Evergreen Sustainable Enterprises (EGSE) 10-Q 2016 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C.  20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended: September 30, 2016 Commission File Number 000-55019

HOME TREASURE FINDERS, INC. AND SUBSIDIARY

(Exact name of registrant as specified in its charter)

COLORADO	26-3119496
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
4316 Tennyson Street, Denver, Colorado	80212
(Address of principal executive offices)	(Zip code)

(720) 273-2398

(Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ý Yes           o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   ý Yes                      o No (Not required)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company ý

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

As of November 14, 2016, 13,205,450 shares of common stock, no par value of registrant were outstanding.

Index

	Page
PART I  FINANCIAL INFORMATION
Item 1. Financial Statements for the period ended September30, 2016
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Operations (Unaudited)	4
Consolidated Statements of Cash Flows (Unaudited)	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3. Quantitative and Qualitative Disclosures About Market Risk	10
Item 4. Controls and Procedures	10
Item 4T. Controls and Procedures	10
PART II  OTHER INFORMATION
Item 1. Legal Proceedings	11
Item 1A. Risk Factors	11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3. Defaults Upon Senior Securities	11
Item 4. Mine Safety	11
Item 5. Other Information	11
Item 6. Exhibits	12
Signatures	13

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PART I  FINANCIAL INFORMATION

Item 1.  Financial Statements

HOME TREASURER FINDERS, INC. AND SUBSIDIARY

 Consolidated Balance Sheets

	September 30,			December 31,
	2016			2015
	(unaudited)
Assets
Current Assets:
Cash	$	45,827		$	45,210
Rent receivable		500			500
Prepaid expenses		2,729			706
Total current assets		49,056			46,416
Property and equipment, net		826,172			843,106
Other assets:
Security deposits		1,050			1,050
Total assets	$	876,278		$	890,572
Liabilities and Shareholders' Equity (Deficit)
Liabilities:
Accounts payable	$	16,900		$	-
Accrued wages		18,612			18,612
Accrued liabilities		70,915			68,187
Accrued interest – related party		3,090			2,781
Note payable, current portion		10,913			13,265
Related party note payable		3,145			9,193
Total current liabilities		123,575			112,038
Long term debt, net of current portion		803,643			811,654
Total liabilities		927,218			923,692
Shareholders' equity (deficit):
Common stock, no par value; 100,000,000 shares authorized,
13,205,450 and 13,205,450 shares issued and outstanding, respectively		215,267			215,267
Additional paid in capital		96,476			96,476
Accumulated deficit		(362,683	)		(344,863	)
Total shareholder's equity (deficit)		(50,940	)		(33,120	)
Total liabilities and shareholders' equity (deficit)	$	876,278		$	890,572

See accompanying notes to consolidated financial statements.

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HOME TREASURER FINDERS, INC. AND SUBSIDIARY

 Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Commission income	$	44,535		$	73,928		$	165,053		$	147,470
Property and rental management income		59,726			29,391			176,657			140,134
Revenue	$	104,261		$	103,319		$	341,710		$	287,604
Operating expenses:
Commission expense		4,448			41,257			52,170			71,674
Professional fees		7,713			5,419			33,931			27,760
General and Administrative		84,393			61,975			230,060			185,708
Total operating expenses		96,554			108,651			316,161			285,142
Operating income (loss)		7,707			(5,332	)		25,549			2,462
Other income (expense)
Other income		-			-			-			-
Interest expense		(14,418	)		(14,738	)		(43,369	)		(44,318	)
Total other income (expense)		(14,418	)		(14,738	)		(43,369	)		(44,318	)
Income (loss) before taxes		(6,711	)		(20,070	)		(17,820	)		(41,856	)
Income tax expense		—			—			—			—
Net income (loss)	$	(6,711	)	$	(20,070	)	$	(17,820	)	$	(41,856	)
Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic and diluted weighted average
common shares outstanding		13,205,450			13,205,450			13,205,450			13,205,450

See accompanying notes to consolidated financial statements.

