Primco Management 10Q 2014 Q2 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended June 30, 2014

-OR-

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _________ to________

Commission File Number 333-173119

Primco Management Inc.

(Exact name of registrant as specified in its charter)



Delaware		27-3696297
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)



2211 Elliott Ave., Suite 200 Seattle, WA		98121
(Address of principal executive offices)		(Zip Code)

(206) 455-2940

(Registrant's telephone number, including area code)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [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 (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):



Large accelerated filer [ ]		Non-accelerated filer [ ]
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]

The number of outstanding shares of the registrant's common stock,

August 19, 2014: Common Stock - 1,873,002,181

PRIMCO MANAGEMENT INC.

FORM 10-Q

For the quarterly period ended June 30, 2014

INDEX

PART 1 – FINANCIAL INFORMATION



		Page
Item 1. Consolidated Financial Statements (Unaudited)		4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		30
Item 3. Quantitative and Qualitative Disclosure About Market Risk		35
Item 4. Controls and Procedures		35

PART II – OTHER INFORMATION



Item 1. Legal Proceedings		38
Item 1A. Risk Factors		38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 3. Defaults upon Senior Securities		39
Item 4. Mine Safety Disclosures		39
Item 5. Other Information		39
Item 6. Exhibits		39

SIGNATURES		40

Primco Management Inc.

(A Development Stage Company)

Consolidated Balance Sheets


		(Restated)
	(Unaudited)	(Audited)
	June 30,	December 31,
	2014	2013
ASSETS
Current Assets:
Cash and cash equivalents	$ 458,072	$ 64,771
Accounts receivable, net	20,135	26,026
Inventory, net	70,528	70,528
Advances to related party	71,130	-
Prepaids	-	20,000
Total Current Assets	619,865	181,325

Property and equipment, net	6,427	7,885
Other Assets:
Investment in Suzie Q's NPO	11,076	-
Deposits	5,100	8,714
Total Other Assets	16,176	8,714
Total Assets	$ 642,468	$ 197,924

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable	$ 92,979	$ 97,979
Accrued liabilities	358,275	301,175
Due to related party	19,348	13,928
Short-term notes payable	630,485	713,000
Short-term convertible notes payable, net of discounts	1,326,317	711,201
Derivative liability	3,180,344	287,071
Total Current Liabilities	5,607,748	2,124,354
Total Liabilities	5,607,748	2,124,354
Stockholders' Equity:
Preferred Stock, $0.00001 par value, 10,000,000 shares authorized,
7,000,000 shares issued and outstanding, respectively	70	70
Common Stock, $0.00001 par value, 4,990,000,000 shares authorized
4,979,119,725 and 1,873,002,181 shares issued and outstanding, respectively	49,791	18,730
Stock subscription payable	354,362	-
Additional paid in capital	1,942,818	1,746,083
Accumulated deficit during development stage	(7,312,321)	(3,691,313)
Total Stockholders' Equity (Deficit)	(4,965,280)	(1,926,430)

Total Liabilities and Stockholders' Equity	$ 642,468	$ 197,924

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

Primco Management Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)



					From inception
					(October 14,
	For the Three Months Ended		For the Six Months Ended		2010) through
	June 30,		June 30,		June 30,
	2014	2013	2014	2013	2014

Revenues	$ 1,915	$ 13,915	$ 21,155	$ 13,915	$ 93,271
Costs of services	320	10,343	592	10,343	44,715

Gross Margin	1,595	3,572	20,563	3,572	48,556

Operating Expenses:
Consulting	134,279	22,500	199,930	22,500	337,430
General and administrative	183,532	10,766	182,425	37,771	566,758
Management salaries	60,000	90,000	120,000	120,000	494,212
Professional fees	5,750	22,609	41,620	22,609	85,480
Total Operating Expenses	383,561	145,875	543,975	202,880	1,483,880

Loss from Operations	(381,966)	(142,303)	(523,412)	(199,308)	(1,435,324)

Other Expenses:
Interest expense	64,117	239,915	61,651	239,915	949,937
Interest expense - derivative	2,853,148	561,058	3,035,945	561,058	4,927,060
Total Other Expense	2,917,265	800,973	3,097,596	800,973	5,876,997

Net Loss Before Income Taxes	(3,299,231)	(943,276)	(3,621,008)	(1,000,281)	(7,312,321)

Provision for Income Taxes	-	-	-	-	-

Net Loss	$ (3,299,231)	$ (943,276)	$(3,621,008)	$(1,000,281)	$ (7,312,321)

Net Loss per Share - Basic and Diluted	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)

Weighted average number of shares
outstanding - Basic and Diluted	4,979,119,725	216,391,693	3,897,081,523	200,738,786

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

Primco Management Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)


			From inception
			(October 14,
	For the Six Months Ended		2010) through
	June 30,		June 30,
	2014	2013	2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) for the Period	$ (3,621,008)	$ (1,000,281)	$ (7,312,321)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Common stock issued for services	-	-	5,000
Depreciation and amortization	1,458	-	2,985
Interest expense- derivative	2,893,273	1,061,057	3,180,344
Changes in Operating Assets and Liabilities
Decrease (Increase) in accounts receivables	5,891	(4,972)	(20,135)
Increase in inventory	-	(9,393)	(70,528)
Decrease (Increase) in deposits	3,614	-	(5,100)
Increase in advances to related party	(99,665)	25,750	(71,130)
Increase (decrease) in accounts payable	(5,000)	53,590	92,979
Increase in accrued liabilities	76,448	110,656	377,373
Discount on short-term convertible debt	-	(270,029)	-
Net Cash Proceeds (Used) in Operating Activities	(744,989)	(33,622)	(3,820,533)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and furniture	-	-	(9,412)
Investment in Suzie Q's NPO	(11,073)	-	(11,073)
Net Cash Used In Investing Activities	(11,073)	-	(20,485)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable	795,000	79,150	1,554,000
Proceeds from sale of stock	354,363	-	354,363
Additional paid in capital	-	-	2,390,727
Net Cash Provided by Financing Activities	1,149,363	79,150	4,299,090

Net (Decrease) Increase in Cash	393,301	45,528	458,072

Cash at Beginning of Period	64,771	91	-

Cash at End of Period	$ 458,072	$ 45,619	$ 458,072

Continued on next page

Primco Management Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

Continued from previous page


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period:
Interest	$ -	$ -	$ -
Franchise and Income Taxes	$ -	$ -	$ -

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Issuance of short term note payable to purchase intellectual property
rights: Music	$ -	$ 916,350	$ 1,442,402
Issuance of short term note payable to purchase intellectual property
rights: Motion Picture	$ -	$ -	$ 315,000
Issuance of short term note payable by Southridge for S-1 legal fees	$ 20,000	$ -	$ 20,000

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

Primco Management Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

June 30, 2014 and December 31, 2013

NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of operations

The Company was incorporated on October 14, 2010 under the laws of the state of Delaware. The Company is a real estate management and property development company and, through its wholly-owned subsidiary, Top Sail Productions, LLC, produces and distributes recorded music and intends to co-produce for distribution lower budgeted motion pictures.

