UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended May 31, 2011

Commission file number:  000-52951

HERE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Registrant’s Telephone Number, including area code:

(210) 957-7879

Securities registered under Section 12(b) of the Exchange Act:

Title of each class:

Name of each exchange on which registered:

N/A

N/A

Securities registered under Section 12(g) of the Exchange Act:

Common Stock

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  [  ] Yes    [X]  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  [  ]  Yes     [X]  No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

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

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, 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.)  [  ]  Yes    [x]  No

(Not required)

Indicate by check mark if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporation by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [  ]

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.

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.$81,900,000.  Registrant trades on the pink sheets under the symbol HRTE.  

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 819,000,000 shares of common stock as of September 29, 2011.

PART I

Item 1.  Business

Corporate History

We were incorporated in the State of Nevada on November 15, 2006.  Our wholly-owned subsidiary, Here Network Corp., was incorporated in the Province of British Columbia on December 12, 2006.  We commenced business operations with the acquisition of dinehere.ca on December 12, 2006.

Through our subsidiary, Here Network Corp. incorporated in British Columbia, we operated a website dining guide at www.dinehere.ca called Dine Here.  The website contained restaurant listings for British Columbia including Greater Vancouver, Victoria and Whistler.  

On May 15, 2009, certain significant shareholders of our company, and Magnolia Solar, Inc., entered into a memorandum of understanding with respect to the potential acquisition by Magnolia of a majority interest in our company.  The memorandum of understanding contemplated that pursuant to a mutually satisfactory definitive agreement between the parties, Magnolia would acquire a majority interest in the issued and outstanding common stock of our Company from our Company and certain significant shareholders of our Company for $300,000.  The purchase price of $300,000 was contemplated to be raised by Midtown Partners as part of its $1,500,000 bridge funding.

In June 2009, we entered into a letter agreement with Magnolia, pursuant to which Magnolia agreed to wire us $20,000, upon the execution of the letter agreement, which amount was to be utilized by us solely for expenses related to the completion of the audit of our financial statements for the year ended May 31, 2009. In addition, upon the consummation of the transactions contemplated under the memorandum of understanding, $20,000 was to be applied as a credit against the purchase price for the controlling interest in our company as contemplated by the memorandum of understanding. If such transactions failed to close on or before August 31, 2009 or such later date as agreed by Magnolia and us, through no fault of  the Company, $20,000 was to be treated as a “break up” fee payable to us. If we or our majority shareholders, for any reason, determined not to proceed with such transactions upon being presented with the definitive merger agreement, $20,000 was to be immediately due and payable to Magnolia within 10 days of being presented with the definitive agreement. We extended the closing date to December 15, 2009.

On October 15, 2009, Magnolia advanced our company $15,000 of $20,000 contemplated under the letter agreement. On December 10, 2009, Magnolia decided not to proceed with the transactions contemplated by the memorandum of understanding and we consider $15,000 from Magnolia as a “break up” fee. Accordingly, we recognized $15,000 as other income in the statement of operations for the nine-month period ended February 28, 2010. Management does not expect our company to receive from Magnolia the remaining $5,000 contemplated under the letter agreement.

On April 9, 2010, we sold all of the issued and outstanding stock of Here Network Corp. to the founders of the Company, in exchange for the return of 5,600,000 shares of Here Enterprises common stock, which shares were then assigned and delivered to others.

On September 9, 2010, the Company entered into an agreement to become the sole shareholder of ABS Land Company, Inc. (“ASB”) and Cycle Ranch Inc. (“Cycle Ranch”), and the owner of 99% limited partnership interest of Cycle Ranch Management, Ltd., making them wholly-owned subsidiaries of the Company.  Cycle Ranch is the managing partner of Cycle Ranch Management, Ltd., which operates a motocross park near Floresville, Texas.  ASB owns land which it leases to Cycle Ranch Management, Ltd. for its operations.  Collectively, the entities will be referred to hereinafter as Cycle Ranch.

The Agreement is also subject to the guarantee of a promissory note issued to the original seller of the stock of the Cycle Ranch in the amount of $640,000, with interest at 6% per annum and dated February 5. 2010, which requires payment of $6,063 per month, with the balance due in full on August 30, 2012.

Current Business

Cycle Ranch operates a motocross race track located in Floresville, Texas. They have 108 acres of red dirt and oak trees.  The main track is approximately 1.7 miles long and 30 feet wide and is prepared every weekend for races.  There is also a junior beginner track located behind the main race track.  Facilities also include bathrooms, covered pavilions with picnic tables, covered grandstands that seat 800 people, a bike wash and a bike shop.  More details on the track, facilities and events can be viewed at www.cycleranchmx.com.

Sources of Revenue

Currently, Cycle Ranch generates revenues from two separate sources.  Cycle Ranch Management, Ltd. generates revenues from the operation of its BMX race track through practice session fees, race event fees, camping fees, special event fees, the bike wash and sales from the bike shop.  Cycle Ranch Management, Ltd. pays a fee to lease the land on which the track is located to ASB Land Management, Inc., which is ASB’s only source of revenue.  Cycle Ranch, Inc. currently only serves as general partner of Cycle Ranch Management, Ltd.

Competition

We compete regionally nationally with other speedway owners to sponsor events.  We compete for spectator interest with all forms of professional and amateur spring, summer and fall sports, and with a wide range of other available entertainment and recreational activities, conducted in and near Floresville, San Antonio, and Austin, Texas, and regionally and nationally.  These competing events or activities may be held on the same days as our events.  We promote outdoor motorsports events.  Weather conditions surrounding these events affect sales of tickets, concessions and souvenirs, among other things.  

