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EX-32 - CERTIFICATION - ZONZIA MEDIA, INC.indigo_10q-ex32.htm
EX-31 - CERTIFICATION - ZONZIA MEDIA, INC.indigo_10q-ex31.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

 

For the Quarterly Period Ended September 30, 2014

or

 

  ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

INDIO-ENERGY INC.

(Exact name of registrant as specified in its charter)

 

NEVADA     84-0871427
(State or other jurisdiction of     (I.R.S. Employer
incorporation or organization)     Identification No.)

 

74 N. Pecos Road, Suite D

Henderson, NV 89074

(Address of principal executive offices)

(702) 463-8528

(Registrant’s telephone number, including area code)

 

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

 

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

 

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

 

Large accelerated filer o        Accelerated filer o

 

Non-accelerated filer o      Smaller reporting company x

 

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

 

The number of shares of Common Stock, $0.001 par value, of the registrant outstanding at November 5, 2014 was 2,000,000,000.

 

 
 

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.     3  
CONDENSED BALANCE SHEETS (UNAUDITED)     3  
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)     4  
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)     5  
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)     6  
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.     10  

Item 3. Quantitative and Qualitative Disclosures About Market Risk

    12  
Item 4. Controls and Procedures.     12  
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.     13  
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.     13  
Item 3. Defaults Upon Senior Securities.     13  

Item 4. Mine Safety Disclosures.

    13  
Item 5. Other Information.     13  
Item 6. Exhibits.     13  
Signatures     14  
Exhibit Index     15  

 

Statement Regarding Forward-Looking Statements

 

Certain statements contained in this report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements include statements about matters such as: future prices and sales of, and demand for, our products; future industry market conditions; future changes in our activities, future exploration, production, operating and overhead costs; operational and management restructuring activities (including implementation of methodologies and changes in the board of directors); future employment and contributions of personnel; tax and interest rates; capital expenditures and their impact on us; nature and timing of restructuring charges and the impact thereof; productivity, business process, rationalization, investment, acquisition, consulting, operational, tax, financial and capital projects and initiatives; contingencies; environmental compliance and changes in the regulatory environment; and future working capital, costs, revenues, business opportunities, debt levels, cash flows, margins, earnings and growth.

 

The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “should,” “intend,” “may,” “will,” “would,” “potential” and similar expressions identify forward-looking statements, but are not the exclusive means of doing so. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical and current trends, current conditions, possible future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees, representations or warranties and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements.  Some of those risks and uncertainties include the risk factors set forth in this report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and the following: current global economic and capital market uncertainties; potential dilution to our stockholders from our recapitalization and balance sheet restructuring activities; potential inability to continue to comply with government regulations; adoption of or changes in legislation or regulations adversely affecting our businesses; permitting constraints or delays, business opportunities that may be presented to, or pursued by, us; changes in the United States or other monetary or fiscal policies or regulations; changes in generally accepted accounting principles; geopolitical events; potential inability to implement our business strategies; potential inability to grow revenues organically; potential inability to attract and retain key personnel; assertion of claims, lawsuits and proceedings against us; potential inability to maintain an effective system of internal controls over financial reporting; potential inability or failure to timely file periodic reports with the SEC; potential inability to list our securities on any securities exchange or market; and work stoppages or other labor difficulties. Occurrence of such events or circumstances could have a material adverse effect on our business, financial condition, results of operations or cash flows or the market price of our securities. All subsequent written and oral forward-looking statements by or attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. We undertake no obligation to publicly update or revise any forward-looking statement.

 

2
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

INDIGO-ENERGY, INC.