In February, 2014 the Company expanded its operations to include the leasing and property management of facilities for the legal cultivation of medical cannabis, and the acquisition and/or entering into joint ventures with third parties involving the planning, staffing, management and operation of legalized medical marijuana dispensing and cultivation.

Mergers and Acquisitions

Effective January 31, 2013, the Company executed a reverse merger with ESMG, Inc. by entering into a stock purchase agreement whereby the Company acquired all of the issued and outstanding stock of ESMG, Inc. as well as the assets, contracts and obligations of ESMG Inc. existing as of that date, through a cashless exchange of stock. ESMG Inc., which was formed in the state of Nevada on October 9, 2012, is a formative multi-media entertainment enterprise with an active music production and distribution division, as well as having a business plan to launch a motion picture and TV production and distribution division; a radio content syndication division and an on-line interactive sports division. Accordingly, as of January 31, 2013, through the acquisition of ESMG Inc., the Company expanded its operations to include entertainment in addition to continuing to offer real estate management and development services.

On May 30, 2013, the Company completed and funded the acquisition of Top Sail Productions, “Top Sail” a music production company and record label with a multi-year US distribution agreement through WEA, a Warner Music Group Company. The Company purchased Top Sail from Chuck Gullo, the principal of Top Sail, who will continue as Senior Executive Consultant to assist in the operation of Top Sail and other entertainment entities owned by the Company. The Company purchased the membership interests in Top Sail for a total of $440,000. The initial payment was $75,000 and $15,000 worth of the Company’s 5,000,000 restricted common shares. The remaining $350,000 is being paid in installments until June 30, 2016 pursuant to a three year consulting agreement with Mr. Gullo.

On June 1, 2013 the board of directors entered into an Amendment and Plan of Reorganization with D & B Music, Inc. (previously known as D & B Records, Inc.) a Delaware corporation, in which D & B Music, Inc. merged with and into the Company whereby the Company was the only surviving entity. D & B Music, Inc. has a music catalog of 41 titles. The consideration paid by the company was the assumption by the Company of a promissory note for $242,000 due Pegasus

Group, Inc. together with accrued and unpaid interest thereon of $114, 841 and the issuance of 7,000,000 of the Company’s Series A preferred stock and 20,000,000 of the Company’s common stock to the sole shareholder, David Michery, who is the CEO and director of the Company.

Basis of presentation

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

The accompanying unaudited quarterly financial statements have been prepared on a basis consistent with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The results of operations for the periods are not necessarily indicative of the results expected for the full year or any future period. These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the SEC on April 15, 2014 (the “2013 Annual Report”).

Development stage enterprise

The Company is currently a development stage enterprise reporting under the provisions of FASB ASC Topic 915, Development Stage Entity. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Use of estimates

The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates.

Revenue recognition

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Research and development

The Company records research and development expense as incurred.

Net loss per common share

The Company adopted FASB ASC Topic 260, Earnings Per Share. Basic earnings per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net income (loss) available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares, if any, that would be issued assuming conversion of all potentially dilutive securities outstanding. For all periods diluted earnings per share is not presented, as potentially issuable securities are anti-dilutive.

There are 1,339,288,217 potentially dilutive shares of common stock outstanding as of June 30, 2014 which derive from our outstanding convertible promissory notes.

Income taxes

Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Financial Accounting Standards Board Accounting Standards Codification ASC 740, “ Income Tax ,” requires the recognition of the impact of a tax position in the financial statements only if that position is more likely than not of being sustained on a tax return upon examination by the relevant taxing authority, based on the technical merits of the position.

At June 30, 2014 and December 31, 2013, the Company had no unrecognized tax benefits. The Company recognizes interest and penalties related to income tax matters in interest expense and operating expenses, respectively. As of June 30, 2014 and December 31, 2013, the Company had no accrued interest or penalties related to uncertain tax positions.

Concentration of cash

The Company maintains cash balances at a bank where amounts on deposit may exceed $250,000 throughout the year. Accounts at the institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Recent accounting pronouncements

The Company does not believe recently issued accounting pronouncements will have any material impact on its financial position, results of operations or cash flows.

NOTE 2 – GOING CONCERN

The Company is a development stage company and the management of the Company has devoted substantially all of its efforts to locating real estate properties for development and constriction and to the production and/or distribution of recorded music from the music artists it has developed and from the music catalogs that it has acquired. The Company expects operating costs to continue to exceed funds generated from operations until significant revenues are generated from its operations and from new financing sources.

The Company had only generated minimal revenues from its operations through June 30, 2014 mainly due to the unsuccessful and disappointing sale of recorded music from the music artists it has under contract. As a result, the Company expects to continue to incur operating losses in the near term, and the operations in the near future are expected to continue to require working capital. The ability of the Company to continue as a going concern is in turn dependent on its ability to raise capital to meet its operating requirements.

The Company’s independent auditors, in their report on the financial statements for the years ended December 31, 2013 and 2012, expressed substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The 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 could result from the outcome of this uncertainty.

NOTE 3 – REVERSE MERGER WITH ESMG, INC.

On January 31, 2013, the Company executed a stock purchase agreement with ESMG, Inc. whereby the Company’s majority stockholder sold 155,200,000 shares of common stock (approx. 86.52% of the issued and outstanding) in exchange for all of the issued and outstanding stock of ESMG, Inc. On the date of the stock purchase agreement, ESMG, Inc. had an asset balance of $1,050,750 which consisted entirely of intangible assets related to music and picture rights and a liabilities balance of $1,050,750 which was made up of $1,025,000 in current notes payable and $25,750 in accounts payable. Management deemed it too costly to have the $1,050,750 of intangible assets appraised at fair value and therefore wrote the intangible assets down to zero with the offsetting entry to additional paid in capital.

Intellectual Property - Music

Through the acquisition of ESMG, Inc., the Company acquired the intangible assets of ESMG, Inc. which included the intellectual property rights to produce and/or co-produce original recorded music, and subsequent production and marketing costs, for the worldwide distribution of the following artists:

Artist

Jesse Scott

V.I.C.