Employees

Our President, Secretary, Treasurer and Director, Mark K. Ryun, and our Chief Financial Officer, George Russell, are the only employees of our Company.  They handle all of the responsibilities in the area of corporate administration, business development and research.

Intellectual Property

We are not aware that our services or proprietary rights infringe the proprietary rights of third parties.  However, from time to time, we may receive notices from third parties asserting that we have infringed their trademarks, copyrights or other intellectual property rights.  In addition, we may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights.  Any such claims could be time-consuming, result in costly litigation, cause service stoppages or lead us to enter into royalty or licensing agreements rather than disputing the merits of such claims.  An adverse outcome in litigation or similar proceedings could subject us to significant liabilities to third parties, require expenditure of significant resources to develop non-infringing technology and opportunities, require disputed rights to be licensed from others, or require us to cease the marketing or use of our website, any of which could have a material adverse effect on our business, operating results and financial condition.

REPORTS TO SECURITY HOLDERS

We filed a Prospectus as part of a Form S-1, as amended, with the Securities and Exchange Commission and will file reports, including quarterly and annual reports, with the Commission pursuant to Section

12(b) or (g) of the Exchange Act.  These reports and any other materials filed with the SEC may be read and copied at the SEC's Public Reference Room at 100 F Street NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.  The Company files its reports electronically with the SEC.  The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The address of that site is http://www.sec.gov.

Item 1A. Risk Factors

Not applicable.

Item 1B.  Unresolved Staff Comments

Not Applicable.

Item 2. Properties

Our executive and head office is located at 848 N. Rainbow Blvd. #2952, Las Vegas, NV 89107.  The Company also operates a motor cross race track, located in Floresville, Texas through its subsidiary, Cycle Ranch.  The Company owns a 99% interest in the company which owns the lease on that property.

Item 3. Legal Proceedings

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which our director and officer, or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 4.  (Removed And Reserved)

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common shares are quoted on the OTC Bulletin Board under the trading symbol “HRTE.OB”.  There were very few trades in our common shares.  The following quotations obtained from the OTC Bulletin Board reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

There were no quotations reported for our common shares as reported on the OTC Bulletin Board prior to January 2008.  The last sale price of our common shares on September 26, 2011, was $0.0042 per share.

There are currently 16 holders of record of our common stock.

There are no outstanding options or warrants to purchase, or securities convertible into, our common shares.  None of our issued and outstanding shares can be sold pursuant to Rule 144 of the Securities Act of 1933.

We have not declared or paid any cash dividends since inception.  We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future.  There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

*

we would not be able to pay our debts as they become due in the usual course of business; or

*

our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

Item 6.  Selected Financial Data.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and in our annual report, particularly in the section entitled “Risk Factors” beginning on page 8 of the annual report.

Our audited consolidated financial statements are stated in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles.

Overview

We were incorporated in the State of Nevada on November 15, 2006.  Our wholly-owned subsidiary, Here Network Corp., was incorporated in the Province of British Columbia on December 12, 2006.  On March 9, 2010, the Company sold its wholly-owned subsidiary, Here Network Corp. to Company’s controlling shareholders in exchange for the return of 5,600,000 common shares of the Company, which were distributed to certain shareholders.

Sources of Revenue

The Company generated $287,592 in revenues for the year ended May 31, 2011, primarily from the operation of its subsidiary companies.  No revenues were generated during the year ended May 31, 2010.  Revenues generated from Here Network Corp. have been included in loss from discontinued operations for the year ended May 31, 2010.

Results of Operations

Year ended May 31, 2011 and May 31, 2009

The following table summarizes our operating results for the years ended May 31, 2011 and 2010:

General and administrative costs were $215,615 for the year ended May 31, 2011 as compared to $109,665 for the year ended May 31, 2010.  The increase in general and administrative costs was primarily attributable to Interest expense accrued and management fees incurred to officers of the Company.

Liquidity and Capital Resources

Working Capital

As of May 31, 2011, we had cash of $5,790, and a working capital deficit of $6,350,901, as compared to cash of $3,087, and working capital deficit of $100,515 as of May 31, 2010.  We have suffered a net loss from inception.  

Management believes that our cash will not be sufficient to meet our working capital requirements for the next twelve month period. We plan to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our funding requirements for the next twelve months primarily through future debt or equity financing. There is no assurance that we will be able to obtain further funds required for our continued working capital requirements. If we are not able to obtain additional funds on a timely basis, we will be unable to conduct our operations as planned. In such event, we will be forced to scale down or perhaps even cease our operations.

Going Concern

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon the continued financial support from our shareholders, our ability to obtain necessary equity financing to continue operations, and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current shareholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Because we have a working capital deficit, have generated minimal revenues, and have incurred losses from operations since inception, in their report on our audited financial statements for the year ended May 31, 2011, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.  Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

Here Enterprises, Inc.

May 31, 2011

Index

Report of Independent Registered Public Accounting Firm

F–1

Consolidated Balance Sheets

F–2

Consolidated Statements of Operations

F–3

Consolidated Statements of Stockholders’ Deficit

F–4

Consolidated Statements of Cash Flows

F–5

Notes to the Consolidated Financial Statements

F–6 – F–18

Report of Independent Registered Public Accounting Firm

To the Directors and Stockholders of

Here Enterprises, Inc.

