e) Performance graph.

Not applicable.

f) Sale of unregistered securities.

Not applicable

Item 5(b)

Use of Proceeds.

Not applicable.

Item 5(c)

Purchases of Equity Securities by the issuer and affiliated purchasers.

Not applicable

ITEM 6. SELECTED FINANCIAL DATA

Not applicable

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CERTAIN STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K (THIS “FORM 10-K”), CONSTITUTE “FORWARD LOOKING STATEMENTS” WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1934, AS AMENDED, AND THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (COLLECTIVELY, THE “REFORM ACT”). CERTAIN, BUT NOT NECESSARILY ALL, OF SUCH FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “BELIEVES”, “EXPECTS”, “MAY”, “SHOULD”, OR “ANTICIPATES”, OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF MASS HYSTERIA ENTERTAINMENT COMPANY, INC. (“THE COMPANY”, “WE”, “US” OR “OUR”) TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-K, UNLESS ANOTHER DATE IS STATED, ARE TO DECEMBER 31, 2014.

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

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

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

Going Concern

Our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our current and future liabilities when they become due until such time, if ever, that we are able to generate sufficient revenues to attain profitable operations. We have experienced losses and negative cash flows from operations since inception and, at December 31, 2014, we had a working capital deficit of $9,779,354 and an accumulated deficit of $12,761,821.  The report of our independent registered public accounting firm on our financial statements for fiscal 2014 and 2013 contained an explanatory paragraph regarding our ability to continue as a going concern. There can be no assurance that acceptable financing to fund our ongoing operations can be obtained on suitable terms, if at all. If we are unable to obtain the financing necessary to support our operations, we may be unable to continue as a going concern. In that event, we may be forced to cease operations and our stockholders could lose their entire investment in our company.

Results of operations for the years ended December 31, 2014 and 2013

For the year ended December 31, 2014, we generated gross revenues of $103,403 compared with revenues of $72,116 for the year ended December 31, 2013, which was an increase of $31,287. In the years ended in December 31, 2014 and 2013, the Company earned the majority of its revenues through its subsidiary Top Sail Production, LLC’s music rights.

Our operating expenses for the year ended December 31, 2014, were $1,317,381, compared to $934,905 for the year ended December 31, 2013, which was an increase of $336,699.

For the year ended December 31, 2014, we had consulting fees of $466,345, compared to $239,500 for the year ended December 31, 2013, which was an increase of $226,845. The increase was due to additional consultants needed to facilitate our planned marijuana operations. We also paid consultants to manage our music distribution operations. Currently, we have 7 consultants who work regularly with the Company. They are all engaged on a month-to-month basis and provide various consulting services ranging from, but not limited to, bookkeeping, promotions and marketing, sales and distribution, general management of ESMG, Inc., social media and real estate development.

For the year ended December 31, 2014, we had general and administrative expenses of $292,002, compared to $277,333 for the year ended December 31, 2013, which was an increase of $14,669. The increase was minimal as the Company’s general and administrative costs stay fairly consistent. They include employee payroll expense, rent, marketing, meals and entertainment, travel, supplies and other operating costs.

For the year ended December 31, 2014, we had wages and officer compensation of $366,268, compared to $374,212 for the year ended December 31, 2013, which was a decrease of $7,944. The decrease was due to our CFO resigning in February 2014. Our President and CEO, David Michery, has an employment agreement with the Company, which is detailed in Note 13 in our footnotes to our financial statements.

For the year ended December 31, 2014, we had professional fees of $192,766 compared to $43,860 for the year ended December 31, 2013, which was an increase of $148,906. The increase was due to additional professional fees needed to execute our planned marijuana operations as well as to execute our convertible notes payable.

For the year ended December 31, 2014, we incurred non-operating expenses totaling $7,666,969 compared to $2,779,401 for the year ended December 31, 2013, which was an increase of $5,065,499.

For the year ended December 31, 2014, we had interest expense of $145,519 compared to $177,931 for the year ended December 31, 2013, which was a decrease of $32,412. The decrease was due to reduced outstanding notes payable balances throughout fiscal 2014.