CONDENSED BALANCE SHEETS

(UNAUDITED)

 

   September 30, 2014   December 31, 2013 
ASSETS          
          
Current Assets          
Cash  $3,096   $ 
Short term notes receivable   453,410     
Prepaid professional fees   10,831     
           
Total assets  $467,337   $ 
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
           
Current Liabilities          
Accounts payable  $71,556   $55,076 
Related party accounts payable   250,087    59,009 
Accrued expenses   131,063    1,014,585 
Accrued interest       577,105 
Related party accrued interest       448,584 
Related party notes payable       9,026,740 
Promissory and other notes payable       1,140,000 
           
Total current liabilities   452,706    12,321,099 
           
Commitments and Contingencies        
           
Stockholders' Equity (Deficit)          
Preferred stock, $.001 par value, 100,000,000 shares authorized and no shares issued and outstanding  $   $ 
Common stock, $.001 par value, 2,000,000,000 shares authorized and 2,000,000,000 and 1,187,956,895 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively   2,000,000    1,187,956 
Additional paid in capital   97,810,155    83,552,962 
Accumulated deficit   (99,795,524)   (97,062,017)
           
           
Total stockholders' equity (deficit)   14,631    (12,321,099)
           
Total liabilities and stockholders' equity (deficit)  $467,337   $ 

 

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

 

3
 

 

INDIGO-ENERGY, INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30,   September 30,   September 30, 
   2014   2013   2014   2013 
                 
Revenue                    
                     
Net revenue  $   $   $   $ 
                     
Expenses                    
Operating expenses                
General and administrative   14,889        500,398     
Professional fees   809,904        1,605,625     
                     
Total operating expenses   824,793        2,106,023     
                     
Loss from operations   (824,793)       (2,106,023)    
                     
Other income (expense)                    
Interest income (expense), net   2,854    (1,146,894)   (885,596)   (2,348,113)
Gain on settlement of obligations           258,112     
                     
Total other income (expense)   2,854    (1,146,894)   (627,484)   (2,348,113)
                     
Net loss  $(821,939)  $(1,146,894)  $(2,733,507)  $(2,348,113)
                     
Net loss per share - basic and diluted  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted average shares outstanding   1,857,608,696    1,187,956,895    1,497,652,469    1,187,956,895 

 

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

 

4
 

 

INDIGO-ENERGY, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   For the Nine Months Ended 
   September 30,    September 30,  
   2014   2013 
           
Cash Flows from Operating Activities          
           
Net loss  $(2,733,507)  $(2,348,113)
           
Adjustments to reconcile net loss to net cash used in operating activities:          
Debt discount and deferred issuance cost amortization       1,420,487 
Non-cash interest   489,939     
Stock based compensation   1,856,044     
Change in interest receivable   (3,410)    
Change in accounts payable   11,997     
Change in accrued expenses   (28,680)    
Change in related party accounts payable   191,078     
Gain on settlement of obligations   (258,112)    
Change in accrued interest   399,067    927,626 
           
Net cash used in operating activities   (75,584)    
           
Cash Flows from Investing Activities          
Issuance of short term notes receivable   (450,000)    
           
Net cash used in investing activities   (450,000)    
           
Cash Flows from Financing Activities          
Proceeds from issuance of related party notes payable          
Proceeds from issuance of common stock   528,680     
           
Net cash provided by financing activities   528,680     
           
Net increase in cash and cash equivalents   3,096     
           
Cash and cash equivalents at beginning of the period        
           
Cash and cash equivalents at end of the period  $3,096   $ 
           
Supplementary Disclosures of Cash Flow Information          
           
Cash paid for income taxes  $   $ 
Cash paid for interest  $   $ 
           
Non-Cash Investing and Financing Activities          
           
Common stock issued for settlement of promissory and other notes and accrued interest  $11,591,496   $ 
Common stock issued for settlement of previously accrued expenses  $578,730   $ 

 

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

 

5
 

 

INDIGO-ENERY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Interim Financial Statements

 

Indigo-Energy, Inc. (the “Company” or “Indigo” or “We”) was originally incorporated in 1981 and is a Nevada Corporation in good standing.