We have audited the accompanying consolidated balance sheets of Here Enterprises, Inc. as of May 31, 2011 and 2010 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Here Enterprises, Inc. as of May 31, 2011 and 2010, and the results of its operations and its cash flows for the years ended in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a working capital deficit, has generated minimal revenues, and has incurred losses from operations since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ “Manning Elliott LLP”

CHARTERED ACCOUNTANTS

Vancouver, Canada

September 29, 2011

F-1

Here Enterprises, Inc.

Consolidated Balance Sheets

(Expressed in U.S. dollars)

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

F-2

Here Enterprises, Inc.

Consolidated Statements of Operations

(Expressed in U.S. dollars)

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

F-3

Here Enterprises, Inc.

Consolidated Statement of Stockholders’ Deficit

(Expressed in U.S. dollars)

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

F-4

Here Enterprises, Inc.

Consolidated Statements of Cash Flows

(Expressed in U.S. dollars)

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

F-5

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

1.

Nature of Operations and Continuance of Business

Here Enterprises, Inc. (“Here Enterprises” or the “Company”) was incorporated in the state of Nevada on November 15, 2006. On December 12, 2006, the Company incorporated Here Network Corp., a company incorporated in the province of British Columbia, Canada. On December 12, 2006, Here Network Corp. acquired a website www.dinehere.ca which provides restaurant listings and reviews to a broad spectrum of Internet visitors.

On March 9, 2010, Here Enterprises sold Here Network Corp. On September 9, 2010, Here Enterprises entered into a Share Purchase Agreement with The Good One, Inc. (“The Good One”), under which it agreed to purchase all of the common stock of Cycle Ranch, Inc. and ASB Land Company, Inc., and a 99% limited partnership interest of Cycle Ranch Management, Ltd. (collectively, “Cycle Ranch”).  Cycle Ranch, Inc. currently only serves as general partner of Cycle Ranch Management, Ltd. and owns the remaining 1% interest in Cycle Ranch Management Ltd.  Cycle Ranch operates a motocross park near Floresville, Texas (the “Cycle Ranch Business”).  Revenue is primarily generated from participant registration fees and admissions.  Upon the completion of this transaction, the Company emerged from the development stage as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Enterprises” as the Company has realized substantial revenue from principal operations and devotes substantial efforts to operating its motocross business. In addition to the motocross business, the Company intends to develop wind energy projects on the premises of existing commercial businesses.  The Company’s first wind farm is being developed on the premises of the Cycle Ranch motocross park. 

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of May 31, 2011, the Company has a working capital deficit of $6,350,901, and has incurred losses from operations of $9,803,898 since inception. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and management, the ability of the Company to obtain necessary equity or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company intends to fund operations through debt and equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending May 31, 2012.  There is no assurance that the Company will obtain the necessary financing to complete its objectives.

2.

Summary of Significant Accounting Policies

a)

Basis of Presentation

These consolidated financial statements and notes are presented in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and wholly-owned subsidiaries, Cycle Ranch, Inc. and ASB Land Company, Inc. and Cycle Ranch Management, Ltd. starting from the date of acquisition, September 9, 2010 (see Note 3).  All significant inter-company transactions and balances have been eliminated.  The Company’s fiscal year end is May 31.

b)

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to valuation of financial instruments, recoverability of long-lived assets, impairment of goodwill, depreciation rates, donated expenses and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

F-6

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

2.

Summary of Significant Accounting Policies (continued)

c)

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

d)

Advertising

Advertising costs totalled approximately $6,727 and $Nil for the year ended May 31, 2011 and 2010, respectively, and are expensed as incurred.

e)

Financial Instruments and Concentrations

ASC 825, Financial Instruments requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value.  A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, accounts payable, amounts due to related parties, loans payable, contingently convertible promissory notes and convertible promissory notes.  Pursuant to ASC 825, the fair value of the Company’s cash equivalents, when applicable, is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets.  The Company estimates that the carrying values of all of its other financial instruments approximate their fair values due to the immediate or relatively short maturities of these instruments and current market rates for similar instruments.

Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of May 31, 2011 as follows:

F-7

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

2.

Summary of Significant Accounting Policies (continued)

e)

Financial Instruments and Concentrations (continued)

Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of May 31, 2010 as follows:

The Company does not have any liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet as of May 31, 2011 or 2010.

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash.  The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.  

Items Measured at Fair Value on a Nonrecurring Basis:

In addition to assets and liabilities measured at fair value on a recurring basis, the Company is required to measure certain assets at fair value on a nonrecurring basis, generally as a result of an impairment charge. During the year ended May 31, 2011, as part of the Company’s annual review of intangible assets, an impairment charge of $3,769,656 was recognized related to the acquisition of Cycle Ranch. The fair value of Cycle Ranch was $1,902,393 at May 31, 2011 based on Level 3 inputs. Fair value was determined based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates and cost of capital.

f)

Property and Equipment

Property and equipment are recorded at cost. Land is not amortized.  Amortization has been provided using the following rates and methods for property and equipment other than land:

g)

Goodwill

In accordance with ASC 350, “Intangibles – Goodwill and Other”, goodwill is required to be tested for impairment on an annual basis, or more frequently if certain indicators arise, using the guidance specifically provided.

Management reviews goodwill at least annually, and on an interim basis when conditions require, evaluates events or changes in circumstances that may indicate impairment in the carrying amount of such assets. An impairment loss is recognized in the statement of operations in the period that the related asset is deemed to be impaired.  During the year ended May 31, 2011, the Company recorded an impairment of goodwill expense of $3,769,656, equal to the excess of the carrying value of goodwill over the estimated fair value of goodwill.

h)

Long-lived Assets

In accordance with ASC 360, “Property, Plant and Equipment”, the carrying values of long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

F-8

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

2.