Hurricane Chris

Tion Phipps

Choo Biggz

Bruce-E-Bee

Downtown Attraction

Kamp Hustle

Bungle Knot Dred

Other various Hip Hop catalog artists

Intellectual Property - Picture

Through the acquisition of ESMG, Inc., the Company acquired the motion picture rights to co-produce with Gorilla Pictures the right to distribute worldwide the animated motion picture “Bigfoot’s Big Halloween Adventures” (the sequel to “The Legend of Sasquatch’). Management did not record an intellectual property asset with regards to the acquisition of ESMG, Inc. due to the lack of evidence to support a current valuation of the music and picture rights. The Company did not have an independent valuation of the intangible assets acquired. Management has reclassified the intangible assets upon acquisition to additional paid in capital due to the uncertain nature of future returns from the intellectual property assets. To date, the Company has generated minimal revenues from the music property rights.

NOTE 4 - ACQUISITION OF D&B MUSIC INC. & TOP SAIL PRODUCTIONS, LLC

D & B MUSIC, INC.

On June 30, 2013, the Company entered into an asset purchase agreement with D & B Music, Inc. (formerly D & B Records, Inc.) which has the worldwide rights to reproduce and distribute 41 fully produced titles.

The sole shareholder of D & B Music, Inc at the time of asset purchase agreement was David Michery, the Company’s CEO and President. The Company did not record an intangible asset on this acquisition because the transaction was consumed between related parties. The Company did not have an independent valuation of the assets acquired. The cost to acquire D & B Music, Inc. was the assumption of $357,111 in liabilities as well as the par value of stock issued as noted in part (b) below

The cost of $357,111 represents:

(a)

the assumption by the Company of a promissory note, originally dated February 1, 2009, payable in the amount of $242,000 to Pegasus Group, Inc., together with the assumption of accrued and unpaid interest thereon through June 30, 2013 of $114,841, for total consideration of $ 356,841 to acquire D & B Music, Inc.; plus

(b)

$ 270 par value of 7,000,000 preferred shares and 20,000,000 common shares issued to David Michery for the right to access and duplicate the recording masters associated with both the D & B Music catalog and David Michery’s own music catalog , for exploitation by ESMG and distribution through WEA/Warner Music Group.

The Company has begun to compile and re-release albums of artists comprised in both music catalogs. Interest continues to accrue at the rate of 10% on the balance of principal due to Pegasus Group, Inc.,

Top Sail Productions, LLC

Company purchased the membership interests in Top Sail for a total of $440,000. The initial payment was $75,000 cash and 5,000,000 restricted common shares in the Company. The remaining $350,000 balance is being paid in installments until June 30, 2016.

NOTE 5 - ACCOUNTS RECEIVABLE AND INVENTORY

Accounts receivable represents the net amount due from WEA/Warner Music Group from the sale of Top Sale Productions’ music CDs, and ESMG’s digital music releases. As of June 30, 2014 and December 31, 2013, the Company had accounts receivable balances of $20,135 and $0.

Inventory represents the finished cost of Top Sail Productions’ music CDs (including prepaid royalties to music artists) available for resale to consumers, less a reserve for defective CDs of $3,729. As of June 30, 2014 and December 31, 2013, the Company had net inventory balances of $70,528.

NOTE 6 – PREPAID EXPENSES

In early May of 2014, the Company began to proceed to terminate the Equity Purchase Agreement with Southridge Partners II, LLC (Southridge”) on September 30, 2013. As previously disclosed in the Form 10-K financials and footnotes, the Company recorded a prepaid expense in the amount of $135,000 for fees incurred with Southridge Partners II, LLC in connection with the Equity Purchase Agreement entered into by the Company whereby Southridge has undertaken to purchase up to $ 10 million of the Company’s issued common stock over a 24 month period at a rate equal to 90% of the Company’s trading price during the applicable period prior to drawdown. The Company’s obligation to Southridge for their fee and legal costs was evidenced partly through a promissory note for $100,000 due June, 2014 and partly through a convertible note for $35,000 maturing August 20, 2014. Under the terms of this Agreement, the Company is required to register an S-1 for the authority to issue registered common shares, which it plans to do so by the end of second quarter 2014.

As of the date of this filing, Southridge Partners II, LLC only advanced $20,000 to lawyers pursuant to this agreement. Furthermore, the Company is in the process of terminating the Equity Purchase Agreement with Southridge. The Company has restated its financial statements as of December 31, 2013 to write off $115,000 of prepaid expenses against $35,000 in convertible notes payable and $80,000 in promissory notes payable to Southridge Partners II, LLC.

NOTE 7 – FIXED ASSETS: PROPERTY & EQUIPMENT

Property and equipment consists of the following at June 30, 2014 and December 31, 2013:


	June 30, 2014	December 31, 2013
Property and equipment, net	$9,412	$9,412
Less: accumulated depreciation	2,985	1,527
Property and equipment, net	$6,427	$7,885

Depreciation expense for the six months ended June 30, 2014 and 2013 was $1,458 and $0.

NOTE 8 - ACCRUED LIABILITIES

Accrued liabilities at June 30, 2014 and December 31, 2013 represent the following:


	June 30, 2013	December 31, 2013
Accrued interest: D & B Music, Inc. (See Note 6)	$ 150,828	$ 134,805
Other accrued interest on short-term debt	86,063	40,658
Accrued management compensation due CEO and CFO	121,384	125,712
Total accrued liabilities	$ 358,275	$ 301,175

NOTE 9 – COMMITMENTS & CONTINGENCIES

Joint Venture Agreement with CanMed Ventures, Inc.

On February 23, 2014, the Company entered into a Joint Venture Agreement with CanMed Ventures, Inc., a British Columbia company, to build and operate a 30,000 square foot cultivation facility for the production of medical marijuana, whereby the Company will own 100% of the building, land and equipment and has granted CanMED a 10-year management contract for the operation of the Joint Venture.

As of June 30, 2014, the Company has not made any payments or advanced any assets pursuant to the joint venture agreement with CanMEd.

Legal Status of Marijuana Industry in Canada

Recently, there was a Federal Court action which was commenced by 2 licensed medical marijuana patients. They won an injunction to block the new regulations from ending their right to grow marijuana or to have a designated grower. Health Canada is preparing an appeal of the injunction to have it set aside. Or the issue will go to trial within an estimated 4 to 5 months. This led to a temporary halt on growers like our proposed deal with Health Canada, The injunction did not prevent the introduction of the new regulations on April 1st. Now there are 12 to 14 “Licensed Producers” (LP) in Canada supplying medical marijuana to the market. There are some 350 LP applications being processed by Health Canada at this time. So for now we have in Canada both the old regulations and the new regulations in effect.

Legal experts have speculated that there is a 90% likelihood of the injunction being overturned. The problem with the old regulations is that people are allowed to grow in their homes or hire someone to grow in their homes without adequate fire and security measures. Most “growers” are also sources for the illegal market. So the legal right issue is more about affordability than about the right to grow and Health Canada has the legal authority to regulate this market.