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HOME TREASURER FINDERS, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Unaudited)

	For the Nine Months Ended
	September 30,
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	(17,820	)	$	(41,856	)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Depreciation and amortization		17,874			19,638
Changes in operating assets and liabilities:
Increase in rent receivable		-			(500	)
Increase in prepaid expense		(2,023	)		(5,783	)
Increase in accrued interest related party		309			550
Increase in accrued liabilities		2,728			20,778
Increase in accounts payable		16,900			1,248
Net cash provided by (used in)
operating activities		17,968			(5,925	)
Cash flows from investing activities:
Cash paid for fixed assets		(940	)		(831	)
Net cash used in investing activities		(940	)		(831	)
Cash flows from financing activities:
Proceeds from related party payable		3,145			1,500
Payment of related party payable		(9,193	)		-
Payment of long term debt		(10,363	)		(9,719	)
Net cash provided by (used in)
financing activities		(16,411	)		(8,219	)
Net change in cash		617			(14,975	)
Cash, beginning of period		45,210			36,848
Cash, end of period	$	45,827		$	21,873
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—		$	—
Interest	$	32,591		$	—
NON CASH FINANCING ACTIVITIES:
None		—			—

See accompanying notes to consolidated financial statements.

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HOME TREASURE FINDERS, INC. AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements

Note 1:  Basis of Presentation

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

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2015 financial statements and notes thereto included. The results of operations for the period ended September 30, 2016, are not necessarily indicative of the operating results for the year ended December 31, 2016.

Note 2:  Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.   These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

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

Note 3:  Related Party Transactions

During the nine months ended September 30, 2016, the related party payable had a net decrease of $6,048.  During the three months ended September 30, 2016 the related party payable increased $1,887.  The balance of the related party payable was $3,145 and $9,193 as of September 30, 2016 and December 31, 2015, respectively.  This payable is due on demand and has an interest rate of 8%.  Accrued interest on this payable was $3,090 and $2,781 at September 30, 2016 and December 31, 2015, respectively.  Interest expense for the nine months ended September 30, 2016 and 2015 was $309 and $505, respectively.  Interest expense on this liability for the three months ended September 30, 2016 and 2015 was $125 and $205, respectively.

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HOME TREASURE FINDERS, INC. AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements

Note 4:  Property and Equipment

The Company's capital assets consist of warehouse units, computer equipment, office furniture and leasehold improvements for the new office.  Depreciation and amortization is calculated using the straight-line method over the estimated useful life of the asset, ranging from 18 months to 39 years.  Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred.  The cost and related accumulated depreciation of any capital assets that are sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.

Fixed assets and related depreciation are as follows: 

	September 30, 2016			December 31, 2015
Computer equipment	$	5,672		$	5,672
Furniture and fixtures		7,777			6,837
Leasehold improvements		4,000			4,000
Warehouse units		861,000			861,000
Accumulated amortization and depreciation		(52,277	)		(34,403	)
Total fixed assets	$	826,172		$	843,106

Depreciation expense was $17,874 and $17,638 for the nine months ended September 30, 2016 and 2015, respectively.  Amortization expense was $0 and $2,000 for the nine months ended September 30, 2016 and 2015, respectively.

Depreciation expense was $6,003 and $5,879 for the three months ended September 30, 2016 and 2015, respectively.  Amortization expense was $0 and $667 for the three months ended September 30, 2016 and 2015, respectively.

Note 5:  Debt

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

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

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

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

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

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HOME TREASURE FINDERS, INC. AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements

Note 5:  Debt (continued)

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

As of September 30, 2016, the balance of the note was $814,556 and the annual maturities of the long-term debt were:

Year Ending December 31,
2016	$	2,902
2017		10,790
2018		11,090
2019		789,774
	$	814,556

Note 6:  Subsequent Events

On October 25, 2016, the Company entered into a new lease for office space.  The space is next door to the Company's current location in a larger space.  We are leasing this facility at a monthly payment of $1,400 for the term of the lease which ends on March 31, 2018.