Summary of Significant Accounting Policies (continued)

i)

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

j)

Revenue Recognition

The Company’s revenue is derived primarily from participant registration fees and admissions to the motocross park. The Company recognizes this revenue in accordance with ASC 605, “Revenue Recognition” when the price is fixed or determinable, persuasive evidence of an arrangement exists, the revenue has been earned, and collectability is reasonably assured.  The price is fixed and determinable, persuasive evidence of an arrangement exists and collectability is reasonably assured when participant registration fees and admissions are received.  Revenue has been earned upon completion of the races.

k)

Comprehensive Income

ASC 220, “Comprehensive Income,” establishes standards for the reporting and display of other comprehensive income and its components in the financial statements. As at May 31, 2011, the Company does not have any accumulated other comprehensive loss.

l)

Earnings (Loss) per Share

The Company computes earnings (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.  As at May 31, 2011, the Company has 1,253,252,985 dilutive potential shares outstanding.

m)

Reclassification

Certain reclassifications have been made to the comparative figures to conform to the current period’s presentation.

n)

Recent Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements, which amends the ASC Topic 820, Fair Value Measurements and Disclosures.  ASU No. 2010-06 amends the ASC to require disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements.  The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures concerning purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  The adoption of this amendment is not expected to have a material effect on the Company’s consolidated financial statements.

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

F-9

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

3.

Acquisition

On September 9, 2010, Here Enterprises entered into Share Purchase Agreement with The Good One, under which it agreed to purchase the Cycle Ranch Business, consisting of all of the common stock of Cycle Ranch, Inc. and ASB Land Company, Inc., and a 99% limited partnership interest of Cycle Ranch Management, Ltd., (collectively the “Shares”). Cycle Ranch, Inc. currently only serves as general partner of Cycle Ranch Management, Ltd. and owns the remaining 1% interest in Cycle Ranch Management Ltd.  Cycle Ranch operates a motocross park near Floresville, Texas (the “Cycle Ranch Business”).  In exchange for the Shares, the Company issued to The Good One a convertible promissory note in the amount of $5,000,000 (the “Note”).  The Note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance.  The Note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 50% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system (the “Conversion Price”).  The Conversion Price is subject to a minimum of $0.001 per share, being par value.  The Note may be repaid by the Company, in whole or in part, at any time with 10 days notice.  The Good One may either accept the prepayment or request that it be immediately converted to shares of the Company at the Conversion Price.  In conjunction with the Share Purchase Agreement, the Company has agreed to guarantee the repayment of a $640,000 promissory note due from The Good One to a third party (the “Promissory Note”).  The Promissory Note is secured by the Shares and bears interest at 6% per annum.  Principal and interest were payable commencing March 1, 2010 in monthly installments of $5,063, increasing to $6,063 on September 1, 2010, with the remaining balance due on August 30, 2012.   The Company is issuing convertible notes for the principal and interest repayments made by the Good One and plans to assume making the payments. The Promissory Note may be repaid, in whole or in part at any time without penalty.  The Shares are to be held in escrow until the Promissory Note and accrued interest are repaid.

The acquisition of the Cycle Ranch Business is valued at the fair value of the Note issued to the Good One and the fair value of the Promissory Note guaranteed by the Company.  The Note and the Promissory Note issued were estimated to have a fair value of $5,552,947. The Company’s allocation of the purchase price to the estimated fair values of the assets and liabilities of the Cycle Ranch Business is as follows:

The Company’s allocation of the purchase price to the assets acquired and liabilities assumed is based upon their estimated fair values at the time of acquisition. The Company is in the process of determining fair values for the assets and liabilities acquired. Matters still under review include deferred income tax calculations, and could affect values assigned to assets and liabilities acquired.

On May 31, 2011, as part of the company’s annual review of intangible assets, the Company recorded an impairment of the goodwill recorded upon the acquisition of Cycle Ranch of $3,769,656.  The goodwill was determined to be impaired as a result of a decrease in fair value of Cycle Ranch resulting from reduced expectations for discounted cash flows.

F-10

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

4.

Property and Equipment

Property and equipment consists of the following:

5.

Related Party Transactions and Balances

a)

As at May 31, 2011, the Company was indebted to the Chief Executive Officer of the Company in the amount of $140,000 (May 31, 2010 - $20,200) for management services and $27,913 for an advance of working capital.  The amounts are unsecured, non-interest bearing and due on demand.

b)

As at May 31, 2011, the Company was indebted to the former Chief Financial Officer of Company in the amount of $22,500 (May 31, 2010 - $5,000) for management services.  The amount is unsecured, non-interest bearing and due on demand.

c)

As at May 31, 2010, the Company was indebted to shareholders of the Company in the amount of $5,500.  The amount was unsecured, non-interest bearing and due on demand.  During the year ended May 31, 2011, amounts owed to the shareholders were exchanged for the promissory note described in Note 7(b).

d)

The Chief Executive Officer of the Company has an agreement to provide management services at a rate of $10,000 per month.  The agreement can be terminated with notice of one month.  During the year ended May 31, 2011, the Company incurred $120,000 (2010 - $20,000) in management fees under the agreement which has been recorded in wages and benefits expense in the statement of operations.  

e)

The former Chief Financial Officer of the Company had an agreement to provide management services at a rate of $2,500 per month.  The agreement could be terminated with notice of one month. The agreement was terminated effective January 31, 2011.  During the year ended May 31, 2011, the Company incurred $20,000 (2010 - $5,000) in management fees under the agreement which has been recorded in wages and benefits expense in the statement of operations.  

f)

One former employee of the Company provided management services and office premises to the Company at no charge for the period of June 1, 2009 to March 8, 2010.  From March 9, 2010 to May 31, 2010, an officer of the Company provided office premises to the Company at no charge. The donated services have an estimated fair value of $2,000 per month and office premises have an estimated fair value of $250 per month. During the year period ended May 31, 2011, $nil (2010 - $18,000) in donated services and $nil (2010 - $2,250) in donated rent were charged to operations and recorded as donated capital.