All current LP are impacted by the injunction. Instead of having a 40,000 customer pool to themselves, they must compete against the “old” system until the court decision is made. These circumstances give our Joint Venture the opportunity to capture market share that would have gone elsewhere but for the injunction. In addition, these circumstances require a re-evaluation of market strategy and tactics as follows:

•

Configure CanMED’s operations to grow and sell marijuana under both the old and the new regulations with a strong focus upon customer acquisition.

•

Look to acquire suitable land and prepare to file Health Canada license application or make agreement with company that has already filed and is well advanced in the process.

•

Make agreements with existing growers who operate under the old regulations to acquire their customers. This would bring revenues within 60 to 90 days.

Office lease

In late 2013, the Company cancelled its lease at 6725 Sunset Boulevard, Suite 420, Hollywood, CA 90028. Subsequently after cancelling the lease, an officer of the Company executed two leases for adjoining commercial office buildings in Orange County, CA where the Company will house ESMG’s music and motion picture operations as well as Top Sail Production operations. The first lease executed on October 24, 2013 is for three year with fixed payment terms of $1,750 a month. The second lease executed on June 13, 2014 is for five years with variable payment terms. The lease payments are $1,750 a month until August 31, 2014. The monthly lease payments then increase September 1, 2014 through June 14, 2015 to $3,500. The monthly lease payments then increase June 15, 2014 through June 14, 2016 to $4,000. The monthly lease payments then increase June 15, 2016 through June 14, 2017 to $4,120. The monthly lease payments then increase June 15, 2017 through June 14, 2018 to $4,243. The monthly lease payments then increase June 15, 2018 through June 14, 2019 to $4,370. Both leases were originally executed in the name of an officer of the Company. In July of 2014, the Company was assigned the lease from the respective officer of the Company.

Minimum future rental payments under the agreement are as follows:

2014 - $28,000

2015 - $66,000

2016 - $66,720

NOTE 10 – RELATED PARTY TRANSACTIONS

Due to/from related party

From time to time, the Company will advance money to and from an affiliated company at zero interest, payable on demand. The amount due to an affiliated company represents the balance due to Michery Inc., a private company owned by our CEO, David Michery. As of June 30, 2014 and December 31, 2013, the Company had a due to related party balance of $19,348 and $13,928.

Merger of D & B Music, Inc.

As explained in Note 7, D & B Music, Inc. (formerly D & B Records, Inc.) merged with the Company on June 1, 2013. D & B Music, Inc. has the worldwide right to reproduce and distribute 41 fully produced titles. At the time of merger, the sole owner of D & B Music, Inc. was David Michery, our CEO. As a component of the merger, David Michery received 7,000,000 preferred shares and 20,000,000 common shares of the Company.

NOTE 11 – SHORT TERM DEBT

On November 25, 2013, Magna Funds, LLC entered into a debt purchase agreement with GAGG, Inc. for the purchase and assignment of $50,000 in principle of that certain promissory note to GAGG, Inc. in the original amount of $250,000 dated May 21, 2013. On the same date, the Company then entered into a convertible debenture with Magna Funds, LLC for that $50,000 of debt assigned. As of June 30, 2014, Magna Funds, LLC converted $50,000 of principle into 909,545,456 unrestricted common shares of the Company.

On December 30, 2013, Magna Funds, LLC entered into a debt purchase agreement with GAGG, Inc. for the purchase and assignment of $50,000 in principle of that certain promissory note to GAGG, Inc. in the original amount of $250,000 dated May 21, 2013. On the same date, the Company then entered into a convertible debenture with Magna Funds, LLC for that $50,000 of debt assigned. As of June 30, 2014, Magna Funds, LLC converted $14,450 of principle into 87,578,384 unrestricted common shares of the Company.

On January 13, 2014, Sherry Harden entered into a debt purchase agreement with Pegasus Capital, Inc. for a $5,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $5,000 portion of debt assigned to Mrs. Harden through the debt purchase agreement. As of June 30, 2014, Mrs. Harden converted $5,000 of principle into 100,000,000 unrestricted common shares of the Company.

On January 13, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $5,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $5,000 portion of debt assigned to SFH Captial, LLC. As of June 30, 2014, SFH Capital, LLC converted $5,000 of principle into 100,000,000 unrestricted common shares of the Company.

On February 13, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $22,515 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $22,515 portion of debt assigned to SFH Captial, LLC. As of June 30, 2014, SFH Capital, LLC converted $22,515 of principle into 125,000,000 unrestricted common shares of the Company.

On February 28, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $90,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $90,000 portion of debt assigned to SFH Captial, LLC. As of June 30, 2014, SFH Capital, LLC converted $27,515 of principle into 225,000,000 unrestricted common shares of the Company.

Short-term debt at June 30, 2014 and December 31, 2013 represents the following:


	June 30, 2014	December 31, 2013
Balance of Promissory Note due GGAG, Inc.	$150,000	$200,000
Balance of Promissory Note due Pegasus Group, Inc.	195,485	228,000
Promissory Note due Southridge Partners II, LLC	20,000	100,000
Balance of Promissory Note due Gorilla Pictures	265,000	265,000
Total Notes Due	$630,485	$793,000

NOTE 12 - SHORT-TERM CONVERTIBLE DEBT AND DERIVATIVE LIABILITY

From time-to-time, the Company enters into convertible note agreements whereby the conversion feature is required to be bifurcated out as a derivative liability. Upon conversion of all or a portion of the convertible note, the derivative liability associated with the principal and interest converted is valued immediately before conversion using the Black-Scholes model. The change in fair value of the derivative liability associated with the principal and interest converted was recorded as a gain/loss on fair value of derivative liability in the accompanying statement of operations, with the remaining value of that portion of the derivative liability written off with a corresponding credit to additional paid-in capital.

LG Capital

On April 1, 2014, the Company issued a convertible note of $100,000 to LG Capital Funding, LLC. Under the terms of the note, the Company is to repay any principal balance and interest, at 8% per annum at the maturity date of April 1, 2015. The Company may prepay the convertible promissory note prior to maturity at varying prepayment penalty rates specified under the agreement. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the five (5) trading days prior to the conversion date. The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of June 30, 2014, LG Capital Funding, LLC has not converted any debt.

Inter-Mountain Capital Corp.

On April 21, 2014, the Company executed a secured convertible promissory note and securities purchase agreement with Inter-Mountain Capital Corp. The note is personally secured by an officer of the Company. The convertible promissory note is in the amount up to $2,207,500, accrues interest at 9% per annum, and is payable by March 21, 2016. The note is convertible into common shares of the Company at a conversion rate fixed at $0.0075 per share. As of June 30, 2014, Inter-Mountain Capital Corp. has funded the Company $500,000.

