Bingo Nation (BLTO) 10-Q 2017 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

  X.QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2016

Commission File Number: 333-175146

BINGO NATION INC.

(Exact name of registrant as specified in its charter)

Nevada	98-0492900
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

6440 Sky Pointe Drive, Suite 140/149

Las Vegas, NV 89131

(Address of principal executive offices)(Zip code)

888-648-0488

(Registrant’s telephone number, including area code)

311 Division Street

Carson City, NV 89703

Nexgen Applied Solutions Inc.

(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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X.No.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post files). Yes X.No.

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

Large accelerated filer. Accelerated filer. Non-accelerated filer. Smaller reporting company X.

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

Indicate the number of shares outstanding of the issuer’s classes of common stock, as of the latest practicable date:

27,633,027 common shares as of February 20, 2017

1

BINGO NATION INC.

(Formerly Nexgen Applied Solutions Inc.)

Condensed Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

Index

Condensed Consolidated Balance Sheets

3

Condensed Consolidated Statements of Operations

4

Condensed Consolidated Statements of Cash Flows

5

Notes to the Condensed Consolidated Financial Statements

6

2

BINGO NATION INC.

(Formerly Nexgen Applied Solutions Inc.)

Condensed Consolidated Balance Sheets

(Expressed in U.S. dollars)

	December 31 2016 $	March 31, 2016 $
	(unaudited)
ASSETS
Current assets
Cash	–	22
Prepaid expenses (Note 4)	16,595	287
Assets of discontinued operations (Note 3)	–	360
Total current assets	16,595	669
Non-current assets
Assets of discontinued operations (Note 3)	–	280,291
Total assets	16,595	280,960
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Bank indebtedness	7	–
Line of credit (Note 9)	36,500	–
Accounts payable and accrued liabilities (Note 6)	91,389	66,237
Convertible notes payable (Note 8)	469,370	436,512
Due to related party (Note 10)	300	180
Liabilities of discontinued operations (Note 3)	–	42,862
Total current liabilities	597,566	545,791
Non-current liabilities
Deferred vendor incentive	–	3,049
Liabilities of discontinued operations (Note 3)	–	85,752
Total non-current liabilities	–	88,801
Total liabilities	597,566	634,592
Nature of operations and continuance of business (Note 1)
Stockholders’ deficit
Preferred stock Authorized: 100,000,000 preferred shares, $0.001 par value 5,000,000 shares issued and outstanding	5,000	–
Common stock Authorized: 400,000,000 common shares, $0.001 par value 27,633,027 and 2,633,027 shares issued and outstanding, respectively	27,633	2,633
Additional paid-in capital	154,984,905	114,539,145
Deficit	(155,598,509)	(114,895,410)
Total stockholders’ deficit	(580,971)	(353,632)
Total liabilities and stockholders’ deficit	16,595	280,960

(The accompanying notes are an integral part of these condensed consolidated financial statements)

3

BINGO NATION INC.

(Formerly Nexgen Applied Solutions Inc.)

Condensed Consolidated Statements of Operations

(Expressed in U.S. dollars)

(Unaudited)

	Three Months	Three Months	Nine Months	Nine Months
	Ended	Ended	Ended	Ended
	December 31,	December 31,	December 31,	December 31,
	2016	2015	2016	2015
	$	$	$	$
Operating expenses
General and administrative	4,024	5,454	22,020	11,102
Professional fees	13,895	15,405	33,530	33,893
Total operating expenses	17,919	20,859	55,550	44,995
Net loss from operations	(17,919)	(20,859)	(55,550)	(44,995)
Other expenses
Impairment of intangible assets	–	–	(27,500,000)	–
Interest expense	(6,254)	(14,540)	(51,294)	(86,022)
Loss on increased valuation -Series A preferred stock	(12,942,902)	–	(12,942,902)	–
Loss on disposal of subsidiary (Note 3)	(144,423)	–	(144,423)	–
Total other expenses	(13,093,579)	(14,540)	(40,638,619)	(86,022)
Loss from continuing operations	(13,111,498)	(35,399)	(40,694,169)	(131,017)
Discontinued operations
Gain (loss) from discontinued operations (Note 3)	–	(61,613)	(8,930)	168,822
Net income (loss)	(13,111,498)	(97,012)	(40,703,099)	37,805
Earnings (loss) per share	(0.43)	(0.07)	(0.97)	0.03
Continuing operations	(0.43)	(0.03)	(0.97)	(0.09)
Discontinued operations	0.00	(0.04)	0.00	0.12
Weighted average shares outstanding	30,622,157	1,408,820	41,996,663	1,408,820

