Latitude 360 10Q/A 2014 Q3 Quarterly report (amended)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

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

For the quarterly period ended September 30, 2014

[ ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from ___________ to ____________.

Commission File Number 333-138111

Latitude 360, Inc.

(Exact name of small business issuer as specified in its charter)

Nevada		20-5587756
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

6022 San Jose Blvd., Jacksonville, FL 32217

(Address of principal executive offices)

(904) 730-0011

(Issuer's telephone number)

N/A

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

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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:. Yes [ ] No [ X ].

Indicate by check mark whether the registrant has submitted electronically and posted on its website, if any, every Interactive File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS325.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files), Yes [ ] No [X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated 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 a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act: Yes [ ] No [ X ].

As of November 19, 2014, there were 127,078,783 shares of Common Stock of the issuer outstanding.

Explanatory Note

The Company is amending is quarterly report on Form 10-Q for the period ended September 30, 2014 to include accompanying footnotes to the previously filed financial statements and to include management’s discussion and analysis. The financial statements included herein have been revised to coordinate with the accompanying footnotes.

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

Latitude 360, Inc
(Formerly Kingdom Konkrete, inc)
Unaudited Condensed Consolidated Balance Sheet

	September 30,			December 31,
ASSETS	2014			2013
Current assets:
Cash	$	84,861		$	10,199
Accounts receivable		82,084			—
Other receivables		2,045,196			—
Inventories		220,540			500
Total current assets		2,432,681			10,699

Property and equipment, net		46,268,467			10,127
Idle Property nd equipment - net		2,013,696			—
Other assets		586,951			—
Total long-term assets		48,869,114			10,127

Total assets	$	51,301,795		$	20,826


LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable	$	4,910,916		$	3,609
Accounts payable - Construction related		7,878,634			—
Accrued expenses		5,417,124			459
Deferred rent		19,700			—
Interest payable		2,923,089			—
Obligations under capital leases		—			61,648
Due to related parties		177,798			6,041
Short-term notes payable		22,143,491			—
Total current liabilities		43,470,752			71,757

Deferred rent		243,360			—
Obligations under capital leases		22,984,756			—
Dividends payable		42,003			—
Total long-term liabilties		23,270,119			—

Total liabilities		66,740,871			71,757

Stockholders' equity:
Series A Preferred Stock		—			—
Common Stock, par value $.001 authorized 500,000,000 shares. Issued 127,247,775 shares at September 30, 2014 and 5,721,900 shares at December 31, 2013.		102,976			5,722
Additional paid-in capital		116,689,287			275,082
Accumulated deficit		(132,231,339	)		(331,735	)
Total stockholders' equity		(15,439,076	)		(50,931	)

Total liabilities and stockholders' equity	$	51,301,795		$	20,826

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

Latitude 360, Inc
(Formerly Kingdom Konkrete, inc)
Unaudited Condensed Consolidated Statements of Operations

	9 Months ended						3 Months Ended
	September 30,			September 30,			September 30,			September 30,
	2014			2013			2014			2013

Net Sales	$	5,171,484		$	101,695		$	3,734,159		$	35,832

Cost and Expenses:
Cost of Sales		1,146,098			48,543			819,403			17,202
Compensation expenses		2,564,296			—			1,857,249			—
Occupancy and relates costs		711,143			—			964,079			—
Professional fees		1,101,087			—			806,920			—
Depreciation and Amortization		2,143,699			3,480			1,073,147			1,160
Selling, general and administrative expenses		4,080,368			70,672			2,377,235			25,386
Total operating expenses	$	11,746,690		$	122,695		$	7,898,033		$	43,748

Loss from operations		(6,575,206	)		(21,000	)		(4,163,874	)		(7,916	)

Other (expenses)
Interest expense		940,530			—			467,759			—
Loss on modification of indebtedness		4,906,470			—			4,906,470			—
Loss on disposition of assets		(2,141	)		—			—
Net loss from continued operations	$	(12,424,347	)	$	(21,000	)	$	(9,538,103	)	$	(7,916	)

Discontinued Operations
Loss from discontinued operations		(72,031	)		—			(2,321	)		—

Net Loss	$	(12,352,317	)	$	(21,000	)	$	(9,535,782	)	$	(7,916	)


Basic and diluted loss per share
Continuing operations		(0.099	)		(0.004	)		(0.098	)		(0.001	)
Discontinued operations		(0.001	)		—			(0.0000	)		—
Total basic and diluted loss per share	$	(0.100	)	$	(0.004	)	$	(0.098	)	$	(0.001	)

Weighted average shares outstanding		125,491,477			5,721,900.00			97,726,702			5,721,900.00

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

Latitude 360, Inc.
(Formerly Kingdom Konkrete, inc)	For the			For the
Unaudited Condensed Consolidated Statements of Cash Flows	Nine months			Nine months
	ended			ended
	September 30,			September
	2014			2013
Net Loss	$	(12,352,317	)	$	(21,000	)
Adjustments to reconcile net loss to net cash used in Operating activities -
Operating activities of discontinued operations		72,031			—
Net loss from operations		(12,280,286	)		(21,000	)