 

The Company’s objective is to seek the acquisition of, or merger with, an existing operating company. The Company’s principal business objective for the next 12 months and beyond will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. On May 25, 2014, the Company entered into a Plan of Merger agreement with Fetopolis, Inc. with the completion of the merger subject to various standard closing conditions, along with certain contingencies.

 

On September 2, 2014 the Company terminated the Plan of Merger with Fetoplis, Inc. and entered into a Plan of Merger with HDIMAX Inc., an entity controlled by the same individual that controls Fetopolis, Inc. For additional detail surrounding the Plan of Merger, see the Company’s Current Report filing on Form 8-K filed on September 4, 2014. The completion of the merger is subject to standard closing conditions and contingencies.

 

The accompanying interim unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. For further information, refer to the financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

 

The accompanying condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern.

 

Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenditures during the reported periods. Actual results could differ materially from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid instruments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. The Company did not have any cash equivalents at September 30, 2014 or December 31, 2013.

 

Reclassifications

 

Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation.

 

6
 

 

Recently Issued Accounting Pronouncements

 

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. The presentation and disclosure requirements in Topic 915 will no longer be required for the first annual period beginning after December 15, 2014. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted ASU No. 2014-10 effective as April 1, 2014. As a result we have revised our consolidated statements of operations and cash flows to exclude reporting for the period from date of inception through September 30, 2014.

 

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers.  The objective of this update is to 1) remove inconsistencies and weaknesses in revenue requirements, 2) provide a robust framework for addressing revenue recognition issues, 3) improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets 4) provide more useful information to users of financial statements through improved disclosure requirements, and 5) simplify the preparation of financial statements. This update is effective in annual reporting periods beginning after December 15, 2016 and the interim periods within that year.  The Company will be evaluating the impact of this update as it pertains to the Company’s financial statements and other required disclosures on an on-going basis, currently contingent upon the successful completion of a plan of merger or other commencement of principal revenue generating activities, until its eventual adoption and implementation.

 

There have been no other recently issued accounting pronouncements through the date of this report that the Company believes will have a material impact on the financial position, results of operations, or cash flows.

 

2. Going Concern

 

The Company does not currently have any business operations, and has not generated any revenue.

 

Since the Company does not have any source of recurring revenue, has suffered recurring losses from operations, and has negative working capital, there is a substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

3. Notes Payable

 

Notes payable consist of the following:

 

   September 30,   December 31, 
   2014   2013 
Convertible notes payable, issued in 2010, interest rate of 12%, due on demand and convertible at a rate of $0.04 to $0.05 per share  $   $500,000 
           
Notes payable, issued in 2007 and 2008, interest rate of 10%, due on demand       565,000 
           
Notes payable - related party, issued in 2010 and revised in 2013, interest rate of 10%, due on demand       8,750,000 
           
Notes payable, issued in 2008, interest rate of 10%, due on demand       75,000 
           
Notes payable - related party, issued in 2011, nominal interest rate of 10%, due on demand       255,000 
           
Notes payable - related party, issued in 2012, interest rate of 10%, due on demand       21,740 
           
Total notes payable  $   $10,166,740 
           
Accrued interest  $   $1,025,689 

 

7
 

 

During the three and nine months ended September 30, 2014 the Company recognized total interest expense of $nil and $889,006, respectively. Interest expense for the three and nine months ended September 30, 2013 was $1,146,894 and $2,348,113, respectively.

 

During the nine months ended September 30, 2014, the Company issued 97,987,895 shares of restricted common stock for consideration totaling $489,939, included in interest expense in the condensed statements of operations, as an inducement to related parties to convert all of their previously outstanding notes payable and accrued interest totaling $310,553 into shares of restricted common stock.

 

During the nine months ended September 30, 2014, the Company settled notes payable with a principal balance totaling $10,166,740 and accrued interest totaling $1,424,756 via the issuance of 220,666,540 shares of common stock, exclusive of the inducement shares described above.