Adar Bays, LLC

On May 27, 2014, the Company issued a convertible note of $75,000 to Adar Bays, LLC. Under the terms of the note, the Company is to repay any principal balance and interest, at 8% per annum at the maturity date of May 27, 2015. The Company may prepay the convertible promissory note prior to maturity at varying prepayment penalty rates specified under the agreement. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the five (5) trading days prior to the conversion date. The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of June 30, 2014, Adar Bays, LLC has not converted any debt.

SFH Capital, LLC

On June 27, 2014, the Company executed a convertible promissory note with SFH Capital, LLC in the amount of $50,000 bearing interest of 10% per annum and maturing on June 27, 2015. The $50,000 was wired directly to WHC Capital, LLC whom is another note holder of the Company. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the ten () trading days prior to the conversion date. The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of June 30, 2014, SFH Capital, LLC has not converted any debt.

Short –term convertible debt at June 30, 2014 and December 31, 2013 represents the following:


Convertible Debt Due:	Original Principal	Reduction through conversion to stock as of June 30, 2013	Balance at June 30, 2014	Balance at December 31, 2013
Asher Enterprises, Inc.	$220,500	($120,800)	$99,700	$125,000
Magna Group, Inc/Hanover Holdings	272,500	(241,750)	30,750	45,000
Redwood Management, LLC	200,000	(200,000)		0
Redwood Fund II, LLC	150,000	(69,689)	80,311	119,664
WHC Capital, LLC	800,000	(319,744)	480,256	500,000
LG Capital	50,000	-	50,000	-
Elegant Funding	20,000	-	20,000	-
Fourth Street Fund LP	50,000	(10,000)	40,000	50,000
Less: Discounts				(128,463)
Total	$1,763,000	$(961,983)	$801,017	$711,201

Nature of Derivative Liability

From time-to-time, the Company enters into convertible note agreements whereby the conversion feature is required to be bifurcated out as a derivative liability.

The derivative liability at June 30, 2014 and December 31, 2013 related to the following convertible notes,


	June 30, 2014	December 31, 2013
Magna Group, Inc.	$ 1,676	$45,166
Redwood Fund II, LLC	114,835	145,773
Southridge Partners II, LLC	-	25,998
WHC Capital, LLC	155,135	70,134
LG Capital	47,766	-
Elegant Funding	1,565	-
Fourth Street Funding	6,219	-
	$327,196	$287,071

The following is the range of variables used in revaluing the derivative liabilities at June 30, 2014 and December 31, 2013:


Annual dividend yield	0
Expected life (years) of	0.08 - 1.43
Risk-free interest rate	0.02 - 0.17%
Expected volatility	170.8 - 400.9%

NOTE 13 – STOCKHOLDERS EQUITY

Authorized Preferred Stock

On August 6, 2013, the Company filed a Certificate of Designation with the State of Delaware to create and issue a series of 10,000,000 preferred stock to be designated the “Series A Preferred Stock” .These shares rank senior to the common stock with respect to distributions or payments in the event of any liquidation, dissolution, or winding up of the Company.

On August 6, 2013, the registrant filed a Certificate of Designation with the State of Delaware to create and issue a series of preferred stock to be designated the “Series A Preferred Stock” by adding the following subsections to Article IV:

- There are Ten Million (10,000,000) Series A Preferred Shares with a par value of $0.001.

-These shares rank senior to the common stock with respect to distributions or payments in the event of any liquidation, dissolution, or winding up of the registrant.

- These shares are not entitled to receive any cash dividends.

- After twelve months, each Series A Preferred Share will be convertible at the option of the holder into one hundred (100) common shares. This conversion ratio will be adjusted to account for stock splits and other, similar changes in the capital structure of the registrant.

- These shares are not entitled to any preemptive rights to purchase stock in any future stock offerings.

- Each Series A Preferred Share shall be entitled to one thousand (1,000) votes per share at any meeting of the stockholders or to participate in any action taken by the registrant or the stockholders thereof, or to receive any notice of any meeting of stockholders.

Preferred Stock Issuances

On June 1, 2013 the board of directors entered into an Amendment and Plan of Reorganization with D & B Music, Inc. (previously known as D & B Records, Inc.) a Delaware corporation, in which D & B Music, Inc. merged with and into the Company. D & B Music, Inc, has a music catalog of 41 titles. The consideration paid by the company was the assumption by the Company of a promissory note for $242,000 due Pegasus Group, Inc. together with accrued and unpaid interest thereon of $114, 841 and the issuance of 7,000,000 of the Company’s Series A preferred stock and 20,000,000 of the Company’s common stock to the sole shareholder of D & B Music, Inc., David Michery, who is also CEO and director of the Company.

As of June 30, 2014 and December 31, 2013 the Company has 7,000,000 shares of preferred stock outstanding.

Authorized Common Stock

On June 10, 2013, the Company’s board of directors adopted a resolution approving an amendment to the Articles of Incorporation increasing the authorized common shares from 500,000,000 par value $0.001 to 2,000,000,000 par value $0.00001 and to designate 10,000,000 preferred shares, par value $0.00001, to be issued from time to time in one or more series as determined by the board of directors, with the balance being designated as 1,990,000,000 common shares.

On August 19, 2013, the Company’s board of directors adopted a resolution approving an amendment to the Articles of Incorporation increasing the authorized shares from 2,000,000,000 par value $0.00001 to 5,000,000,000 par value $0.00001 , with 10,000,000 preferred shares, par value $0.00001 and 4,990,000,000 common shares, par value

$ 0.00001, to be issued from time to time in one or more series as determined by the board of directors.

On February 13, 2014, the board of directors of the Company adopted a resolution approving an amendment to our Articles of Incorporation increasing the authorized common shares from 5,000,000,000 common shares, par value $0.00001 to 9,000,000,000 common shares, par value $0.00001. The effectuating of this corporate action will not be filed with the Secretary of State for the State of Delaware, until twenty (20) days after the date of a Definitive Information Statement is filed with the Securities and Exchange Commission.

Common Stock Issuances

In the year ended December 31, 2013, the Company issued 1,798,090,181 shares of common stock of which 5,000,000 shares were for the purchase of Top Sail Productions, LLC as a wholly owned subsidiary, 20,000,000 shares were for the acquisition of D&B Music and 1,663,090,181 shares were for the reduction of $824,640 in convertible debt.

In the six months ended June 30, 2014, the Company issued 3,241,997,544 shares of common stock for the reduction of $191,171 in convertible debt. The Company also temporarily canceled 135,880,000 shares to its CEO David Michery to allow the Company to issue additional shares to other parties because it reached its maximum authorized shares. The Company is currently in the process of increasing its authorized shares.

Stock Subscription Payable

In the six months ended June 30, 2014, the Company sold stock purchase agreements for 400,790,341 common shares for $354,363 cash. The Company does not have the authorized shares available to issue these shares and therefore has recorded them as a stock subscription payable. Reference “Authorized Common Stock” above for information regarding increase in authorized common shares.

