. Evans.
10.4		Stock Purchase Agreement,dated August 15, 2019, among Home Treasure Finders, Inc., HMTF Merger Sub Inc,, Energy Hunter Resources, Inc. (the “Company”), certain stockholders of the Company set forth therein, and Gary C. Evans
10.5		Amendment No. 1 to Stock Purchase Agreement,dated October 1, 2019, among Home Treasure Finders, Inc., HMTF Merger Sub Inc,, Energy Hunter Resources, Inc. (the “Company”), certain stockholders of the Company set forth therein, and Gary C. Evans.
10.6		Legacy Business Bill of Sale, Assignment and Assumption Agreement, dated December 20, 2019, between Generation Hemp. Inc.  and Corey Wiegand
10.7**		2019 Form of Common Stock Subscription Agreement of Energy Hunter Resources, Inc.
10.8**		Convertible Promissory Note, dated October 15, 2019, made by Home Treasure Finders, Inc. in favor of Energy Hunter Resources, Inc.
10.9**		Security Exchange Agreement, dated as of November 27, 2019, among Energy Hunter Resources, Inc., the former Series C Preferred Shareholders of Energy Hunter Resources, Inc., and Generation Hemp, Inc.
10.10**		2020 Form of Common Stock and Warrant Subscription Agreement of Generation Hemp, Inc.
10.11**		Subordinated Promissory Note, dated September 30, 2020, made by Generation Hemp, Inc. in favor of Gary C. Evans
10.12**		Asset Purchase Agreement, dated March 7, 2020, by and among, Generation Hemp, Inc., GENH Halcyon Acquisition, LLC, Oz Capital, LLC, OZC Agriculture KY LP, Halcyon Thruput, LLC, and the owners set forth therein.
10.13		Amendment No. 2 to Stock Purchase Agreement,dated October 1, 2019, among Home Treasure Finders, Inc., HMTF Merger Sub Inc,, Energy Hunter Resources, Inc. (the “Company”), certain stockholders of the Company set forth therein, and Gary C. Evans.

21**		List of Subsidiaries of the Company
31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302
32.1		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of The Sarbanes-Oxley Act of 2004

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*
101.INS		XBRL Instance Document
101SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

	**
101.DEF		XBRL Taxonomy Extension Definition Linkbase DocumentExhibit filed herewith

Reports on 8-K

No reports were filed on Form 8-K this fiscal year.

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SIGNATURES

In accordance with

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HOME TREASURE FINDERS GENERATION HEMP, INC. (Registrant)Registrant)
DATE:  March 31, 2017 �� December 15, 2020	By:	/s/ Corey Wiegand	Gary C. Evans
		Corey Wiegand President, CEO,  Sole Director and Chief Financial Officer	Gary C. Evans
			Chairman and Chief Executive Officer

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