6.

Loans Payable

(a)

On October 8, 2008, the Company issued a promissory note to an unrelated company for proceeds of $30,000.  The promissory note bears interest at 20% per annum, is unsecured and repayable on demand.

(b)

At May 31, 2011, the Company was indebted to a financing company for $926 (May 31, 2010 - $Nil).  The note is payable in monthly instalments of $162, bears interest of 10.4% and is secured by machinery.

(c)

On April 8, 2009, the Company issued a promissory note to an unrelated company for proceeds of $10,000.  On June 26, 2009 and March 24, 2010, the Company issued additional promissory notes to this company for proceeds of $20,000 and $2,700 respectively.  The Company repaid $5,000 on October 20, 2009, and $8,000 on November 19, 2009.  As at May 31, 2011, the carrying value of the promissory notes and remaining outstanding principal was $19,700 (May 31, 2010 - $19,700). The promissory notes bear no interest, are unsecured and have no fixed term for repayment.

F-11

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

6.

Loans Payable (continued)

(d)

On September 9, 2010, as part of the Share Purchase Agreement described in Note 3, the Company has agreed to guarantee the repayment of a $640,000 promissory note due from The Good One to a third party.  The Promissory Note is secured by the Shares and bears interest at 6% per annum.  Principal and interest was payable commencing March 1, 2010 in monthly instalments of $5,063, increasing to $6,063 on September 1, 2010, with the remaining balance due on August 30, 2012.  The Company is issuing convertible notes for the principal and interest repayments made by the Good One and plans to assume making the payments. The Promissory Note may be repaid, in whole or in part at any time without penalty.  The Shares are pledged as security and to be held in escrow until the Promissory Note and accrued interest are repaid. Refer to Note 3.  On September 9, 2010, the Company discounted the note to the present value of the future cash flows.  The carrying value will be accreted over the term of the promissory note up to its face value of $640,000.  As at May 31, 2011, the carrying value of the convertible promissory note was $548,571 and the remaining outstanding principal was $579,420.

7.

Contingently Convertible Promissory Notes

a)

On May 12, 2010, the Company issued a contingently convertible promissory note to The Good One, Inc. for proceeds of $10,000.  The promissory note is unsecured, bears interest at 5% per annum and is automatically convertible into shares of the Company’s stock upon the satisfaction of certain conditions.  The conditions for automatic conversion were not satisfied and the note and accrued interest was repayable on November 12, 2010.  

On November 12, 2010, the Company and The Good One, Inc. agreed to amend the repayment date to September 25, 2011 unless the conditions for automatic conversion are satisfied.  All other terms and conditions of the Note remain the same.  The amendment was accounted for pursuant to ASC 470-60 “Troubled Debt Restructuring”.  As the total future cash payments exceeded the carrying amount of the liability, no gain or loss was recognized and there was no change in the carrying value.

The conversion price is equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The note may be repaid by the Company, in whole or in part, at any time without penalty.

b)

On December 6, 2010, the Company issued a contingently convertible promissory note to a shareholder to settle accounts payable relating to expenses incurred and equipment purchased on behalf of the company of $121,206.  The promissory note is unsecured, bears interest at 5% per annum and is automatically convertible into shares of the Company’s stock upon the satisfaction of certain conditions.  If the conditions for automatic conversion are not satisfied, the note and accrued interest are repayable on June 6, 2011.  The conversion price is equal to 30% of the average closing bid price for the three business days prior to the notice of conversion.  The note may be repaid by the Company, in whole or in part, at any time without penalty.

F-12

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

8.

Convertible Promissory Notes

Convertible promissory notes outstanding at May 31, 2011 are summarized in the following table:

(a)

On July 20, 2010, the Company issued a $10,000 convertible note to a shareholder of the Company for proceeds of $10,000. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being January 20, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $10,000 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $10,000. As at May 31, 2011, the carrying value of the convertible promissory note was $10,000.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(b)

On August 3, 2010, the Company issued a $10,000 convertible note to a shareholder of the Company for proceeds of $10,000. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being February 3, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $10,000 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $10,000. As at May 31, 2011, the carrying value of the convertible promissory note was $10,000.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

F-13

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

8.

Convertible Promissory Notes (continued)

(c)

On August 31, 2010, the Company issued a $10,000 convertible note to a shareholder of the Company for proceeds of $10,000. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being May 31, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $10,000 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $10,000. As at May 31, 2011, the carrying value of the convertible promissory note was $10,000.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(d)

On September 9, 2010, the Company, as part of the Share Purchase Agreement described in Note 3, issued a $5,000,000 convertible note pursuant to the acquisition agreement described in Note 3. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being March 9, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 50% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The conversion price is subject to a minimum of $0.001, being par value. The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $5,000,000 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $5,000,000. As at May 31, 2011, the carrying value of the convertible promissory note was $5,000,000.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(e)

On October 7, 2010, the Company issued a $12,000 convertible note to a shareholder of the Company for proceeds of $12,000. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being April 7, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $12,000 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $12,000. As at May 31, 2011, the carrying value of the convertible promissory note was $12,000.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(f)

On October 15, 2010, the Company issued a $25,000 convertible note to a shareholder of the Company for proceeds of $10,000, $2,826 of equipment purchased and $12,174 of expenses incurred on behalf of the Company. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing one year from the date of issuance October 15, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $25,000 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $Nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $25,000. As at May 31, 2011, the carrying value of the convertible promissory note was $5,742.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

F-14

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

8.