NOTE 14 – SUBSEQUENT EVENTS

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that other than listed below, no other material subsequent events exist.

On July 19, 2014, the Company entered into a letter agreement with DTRB Management Inc. d/b/a Casico, a Delaware corporation operating in the State of Michigan. The letter sets forth terms to develop one or more properties and establish a medical marijuana grow-room rental facilities and dispensaries in the State of Michigan. The company will use reasonable commercial efforts to secure $350,000 in funding to develop the properties.

On July 22, 2014, the Company executed an amendment to the Asset Purchase Agreement with Jessica Vance, the owner of Suzie Q’s NPO, dated March 7, 2014. The assets purchases consist of permits and licenses issued by the City of Seattle for the cultivation and sale of medical cannabis as well as all the necessary equipment and furniture to operate the business. The Company paid $20,000 for the purchase of Suzie Q’s NPO.

On July 22, 2014, the Company executed a consulting agreement with Jessica Vance whereby the Company will pay Ms. Vance a signing bonus of $80,000 within 30 days of the executed consulting agreement. The Company will also issue Ms. Vance 25,000,000 restricted common shares and offer a potential performance bonus of up to $50,000 if revenue targets are met within the first 90 days after the Company takes over operations of Suzie Q’s. Ms. Vance will provide operational support services to the Company with respect to the operations of Suzie Q’s NPO.

In July of 2014, the Company executed a convertible note agreement with Beaufort Capital Partners, LLC in the amount of $100,000, interest of 12% per annum, payable by December 30, 2014 and convertible into common shares of the Company at a 38% discount to market based on the (3) three lowest closing prices within (10) ten days prior to conversion.

NOTE 15 – RESTATEMENT OF FINANCIAL STATEMENTS

The Company has restated its consolidated balance sheet as of December 31, 2013, its consolidated statement of operations for the year ended December 31, 2013 and from inception (October 14, 2010) to December 31, 2013, its consolidated statement of cash flows for the year ended December 31, 2013 and from inception (October 14, 2010) to December 31, 2013, and its consolidated statements of stockholders’ equity to account for the following;

Revaluation of the acquisitions of D&B Music, Inc. and Top Sail Productions, LLC whereby the intangible assets acquired, totaling $1,361,056, are to be reclassified to additional paid in capital.

To reclassify $115,000 of prepaid expenses against $35,000 in convertible notes payable and $80,000 in promissory notes payable to Southridge Partners II, LLC.

To reconcile 110,000,000 shares of common stock believed to be issue and outstanding but were never issued by the transfer agency due to lack of authorized shares as of December 31, 2013.

The following are previously recorded and restated balances as of December 31, 2013, for the year ended December 31, 2013 and from inception (October 14, 2010) to December 31, 2013.

PRIMCO MANAGEMENT INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS


	December 31, 2013
	Originally
	Reported	Restated	Difference
ASSETS
Current Assets:
Cash and cash equivalents	$ 64,771	$ 64,771	$ -
Accounts receivable, net	26,026	26,026	-
Inventory, net	70,528	70,528	-
Advances to related party	-	-	-
Intellectual property rights: Music, net of impairment	688,945	-	688,945
Intellectual property rights: Motion Picture	315,000	-	315,000
Prepaids	135,000	20,000	115,000
Total Current Assets	1,300,270	181,325	1,118,945

Property and equipment, net	7,885	7,885	-

Other Assets:
Music catalog	357,111	-	357,111
Lease deposit	8,714	8,714	-
Total Other Assets	365,825	8,714	357,111
Total Assets	$ 1,673,980	$ 197,924	$ 1,476,056

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable	$ 97,979	$ 97,979	$ -
Accrued liabilities	301,175	301,175	-
Due to related party	13,928	13,928	-
Short-term notes payable	793,000	713,000	80,000
Short-term convertible notes payable, net of discounts	746,201	711,201	35,000
Derivative liability	287,071	287,071	-
Total Current Liabilities	2,239,354	2,124,354	115,000

Total Liabilities	2,239,354	2,124,354	115,000

Continued on next page

PRIMCO MANAGEMENT INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

Continued from previous page


Stockholders' Equity:
Preferred Stock, $0.00001 par value, 10,000,000 shares authorized,
7,000,000 shares issued and outstanding, respectively	70	70	-
Common Stock, $0.00001 par value, 4,990,000,000 shares authorized
4,979,119,725 and 1,983,002,181 shares issued and outstanding, respectively	19,830	18,730	1,100
Stock subscription payable	-	-	-
Additional paid in capital	3,661,496	1,746,083	1,915,413
Accumulated deficit during development stage	(4,246,770)	(3,691,313)	(555,457)
Total Stockholders' Equity (Deficit)	(565,374)	(1,926,430)	1,361,056

Total Liabilities and Stockholders' Equity	$ 1,673,980	$ 197,924	$ 1,476,056

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

PRIMCO MANAGEMENTS INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Year ended			From Inception (Oct 14, 2010)
	December 31, 2013			through December 31, 2013
	Originally			Originally
	Reported	Restated	Difference	Reported	Restated	Difference

Revenues	$ 72,116	$ 72,116	$ -	$ 72,116	$ 72,116	$ -
Costs of services	44,123	44,123	-	44,123	44,123	-

Gross Margin	27,993	27,993	-	27,993	27,993	-

Operating Expenses:
General and administrative	805,121	703,121	102,000	810,121	708,121	102,000
Reserve for losses on artists contracts	453,457	-	453,457	453,457	-	453,457
Total Operating Expenses	1,258,578	703,121	555,457	1,263,578	708,121	555,457

Loss from Operations	(1,230,585)	(675,128)	(555,457)	(1,235,585)	(680,128)	555,457

Other Expenses:
Interest expense	888,286	888,286	-	888,286	888,286	-
Interest expense - derivative	1,891,115	1,891,115	-	1,891,115	1,891,115	-
Provision for loss on property develop	38,500	38,500	-	38,500	38,500	-
Total Other Expense	2,817,901	2,817,901	-	2,817,901	2,817,901	-

Net Loss Before Income Taxes	(4,048,486)	(3,493,029)	(555,457)	(4,053,486)	(3,498,029)	(555,457)

Provision for Income Taxes	-	-	-	-	-	-

Net Loss	$ (4,048,486)	$ (3,493,029)	$(555,457)	$(4,053,486)	$(3,498,029)	$(555,457)

Net Loss per Share - Basic and Diluted	$ (0.00)	$ (0.00)	$ (0.01)

Weighted average number of shares
outstanding - Basic and Diluted	1,983,002,181	1,881,476,718	101,525,463

