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 UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

 

From the transition period from ___________ to ____________.

 

Commission File Number 333-138111

 

Latitude 360, Inc.

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

 

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

 

6022 San Jose Blvd., Jacksonville, FL 32217

(Address of principal executive offices)

 

  (904) 730-0011

(Issuer's telephone number)

 

N/A

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

 

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

 

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

 

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

 

 

	Large Accelerated Filer [  ]	Accelerated Filer [  ]
	Non-Accelerated Filer [  ]	Smaller Reporting Company [X]

 

 

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

 

 

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

 

 

PART I – FINANCIAL INFORMATION 

Item 1. Financial Statements 

Latitude 360, Inc
(Formerly Kingdom Konkrete, inc)
Unaudited Condensed Consolidated Balance Sheet
		September 30,				December 31,
ASSETS		2014				2013
Current assets:
Cash		$	84,861			$	10,199
Accounts receivable			82,084				—
Other receivables			2,045,196				—
Inventories			220,540				500
Prepaid expenses			—				—
Total current assets			2,432,681				10,699
Property and equipment, net			46,268,467				10,127
Idle Property nd equipment - net			2,013,696				—
Restricted cash			—				—
Other assets			586,951				—
Assets of discontinued operations			—				—
Total long-term assets			48,869,114				10,127
Total assets		$	51,301,795			$	20,826
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable		$	4,910,916			$	3,609
Accounts payable - Construction related			7,878,634				—
Accrued expenses			5,417,124				459
Accrued compensation - related party			—				—
Deferred rent			19,700				—
Interest payable			2,923,089				—
Obligations under capital leases			—				61,648
Due to related parties			177,798				6,041
Short-term notes payable			22,143,491				—
Total current liabilities			43,470,752				71,757
Deferred rent			243,360				—
Obligations under capital leases			22,984,756				—
Dividends payable			42,003				—
Total long-term liabilties			23,270,119				—
Total liabilities			66,740,871				71,757
Stockholders' equity:
Series A Preferred Stock			—				—
Common Stock, par value $.001 authorized 500,000,000 shares. Issued 127,247,775 shares at December 31, 2013 and 123,485,879 shares at December 31, 2012.			102,976				5,722
Additional paid-in capital			116,689,287				275,082
Accumulated deficit			(132,231,339	)			(331,735	)
Total stockholders' equity		$	(15,439,076	)		$	(50,931	)
Total liabilities and stockholders' equity			51,301,795				20,826

 

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

 

 

 

 

 

Latitude 360, Inc
(Formerly Kingdom Konkrete, inc)
Unaudited Condensed Consolidated Statements of Operations
		9 Months ended								3 Months Ended
		September 30,				September 30,				September 30,				September 30,
		2014				2013				2014				2013
Net Sales		$	5,171,484			$	101,695			$	3,734,159				35,832
Cost and Expenses:
Cost of Sales			1,146,098				48,543				819,403				17,202
Compensation expenses			2,564,296				—				1,857,249
Occupancy and relates costs			711,143				—				964,079
Professional fees			1,101,087				—				806,920
Depreciation and Amortization			2,143,699				3,480				1,073,147				1,160
Selling, general and administrative expenses			4,080,368				70,672				2,377,235				25,386
Total operating expenses			11,746,690				122,695				7,898,033				43,748
Loss from operations			(6,575,206	)			(21,000	)			(4,163,874	)			(7,916	)
Other (expenses)
Interest expense			940,530				—				467,759
Loss on modification of indebtedness			4,906,470				—				4,906,470
Loss on disposition of assets			(2,141	)			—				—
Net loss from continued operations			(12,424,347	)			(21,000	)			(9,538,103	)			(7,916	)
Discontinued Operations
Loss from discontinued operations			(72,031	)			—				(2,321	)
Net Loss		$	(12,352,317	)		$	(21,000	)		$	(9,535,782	)			(7,916	)
Basic and diluted loss per share
Continuing operations			(0.1257	)			(0.0037	)			(0.0965	)			(0.0014	)
Discontinued operations			(0.0007	)			—				(0.0000	)			—
Total basic and diluted loss per share
Weighted average shares outstanding			98,825,160				5,721,900.00				98,825,160				5,721,900.00

