UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.  20549

FORM 10-Q

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

For Quarter Ended: JuneSeptember 30, 2017
Commission File Number 000-55019

HOME TREASURE FINDERS, INC. AND SUBSIDIARY
(Exact name of registrant as specified in its charter)

COLORADO26-3119496
(State or other jurisdiction of(I.R.S. Employer Identification No.)
incorporation or organization) 
  
4316 Tennyson Street, Denver, Colorado
80212
(Address of principal executive offices)(Zip code)

(720) 273-2398
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ý Yes           o No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   ý Yes                      o No (Not required)

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

Large accelerated filer
 
Accelerated filer
Non-accelerated filer  
 
Smaller reporting company ý
(Do not check if smaller reporting company) 
Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes   ý No
 

As of AugustNovember 14, 2017 registrant had outstanding, 13,205,450 shares of common stock, no par value.

value of registrant were outstanding.

 

 

 


 

 
Index
 
 

 
Page
PART I  FINANCIAL INFORMATION
 
 
Item 1. Financial Statements for the period ended June30,September 30, 2017
 
          Consolidated Balance Sheets (Unaudited)
  3
          Consolidated Statements of Operations (Unaudited)
  4
          Consolidated Statements of Cash Flows (Unaudited)
5
          Notes to Unaudited Consolidated Financial Statements
  6
  
Item 2. Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations97
Item 3. Quantitative and Qualitative Disclosures About Market Risk10
Item 4. Controls and Procedures10
Item 4T. Controls and Procedures10
  
PART II  OTHER INFORMATION 
  
Item 1. Legal Proceedings11
Item 1A. Risk Factors11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds11
Item 3. Defaults Upon Senior Securities11
Item 4. Submission of Matters to a Vote of Security HoldersMine Safety11
Item 5. Other Information11
Item 6. Exhibits12
  
Signatures13
13 
 
 
 
 
 

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PART I  FINANCIAL INFORMATION
 
Item 1.  Financial Statements
 
HOME TREASURE FINDERS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
 
 
            
 June 30,  December 31,  September 30,  December 31, 
 2017  2016  2017  2016 
 (unaudited)     (unaudited)    
AssetsAssets    Assets    
            
Current Assets:            
Cash $38,830  $60,202  $37,385  $60,202 
Rent receivable  4,101   500   2,086   500 
Prepaid expenses  5,633   1,737   
2,816
   1,737 
Total current assets  48,564   62,439   42,287   62,439 
                
Property and equipment, net  808,549   820,203   803,053   820,203 
                
Other assets:                
Security deposits  1,400   1,400   
1,400
   
1,400
 
                
Total assets $858,513  $884,042  $846,740  $884,042 
                
Liabilities and Shareholders' Deficit     
Liabilities and Shareholders' Equity (Deficit)Liabilities and Shareholders' Equity (Deficit)     
                
Liabilities:                
Accounts payable $18,094  $18,336  $22,231  $18,336 
Accrued wages  28,612   28,612   
40,612
   
28,612
 
Accrued liabilities  50,968   56,672   54,024   56,672 
Accrued interest – related party  4,051   3,305   4,462   3,305 
Note payable, current portion  11,229   10,790   11,455   10,790 
Related party note payable  15,900   17,590   10,977   17,590 
Total current liabilities  128,854   135,305   143,761   135,305 
                
Long term debt, net of current portion  795,137   800,864   792,187   800,864 
Total liabilities  923,991   936,169   935,948   936,169 
                
Commitments and Contingencies        
Commitments and contingencies  -   - 
                
Shareholders' deficit:        
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   215,267   215,267 
Additional paid in capital  96,476   96,476   96,476   96,476 
Accumulated deficit  (377,221)  (363,870)  
(400,951
)  
(363,870
)
Total shareholder's deficit  (65,478)  (52,127)
Total shareholders' equity (deficit)
  
(89,208
)  
(52,127
)
                
Total liabilities and shareholders' deficit $858,513  $884,042 
Total liabilities and shareholders' equity (deficit) $846,740  $884,042 
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
 

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIESSUBSIDIARY
Condensed Consolidated Statements of Operations
(Unaudited)
 
 
 For the Three Months Ended  For the Six Months Ended  For the Three Months Ended  For the Nine Months Ended 
 June 30,  June 30,  September 30,  September 30, 
 2017  2016  2017  2016  2017  2016  2017  2016 
                        