PRIMCO MANAGEMENTS INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Year Ended			From Inception (Oct 14, 2010)
	December 31, 2013			through December 31, 2013
	Originally			Originally
	Reported	Restated	Difference	Reported	Restated	Difference
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) for the Period	(4,048,486)	(3,493,029)	(555,457)	(4,053,486)	(3,498,029)	(555,457)
Adjustments to reconcile net loss to net cash			-
provided by operating activities:			-
Common stock issued for services	-	-	-	5,000	5,000	-
Depreciation and amortization	1,527	1,527	-	1,527	1,527	-
Changes in Operating Assets and Liabilities
Decrease (Increase) in accounts receivables	(26,026)	(26,026)	-	(26,026)	(26,026)	-
Increase in inventory	(70,528)	(70,528)	-	(70,528)	(70,528)	-
Increase in prepaid expenses	(143,714)	(28,714)	(115,000)	(143,714)	(28,714)	(115,000)
Increase in advances to related party	13,928	13,928	-	13,928	13,928	-
Increase in accounts payable	97,979	97,979	-	97,979	97,979	-
Increase in accrued liabilities	291,175	291,175	-	291,175	291,175	-
Discount on short-term convertible debt	(128,463)	(128,463)	-	(128,463)	(128,463)	-
Change in fair value of derivative liability	287,162	287162	-	287,162	287,162	-
Net Cash Proceeds (Used) in Operating Activities	(3,725,446)	(3,054,989)	(670,457)	(3,725,446)	(3,054,989)	(670,457)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in music rights and artists	(1,046,056)	-	(1,046,056)	(1,046,056)	-	(1,046,056)
Investments in movie rights and co-productions	(315,000)	-	(315,000)	(315,000)	-	(315,000)
Purchase of property and equipment	(9,412)	(9,412)	-	(9,412)	(9,412)	-
Net Cash Used In Investing Activities	(1,370,468)	(9,412)	(1,361,056)	(1,370,468)	(9,412)	(1,361,056)

CASH FLOWS FROM FINANCING ACTIVITIES:
Short term debt	1,667,664	1,552,664	115,000	1,667,664	1,552,664	115,000
Share capital	18,051	18,051	-	18,051	18,051	-
Additional paid in capital	3,474,970	1,558,457	1,916,513	3,474,970	1,558,457	1,916,513
Net Cash Provided by Financing Activities	5,160,685	3,129,172	2,031,513	5,160,685	3,129,172	2,031,513

Net (Decrease) Increase in Cash	$ 64,771	$ 64,771	$ -	$ 64,771	$ 64,771	$ -

Cash at Beginning of Period	$ -	$ -	$ -	$ -	$ -	$ -

Cash at End of Period	$ 64,771	$ 64,771	$ -	$ 64,771	$ 64,771	$ -

PRIMCO MANAGEMENT INC.

(A Development-Stage Company)

Consolidated Statements of Stockholders’ Deficit

(Restated)


	Preferred			Common				Additional Paid in			Accumulated	Total Stockholders'
	Number of Shares	Amount		Number of Shares		Amount		Capital			Deficit	Deficit
Balance on October 14, 2010 (Inception)	-	$ -		-		$ -		$ -			$ -	$ -
Balance at December 31, 2010	-	-		-		-		-			-	-

Issuance of stock for services	-	-		5,000,000		50		4,950			-	5,000
Net loss for the year ended December 31, 2012	-	-		-		-		-			(5,000)	(5,000)
Balance, December 31, 2012	-	-		5,000,000		50		4,950			(5,000)	(5,000)

Recapitalization	-	-		179,912,000		1,799		(11,708)			-	(9,909)
Issuance of stock in part consideration for purchase of Top Sail Productions, LLC	-	-		5,000,000		50		14,950			-	15,000
Issuance of stock for D&B Music acquisition	7,000,000	70		20,000,000		200		(357,111)			-	(356,841)
Issuance of stock to settle convertible debt, with interest	-	-		1,663,090,181		16,631		808,009			-	824,640
Gain on extinguishment of derivative liabilities (net)	-	-		-		-		2,551,111			-	2,551,111
Acquisition of ESMG, Inc.	-	-		-		-		(1,457,402)			-	(1,457,402)
Net loss for the year ended December 31, 2013	-	-		-		-		-			(3,493,029)	(3,493,029)
Balance, December 31, 2013	7,000,000		$ 70		1,873,002,181		$ 18,730		$1,746,083	$ (3,691,313)			$ (1,926,430)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Since our incorporation on October 14, 2010 in the state of Delaware we have been a development stage company. We began by offering a general array of real estate management services, which continued until January 31, 2013. We then redirected our real estate focus to seeking out properties which had obtained the necessary building permits but which needed finance to start construction. In addition, as of January 31, 2013 with our acquisition of ESMG Inc. we added an entertainment related business segment. Our performance can be significantly affected by changes in general economic conditions and, specifically, shifts in consumer confidence and spending. Additionally, our performance can be affected by competition. Management believes that, as both industries continue to consolidate, competition with respect to pricing will intensify. Such a heightened competitive pricing environment will make it increasingly important for us to successfully distinguish ourselves from competitors based on quality and superior service and content and on our operating efficiency. We are currently not aware of any other known material trends, demands, commitments, events or uncertainties that will have, or are reasonable likely to have, a material impact on our financial condition, operating performance, revenues and/or income, or results in our liquidity decreasing or increasing in any material way.

Results of Operations for the three months ended June 30, 2014

For the three months ended June 30, 2014 we generated revenues of $1,915, which resulted in a gross margin of $1,595 after the cost of services of $320 compared to revenues of $13,915, which resulted in a gross margin of $3,572 after the cost of services of $10,343 for the three months ended June 30, 2013.

Our operating expenses for the three months ended June 30, 2014 totaled $383,561, compared to $145,875 for the three months ended June 30, 2013. By comparison, our operating expenses increased due to additional consulting and legal fees from increased operating activities.

For the three months ended June 30, 2014 we incurred non-operating expenses totaling $2,917,265 as compared to $800,973 for the three months ended June 30, 2013. By comparison, the increase was due to additional derivative interest recorded which was attributable to the outstanding convertible debt.

Our operating expenses consisted mainly of developing and rolling out our business plans and the cost of our convertible debt financing arrangements, as well as the cost of management, consultants, accountants, lawyers and office operations.

Results of Operations for the six months ended June 30, 2014

For the six months ended June 30, 2014 we generated gross revenues of $21,155, resulting in a gross margin of $20,563 after the cost of service of $592, compared to revenues of $13,915, resulting in a gross margin of $3,572 after the cost of service of $10,343 for the six months ended June 30, 2013.

Our operating expenses for the six months ended June 30, 2014 totaled $543,975, compared to $202,880 for the six months ended June 30, 2013. By comparison, our operating expenses increased due to additional consulting and legal fees from increased operating activities.