Convertible Promissory Notes (continued)

(g)

On October 21, 2010, the Company issued a $7,459 convertible note to a shareholder of the Company for $7,459 of expenses incurred on behalf of the Company. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing one year from the date of issuance being October 21, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $7,459 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $7,459. As at May 31, 2011, the carrying value of the convertible promissory note was $2,585.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(h)

On November 8, 2010, the Company issued a $10,000 convertible note to a shareholder of the Company for proceeds of $10,000. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being May 8, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $10,000 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $10,000. As at May 31, 2011, the carrying value of the convertible promissory note was $10,000.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(i)

On January 14, 2011, the Company issued a $24,500 convertible note to a shareholder of the Company for proceeds of $24,500. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being July 14, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $24,500 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $24,500. As at May 31, 2011, the carrying value of the convertible promissory note was $9,236.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(j)

On February 2, 2011, the Company issued a $82,685 convertible note to a shareholder of the Company for proceeds of $71,000 and payment of $11,685 of expenses on behalf of the Company. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being August 2, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $82,686 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $82,686. As at May 31, 2011, the carrying value of the convertible promissory note was $13,873.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

F-15

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

8.

Convertible Promissory Notes (continued)

(k)

During the year ended May 31, 2011, the Company issued convertible notes totalling $51,989 to a shareholder of the Company for $51,991 of expenses paid on behalf of the Company. The convertible notes are unsecured and bear interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance. The notes can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion features of $51,991 as additional paid-in capital and reduced the carrying value of the convertible promissory notes to $nil. The carrying value will be accreted over the term of the convertible promissory notes up to their aggregate face value of $51,989. As at May 31, 2011, the carrying value of the convertible promissory notes was $44,272.  The notes may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

(l)

On March 17, 2011, the Company issued a $14,824 convertible note to a shareholder of the Company for payment of $14,823 of expenses on behalf of the Company. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance being September 2, 2011. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.  The Company analyzed the financial instrument under ASC 815, “Derivatives and Hedging”, and determined that the embedded conversion feature did not meet the characteristics of a derivative instrument. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $14,824 as additional paid-in capital and reduced the carrying value of the convertible promissory note to $nil. The carrying value will be accreted over the term of the convertible promissory note up to its face value of $14,824. As at May 31, 2011, the carrying value of the convertible promissory note was $2,008.  The note may be repaid by the Company, in whole or in part, at any time with 10 days notice. The holder may either accept the prepayment or request that it be immediately converted to shares of the Company at the conversion price.

9.

Common Stock

On October 26, 2010, the Company effected a 1:100 forward stock-split of its issued and outstanding common stock.  The issued and outstanding common shares increased from 8,190,000 shares of common stock to 819,000,000 shares of common stock.  All per share amounts have been retroactively restated to reflect the forward stock-split.

10.

Commitment

On November 23, 2010, the Company entered into an agreement to host three United States Auto Club sanctioned truck races.  One race will be held a year in 2012, 2013 and 2014.  Pursuant to the agreement the Company will pay the United States Auto Club $50,000 in 2011, $75,000 in 2012 and $100,000 in 2013.

F-16

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

11.

Discontinued Operations

On March 9, 2010, the Company sold its wholly-owned subsidiary, Here Network Corp. to the Company’s former controlling shareholders in exchange for the return of 5,600,000 common shares of the Company to treasury. The transaction was measured at $6,400, the estimated fair value of Here Network Corp., which was considered more reliably measureable than the Company’s stock as it did not trade in an active market. The Company recognized a gain on disposal of Here Network Corp. of $28,260. The 5,600,000 common shares were subsequently redirected to other shareholders of the Company at a price of $0.001 per share. As at May 31, 2011, subscriptions in the amount of $5,600 are receivable from these shareholders.

The results of discontinued operations of Here Network Corp. are summarized as follows:

Cash flows of the discontinued operations of Here Network Corp. are summarized as follows:

F-17

Here Enterprises, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. Dollars)

12.

Income Taxes

The income tax recovery differs from the amount computed by applying the federal and state income tax rate of 35% (2010 – 35%) to loss from continuing operations for the years ended May 31, 2011 and 2010 as follows:

Significant components of the Company’s deferred tax assets and liabilities as at May 31, 2011 and 2010 were as follows:

Upon the acquisition of Cycle Ranch the Company recognized a deferred income tax liability of $284,342 relating to the increase in the book value of certain assets acquired from Cycle Ranch in excess of tax basis. Post acquisition operating losses of Cycle Ranch are available to reduce the deferred tax liability by $145,050 which has been recorded as a deferred income tax recovery for the year ended May 31, 2011.

The Company has incurred net operating losses totalling $1,155,031, which begin to expire in 2025. The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years.

13.

Subsequent Event

On July 21, 2011, the Company issued a $31,354 convertible note to a shareholder of the Company for expenditures incurred on behalf of the Company. The convertible note is unsecured and bears interest at 5% per annum. Principal and accrued interest is repayable on demand commencing six months from the date of issuance. The note can be converted into shares of the Company, in whole or in part, at any time prior to maturity, at a conversion price equal to 30% of the average closing bid price for the three business days prior to the notice of conversion as quoted on the Pink Sheets quotation system.