Depreciation and amortization expense		2,143,699			3,480
Loss on modification of debt		4,906,470			—
Gain on disposition of assets		(2,141	)		—
(Increase) decrease in assets:
(Increase) decrease in accounts Receivable		(2,127,280	)		—
(Increase) decrease in inventories		(218,540	)		787
(Increase) decrease in other assets		(586,951	)		1,150
(Increase) decrease in liabilities:
Increase in accounts Payable		12,789,550			2,446
Increase in accrued Expenses		5,456,261			818
Increase in interest Payable		2,923,089			—
Increase in obligations under capital leases		22,984,756			—
(Decrease) increase in deferred rent		263,060			—
Net cash (used in) provided by operating activities		36,251,687			(12,319	)

Cash flows from investing activities
Cost of Merger		(8,011,147	)		—
Purchase of Property and equipment		(50,415,914	)		—
Net cash used in investing activities		(58,427,061	)		—

Cash flows from financing activities -
Restricted cash reclassification		—			—
Proceeds from construction loans		—			—
Proceeds from issuance of convetible and other debt		22,143,491			—
Principal reduction in convertible and other debt		—			(14,656	)
Principal reduction in obligations under capital leases		—			—
Proceeds from related party advances		—			18,853
Repayments on related party advances		110,424			—
Net cash provide by financing activities		22,253,915			4,197

Net (decrease) increase in cash		78,541			(8,122	)

Beginning balance - cash		6,320			22,160

Ending balance - cash	$	84,861		$	14,038

Suplplemental Information

Interest expense paid		16,964			—
Income taxes paid		—			—

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

1. DESCRIPTION OF BUSINESS

Nature of Business

Kingdom Koncrete, Inc. (the “Company”) operates a ‘carry and go’ concrete business. The Company is located in Rockwall, Texas and was incorporated on August 22, 2006 under the laws of the State of Nevada.

On August 22, 2006, Kingdom Koncrete, Inc. ("Koncrete Nevada"), a private holding company established under the laws of Nevada, was formed in order to acquire 100% of the outstanding common stock of Kingdom Texas. On June 30, 2006, Koncrete Nevada issued 5,000,000 shares of common stock in exchange for a 100% equity interest in Kingdom Texas. As a result of the share exchange, Kingdom Texas became the wholly owned subsidiary of Koncrete Nevada. As a result, the shareholders of Kingdom Texas owned a majority of the voting stock of Koncrete Nevada. The transaction was regarded as a reverse merger whereby Kingdom Texas was considered to be the accounting acquirer as its shareholders retained control of Koncrete Nevada after the exchange, although Koncrete Nevada is the legal parent company. The share exchange was treated as a recapitalization of Koncrete Nevada. As such, Kingdom Texas (and its historical financial statements) is the continuing entity for financial reporting purposes. The financial statements have been prepared as if Koncrete Nevada had always been the reporting company and, on the share exchange date, changed its name and reorganized its capital stock.

On May 30, 2014 the Company completed its acquisition of Latitude 360, Inc., a Florida corporation (“L360”), pursuant to the Agreement and Plan of Merger (as amended, the “Merger Agreement”) dated April 8, 2014, among the Company, Latitude Global Acquisition Corp., a Florida corporation and a wholly-owned subsidiary of the Company (the “Merger Sub”), and L360. Pursuant to the Merger Agreement, on May 30, 2014, Merger Sub merged with and into L360, and L360 became a wholly-owned subsidiary of the Company (the “Merger”).

At the effective date of the Merger, the Company issued an aggregate of 114,070,828 shares of the Company’s common stock (the “Merger Shares”) to the shareholders of L360 as consideration for the 68,278,434 common shares of L360. The Merger Shares represent approximately 98.9% of the total number of outstanding shares of the Company’s common stock.

Unaudited Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable Securities and Exchange Commission (“SEC”) regulations for interim financial information. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) necessary to present fairly the balance sheets, statements of operations and statements of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to SEC rules and regulations. It is presumed that users of this interim financial information have read or have access to the audited financial statements and footnote disclosure for the preceding fiscal year contained in the Company’s Annual Report on Form 10-K. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

2. MANAGEMENT’S PLANS REGARDING FUTURE OPERATIONS AND LIQUIDITY

The Company has incurred significant losses from operations since its inception, and has an accumulated deficit of $132,231,339 at September 30, 2014. The Company’s ability to continue its operations and to pay its obligations when they become due is contingent upon obtaining additional financing and generating positive cash flows from its operations. Management’s plans include the procurement of additional funds through the issuance of debt and/or equity instruments and the increase in operating cash flows from revenues generated as part of various new venues that are expected to begin operations in 2015.