 

4. Related Party Transactions

 

During the nine months ended September 30, 2014, the Company received total working capital advances from a related party of $191,078. As of September 30, 2014 and December 31, 2013, the Company had accounts payable of $250,087 and $59,009 due to a related party, respectively.

 

For the nine months ended September 30, 2014 and 2013, the Company recognized interest expense of $842,848 and $2,248,235, respectively, associated with notes payable due to related parties. In addition, during the nine months ended September 30, 2014, the Company settled related party notes payable with a principal balance of $9,026,740 and accrued interest of $801,494 by issuing 292,858,075 shares of common stock, inclusive of the inducement shares as described in Note 3.

 

5. Equity Transactions

 

On February 28, 2014, the Company entered into settlement agreements with note holders with a total principal balance of $1,141,740 and accrued interest of $558,168 via the issuance of 22,834,800 shares of common stock.

 

On March 4, 2014, the Company entered into settlement agreements with three previous service providers in which a total of $578,730 of previously accrued expenses was converted to 11,574,600 shares of common stock.

 

On April 1, 2014, the Company entered into a settlement agreement with a note holder with a principal balance of $25,000 and accrued interest of $24,523 via the issuance of 990,460 shares of common stock.

 

On May 15, 2014, the Company entered into a settlement agreement with a related party holding a note payable with a principal balance of $8,750,000 and accrued interest of $716,769 via the issuance of 189,335,380 shares of common stock.

 

On May 29, 2014, the Company issued 5,735,840 shares of common stock for cash totaling $28,680.

 

On May 31, 2014, the Company entered into a settlement agreement with a note holder with a principal balance of $250,000 and accrued interest of $125,295 via the issuance of 7,505,900 shares of common stock.

 

On June 6, 2014, the Company issued 50,000,000 shares of common stock for cash totaling $250,000.

 

On June 13, 2014, the Company issued a total of 100,691,195 shares of common stock for consulting fees valued at $13,517 and conversion inducement consideration of $489,939.

 

On June 25, 2014, the Company issued a total of 123,000,000 shares of common stock for consulting fees valued at $615,000. On the same date, the Company issued 95,374,930 shares of common stock to its sole officer and Director for compensation totaling $476,875. The Company also issued, on June 25, 2014, 5,000,000 shares of common stock for prepaid legal fees totaling $25,000.

 

On September 2, 2014, the Company issued 50,000,000 shares of common stock for cash totaling $250,000.

 

On September 4, 2014, the Company issued a total of 150,000,000 shares of common stock for consulting fees valued at $750,000.

 

8
 

 

6. Contingent Plan of Merger

 

On September 2, 2014, the Company entered into an agreement and Plan of Merger with HDIMAX, Inc., a Delaware corporation, and HDIMAX Acquisition Corporation., a Nevada corporation and a wholly-owned subsidiary of the Company (the “HDIMAX Merger Agreement”), pursuant to which we agreed to acquire all of HDIMAX’s issued and outstanding common shares in exchange for the issuance of ninety-four percent (94%) of the Company outstanding common stock immediately after the effectiveness of the merger.

 

Pursuant to the plan of merger, HDIMAX Acquisition Corporation will merge with and into HDIMAX, Inc., with HDIMAX, Inc. remaining as the surviving corporation and operating as a wholly owned subsidiary after the merger closes.

 

The completion of the merger is subject to various closing conditions, and is also contingent upon the completion of the audit of the financial statements of HDIMAX and the pro forma financial statements of the combined Company and the satisfaction of applicable regulatory requirements.

 

The merger agreement also contemplates that our board of directors will appoint the nominees and appointees of HDIMAX, Inc. as directors and officers of our company as of the closing date of the merger.