F-18

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.  Controls and Procedures.

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, being May 31, 2011. This evaluation was carried out under the supervision and with the participation of our management, including our President (our principal executive officer, principal financial officer, and principal accounting officer).

Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. The design of a control system is also based upon certain assumptions about potential future conditions; over time, currently implemented controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Based upon that evaluation, our President concluded that our disclosure controls and procedures were ineffective as at the end of the period covered by this annual report.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the applicable time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures which are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our President to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of May 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of May 31, 2011, our internal control over financial reporting was not effective. The ineffectiveness of our internal control over financial reporting was due to the existence of significant deficiencies constituting material weaknesses, as described in greater detail below. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Our management identified the following material weaknesses in our internal control over financial reporting:

*

Lack of independent directors and an audit committee – Our management believes that an audit committee is an utmost important entity level control over our financial reporting. We currently do not have an audit

F-19

committee and have no independent director. Our board of directors consists solely of our President, who is not independent of management and lacks sufficient financial expertise for overseeing financial reporting responsibilities;

*

Insufficient segregation of duties in our finance and accounting functions due to limited personnel – During the year ended May 31, 2011, we had limited personnel that performed nearly all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements. This creates certain incompatible duties and a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the Securities and Exchange Commission. These control deficiencies could result in a material misstatement of our annual or interim financial statements that would not be prevented or detected; and

*

Lack of accounting staff with sufficient technical accounting knowledge – We do not have accounting staff with sufficient technical accounting knowledge relating to accounting for complex U.S. generally accepted accounting principles matters.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. To remediate the material weaknesses identified, we plan to implement the following changes during the year ending May 31, 2012:

*

We intend to recruit two or more additional independent directors and create an audit committee at such time as additional directors are retained; and

*

We intend to hire additional personnel to assist with the preparation of our financial statements, which is expected to allow for proper segregation of duties, as well as additional manpower for proper documentation.

The above remediation efforts are largely dependent on our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, the remediation efforts may be adversely affected in a material manner.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our fourth fiscal quarter ended May 31, 2011, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

A director of our company holds office until the next annual meeting of the shareholders or until his successors has been elected and qualified.  An officer of our company is appointed by our board of directors and holds office until his death, resignation or removal from office.  Our directors and executive officers, their age, positions held, and duration as such, are as follows:

Business Experience

The following is a brief account of the education and business experience of our officers and sole director during at least the past five years, indicating business experience, principal occupation during the period, and the name and principal business of the organization by which he was employed.

George Russell

Since 1996, Mr. Russell has acted as investment adviser, financial planner and retirement consultant for affluent clients, small businesses, and medium capitalization companies.  He was presented the Blue Chip Aware five consecutive years for excellence in client services.  He was certified and performed as a Portfolio Manager of individual equities.  In 2006, Mr. Russell was named Managing Director and Controller of JBC, a new construction/remodeling conglomerate operating throughout the state of Texas.

Mr. Russell earned an Executive MBA in Management and Strategy from Kellogg School of Management and holds a Bachelor’s degree in Business Administration.

Mark K. Ryun

Since July of 1991, Mr. Mark K. Ryun has been the president and chief executive officer of Coastal Wood Floors, a full-service hardwood flooring contracting company based in Haleiwa, Hawaii. Over the past 18 years, Mr. Ryun has been a member of the board of directors with the Honolulu Board of Contractors in the State of Hawaii, the National Wood Flooring Association (NWFA), and the Better Business Bureau of Hawaii (BBB).

Since June of 1992, Mr. Ryun raced professional motocross for Pflueger Honda, Montgomery Motors, No Fear and Oakley. He competed in Motocross events for ten years. During that time he also was employed as a spokesman and stuntman for the DARE program of Hawaii, helping to educate the public about the harmful effects of drugs and alcohol abuse.

Family Relationships

There are no family relationships between any director or executive officer.

Involvement in Certain Legal Proceedings

None of our director and executive officer has been involved in any of the following events during the past five years:

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officer and director, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the fiscal year ended May 31, 2010, all filing requirements applicable to our former officers and directors and greater than ten percent beneficial owners were complied with.

Corporate Governance

All proceedings of our board of directors for the year ended May 31, 2011, were conducted by resolutions consented to in writing by our former directors or current director and filed with the minutes of the proceedings of the board of directors. A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this annual report.

Code of Ethics

We have not adopted a code of ethics because our board of directors believes that our small size does not merit the expense of preparing, adopting and administering a code of ethics. Our board of directors intends to adopt a code of ethics when circumstances warrant.

Nominating and Compensation Committees

We do not have standing nominating or compensation committees, or committees performing similar functions. Our board of directors believes that it is not necessary to have a standing compensation committee at this time because the functions of such committee are adequately performed by our board of directors.  Our board of directors has not adopted a charter for the compensation committee.

Our board of directors also is of the view that it is appropriate for us not to have a standing nominating committee because our board of directors has performed and will perform adequately the functions of a nominating committee.  Our board of directors has not adopted a charter for the nomination committee.  There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.  Our board of directors does not believe that a defined policy with regard to the consideration of candidates recommended by shareholders is necessary at this time because we believe that, given the early stages of our development, a specific nominating policy would be premature and of little assistance until our business operations are at a more advanced level.  There are no specific, minimum qualifications that our board of directors believes must be met by a candidate recommended by our board of directors.  The process of identifying and evaluating nominees for director typically begins with our board of directors soliciting professional firms with whom we have an existing business relationship, such as law firms, accounting firms or financial advisory firms, for suitable candidates to serve as directors.  It is followed by our board of directors’ review of the candidates’ resumes and interview of candidates.  Based on the information gathered, our board of directors then makes a decision on whether to recommend the candidates as nominees for director.  We do not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominee.