Subsequent to the balance sheet date and through November 19, 2014, the Company received cash funding of approximately $363,000 through the issuance of short term notes. As of November 19, 2014, the Company has approximately $16 million in notes payable which are due periodically through calendar year 2014 and 2015.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue its operating activities. As of September 30 2014, the Company believes that the actions presently being taken to implement its strategic plans provide the opportunity for the Company to continue its operating activities.

The accompanying consolidated financial statements have been prepared assuming that the company will continue as a going concern and it does not include any adjustments that might result from the outcome of this uncertainty.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation, Reorganization, and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Latitude 360 and its wholly owned subsidiaries including:

Latitude 30 Group LLC (“Lat 30”) - formed in Florida on January 2, 2009,

Latitude 39 Group LLC (“Lat 39”) - formed in Florida on December 14, 2010

Latitude 40 Group LLC (“Lat 40”) - formed in Florida on February 2, 2011

Latitude 42 Group LLC (“Lat 42”) - formed in Florida on December 30, 2011

All significant intercompany accounts and transactions have been eliminated.

Business Segment

The Company operates two business segment which are comprised of the Company’s concrete business and its restaurant and entertainment business.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents. At September 30, 2014 the Company had no cash equivalents.

Inventories

Inventories primarily consist of food, beverages and game redemption items. Inventories are accounted for at lower of cost or market using the average cost method. Spoilage is expensed as incurred. Finished goods as of September 30, 2014 totaled $220,540.

Property and Equipment

Property and equipment is recorded at cost and is depreciated over the assets' estimated useful lives using the straight-line method. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful life of the asset or the term of the related lease. The estimated lives for equipment, furniture and fixtures, and computers range from three to ten years. The estimated life for leasehold improvements is twenty years. The cost of repairs and maintenance are expensed when incurred, while expenditures for major betterments and additions are capitalized. Gains and or losses are recognized on disposals or sales.

Long-Lived Assets

The Company reviews long-lived assets and certain identifiable intangibles subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There was no impairment losses recognized during the nine months ended September 30, 2014 and 2013.

Revenue Recognition

Revenues from the operation of the facilities are recognized when sales occur. The revenue from electronic gift cards is deferred when purchased by the customer and revenue is recognized when the gift cards are redeemed. This amount was not significant as of and for the periods presented.

Issuances Involving Non-cash Consideration

All issuances of the Company’s stock for non-cash consideration have been assigned a dollar amount equaling the market value of the shares issued on the date the shares were issued for such services and property. The non-cash consideration paid pertains to additional consideration issued in the issuance of convertible debt, payment on accrued interest, employee compensation and consulting services.

Stock Based Compensation

The Company accounts for stock-based compensation under ASC Topic 505-50, formerly Statement of Financial Accounting Standards (“SFAS”) No. 123R, "Share-Based Payment” and SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - An amendment to SFAS No. 123.” These standards define a fair-value-based method of accounting for stock-based compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period

Loss per Share of Common Stock

The Company reports earnings (loss) per share in accordance with Accounting Standards Codification “ASC” Topic 260-10,"Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of debt to purchase common shares would have an anti-dilutive effect. Potential common shares as of September 30, 2014 that have been excluded from the computation of diluted net loss per share consist of $12,309,678 of convertible debt convertible into 8,732,753 of common shares, 4,860,734 common stock options and 33,122,422 common stock warrants.

Advertising Costs

Advertising costs are expensed as incurred. Sponsorship costs are capitalized and amortized to expense over the sponsorship periods. Advertising costs as of September 30, 2014 and 2013 were approximately $130,000 and $2,000, respectively.

Operating Leases

The Company accounts for rent expense for its operating leases on the straight-line basis in accordance with ASC Topic 840, "Leases" (formerly SFAS No. 13, "Accounting for Leases"). The Company leases land and buildings that have terms expiring between 10 and 20 years. The term of the leases do not include unexercised option periods. One premise has renewal clauses of up to 15 years, exercisable at the option of the Company. The Company does not have enough history to include renewal options in its deferred rent calculation.

Most lease agreements contain one or more of the following: tenant improvement allowances, rent holidays, rent escalation clauses and/or contingent rent provisions. The Company includes scheduled rent escalation clauses for the purpose of recognizing straight-line rent. Certain of these leases require the payment of contingent rentals based on a percentage of gross revenues, as defined, and certain other rent escalation clauses are based on the Consumer Price Index.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash.

The Company maintains cash balances at several banks. Accounts at each institution are insured by the Federal Deposit Insurance Corporation ("FDIC"). Interest bearing accounts are insured up to $250,000 and non-interest bearing accounts have no limitation. From time to time, the Company may have cash in financial institutions in excess of federally insured limits. As of September 30, 2014, the Company did not have cash in excess of FDIC limits.