 

In June and September of 2014 the Company issued short term notes receivable for $200,000 and $250,000, respectively, to the counter-party in the Company’s contingent plan of merger. The notes carry an interest rate of 5% per annum and are payable within 60 days of the closing of the contingent plan of merger.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9
 

 

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

 

The following discussion provides information that we believe is relevant to an assessment and understanding of the results of operations and financial condition of the Company as of and for the period ended September 30, 2014, as well as our future results. It should be read in conjunction with the condensed financial statements and accompanying notes also included in this 10-Q and our Annual Report on Form 10-K as of and for the fiscal year ended December 31, 2013.

 

Overview

 

Since December 31, 2013, the Company has been engaged in organizational efforts, seeking to settle outstanding obligations on the best terms possible, and re-establishing its regulatory compliance. Subsequent to the Company’s re-entrance into the development stage, as defined by accounting principles generally accepted in the United States (“US GAAP”), on August 1, 2013, the Company’s primary objective is to seek the acquisition of, or merger with, an existing operating company.

 

The Company’s principal business objective for the next 12 months and beyond will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings.

 

On September 2, 2014, the Company entered into an agreement and Plan of Merger with HDIMAX, Inc., a Delaware corporation, and HDIMAX Acquisition Corporation., a Nevada corporation and a wholly-owned subsidiary of the Company (the “HDIMAX Merger Agreement”), pursuant to which we agreed to acquire all of HDIMAX’s issued and outstanding common shares in exchange for the issuance of ninety-four percent (94%) of the Company outstanding common stock immediately after the effectiveness of the merger. The Company entered into the HDIMAX Merger Agreement in lieu of a previously contemplated transaction with Fetopolis, Inc.

 

Pursuant to the plan of merger, HDIMAX Acquisition Corporation will merge with and into HDIMAX, Inc., with HDIMAX, Inc. remaining as the surviving corporation and operating as a wholly owned subsidiary after the merger closes. The completion of the merger is subject to various closing conditions, and is also contingent upon the completion of the audit of the financial statements of HDIMAX and the pro forma financial statements of the combined Company and the satisfaction of applicable regulatory requirements.

 

Results of Operations

 

During the three and nine months ended September 30, 2014, we incurred total operating expenses of $824,793 and $2,106,023, respectively, compared to no operating expenses incurred in the prior comparable periods. Included in our operating expenses for the three and nine months ended September 30, 2014 is general and administrative expenses of $14,889 and $500,398, respectively, the nine months primarily consisted of $476,875 of officer compensation paid to our sole officer and Director via the issuance of 95,374,930 shares of common stock. We expect this payment to our sole officer and Director to be non-recurring based on our current business activities, and unless we complete our proposed plan of merger, our general and administrative expenses will likely decline the remainder of the fiscal year. Our remaining operating expenses for the three and nine months ended September 30, 2014 consisted of professional fees of $809,904 and $1,605,625 respectively. These professional fees were incurred for the services of third party legal, accounting, and other consultants for the preparation of our previously delinquent 1934 Act periodic reports, and document preparation and other due diligence associated with our proposed plan of merger. Of the professional fees incurred during the three and nine months ended September 30, 2014, we successfully settled total obligations of $750,000 and $1,369,000 via the issuance of shares of common stock. We expect our operating expenses to remain at their current levels or decline on a quarterly basis over the next twelve months unless we successfully complete our proposed plan of merger or enter into a different strategic business combination.

 

10
 

 

We recognized interest expense of $nil and $889,006 during the three and nine months ended September 30, 2014 as compared to $1,146,894 and $2,348,113 for the respective periods in the prior year. Approximately $490,000 of the current period interest expense relates to non-recurring conversion inducement shares issed to related parties. As the Company has successfully settled all its previously outstanding principal and interest obligations via the issuance of common stock, no further interest expense is expected to be recognized for the next several periods.

 

Liquidity and Capital Resources

 

During the nine months ended September 30, 2014, the Company used operating cash of $75,584; inclusive of the settlement of previously accrued professional fees at a discount resulting in the recognition of a gain of $258,112 and the settlement of accrued professional fees. We expect to continue to accrue expenses, primarily professional fees, some of which are paid by related parties until the successful completion of a business combination, if any.