The Company has evaluated all other subsequent events pursuant to ASC Topic 855 and has determined that there are no events that require disclosure as of the date of issuance. 

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Part I. Item 2.  Management's Discussion and Analysis of Financial Conditions and Results of Operations

Forward-looking statements

The following discussion should be read in conjunction with the financial statements of Home Treasure Finders, Inc. and Subsidiaries (the "Company"), which are included elsewhere in this Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking information. Forward-looking information includes statements relating to future actions, future performance, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other such matters of the Company. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. Forward-looking information may be included in this Quarterly Report on Form 10-Q or may be incorporated by reference from other documents filed with the Securities and Exchange Commission (the "SEC") by the Company. You can find many of these statements by looking for words including, for example, "believes", "expects", "anticipates", "estimates" or similar expressions in this Quarterly Report on Form 10-Q or in documents incorporated by reference in this Quarterly Report on Form 10-Q. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.

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

Financial Condition and Results of Operation

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

Our net loss for the nine months ended September 30, 2016 was $17,820.  We generated operating revenue from three sources, sales commissions, property management, and commercial real estate for legal cannabis cultivation. We manage approximately 65 rental real estate owned by non-related third parties. In comparison our net loss for the nine months ended September 30, 2015 was $41,856.

For the nine months ended September 30, 2016 the Company generated a total of $341,710 in revenues, consisting of $165,053 from sales commissions and $176,656 from rental and property management.  During the nine months ended September 30, 2015 we generated a total of $287,604 in revenues, consisting of $147,470 from sales commissions and $140,134 from rental and property management.

During the nine months ending September 30, 2016 we incurred operating expenses totaling $316,161. Such expenses consisted primarily of commissions paid on the revenue earned, general and administrative expenses, property management expenses and professional fees.  During the nine months ended September 30, 2015 we incurred a total of $285,142 of operating expenses consisting primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  The increase in expenses over prior year was primarily related to increase in audit and legal fees and increase in property management expenses and other administrative expenses.

 Our net loss for the three months ended September 30, 2016 and 2015 was $6,711 and $20,070, respectively.  For the three months ended September 30, 2016 the Company generated a total of $104,261 in revenues, consisting of $44,535 from sales commissions and $59,726 from rental and property management.  During the three months ended September 30, 2015 we generated a total of $103,319 in revenues, consisting of $73,928 from sales commissions and $29,391 from rental and property management.

During the three months ending September 30, 2016 we incurred operating expenses totaling $96,554. Such expenses consisted primarily of commissions paid on the revenue earned, general and administrative expenses, property management expenses and professional fees.  During the three months ended September 30, 2015 we incurred a total of $108,651 of operating expenses consisting primarily of commissions paid on the revenue earned, general and administrative expenses and professional fees.  The decrease in expenses over prior year was primarily related to a decrease in commissions being paid out.

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Liquidity and Capital Resources

At September 30, 2016, we had $45,827 in cash and working capital deficit of $74,519.  At December 31, 2015 we had $45,210 in cash and a working capital deficit of $65,622.

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

No response required.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

Item 4T.  Changes in Internal Controls over Financial Reporting

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

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Part 2.    Other Information

Item 1 -  Legal Information.

No response required.

Item 1A.  Risk Factors

No response required.

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

None.

Item 3 -  Defaults Upon Senior Securities.

No response required.

Item 4 -  Mine Safety.

No response required.

Item 5 -  Other Information.

No response required.

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

(a)       Exhibits:

Exhibit Number	Description
31.1	Certification of CEO/CFO pursuant to Sec. 302
32.1	Certification of CEO/CFO pursuant to Sec. 906
99.1	Settlement Agreement And Mutual Release
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.INS	XBRL Instance Document
101SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

(b)           Reports on Form 8-K:

None.

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SIGNATURES

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

	HOME TREASURE FINDERS, INC. AND SUBSIDIARY
	(Registrant)
DATE:   November 14, 2016	BY:	/s/ Corey Wiegand
		Corey Wiegand
		President

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