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following

	September 30, 2014			Estimated Useful Lives


Audio/visual	$	6,092,592			10
Computers & software		1,087,087			3
Equipment		1,414,661			5-10
Vehicles		115,850			5
Furniture		1,167,734			10
Gaming equipment		5,736,702			5
Leasehold improvements		19,514,494			20
Property held under capital lease		20,588,190			5-20
		55,717,310
Less: accumulated depreciation and amortization		(9,448,843	)

Sub Total		46,268,467

Idle Equipment		2,013,696

Property and equipment, net	$	48,282,163

Depreciation and amortization expense for the three months ended September 30, 2014 and 2013 was $1,073,147 and $1,160, respectively. Depreciation and amortization expense for the nine months ended September 30, 2014 and 2013 was $2,143,699 and $3,480, respectively.

5. NOTES AND LOANS PAYABLES

The balance of convertible notes at September 30, 2014:

	September 30, 2014
Principal balance	$	12,743,028
Accrued interest		2,923,089
		15,666,117
Less discounts		(1,048,643	)
		14,617,474

Other Debt

Notes issued to private investors at interest rates ranging from 10% to 12%.		1,574,620

Short term advances provided by private, non-institutional third parties with no specific interest or repayment terms. These notes are used for short term working capital needs and are intended to be repaid within one year. The Company is delinquent on certain payments due on these obligations.		485,359

Short term advances provided by officer and directors with no specific interest or repayment terms. These notes are used for short term working capital needs and are intended to be repaid within one year. The Company is delinquent on certain payments due on these obligations.		1,813,806

Secured note used for equipment acquisition and accrues interests at 9% per annum. The Company is delinquent on payments due on these obligations		541,748

Secured note used for equipment acquisition and accrues interests at 10.5% per annum. The Company is delinquent on certain payments due on these obligations		3,693,577

Secured note used for construction and accrues interests at 18% per annum. The Company is delinquent on certain payments due on these obligations		2,339,995

Secured note used for vehicle acquisition and accrues interests at 18% per annum. Renegotiated and paid off in 2014		96,944
Total	$	25,163,523
Accrued interest		(2,923,089	)

Total Short Term Notes Payables	$	22,240,434

Of the $12,743,028 convertible debt due, $3.830.000 was due to related parties.

6. OBLIGATIONS UNDER CAPITAL LEASES

In February 2012, the Company purchased two buildings that housed venues in Jacksonville, Florida and Indianapolis, Indiana, for a total cost of $9,200,035. Simultaneous with the purchases, the Company entered into a sales/leaseback of the two buildings with an unrelated third party. Under the terms of the agreement relating to the sales/leaseback, the Company received a total of $21,000,000, of which $9,200,035 was used to fund the purchase of the two buildings; $811,398 was used to pay commission, legal fees, and other costs associated with the transaction; $7,250,000 was placed in reserve to fund the construction of the two venues; $1,525,716 was used to pay vendors; and $2,212,851 was received in cash and used as working capital.

The Company accounted for lease of these two properties as capital leases. The initial terms of each lease is 20 years, with options to extend the lease for four successive terms of five years each. In addition the Company leases copiers and other office equipment that are accounted for as capital leases. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets are depreciated over the lower of their related lease terms or their estimated productive lives. Depreciation of assets under capital leases is included in depreciation expense for 2014 and 2013.

Following is a summary of property held under capital leases:

	September 30, 2014

Buildings	$	18,937,348
Equipment		81,218
		19,018,566
Less accumulated depreciation		(1,670,258	)
	$	17,348,308

Depreciation on assets under capital leases charged to expense in 2014 and 2013 was $715,825 and $0, respectively.

Minimum future lease payments under the capital lease at September 30, 2014 for each of the next five years and in the aggregate are as follows:

2014	$	4,498,014
2015		2,309,051
2016		2,306,583
2017		2,488,653
2018		2,525,250
Thereafter		37,145,734
Total		51,273,285
Less accrued interest		(28,288,529	)
Present value of net minimum	$	22,984,756

7. RELATED PARTY TRANSACTIONS

In 2014, Management through various entities controlled by them advanced the Company a total of $6,333,200 of which $4,045,000 was received in consideration for the issuance of convertible notes. The notes are convertible into the Company’s common stock at various conversion prices and are assessed interest at an annual rate of 12% with maturity dates of less than one year. During 2014, Convertible notes totaling $505,000 was converted into 565,311 shares of the Company’s common stock. The balance of the related party convertible debt is included in short term notes payable on the balance sheet and as discussed in Note 5 above. The remaining $2,288,200 received is non-interest bearing and due on demand of which $758,000 was repaid during 2014.

As of September 30, 2014 the Company owes $1,600,000 to a director as compensation. The amount is included in the accrued expenses in the balance sheet.

8. SEGMENT REPORTING

The Company’s operations are classified into two reportable segments including its concrete operations and its restaurant and entertainment operations

For the three months ended September 30, 2014

		Revenues		Segment Operating losses		Depreciation and amortization

Concrete segment	$	111,549	$	8,661	$	3,480
Restaurant and Entertainment segment	$	3,734,159	$	4,163,874	$	1,073,147
Total	$	3,845,708	$	4,172,535	$	1,076,627

9. COMMITMENTS AND CONTINGENCIES

Operating leases

The Company leases land and buildings under operating leases that have terms expiring between 10 and 20 years. The term of the lease is considered its initial obligation period, which does not include unexercised option periods. Each lease has three or four available renewal clauses of five years each, exercisable at the option of the Company. Certain leases require the payment of contingent rentals based on percentage of gross revenue. Certain leases may also include rent escalation clauses based on a fixed rate or adjustable terms such as the Consumer Price Index.