 

We expect to meet our on-going obligations at their current levels through continued related party advances in the near-term, however, there are no guarantees these related parties will continue to make advances, nor is there any contractual obligation for them to do so. These related parties have informally agreed to defer repayment of these obligations until we commence revenue generating operating activities, if any. We have also successfully settled significant portions of our operating expenses via the issuance of shares of common stock, however, we may not be able to do so in the future.

 

In June and September of 2014 the Company issued short term notes receivable for $200,000 and $250,000 respectively to the counter-party in the Company’s contingent plan of merger. The notes carry interest rates of 5% per annum and are payable within 60 days of the closing of the contingent plan of merger.

 

At September 30, 2014, we had current obligations totaling approximately $453,000, a reduction of approximately $11.9 million, the majority of which was settled via the issuance of our common stock.

 

During the nine months ended September 30, 2014 we raised cash totaling $528,680 via the issuance of shares of our common stock. The cash proceeds were used to pay our on-going operating expenses and to provide short-term liquidity to our proposed merger target. We are actively pursuing several financing options; however, these activities are severely hampered by the lack of liquidity in our equity instruments, partially caused by not being in full compliance with our 1934 Act filing requirements. As of the date of this report, we do not have any firm funding commitments. Any funding arrangements entered into in the next twelve months will likely not be at terms favorable to the Company based on its current risk profile.

 

Any potential future business operations are dependent upon the ability of the Company raise additional capital. As of the date of this report, the Company does not have any firm funding commitments.

 

Critical Accounting Policies And Estimates

 

There have not been any material changes to the critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.

 

Off- Balance Sheet Arrangements

 

None.

 

11
 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable for smaller reporting companies.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

A. Disclosure

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this Quarterly Report on Form 10-Q, management performed, with the participation of our Principal Executive Officer (who also serves as our Principal Accounting Officer), an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (“Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Exchange Act and SEC’s rules, and that such information is accumulated and communicated to our management, including our Principal Executive, to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Our Principal Executive Officer concluded that, as of September 30, 2014, our disclosure controls and procedures were not effective.

 

B. Internal Control over Financial Reporting

 

No change in our internal control over financial reporting, as such term is defined in Exchange Act Rule 13(a)-15 occurred during the fiscal quarter ended September 30, 2014, that materially affected or is reasonably likely to materially affect our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

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

 

On September 2, 2014, the Company issued 50,000,000 shares of common stock for cash totaling $250,000.

 

On September 4, 2014, the Company issued a total of 150,000,000 shares of common stock for consulting fees valued at $750,000

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosure.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

(a)     The following documents are filed as part of this Report:

 

(2) Exhibits filed as part of this Report:

 

Exhibit

Number

  Exhibit
     
3.1   Amended and Restated Articles of Incorporation of Indigo-Energy, Inc. (incorporated by reference to our definitive Information Statement on Schedule 14C filed on October 20, 2014)
     
3.2   Amended and Restated Bylaws of Indigo-Energy, Inc. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed October 6, 2014)
     
31   Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
     
32   Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

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SIGNATURES

 

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

 

  INDIGO-ENERGY, INC.
  (Registrant)
   
Date: November 6, 2014 By: /s/ James C. Walter, Sr.
    Name: James C. Walter Sr.
    Title: Principal Executive Officer and Principal Financial Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit Index

 

Exhibit

Number

  Exhibit
     
31   Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
     
32  

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     
101.INS   XBRL Instance Document
     
101.SCH   XBRL Schema Document
     
101.CAL   XBRL Calculation Linkbase Document
     
101.DEF   XBRL Definition Linkbase Document
     
101.LAB   XBRL Label Linkbase Document
     
101.PRE   XBRL Presentation Linkbase Document

  

 

 

 

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