Commission income $20,822  $72,492  $70,299  $120,518  $37,898  $44,535  $108,198  $165,053 
Rental and property and rental management income  66,072   60,025   126,911   116,930 
Property and rental management income  65,409   59,726   192,319   176,657 
Revenue $86,894  $132,517  $197,210  $237,448  $103,307  $104,261  $300,517  $341,710 
                                
Operating expenses:                                
Commission expense  1,898   42,919   6,464   47,722   29,353   4,448   35,817   52,170 
Professional fees  6,563   9,939   13,393   26,218   6,686   7,713   20,079   33,931 
General and Administrative  93,508   81,668   172,139   145,665   74,477   84,393   246,617   230,060 
Total operating expenses  101,969   134,526   191,996   219,605   110,516   96,554   302,513   316,161 
                                
Operating income (loss)  (15,075)  (2,009)  5,214   17,843   (7,209)  7,707   (1,996)  25,549 
                                
Other income (expense)                
Other income (expense):                
Gain on legal settlement  14,560   -   14,560   -   -   -   14,560   - 
Interest expense  (16,540)  (14,367)  (33,125)  (28,951)  (16,520)  (14,418)  (49,645)  (43,369)
                                
Total other income (expense)  (1,980)  (14,367)  (18,565)  (28,951)  (16,520)  (14,418)  (35,085)  (43,369)
                                
Net loss $(17,055) $(16,376) $(13,351) $(11,108)
Income (loss) before taxes  (23,729)  (6,711)  (37,081)  (17,820)
                
Income tax expense            
                
Net income (loss) $(23,729) $(6,711) $(37,081) $(17,820)
                                
Basic and diluted loss per share $(0.00) $(0.00) $(0.00) $(0.00) $(0.00) $(0.00) $(0.00) $(0.00)
                                
Basic and diluted weighted average                                
common shares outstanding  13,205,450   13,205,450   13,205,450   13,205,450   13,205,450   13,205,450   13,205,450   13,205,450 
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
 

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIESSUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 For the Six Months Ended  For the Nine Months Ended 
 June 30,  September 30, 
 2017  2016  2017  2016 
Cash flows from operating activities:            
Net loss $(13,351) $(11,108)
Adjustments to reconcile net loss to net cash        
Provided by (used in) operating activities:        
Net income (loss) $(37,081) $(17,820)
Adjustments to reconcile net loss to net cash provided by        
(used in) operating activities:        
Depreciation and amortization  11,654   11,871   17,150   17,874 
Changes in operating assets and liabilities:                
Increase in rent receivable  (3,601)     (1,586)  - 
Increase in prepaid expense  (3,896)  (4,739)  (1,079)  (2,023)
Increase in accrued interest  746   184 
(Decrease) increase in accrued liabilities  (5,704)  4,430 
(Decrease) increase in accounts payable  (242)  19,277 
Increase in accrued interest related party  1,157   309 
Increase in accrued liabilities  9,352   2,728 
Increase in accounts payable  3,895   16,900 
                
Net cash provided by (used in) operating activities  (14,394)  19,915   (8,192)  17,968 
                
Cash flows from investing activities:                
Purchase of fixed assets     (940)
        
Net cash (used in) investing activities     (940)
Cash paid for fixed assets  -   (940)
Net cash used in investing activities  -   (940)
                
Cash flows from financing activities:                
Proceeds from related party payable  2,310   1,258   2,387   3,145 
Payment of related party payable  (4,000)  (9,193)  (9,000)  (9,193)
Payment of long term debt  (5,288)  (6,848)  (8,012)  (10,363)
                
Net cash (used in) financing activities  (6,978)  (14,783)
Net cash provided by (used in) financing activities  (14,625)  (16,411)
                
Net change in cash  (21,372)  4,192   (22,817)  617 
                
Cash, beginning of period  60,202   45,210   60,202   45,210 
                
Cash, end of period $38,830  $49,402  $37,385  $45,827 
                
Supplemental disclosure of cash flow information:                
Cash paid during the period for:                
Income taxes $  $  $  $ 
Interest $32,379  $28,767  $48,488  $32,591 
        
NON CASH FINANCING ACTIVITIES:        
None       
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
 
 

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIESSUBSIDIARY

Notes to Unaudited Condensed Consolidated Financial Statements
 
 
 
Note 1:  Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2016 financial statements and notes thereto included. The results of operations for the period ended JuneSeptember 30, 2017, are not necessarily indicative of the operating results for the year ended December 31, 2017.