Minimum future lease payments under the operating lease obligations at September 30, 2014 for each of the next five years and in the aggregate are as follows:

2015	$ 990,750
2016	528,778
2017	808,692
2018	808,692
2019	808,692
Thereafter	1,213,038

Total	$ 5,158,642

Rent expense for the three and nine months ended September 30, 2014 and 2013 was $368,260, and $924,805, respectively.

Litigation

In the ordinary course of conducting its business, the Company is exposed to litigation risks from time to time that can have significant adverse effects upon our financial and operating condition, which in turn could have a material adverse effect on our ability to continue as a going concern.

At any given time there may be numerous civil actions initiated against the Company and/or its subsidiaries. Currently there are five civil actions pending against the Company’s subsidiary in which, in each case, the plaintiff(s) seek damages in excess of $500,000. The aggregate amount sought in these cases exceeds $5 million. With respect to most of these actions, the parties are either engaged in settlement discussions or have already executed a settlement agreement. If the parties do not succeed in settling this matter, then the Company is intent on defending the action.

On December 12, 2012, The Estate of Jerome H. Dinner commenced an action entitled Larry Grossing, Personal Representative of the Estate of Jerome H. Dinner v. The Brownstone Group, LLC and Latitude 30 Group, LLC, case no. 2012-CA-013255, Duval County Circuit Court, Florida. The lawsuit alleges that the Brownstone Group, LLC and Latitude 30 Group, LLC, on June 25, 2010, executed a promissory note in the principal amount of $879,807.54 and that the note was not paid on the maturity date of December 31, 2010. The suit seeks money damages in the amount of $879,807.54 plus interest and attorneys’ fees. Latitude 30 Group, LLC intends to vigorously defend the action on the ground that most of plaintiff’s funds were provided by plaintiff’s attorney in fact to an escrow agent who converted the monies and failed to make restitution to the plaintiff. Latitude 30 Group, LLC has repaid the plaintiff all of the funds the escrow agent disbursed to Latitude 30 Group, LLC, and Latitude 30 Group, LLC asserts that it is not liable to repay the other funds that were converted by the escrow agent in the approximate amount of $775,000. There can be no assurance given that Latitude 30 Group, LLC will prevail in this litigation and in the event that Brownstone Group, LLC and Latitude 30 Group, LLC are found liable in such litigation it would have a material adverse effect on the financial condition of the Company. In addition, there can be no assurance that if such event should occur, that Latitude 30 Group, LLC will be able to look to Brownstone Group, LLC to contribute a pro rata amount to the payment of any judgment. The Security Exchange Commission (SEC) brought suit against the parties responsible for the conversion of escrow funds. The company expects a restitution check in the amount of approximately $155,000 in the next 90 days from the SEC to offset this claim.

On October 10, 2014 a complaint was filed by Craig Phillips, a former employee seeking $150,000 in severance and 2,412,574 shares of stock. The company denies that any sums are due to Mr. Phillips as a result of his voluntary termination of his employment. The company intends to vigorously defend this action. On November 6, 2014 the company filed a counterclaim against Mr. Phillips arising from his employment with the company indicating that there are no outstanding paychecks from the company and there are no claims from the Department of Labor.

On October 17, 2014 the company received a demand for arbitration from Summit Trading Ltd arising from a consulting agreement between the company and Summit Trading Ltd. Summit is seeking 3,344,988 shares of common stock of the company. The company denies that any sum is due to Summit and will vigorously defend the action.

Nevertheless, if one or more of the pending lawsuits, or any lawsuits in the future, are adjudicated in a manner adverse to the Company and/or its subsidiary’s interests, or if a settlement of any lawsuit requires the Company to pay a significant amount, the result could have an adverse impact on the Company’s overall financial position. The Company will continue to vigorously defend any such litigation.

Major concentrations

During the nine months ended September 30, 2014, one supplier represented approximately 15% of the Company’s purchases.

10. SUBSEQUENT EVENTS

On July 21, 2014, the Company announced its fourth location will be part of the Crossgates Mall located in Albany, New York. The Company expects to commence operations in mid-2015.

On July 24, 2014, the Company entered into a lease with Duke Realty on its fifth venue located at The Shops at West End in St. Louis Park, MO. The landlord has agreed to finance the venue’s build out. The 43,000 square-foot venue is expected to commence operating in third quarter 2015.

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements, and related notes included herein. Unless otherwise specified, the meanings of all defined terms in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are consistent with the meanings of such terms as defined in the Notes to Consolidated Financial Statements.