(The accompanying notes are an integral part of these condensed consolidated financial statements)

4

BINGO NATION INC.

(Formerly Nexgen Applied Solutions Inc.)

Condensed Consolidated Statements of Cash Flows

(Expressed in U.S. dollars)

(Unaudited)

	Nine Months	Nine Months
	Ended	Ended
	December 31,	December 31,
	2016	2015
	$	$
Operating activities
Net loss for the period	(40,694,169)	(131,017)
Adjustments to reconcile net income to net cash used in operating activities:
Impairment of intangible assets	27,500,000	–
Loss on increased valuation of Series A preferred stock	12,942,902	–
Non-cash interest expense	50,602	67,595
Changes in operating assets and liabilities:
Prepaid expenses	(16,595)	–
Line of credit	36,500	–
Accounts payable and accrued liabilities	4,647	43,552
Deferred vendor incentive	–	(858)
Net cash used in operating activities	(176,113)	(20,728)
Investing activities
Bank indebtedness	7	–
Cash balance removed on deconsolidation	(1,710)	–
Net cash used in investing activities	(1,703)	–
Financing activities
Repayments to related parties	120	(95)
Advances for convertible notes payable	32,858	67,595
Net cash provided by financing activities	32,978	67,500
Cash flow from discontinued operations
Net cash provided by (used in) operating activities	144,709	(50,292)
Net cash used in investing activities	–	(796)
Net cash provided by (used in) discontinued operations	144,709	(51,088)
Decrease in cash	(129)	(4,316)
Cash, beginning of period	129	4,469
Cash, end of period	–	153
Non-cash investing and financing activities:
Shares issued for acquisition of intangible assets	27,500,000	–
Supplemental disclosures:
Interest paid	1,502	5,595
Income taxes paid	–	–

(The accompanying notes are an integral part of these condensed consolidated financial statements)

5

1.

Nature of Operations and Continuance of Business

Viking Minerals Inc., (the “Company”), was incorporated in the State of Nevada on March 24, 2006 with 75,000,000 authorized common shares with a par value of $0.001 per share. In January 2011, the Company filed an amendment with the State of Nevada to increase the authorized shares to 400,000,000 common shares with a par value of $0.001 per share. On April 14, 2014, the Company changed its name to Indie Growers Association and completed a 1:200 reverse stock consolidation.

The Company was originally organized for the purpose of acquiring and developing mineral claims. On June 30, 2014, the Company acquired River Ridge Sunshine Farms LLC (“River Ridge”), a Washington State corporation, and in so doing, changed its business to that of real estate development for the purpose of leasing and agricultural buildings to licensed cannabis producers.

On April 4, 2016, the Company changed its name to Nexgen Applied Solutions Inc. and completed a 1:100 reverse stock consolidation. All share amounts in these interim condensed consolidated financial statements have been restated to reflect all stock consolidations.

On July 1, 2016, the Company changed its name to Bingo Nation Inc.

These interim condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2016, the Company has a working capital deficiency of $580,971 and accumulated losses of $155,598,509 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues. These interim condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.