Audit Committee

We do not have a standing audit committee or an audit committee charter at the present time.  Our board of directors has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.

We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.  The board of directors of our company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors.  In addition, we believe that retaining a person who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development.

Item 11. Executive Compensation.

The following table shows the compensation received by our executive officers for the fiscal years ended May 31, 2011 and 2010:

(1)

 Mr. Au became our director on September 10, 2008 and our President, Secretary, and Treasurer on September 12, 2008 and resigned all of his positions on March 4, 2010

(2)

 Mr. Ryun became our President, Secretary, Treasurer and director on March 4, 2010.

(3)

 Mr. Moore became our CFO on March 16, 2010 and resigned on February 9, 2011.

(4)

Mr. Russell became our CFO on May 6, 2011.

We have not entered into written employment agreements with our former directors and officers.  We have entered into written employment agreement with our current chief executive officer.

There have been no arrangements or plans in which we have provided pension, retirement or similar benefits for our former directors and officers or our current director and officer.  We have not had any material bonus or profit sharing plans pursuant to which cash or non-cash compensation has been or may be paid to our former directors and officers or our current director and officer, except that stock options may be granted at the discretion of our board of directors in the future.

We have no plans or arrangements in respect of remuneration received or that may be received by our former officers or our current officer to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control.

Outstanding Equity Awards at Fiscal Year-End

As at May 31, 2011, we had not adopted any equity compensation plan and no stock, options, or other equity securities were awarded to our former executive officers or current executive officer.

Director Compensation

Our former directors or current director did not receive or accrue any compensation for their services as a director during the fiscal year ended May 31, 2011.  We have no formal plan for compensating our director for his service in his capacity as a director.  A director is entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors.  Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth, as of May 31, 2011, certain information with respect to the beneficial ownership of our common stock by each shareholder known by us to be the beneficial owner of more than 5% of our common stock, as well as by our current director and executive officer.  Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

Changes in Control

On September 9, 2010, we signed a Stock Purchase Agreement, and related documents, in which we purchased all of the stock and limited partnership interests owned by The Good One, Inc.  While management of the Company will not change as a result of this acquisition, it may be treated as a reverse capitalization for financial reporting purposes.  Please see “Item 1. Business” above for more information regarding this transaction.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Transactions with related persons

Other than as disclosed below and elsewhere, there has been no transaction, since the beginning of the year ended May 31, 2011, or currently proposed transaction, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any of the following persons had or will have a direct or indirect material interest.

As at May 31, 2011, the Company was indebted to the Chief Executive Officer of the Company in the amount of $140,000 (May 31, 2010 - $20,200) for consulting services and $27,913 for an advance of working capital.  The amounts are unsecured, non-interest bearing and due on demand.

As at May 31, 2011, the Company was indebted to the former Chief Financial Officer of Company in the amount of $22,500 (May 31, 2010 - $5,000) for consulting services.  The amount is unsecured, non-interest bearing and due on demand.

As at May 31, 2010, the Company was indebted to shareholders of the Company in the amount of $5,500.  The amount was unsecured, non-interest bearing and due on demand.  During the year ended May 31, 2011, amounts owed to the shareholders were exchanged for the promissory note described in Note 7(b).

The Chief Executive Officer of the Company has an agreement to provide management services at a rate of $10,000 per month.  The agreement can be terminated with notice of one month.  During the year ended May 31, 2011, the Company incurred $120,000 (2010 - $20,000) in management fees under the agreement which has been recorded in payroll expense in the statement of operations.  

The former Chief Financial Officer of the Company had an agreement to provide management services at a rate of $2,500 per month.  The agreement could be terminated with notice of one month. The agreement was terminated effective January 31, 2011.  During the year ended May 31, 2011, the Company incurred $20,000 (2010 - $5,000) in management fees under the agreement which has been recorded in payroll expense in the statement of operations.  

One former employee of the Company provided management services and office premises to the Company at no charge for the period of June 1, 2009 to March 8, 2010.  From March 9, 2010 to May 31, 2010, an officer of the Company provided office premises to the Company at no charge. The donated services have an estimated fair value of $2,000 per month and office premises have an estimated fair value of $250 per month. During the year period ended May 31, 2011, $nil (2010 - $18,000) in donated services and $nil (2010 - $2,250) in donated rent were charged to operations and recorded as donated capital.

Director Independence

We currently act with one director, Mark K. Ryun.  As Mr. Ryun is our President, he is not an “independent director” as the term is used in NASDAQ rule 5605(a)(2).

Item 14. Principal Accounting Fees and Services.

Audit Fees: All fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements and the review of financial statements included in the registrant's Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.

2011:

$84,907.57

2010

$25,000

Audit-Related Fees: All fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the registrant's financial statements and are not reported under Item 9(e)(f1) of Schedule 14A.

2011:

$ 0

2010:

$0

Tax Fees: The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning:

2011:

$4,688.00

Nature of Services:  Tax Preparation

2010:

$ 0

Nature of Services

All Other Fees:

2011:

$600.00

2010:

$ 0

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(1)

* Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HERE ENTERPRISES, INC.

By:

/s/ Mark K. Ryun

Mark K. Ryun

Principal Executive Officer, President,

Principal Accounting Officer

By:

/s/ George Russell

George Russell, CFO

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the date indicated.

/s/ Mark K. Ryun

Mark K. Ryun, Director, President,

Treasurer, Principal Accounting Officer