This report contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our anticipated future financial performance, expected operating results, such as revenue growth, and efforts to grow our business.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to continue as a going concern; our history of incurring significant net losses and limited operating history; the competitive environment in the markets in which we operate; consumer acceptance of our offerings; our ability to raise additional financing on satisfactory terms, or at all; our success in retaining or recruiting, or changes required in, our management and other key personnel; the potential liquidity and trading of our securities; the risk that any projections, including earnings, revenues, margins or any other financial items are not realized; changing legislation and regulatory environments; the general volatility of the market price of our common stock; risks and costs associated with regulation of corporate governance and disclosure standards (including pursuant to Section 404 of the Sarbanes-Oxley Act);and general economic conditions.

Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Nature of Activities, History and Organization:

Latitude 360 (“L360” or the Company), is an independent, full-service entertainment company whose predecessor entity was founded in 2009 to plan, develop, construct and operate state-of-the-art, 40,000 to 70,000 square foot premier entertainment venues while targeting “A” location commercial properties at distressed prices. Each L360 location fuses an exceptional food & beverage experience with multiple entertainment options in an upscale and contemporary designed venue. Entertainment options include; a dine-in luxury movie screening room (Cinegrille), a dine-in live performance theater with a full-size stage (Latitude LIVE), luxury bowling lanes (bowling/full food service to lanes), a sports theater, a main bar with small stage/dance floor (Axis bar), the latest offering in hi-tech electronic video games, and an upscale Nuevo-American casual dining restaurant and sports bar. As of September 30, 2014, the Company had three operational entertainment venues and two under construction and scheduled to open in the first quarter of 2015. The Company also has a “Go and Carry “concrete business as a separate operating subsidiary.

On May 30, 2014 the Company completed its acquisition of Latitude 360, Inc., a Florida corporation (“L360 Florida”), pursuant to the Agreement and Plan of Merger (as amended, the “Merger Agreement”) dated April 8, 2014, among the Company, Latitude Global Acquisition Corp., a Florida corporation and a wholly-owned subsidiary of the Company (the “Merger Sub”), and L360 Florida. Pursuant to the Merger Agreement, on May 30, 2014, Merger Sub merged with and into L360 Florida, and L360 Florida became a wholly-owned subsidiary of the Company (the “Merger”). Copies of the Merger Agreement, Amendment No. 1 to the Merger Agreement and Amendment No. 2 to the Merger Agreement were attached to the Current Reports on Form 8-K filed by the Company with the Securities and Exchange Commission on April 9, 2014, May 5, 2014 and May 20, 2014.

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger the Company issued (or reserved for issuance) an aggregate of 154,735,504 shares of the Company’s common stock (the “Merger Shares”) to the shareholders of L360 Florida immediately prior to the effective time as consideration for the acquisition. The Merger Shares represent approximately 98.9% of the total number of outstanding shares of the Company’s common stock. Except for certain convertible securities of L360 Florida which did not convert into shares of the Company’s common stock in connection with the Merger (the “L360 Non-Converting Securities”), each outstanding share of preferred stock of L360 Florida, each warrant to purchase L360 Florida common stock, and any other security of L360 Florida exchangeable for or convertible into shares of L360 common stock (the “L360 Convertible Securities”) was exchanged or converted into shares of L360 Florida common stock immediately prior to the consummation of the Merger, such that the shares of L360 common stock issued upon conversion, along with the shares of the Company’s common stock underlying the L360 Non-Converting Securities, represented the right to receive a portion of the Merger Shares. Each L360 Non-Converting Security outstanding at the effective time of the Merger was automatically converted into a like convertible security, or the right to receive a like convertible security, to acquire a portion of the Merger Shares, at an exercise price per share appropriately adjusted so that the aggregate exercise price is the same as it was prior to the effective time of the Merger. The company changed its name to Latitude 360 Inc. on June 2, 2014.

Corporate History

L360 is a holding company and is the parent company of three wholly-owned limited liability companies organized in the State of Florida: Latitude 30 Group, LLC (“Lat 30”), Latitude 39 Group, LLC (“Lat 39”) and Latitude 40 Group, LLC (“Lat 40”), (collectively, the “LG Subsidiaries”). The predecessor of the Company, Latitude Global Inc. was incorporated in the State of Florida on June 21, 2010. L360 is also the parent of Kingdom Koncrete, Inc. (“Kingdom Koncrete”), the company’s “Go and Carry” concrete business.

The Company’s Business

L360 is an award-winning, full-service upscale casual restaurant/entertainment venue operator. Founded in 2009, L360’s objective is to plan, develop, construct and operate state-of-the-art, 40,000 to 85,000 square foot upscale dining and entertainment venues taking advantage of the downturn in big box commercial property locations and leasing at discounted rates. The L360 target locations are shopping centers and urban markets in “A” cities as well as destination locations. L360 venues fuse an exceptional food and beverage experience with multiple entertainment options in an upscale and contemporary designed venue. The Company also operates its “Go and Carry” concrete subsidiary, Kingdom Koncrete.