Significant Accounting Policies

(a)

Basis of Presentation and Consolidation

The accompanying interim condensed consolidated financial statements of the Company should be read in conjunction with the financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission for the fiscal year ended March 31, 2016. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

These interim condense consolidated financial statements are expressed in U.S. dollars and include the accounts of the Company and those of its wholly-owned subsidiary, River Ridge. All intercompany balances and transactions are eliminated on consolidation.

(b)

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

(c)

Reclassifications

Certain of the prior period figures have been reclassified to conform to the current period’s presentation.

6

3.

Discontinued Operations

On October 31, 2016, the Company entered into a settlement agreement whereby the Company cancelled its lease agreement and transferred River Ridge to the owners of the property to settle the early termination of the lease without penalties. The agreement is effective September 30, 2016.

Accordingly, the operations of River Ridge have been treated as discontinued operations for the period ended December 31, 2016 and the comparative balances for 2015 have been reclassified.

The fair value of all consideration given up and charged to loss on disposal of subsidiary is comprised of the following:

	$
Fair value of identifiable assets and liabilities transferred to the owners of the property
Cash	1,710
Property, plant, and equipment	275,363
Accounts payable and accrued liabilities	(132,650)
Loss on disposal of subsidiary	144,423

Assets of discontinued operations

	December 31, 2016 $	March 31, 2016 $
Current assets of discontinued operations
Cash	–	107
Prepaid assets	–	253
		–
Total current assets of discontinued operations	–	360
Non-current assets of discontinued operations
Property, plant, and equipment, net of accumulated depreciation $14,601	–	280,291
Total non-current assets of discontinued operations	–	280,291
Total assets of discontinued operations	–	280,651

Liabilities of discontinued operations

	December 31, 2016 $	March 31, 2016 $
Current liabilities of discontinued operations
Accounts payable and accrued liabilities	–	42,862
Total current liabilities of discontinued operations	–	42,862
Non-current liabilities of discontinued operations
Due to related parties	–	85,752
Total liabilities of discontinued operations	–	128,614

7

3.

Discontinued Operations (continued)

Net income (loss) from discontinued operations

	Three months ended December 31, 2016 $	Three months ended December 31, 2015 $	Nine months ended December 31, 2016 $	Nine months ended December 31, 2015 $
Revenue
Rental income	–	156,000	118,650	416,000
Operating expenses
Bad debt expense	–	205,000	103,650	205,000
Depreciation	–	2,454	4,928	7,362
General and administrative	–	6,659	6,098	16,238
Land lease	–	3,000	6,000	9,000
Management fees	–	–	6,000	6,540
Professional fees	–	–	–	800
Repairs and maintenance	–	106	93	1,447
Interest expense	–	394	811	791
Total operating expenses	–	217,613	127,580	247,178
Net income (loss) from discontinued operations	–	(61,613)	(8,930)	168,822

4.

Prepaid expenses

As at December 31, 2016, the Company had prepaid professional fees of $16,595 (March 31, 2016 - $nil) to be deducted against future services.

5.

Intangible Assets

	Cost $	Accumulated amortization $	Impairment $	Net book value as at December 31, 2016 $	Net book value as at March 31, 2016 $
Intangible assets	27,500,000	–	(27,500,000)	–	–

On April 18, 2016, the Company acquired a business development contract, an exclusive software technology license to a bingo-themed Class II game recognized by the Indian Gaming Regulatory Act, and related television broadcast rights. Under the term of the agreement, the Company issued 50,000,000 restricted common shares of the Company. Refer to Note 11(a).

As at June 30, 2016, the Company had not put these assets into use and has not yet recorded any amortization. As at June 30, 2016, the Company reviewed the assets for indication of impairment. Due to the inability to estimate future cash flows, the intangible assets have been written-off.

6.

Accounts payable

	December 31, 2016 $	March 31, 2016 $
Trade accounts payable	91,389	66,237

8

7.