Note 2:  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 net income.  This factor,These factors, among others, indicates that there is substantial doubtmay indicate that the Company will be ableunable 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 3:  Related Party Transactions

During the sixnine months ended JuneSeptember 30, 2017, the related party payable had a net decrease of $1,690.$6,613.  The balance of the related party payable was $15,900$10,977 and $17,590 as of JuneSeptember 30, 2017 and December 31, 2016, respectively.  This payable is due on demand and has an interest rate of 8%.  Accrued interest on this payable was $4,051$4,462 and $3,305 at JuneSeptember 30, 2017 and December 31, 2016, respectively.  Interest expense for the sixnine months ended JuneSeptember 30, 2017 and 2016 was $746$1,157 and $184, respectively.  Interest expense for the three months ended JuneSeptember 30, 2017 and 2016 was $377$411 and $13,$125, respectively.
 
 
 
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HOME TREASURE FINDERS, INC. AND SUBSIDIARIESSUBSIDIARY

Notes to Unaudited Condensed Consolidated Financial Statements
 
 
Note 4:  Property and Equipment

The Company's capital assets consist of warehouse units, computer equipment, office furniture and leasehold improvements for the new office.  Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset, ranging from 18 months to 39 years.  Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred.  The cost and related accumulated depreciation 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 depreciation are as follows: 
  
September 30,
2017
  
December 31,
2016
 
Computer equipment $5,672  $5,672 
Furniture and fixtures  7,777   7,777 
Leasehold improvements  4,000   4,000 
Warehouse units  861,000   861,000 
Accumulated amortization and depreciation  (75,396)  (58,246)
     Total fixed assets $803,053  $820,203 

  
June 30,
2017
  
December 31,
2016
 
Computer equipment $5,672  $5,672 
Furniture and fixtures  7,777   7,777 
Leasehold improvements  4,000   4,000 
Warehouse units  861,000   861,000 
Accumulated amortization and depreciation  (69,900)  (58,246)
     Total fixed assets $808,549  $820,203 


Depreciation and amortization expense was $11,654$17,150 and $11,871$17,874 for the sixnine months ended JuneSeptember 30, 2017 and 2016, respectively. 

Depreciation and amortization expense was $5,685$5,496 and $5,935$6,003 for the three months ended JuneSeptember 30, 2017 and 2016, respectively.
 
 

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HOME TREASURE FINDERS, INC. AND SUBSIDIARIESSUBSIDIARY

Notes to Unaudited Condensed Consolidated Financial Statements
 
 
 
Note 5:  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 each of the three separate units to licensed third party growers for cannabis cultivation.  The terms of the variable interest 25 year amortization note carried by the seller of the property call for payments to seller as follows:

1First 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.

As of JuneSeptember 30, 2017, the balance of the note was $806,366$803,642 and the annual maturities of the long-term debt were:

 Year Ending December 31,   
 2017 $5,502 
 2018  11,090 
 2019  789,774 
      
   $806,366 
 Year Ending December 31,   
 2017 $2,778 
 2018  11,090 
 2019  789,774 
      
   $803,642 

 
Note 6:  Commitment and Contingencies

On March 28, 2017 an ongoing lawsuit regarding the warehouse owned by the Company was settled.  The Company received $23,092 to cover attorney fees paid over the course of the lawsuit.


Note 7:  Subsequent Events

The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no events that require disclosure as of the date of issuance.
 
 
 
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Part I. Item 2.  Management's Discussion and Analysis of Financial Conditions and Results of Operations

Forward-looking statements

The following discussion should be read in conjunction with the financial statements of Home Treasure Finders, Inc. and Subsidiaries (the "Company"), which are included elsewhere in this Form 10-Q. This Quarterly Report on Form 10-Q 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, 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 projected in the information. Forward-looking information may be included in this Quarterly Report on Form 10-Q or may be incorporated by reference from other documents filed with the Securities and Exchange Commission (the "SEC") by the Company. You can find many of these statements by looking for words including, for example, "believes", "expects", "anticipates", "estimates" or similar expressions in this Quarterly Report on Form 10-Q or in documents incorporated by reference in this Quarterly Report on Form 10-Q. 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.

Financial Condition and Results of Operation

Home Treasure Finders, Inc. was formed on July 28, 2008. The founder, sole director and officer of our company is Corey Wiegand. On March 3, 2014 we formed a wholly owned subsidiary, HMTF Cannabis Holdings, Inc. to purchase properties that qualify for legal cultivation of cannabis. 