Entertainment options (all with an array of dining and beverage service, from casual to upscale) can include:

•

The 360 Grille & Bar – a casual yet contemporary American restaurant.

•

The Lanes – Luxury bowling lanes with leather couches and cutting-edge audio/visual systems on every lane, creating an upscale, lounge-like atmosphere.

•

The Cinegrille – A dine-in movie theater featuring home theater-style seating.

•

Game Room – The latest offering in hi-tech electronic video, redemption games and prizes.

	•	Latitude LIVE – A live performance theater with a full-stage, high-end theatrical sound and lighting systems and seating for 170-300+ guests. Features live comedy on Friday and Saturday.

	•	HD Sports Theater–A sports theater with multiple HD screens, similar to sports books in Vegas.

	•	The AXIS Bar & Stage–A unique bar, dance floor and stage with weekend performances by the hottest DJs and regional bands.

	•	Latitude Lit–A luxury cigar lounge with HD screens and patio access.

L360’s unique concept creates what its founders believe to be a one-of-a-kind venue with a first-class menu including hand-crafted and signature items. What in the past may have traditionally been viewed as separate industries and businesses, L360 is combining and operating its locations as one stand-alone, multi-venue facility. The strategy includes co-locating several distinct businesses (dining, movies, bowling, video and redemption gaming, Latitude Live entertainment and sports bars), and others as the imagination and technology further evolves. It is anticipated that the public’s discretionary dining and entertainment spending dollars can be captured by offering a single destination for an entire day and evening. By combining separate businesses in its multi-venue centers, the Company believes the L360 concept will also continue to capture more of the consumer’s leisure time.

Consumer acceptance of these concepts is due to many economic, social and business factors including, in part, a growing social trend of families enjoying more time together (cocooning), time constraints reflecting their busy schedules, as well as the current high cost of fuel. By combining dining with other forms of entertainment, families can increasingly plan and enjoy the convenience of an entire evening’s activities at one multi-functional location without the hassle of driving from venue to venue, while also being socially responsible. The Company has been capitalizing on this growing trend by leveraging its strengths and applying its experience in creating premier multi-venue entertainment complexes located in Jacksonville, FL, Indianapolis, IN and Pittsburgh, PA, respectively. These venues offer upscale casual dining restaurants, luxury sports bars, billiards and electronic gaming rooms, luxury bowling lanes, Latitude Live (Vegas-style Review) and private luxury movie screening rooms that cater to families and the corporate community. L360 strives to offer its patrons, including groups, a wide variety of appealing dining, entertainment and activity choices, at an array of different price points.

Group sales is a key component of L360’s ongoing and future success. L360 has already hosted over 8,600 group events, with hundreds of corporate events held annually. More than 400 different corporate clients, including more than half of the leading corporations that make up the Dow Jones Industrial Average, have used one of L360’s venues for hosting an event. Event sales revenue presently represents approximately 20% of total L360 sales and this percentage is expected to grow over time. Importantly, group sales showcase L360 venues, including its multiple dining and entertainment options.

As a result, attendees often bring family and friends for future visits, thereby creating a ‘ripple effect.’ The ripple effect also works in the other direction as family and friend visits also lead to future corporate or other event bookings at L360 locations, for their own organization or via word of mouth recommendations and endorsements to work colleagues and other friends/ family members.

Each location has a Director of Group Sales focused on proactively reaching out to the local business community. The impressive list of corporate clients includes, Walmart, Apple, Bank of America, DuPont, FedEx, McDonalds, Cisco, Coach, Verizon, Microsoft, American Express, HP, Home Depot, State Farm, the Indianapolis Colts, UPS, Pfizer, and many more.

Management’s goal is to open its first 10 “Latitudes” within the next two to three years in desirable locations, pursuant to its L360 growth strategy. L360 opened its first Latitude location in Jacksonville, Florida in January 2011. L360 opened its second location in November 2012 in Pittsburgh, Pennsylvania. L360’s third venue, which is located in Indianapolis, Indiana in the affluent Keystone Crossing area, opened in January 2013. On July 21, 2014 management announced the scheduled opening of its fourth location in the Crossgates Mall in Albany, NY in mid-October, 2014.

Results of Operations

Please note: The following results are not comparable due to the result of the merger consummated on May 30, 2014 of Latitude 360, Inc. (a Florida Corporation) and its wholly owned subsidiaries. The results of L360 Florida for the period May 31, 2014- September 30, 2014 are included in the three and nine month of 2014 and are not included in 2013.

Nine Months ended September 30, 2014, compared to the same period ended September 30, 2013:

Net Revenues –Net revenues increased to approximately $5.1 million for the period ended September 30, 2014 from approximately $72,000 for the same period in 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014.

Total Operating Expenses. Total Venue Expenses increased to $5.5 million for the period ended September 30, 2014 from an approx. $44,000 for the period ended September 30, 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014. For the period ended September 30, 2014, the Company had three venues in full operation.