 

 

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

 

 

 

Latitude 360, Inc.
(Formerly Kingdom Konkrete, inc)		For the				For the
Unaudited Condensed Consolidated Statements of Cash Flows		Nine months				Nine months
		ended				ended
		September 30,				September
		2014				2013
Net Loss		$	(12,352,317	)		$	(21,000	)
Adjustments to reconcile net loss to net cash used in Operating activities -
Operating activities of discontinued operations			72,031
Net loss from operations			(12,280,286	)			(21,000	)
Depreciation and amortization expense			2,143,699				3,480
Loss on modification of debt			4,906,470
Gain on disposition of assets			(2,141	)
(Increase)  decrease in assets:
(Increase)  decrease in accounts Receivable			(2,127,280	)
(Increase)  decrease in inventories			(218,540	)			787
(Increase)  decrease in other assets			(586,951	)			1,150
(Increase)  decrease in liabilities:
Increase in accounts Payable			12,789,550				2,446
Increase in accrued Expenses			5,456,261				818
Increase in interest Payable			2,923,089
Increase in obligations under capital leases			22,984,756
(Decrease) increase in deferred rent			263,060
Net cash (used in) provided by operating activities			36,251,687				(12,319	)
Cash flows from investing activities
Cost of Merger			(8,011,147	)
Purchase of Property and equipment			(50,415,914	)			0
Net cash used in investing activities			(58,427,061	)			0
Cash flows from financing activities -
Restricted cash reclassification			0				0
Proceeds from construction loans			0				0
Proceeds from issuance of convetible and other debt			22,143,491				0
Principal reduction in convertible and other debt			0				(14,656	)
Principal reduction in obligations under capital leases			0				0
Proceeds from related party advances			0				18,853
Repayments on related party advances			110,424				0
Net cash provide by financing activities			22,253,915				4,197
Net (decrease) increase in cash			78,541				(8,122	)
Beginning balance - cash			6,320				22,160
Ending balance - cash		$	84,861			$	14,038
Suplplemental Information
Interest expense paid			16,964				0
Income taxes paid			0				0

 

 

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

 

 

 

  

1. DESCRIPTION OF BUSINESS

Nature of Business

Latitude 360 (“L360” or the “Company”), previously known as Kingdom Koncrete, Inc., is an independent, full-service entertainment company whose predecessor entity was formed in Florida on June 21, 2010 to act as a holding Company for the ownership interest in the following Limited Liability Companies collectively referred to as the venues:

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

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

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

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

 

The Company opened its first venue in 2011 located in Jacksonville, Florida (Lat 30). In 2012, the Company opened two venues located in Indianapolis, Indiana (Lat 39), and Pittsburgh, Pennsylvania (Lat 40). Each venue consists of a full-service restaurant and bar, dine-in bowling lanes, dine-in luxury screening room, and a dine-in live performance theatre. The Company commenced constructing Lat 42’s venue located in Chicago, Illinois, in 2012. The Company decided to abandon the Chicago location in 2013. The Company is accounting for Lat 42’s activity as a discontinued operation pursuant to Accounting Standards Codification (“ASC”) Topic 250-20, “Discontinued Operations”. The Company also has a “Go and Carry” concrete business as a separate operating subsidiary.

 

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

 

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

 

Unaudited Interim Financial Statements

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

   

 

 

PART II

 

Items No. 1, 2, 3, 4, 5 - Not Applicable.

 

 

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

 

(a)  None

 

(b)   Exhibits

 

 

Exhibit Number		Name of Exhibit
31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.
101	XBRL To be filed by amendment.

 

 

 

 

SIGNATURES

 

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

 

Latitude 360, Inc.

 

By /s/ Brent Brown

Brent Brown,

Chief Executive Officer

and  Chief Financial Officer

 

Date:  November 19, 2014