Deferred Vendor Incentive

In December 2013, the Company’s transfer agent paid off the outstanding balance of $5,717 owed to the former transfer agent which had been recorded as deferred vendor incentive. It is being amortized on a straight-line baseover the contract term of five yearsand offset against transfer agent fees in the statement of operations.

On May 16, 2016, the Company changed transfer agents. As a result of the early termination, the Company was required to pay back the original amount of the vendor incentive, which has been added to the termination fees charged by the outgoing transfer agent.

8.

Convertible Notes Payable

As of December 31, 2016, the Company had $469,370 (March 31, 2016 - $436,512) in convertible notes payable. The amounts are unsecured, bear interest at 5% per annum, are due on demand, and convertible at a price of $0.001 per share. The shares are not subject to forward or reverse stock splits unless the shares have been converted and issued prior to any such forward or reverse stock split. Therefore, if the balance outstanding was converted into common shares, the amount of stock to be issued would be 469,370,000 (March 31, 2016 – 436,512,000) common shares.

During the nine months ended December 31, 2016, the Company received $32,858 (March 31, 2016 - $107,258). The Company assessed the conversion option and determined that during the period the debenture had a beneficial conversion feature with intrinsic value in excess of the debt. Therefore, the Company fully amortized a conversion benefit of $32,858 (March 31, 2016 - $107,258) for the current period, which was recorded as interest expense.

During the nine months ended December 31, 2016, the Company issued nil (March 31, 2016 – 1,150,000) common shares for the settlement of $nil (March 31, 2015 - $115,000) of convertible notes payable. As at December 31, 2016, the Company has accrued $17,406 (March 31, 2016 - $41,784) in interest expense which has been recorded in accounts payable and accrued liabilities.

9.

Line of Credit

On October 1, 2016, the Company, entered into a credit line agreement with an unrelated party. The agreement covers a line of credit for the principal amount of up to $100,000 and matures on September 30, 2017. Interest rate shall accrue on the outstanding principal balance at an annual rate of 8%.

10.

Related Party Transactions

As at December 31, 2016, the Company owed $300 (March 31, 2016 - $180) to the Chief Executive Officer of the Company, which is unsecured, non-interest bearing, and due on demand.

11.

Share Capital

Authorized:

400,000,000 common shares with $0.001 par value

100,000,000 preferred shares with $0.001 par value

(a)

On April 18, 2016, the Company issued 50,000,000 common shares with a fair value of $27,500,000 based on the market price of the shares issued for the acquisition of various intangible assets. Refer to Note 5.

(b)

On October 11, 2016, the Company designated 25,000,000 preferred shares as Series A preferred shares. The holders of Series A preferred shares shall not be entitled to receive any dividends and the Series A preferred shares shall not be convertible into common shares and have no other conversion rights. Each holder of Series A preferred shares is entitled to cast 100 votes for every one Series A preferred shares held.

(c)

On October 11, 2016, the majority shareholder of the Company converted 25,000,000 common shares to 5,000,000 shares of Series A preferred shares. The addition of new shares triggered extinguishment accounting which requires the Company to fair value the new instrument and consider the incremental value of the fair value of the Series A preferred shares over the carrying value of the previously held common shares at the date of the conversion as a reduction of income available to common stockholders. The 5,000,000 Series A preferred shares were deemed to have a fair value of $12,967,902 based upon the converted valuation approach as the primary driver of value in the instrument, its common stock equivalency. Accordingly, the Company recorded a loss on increased valuation of Series A preferred shares of $12,942,902.

9

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

RESULTS OF OPERATIONS

Working Capital

	December 31, 2016 $	March 31, 2016 $
Current Assets	16,595	309
Current Assets – discontinued operations	Nil	360
Current Liabilities	597,266	502,749
Current Liabilities – discontinued operations	Nil	42,862
Working Capital (Deficit) – continuing operations	(580,671)	(502,440)
Working Capital (Deficit) – discontinued operations	Nil	(42,502)

Cash Flows

	December 31, 2016 $	December 31, 2015 $
Cash Flows used in Operating Activities	(176,113)	(20,728)
Cash Flows used in Investing Activities	(1,703)	Nil
Cash Flows provided by Financing Activities	32,978	67,500
Cash Flows provided by (used in) Discontinued Operations	144,709	(51,088)
Net Increase (Decrease) in Cash During Period	(129)	(4,316)

Operating Revenues

Continuing Operations

During the three months ended December 31, 2016 and 2015, the Company earned no revenues from continuing operations.