Our net loss for the sixnine months ended JuneSeptember 30, 2017 was $13,351.$37,081.  We generated operating revenue from three sources, sales commissions, property management, and commercial real estate for legal cannabis cultivation. We manage approximately 97 rental real estate owned by non-related third parties. In comparison our net loss for the sixnine months ended JuneSeptember 30, 2016 was $11,108.$17,820.

For the sixnine months ended JuneSeptember 30, 2017 the Company generated a total of $197,210$300,517 in revenues, consisting of $70,299$108,198 from sales commissions and $126,911$192,319 from rental and property management.  During the sixnine months ended JuneSeptember 30, 2016 we generated a total of $237,448$341,710 in revenues, consisting of $120,518$165,053 from sales commissions and $116,931$176,657 from rental and property management.  Commission income decreased over prior year due to a decline in home sales.  The increase in rental and property management is the result of an increase in the number of rentals we manage.

During the sixnine months ending JuneSeptember 30, 2017 we incurred operating expenses totaling $191,996.$302,513. Such expenses consisted primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  During the sixnine months ended JuneSeptember 30, 2016 we incurred a total of $219,605$316,161 of operating expenses consisting primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  The decrease in expenses over prior year was primarily related to decrease in commission expense as a result of the decrease in sales commission.commission income.  Also, professional fees decreased over prior year due to decrease in audit and legal fees and the refund of legal fees with the settlement of the lawsuit.  The decrease in these expenses was offset some by an increase in other administrative expenses.
 
 
 
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Our net loss for the three months ended JuneSeptember 30, 2017 and 2016 was $17,055$23,729 and $13,351,$6,711, respectively.  For the three months ended JuneSeptember 30, 2017 the Company generated a total of $86,894$103,307 in revenues, consisting of $20,822$37,898 from sales commissions and $66,072$65,409 from rental and property management.  During the three months ended JuneSeptember 30, 2016 we generated a total of $132,517$104,261 in revenues, consisting of $72,492$44,535 from sales commissions and $60,025$59,726 from rental and property managementmanagement.

During the three months ending JuneSeptember 30, 2017 we incurred operating expenses totaling $101,969.$110,516. Such expenses consisted primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  During the three months ended JuneSeptember 30, 2016 we incurred a total of $134,526$96,554 of operating expenses consisting primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  The decreaseincrease in expenses over prior year was primarily related to decreasean increase in commission expense as a resultpaid in this quarter due to the timing of the decrease in sales commission.commission income received.  Also, professional fees decreased over prior year due to decrease in audit and legal fees and the refund of legal fees with the settlement of the lawsuit.fees.  The decrease in these expenses was offset some by an increase in other administrative expenses.


Liquidity and Capital Resources

At JuneSeptember 30, 2017, we had $38,830$37,385 in cash and working capital deficit of $80,290.$101,474.  At December 31, 2016 we had $60,202 in cash and a working capital deficit of $72,866.

The business plan of our subsidiary, HMTF Cannabis Holdings, Inc. is capital intensive and requires that we raise significant additional capital to acquire and improve real estate. We are negotiating with various sources for an equity infusion to match our long term capital needs.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

No response required.


Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our Chief Executive Officer has reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) within the end of the period covered by this Quarterly Report on Form 10-Q and has concluded that the disclosure controls and procedures are ineffective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no changes in our internal controls or in other factors that could materially affect these controls subsequent to the last day they were evaluated by our Chief Executive Officer, who is our principal executive officer and our principal financial officer.


Item 4T.  Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
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Part 2.    Other Information

Item 1 -  Legal Information.

No response required.


Item 1A.  Risk Factors

No response required.


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

None.


Item 3 -  Defaults Upon Senior Securities.

No response required.


Item 4 -  Mine Safety.

No response required.


Item 5 -  Other Information.

No response required.





 
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Item 6 - Exhibits and Reports on Form 8-K.

(a)       Exhibits:


 
Exhibit
Number
 
 
 
Description
   
31.1 
32.1 
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.DEFXBRL Taxonomy Extension Definition Linkbase Document


(b)   Reports on Form 8-K:

None.



 
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SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 HOME TREASURE FINDERS, INC. AND SUBSIDIARY
 (Registrant)
   
   
DATE:   AugustNovember 14, 20172014BY: /s/ Corey Wiegand
  Corey Wiegand
  President
 
 
 
 
 
 
 
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