Depreciation and Amortization. Depreciation and amortization expense increased to approximately $2.1 million for the period ended September 30, 2014 from $2,320 in the same period in 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014.

Selling, General and Administrative Expenses. General and Administrative expenses, which primarily consist of administration, travel, increased to approximately $4.01 million for the period ended September 30, 2014 from approximately $32,000 for the same period in 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the merger.

Interest Expense. As result in higher borrowings, as a result of convertible offerings, interest expense increased to $940,530 for the period ended September 30, 2014 from zero in the same period of 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014.

Net Loss from continuing operations. As a result of the foregoing, the net loss from continuing operations for the nine months ended September 30, 2014 was $12,352,317 or $0.099 per basic and diluted share.

Three months ended September 30, 2014, compared to the three-month period ended September 30, 2014:

Net Revenues –Net revenues increased to approximately $3.7 million for the three months ended September 30, 2014 from approximately $19,000 for the same period in 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014.

Total Venue Expenses. Total Venue Expenses increased $2.8 million for the three months ended September 30, 2014 from zero for the three months ended September 30, 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014. For the three months ended September 30, 2014, the Company had three venues in full operation.

Depreciation and Amortization. Depreciation and amortization expense increased to approximately $1,037,000 for the three months ended September 30, 2014 from $1,160 in the same period in 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014.

General and Administrative Expenses. General and Administrative expenses, which primarily consist of administration, travel, professional fees increased to approximately $8,091,000 for the three months ended September 30, 2014 from approximately $25,000 for the same period in 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014.

Interest Expense. As result in higher borrowings, resulting from convertible offerings, interest expense increased to $468,000 for the three months ended September 30, 2014 from zero in the same period of 2013. This increase was due to the inclusion of the results of L360 Florida for the period May 30, 2014, the effective date of the reverse merger, to September 30, 2014.

Net Loss from continued operations. As a result of the foregoing, the net loss for the three months ended September 30, 2014 was $9,539,128, or $0.098 per basic and diluted share.

Inflation

We do not believe that inflation has had a material impact on our results of operations. However, there can be no assurance that inflation will not have such an effect in future periods.

Liquidity and Capital Resources

Our total assets were $51 million at September 30, 2014, of which $2.4 million were current assets. As of September 30, 2014 we had cash and cash equivalents of $85,000 and a working capital deficit of $23 million. During the past two years, we have experienced net losses. We anticipate our operating cash flows to continue to be negative during the construction and development periods for our new venues.

While we currently operate as a going concern, certain significant factors raise substantial doubt about our ability to continue to operate as a going concern. We have incurred significant losses since inception. This factor, among others, raise substantial doubt about our ability to continue to operate as a going concern.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

Use of Estimates

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original term of three months or less to be cash equivalents.

Inventories

Inventories primarily consist of food, beverages and game redemption items. Inventories are accounted for at lower of cost or market using the average cost method. Spoilage is expensed as incurred.

Property and Equipment

Long-Lived Assets

Revenue Recognition

Issuances Involving Non-cash Consideration

Stock Based Compensation

Loss per Share of Common Stock

Advertising Costs

Advertising costs are expensed as incurred. Sponsorship costs are capitalized and amortized to expense over the sponsorship periods.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2014. This evaluation was accomplished under the supervision and with the participation of our chief executive officer / principal executive officer, and chief financial officer/principal financial officer who concluded that our disclosure controls and procedures are not effective.

Based upon an evaluation conducted for the period ended September 30, 2014, our Chief Executive and Chief Financial Officer as of September 30, 2014 and as of the date of this Report, has concluded that as of the end of the periods covered by this report, we have identified the following material weakness of our internal controls:

●

Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transaction.

●

Lack of sufficient accounting document control.

In order to remedy our existing internal control deficiencies, as our finances allow, we will hire additional accounting staff.

Changes in Internal Controls over Financial Reporting

We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

Items No. 1, 3, 4, 5 - Not Applicable.

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

Other than those previously reported on Form 8-K, no unregistered securities were sold or issued during the quarter ended September 30, 2014.

Item No. 6 - Exhibits and Reports on Form 8-K

(a) None

(b) Exhibits

Exhibit Number		Name of Exhibit

2.1	Agreement and Plan of Merger dated April 8, 2014(1)

2.2	Amendment No.1, dated May 2, 2014, to Agreement and Plan of Merger(2)

2.3	Amendment No. 2, dated May 16, 2014, to Agreement and Plan of Merger(3)

3.1	Articles of Merger filed June 2, 2014(4)


31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.

101*	XBRL

(1)	Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on April 9, 2014.
(2)	Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on May 5, 2014.
(3)	Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on May 20, 2014.
(4)	Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on June 5, 2014.

* To be filed by Amendment

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Latitude 360, Inc.

By/s/ Brent Brown

Brent Brown,

Chief Executive Officer

and Chief Financial Officer

Date: February 13, 2015

Latitude 360 Inactive 10-Q/A2014 Q3 Quarterly report (amended)