Discontinued Operations

During the three months ended December 31, 2016, the Company had a nil gain (loss) compared with a loss of $61,613 during the three months ended December 31, 2015 from discontinued operations. This is due to all discontinued operations having ceased during the three months ended December 31, 2016.

Operating Expenses and Net Loss

Operating Expenses

Continuing Operations

During the three months ended December 31, 2016, the Company incurred operating expenses of $17,919 compared with $20,859 during the three months ended December 31, 2015. The decrease is mainly due to lower general and administrative expenses as the Company had minimal cash flows for operating activities.

10

During the nine months ended December 31, 2016, the Company incurred operating expenses of $55,550 compared to $44,995during the nine months ended December 31, 2015. The increase in operating expenses was attributed to a $10,918 increase in general and administrative expenses while professional fees decreased by $363.

Discontinued Operations

During the three months ended December 31, 2016, the Company recorded a nil gain (loss) from discontinued operations compared to a $61,613 loss during the three months ended December 31, 2015. The decrease was due to the fact that the Company had completely ceased discontinued operations for the three months ending December 31, 2016.

During the nine months ended December 31, 2016, the Company recorded a loss of $8,930 compared to a gain of $168,822 during the nine months ended December 31, 2015. The decrease is due to the Company entering into an agreement whereby the Company cancelled its lease agreement and transferred River Ridge to the owners of the property to settle the early termination of the lease without penalties.

Net Income (Loss)

For the three months ended December 31, 2016, the Company had a net loss of $13,111,498 and basic and diluted net loss per share of $0.43. In addition to operating expenses, the Company also incurred $6,254 in interest expense for interest charges incurred on its convertible notes payable and beneficial conversion feature on new debt.For the three months ended December 31, 2015, the Company had a net loss of $97,012 and basic and diluted net loss per share of $0.07, comprised of a loss per share of $0.03 for continuing operations and loss per share of $0.4 for discontinued operations.

For the nine months ended December 31, 2016, the Company had a net loss of $40,703,099 and loss per share of $0.97 from continuing operations. In addition to the net loss from operations, the Company also recorded an impairment charge of $27,500,000 for the acquisition of intangible assets through the issuance of common shares, a loss on the conversion of common shares of $12,942,902, a loss on the disposal of subsidiary of $144,423 and $51,294 of interest and accretion expense for its convertible notes payable. For the nine months ended December 31, 2015, the Company incurred a net income of $37,805 or $0.03 per share, comprising of a loss of $0.09 per share for continuing operations and earnings of $0.12 per share for discontinued operations.

Liquidity and Capital Resources

Continuing and Discontinued Operations

At December 31, 2016, the Company had cash and total current assets of $16,595 compared with cash and total current assets of $669 at March 31, 2016.The increase in cash and total current assets is attributed to an increase in prepaid expenses for professional fees.

The overall working capital deficit increased from $544,942 at March 31, 2016 to $580,671 at December 31, 2016 due to increases in both accounts payable and accrued liabilities and convertible notes payable.

Cash flow from Operating Activities

During the nine months ended December 31, 2016, the Company used $176,113 compared to $20,728 during the nine months ended December 31, 2015. The decrease in cash is due to the fact that the Company did not have any cash inflows from continuing operations and were fully supported by cash received from financing activities which decreased during the current year.

Cash flow from Investing Activities

During the nine months ended December 31, 2016 the Company decreased net cash used in investing activities by $1,703 due to a cash balance being removed on deconsolidation and during the nine months ended December 31, 2015, the Company had no investing activities from continuing operations.