For the six months ended June 30, 2014 we incurred non-operating expenses totaling $3,097,596 as compared to $800,973 for the six months ended June 30, 2013. By comparison, the increase was due to additional derivative interest recorded which was attributable to the outstanding convertible debt.

Liquidity and Capital Resources

As of June 30, 2014, the Company has a working capital deficit of $4,987,883 compared to a working capital deficit as of December 31, 2013 of $1,943,029. The working capital deficit increased primarily due to the increase in convertible debt and derivative liability associated with said convertible debt.

For the six months ended June 30, 2014, our cash used in operating activities was $744,989 compared to cash used in operating activities of $33,622 the six months ended June 30, 2013.

For the six months ended June 30, 2014, our cash used in investing activities was $11,073 which was from our initial investment in Suzie Q’s.

For the six months ended June 30, 2014, our cash provided by financing activities was $1,149,363 which consisted of $795,000 from convertible notes payable and $354,363 in proceeds from sale of stock subscriptions.

We have had no off balance sheet arrangements since inception through June 30, 2014.

The Company has not generated sufficient revenue from its operations and needs to raise capital to meet the operating requirements over the next twelve months. The Company’s financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The report from the Company’s independent registered public accounting firm states that there is substantial doubt about the Company’s ability to continue as a going concern.

Plan of Operation for the Next 12 months

To help improve our current limited financial position, we plan to carefully seek out and secure third-party equity financing, both short-term and long-term, to both replace our current convertible debt financing and to provide a new and more stable source of capital. Our convertible debt financing to date has been expensive and highly dilutive and detrimental to our stock and needs to be replaced with less costly equity investment.

We intend to more carefully review investment in any future music artist so that we can more effectively manage our risk and downside. We view investment in a well packaged, well cast lower budget motion picture to be preferable than and investment in a higher risk one-off/unproven music artist.

We have redirected our real estate focus to acquiring properties specifically for lease to legalized medical marijuana cultivation growers and to investment, potentially with joint ventures, in business associated with the legalized growing of medical marijuana.

We also intend to include potential strategic business partners and alliances as possible sources of financing, as well as traditional institutional and venture capital sources.

Seasonality

We do not anticipate that our business will be affected by seasonal factors.

Impact of Inflation

General inflation in the economy has driven the operating expenses of many businesses higher. We will continuously seek methods of reducing costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls. While we are subject to inflation as described above, our management believes that inflation currently does not have a material effect on our operating results. However, inflation may become a factor in the future.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Critical accounting policies include revenue recognition and impairment of long-lived assets.

We recognize revenue in accordance with Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.” Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances and other adjustments are provided for in the same period the related sales are recorded.

We evaluate our long-lived assets for financial impairment on a regular basis in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” which evaluates the recoverability of long-lived assets not held for sale by measuring the carrying amount of the assets against the estimated discounted future cash flows associated with them. At the time such evaluations indicate that the future discounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values.

Quantitative and Qualitative Disclosures About Market Risk

We conduct all of our transactions, including those with foreign suppliers and customers, in U.S. dollars. We are therefore not directly subject to the risks of foreign currency fluctuations and do not hedge or otherwise deal in currency instruments in an attempt to minimize such risks. Demand from foreign customers and the ability or willingness of

foreign suppliers to perform their obligations to us may be affected by the relative change in value of such customer or supplier’s domestic currency to the value of the U.S. dollar. Furthermore, changes in the relative value of the U.S. dollar may change the price of our products relative to the prices of our foreign competitors.

Stock-Based Compensation

We recognize compensation cost for stock-based awards based on the estimated fair value of the award on date of grant. We measure compensation cost at the grant date based on the fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition or over a service period.

Recently Issued Accounting Pronouncements

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update were effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for

determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable for a smaller reporting company

ITEM 4: CONTROLS AND PROCEDURES

The term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a, et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

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

Evaluation of Disclosure and Controls and Procedures. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. The evaluation was undertaken in consultation with our accounting personnel. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective at June 30, 2014 due to the lack of accounting personnel. We intend to hire additional employees when we obtain sufficient capital.

Changes in Internal Controls over Financial Reporting. There were no changes in the internal controls over our financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not engaged in any litigation at the present time, and management is unaware of any claims or complaints that could result in future litigation. Management will seek to minimize disputes with its customers but recognizes the inevitability of legal action in today’s business environment as an unfortunate price of conducting business.

Item 1A. Risk Factors

Not applicable for smaller reporting companies

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

On April 7, 2014, the Company executed a stock purchase agreement with SFH Capital, LLC whereby the Company will issue 40,000,000 shares of common stock for $60,000 cash. As of the date of this filing, the shares have not yet been issued. The shares issuable to SFH Capital, LLC will be restricted in their transfer as required by the Securities Act.

On April 27, 2014, the Company executed a stock purchase agreement with SFH Capital, LLC whereby the Company will issue 33,325,000 shares of common stock for $49,988 cash. As of the date of this filing, the shares have not yet been issued. The shares issuable to SFH Capital, LLC will be restricted in their transfer as required by the Securities Act.

On May 9, 2014, the Company executed a stock purchase agreement with SFH Capital, LLC whereby the Company will issue 45,454,546 shares of common stock for $50,000 cash. As of the date of this filing, the shares have not yet been issued. The shares issuable to SFH Capital, LLC will be restricted in their transfer as required by the Securities Act.

On February 28, 2014, the Company executed a stock purchase agreement with Left Coast Pictures, Inc. whereby the Company will issue 153,571,429 shares of common stock for $107,500 cash. As of the date of this filing, the shares have not yet been issued. The shares issuable to Left Coast Pictures, Inc. will be restricted in their transfer as required by the Securities Act.

On March 14, 2014, the Company executed a stock purchase agreement with Sherry Harden whereby the Company will issue 47,272,700 shares of common stock for $26,000 cash. As of the date of this filing, the shares have not yet been issued. The shares issuable to Sherry Harden will be restricted in their transfer as required by the Securities Act.

On March 25, 2014, the Company executed a stock purchase agreement with Left Coast Pictures, Inc. whereby the Company will issue 81,166,666 shares of common stock for $60,875 cash. As of the date of this filing, the shares have not yet been issued. The shares issuable to Left Coast Pictures, Inc. will be restricted in their transfer as required by the Securities Act.

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits

Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS** XBRL Instance Document

101.SCH** XBRL Taxonomy Extension Schema Document

101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**. XBRL Taxonomy Extension Definition Linkbase Document

101.LAB** XBRL Taxonomy Extension Label Linkbase Document

101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

Dated: August 19, 2014

Primco Management Inc.

/s/ David Michery

David Michery

Chief Executive Officer

/s/ Steven J. Corso

Steven J. Corso

Chief Financial Officer

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Primco Management (PMCM) Inactive 10-Q2014 Q2 Quarterly report

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