Cash flow from Financing Activities

During the nine months ended December 31, 2016, the Company received $32,978 of cash for financing activities, compared with $67,500 received during the nine months ended December 31, 2015. The decrease in cash received for financing activities relates to a decrease in proceeds received from convertible notes payable.

11

Cash flow from Discontinued Operations

During the nine months ended December 31, 2016, the Company received cash of $144,709 from discontinued operations from operating activities compared to the use of $51,088 during the nine months ended December 31, 2015 which was comprised of $50,292 for operating activities and $796 for financing activities. The Company’s former subsidiary received funding from cash generated by rental income as well as funding supporting from the Company on an as-needed basis.

Convertible Notes Payable

As of December 31, 2016, the Company had recorded $469,370 (March 31, 2016 - $436,512) in convertible notes payable. The amounts are unsecured; bear interest at 5% per annum, due on demand, and convertible at a price of $0.001 per share. The shares are not subject to forward or reverse stock splits unless the shares have been converted and issued prior to any such forward or reverse stock split. Therefore, if the balance outstanding was converted into common shares, the amount of stock to be issued would be 469,370,000 (March 31, 2016 – 436,512,000) common shares.

During the nine month period ended December 31, 2016, the Company received $32,858 (March 31, 2016 - $107,258). The Company assessed the conversion option and determined that during the period the debenture had a beneficial conversion feature with intrinsic value in excess of the debt. Therefore, the Company fully amortized a conversion benefit of $32,858 (March 31, 2016 - $107,258) for the current period which was recorded as interest expense.

During the nine month period ended December 31, 2016, the Company issued nil (March 31, 2016 – 1,150,000) common shares for the settlement of $nil (March 31, 2015 - $115,000) of convertible notes payable. As at December 31, 2016, the Company has accrued $17,406 (March 31, 2016 - $41,784) in interest expense which has been recorded in accounts payable and accrued liabilities.

Critical Accounting Policies and Estimates

We prepared our financial statements and the accompanying notes in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions about future events that affect the reported amounts in the financial statements and the accompanying notes. We identified certain accounting policies as critical based on, among other things, their impact on the portrayal of our financial condition, results of operations, or liquidity and the degree of difficulty, subjectivity, and complexity in their deployment. Critical accounting policies cover accounting matters that are inherently uncertain because the future resolution of such matters is unknown. Management routinely discusses the development, selection, and disclosure of each of the critical accounting policies. The following is a discussion of our most critical accounting policies:

Basis of Presentation and Consolidation

The accompanying interim condensed consolidated financial statements of the Company should be read in conjunction with the financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission for the fiscal year ended March 31, 2016. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

These interim condense consolidated financial statements are expressed in U.S. dollars and include the accounts of the Company and those of its wholly-owned subsidiary, River Ridge. All intercompany balances and transactions are eliminated on consolidation

Use of Estimates

The preparation of these interim condensed consolidated financial statements are in accordance with accounting principles generally accepted in the United States and requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from these estimates. The results of operations and cash flows for the period shown are not necessarily indicative of the results to be expected for the full year.

12

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

None.

Item4. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC rules and forms, and that such information is accumulated and communicated to management, as appropriate, to allow timely decisions regarding required disclosures. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives.

Our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based upon this evaluation, our management concluded that our disclosure controls and procedures were not effective as of December 31, 2016, because of the identification of a material weakness in our internal control over financial reporting which is described below. We intend to continue to review and document our disclosure controls and procedures, including our internal controls over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. GAAP.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and our receipts and expenditures are being made only in accordance with authorizations of our management; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in their Internal Control-Integrated Framework. Based on this evaluation, our management concluded that that our internal control over financial reporting was not effective as of December 31, 2016.

Our CEO concluded we have a material weakness due to: (i) lack of a functioning audit committee; (ii) lack of outside directors on our board of directors; (iii) ineffective oversight in the establishment and monitoring of required internal controls and procedures; (iv) inadequate segregation of duties because of lack of staff; and (v) ineffective controls over period end financial disclosure and reporting processes. A material weakness is a deficiency, or a combination of control 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.

While we would like to segregate duties as much as practicable, there are insufficient resources at this point in time to justify accounting staff. We believe that this is typical in many start-up companies. We may not be able to fully remediate our material weaknesses until we increase our operations at which time we would expect to hire more staff and consider increasing the number of directors on our board. We will continue to monitor and assess the costs and benefits of additional staffing.

Notwithstanding the identified material weaknesses, our management believes these consolidated financial statements fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

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Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls and Procedures

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On February 29, 2016, the Company reported that it had entered into a share exchange agreement to acquire 100% of the outstanding shares of Teascom UK Limited (“Teascom”). The acquisition was expected to close on April 15, 2016. On April 7, 2016, Secure Channels Inc. (the “Plaintiff”) filed a complaint in the Superior Court of California alleging that Teascom was in breach of a contract over the Plaintiff’s planned use of the intellectual property owned by Teascom. A hearing on this matter was held on April 11, 2016. The court dismissed the lawsuit but granted leave for the Plaintiff to amend their complaint and re-file. With the uncertainty surrounding the lawsuit, the Company and Teascom mutually agreed to terminate the share exchange agreement effective April 13, 2016.

Even with the termination of the share exchange agreement, the Plaintiff amended and refiled the lawsuit on April 23, 2016, specifically alleging that the Company and Robert Coleridge conspired with Teascom to breach the Plaintiff’s contract with Teascom. The matter was heard on July 11, 2016 before the Orange County Superior Court of California which granted the Company’s motion to quash. We consider this matter now closed.

We are not aware of any other pending or threatened legal actions to which we are a party or of which our property is the subject that would, if determined adversely to us, have a material adverse effect on our business and operations.

We have from time to time been involved in disputes and proceedings arising in the ordinary course of business. In addition, as a public company, we are also potentially susceptible to litigation, such as claims asserting violations of securities laws. Any such claims, with or without merit, if not resolved, could be time-consuming and result in costly litigation. There can be no assurance that an adverse result in any future proceeding would not have a potentially material adverse effect on our business, results of operations or financial condition.

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

None.

Item 3. Defaults Upon Senior Securities

N/A

Item 4. Mine Safety Procedures

N/A

Item 5. Other Information

N/A

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Item 6. Exhibits

Exhibit Number	Description
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Form 10-K/A filed September 2, 2016)
3.2	Bylaws (incorporated by reference to Form SB-1 filed December 19, 2006)
10.1	Share Exchange Agreement dated June 30, 2014 between Ricardo Esparza and Indie Growers Association (incorporated by reference to Form 8-K filed July 2, 2014)
10.2	Lease Agreement dated May 1, 2015 between Ricardo Esparza, Lismar Properties LLC and River Ridge Sunshine Farms LLC (incorporated by reference to Form 10-K/A filed November 16, 2015)
10.3	Sublease Agreement dated May 1, 2015 between River Ridge Sunshine Farms LLC and Fourdub LLC with Addendum (incorporated by reference to Form 10-K/A filed November 16, 2015)
10.4	Addendum No 2. to Sublease Agreement dated May 1, 2016 (incorporated by reference to Form 10-K filed August 25, 2016)
21.1	Subsidiaries of the Registrant (incorporated by reference to Form 10-K filed August 25, 2016)
31	Sec. 302 Certification of Chief Executive Officer and Chief Financial Officer (filed herewith)
32	Sec. 906 Certification of Chief Executive Officer and Chief Financial Officer (filed herewith)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BINGO NATION INC.
Date: February 20, 2017		/s/ Robert Coleridge
		Robert Coleridge Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Director

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