For the year ended December 31, 2014, we had derivative interest expense of $7,666,969 compared to $2,601,470 for the year ended December 31, 2013, which was an increase of $5,065,499. The increase was due to additional derivative liability being recorded in the year ended December 31, 2014. We calculate our derivative liability using the Black Scholes Model which takes into account variable features in our outstanding convertible debt as well as our ever changing stock price. Our stock price decreased dramatically in the year ended December 31, 2014, which was the major factor in the increased Black Scholes Model calculations of derivative liability.

Liquidity and Capital Resources

Our cash resources totaled $196,993 at December 31, 2014, compared to $64,771 as of December 31, 2013. We have a working capital deficit of $9,786,854 at December 31, 2014. Our working capital deficit is mainly due to the outstanding derivative liability of $7,811,895. Without factoring in the derivative liability, we have a working capital deficit of $1,975,486. We believe we will need an infusion of capital from third-party sources as our operations are not profitable.

In the year ended December 31, 2014, we had net cash used in operating activities of $1,472,141, compared to $1,478,481 in the year ended December 31, 2013.

In the year ended December 31, 2014, we had net cash used in investing activities of $32,500, which consisted of a $12,500 investment in Seattle Green Care and $20,000 in Suzie Q’s NPO. In the year ended December 31, 2013, we had net cash used in investing activities of $9,412, which consisted of purchased of furniture and equipment.

In the year ended December 31, 2014, we had net cash used in financing activities of $1,636,863, which consisted of $1,262,500 of proceeds from convertible notes payable and $374,363 in proceeds from the issuance of our stock. In the year ended December 31, 2013, we had net cash used in financing activities of $1,552,664, which was entirely from proceeds from convertible notes payable.

We have had no off balance sheet arrangements since inception through December 31, 2013.

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

Plan of Operation for the Next 12 Months

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

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

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

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable for smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

PRIMCO MANAGEMENT INC.

(A Development Stage Company)

Index to

Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and shareholders of

Primco Management Inc.

Seattle, WA

I have audited the accompanying consolidated balance sheets of Primco Management Inc. and its subsidiaries (the “Company”) as of December 31, 2014 and 2013 and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years ended December 31, 2014 and 2013. These consolidated financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these consolidated financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were I engaged to perform, an audit of its internal control over financial reporting. my audits included 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 the Company’s internal control over financial reporting. Accordingly, I express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.  I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2014 and 2013 and the consolidated results of its operations and its cash flows for the years ended December 31, 2014 and 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 of the accompanying consolidated financial statements, the Company has no revenues, has incurred losses since inception, and has a negative working capital balance at December 31, 2014, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are described in Note 2.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Terry L. Johnson, CPA

Casselberry, Florida

April 12, 2015

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

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

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

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

Primco Management Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2014 and December 31, 2013

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

Nature of operations

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

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

Mergers and Acquisitions

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

On May 30, 2013, the Company completed and funded the acquisition of Top Sail Productions, LLC (“Top Sail” or “Top Sail Productions”), a California limited liability company and music production company and record label with a multi-year US distribution agreement through WEA, a Warner Music Group Company. The Company purchased Top Sail from Chuck Gullo, the principal of Top Sail, who will continue as Senior Executive Consultant to assist in the operation of Top Sail and other entertainment entities owned by the Company. The Company purchased the membership interests in Top Sail for a total of $440,000. The initial payment was $75,000 cash and 5,000,000 restricted common shares in the Company. The remaining $350,000 balance is being paid in installments as follows; $6,250 for 12 months commencing July 1, 2013, $10,417 for 12 months commencing July 1 2014, $12,500 per month commencing July 1, 2015. As of December 31, 2014, the Company paid Chuck Gullo a total of $210,483 which is in accordance with the payment plan.

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

Suzie Q’s NPO

On July 22, 2014, the Company executed an amendment to the Asset Purchase Agreement, (the “Agreement”), with Jessica Vance, the owner of Suzie Q’s NPO, (“Suzie Q’s”), dated March 7, 2014. Pursuant to the Agreement, the Company acquired the business operations of Suzie Q’s, minimal equipment and furniture to operate the business, the customer/patient list and the exclusive rights to use the name “Suzie Q.” Suzie Q’s is a Washington state non-profit corporation. The Company paid a total of $20,000 cash pursuant to the acquisition of Suzie Q’s. The Company did not take over the lease on the location. The equipment and furniture had an approximate historical cost of $7,760 and a net book value of $0 as of the date of the Agreement. The Company recorded the excess consideration paid of $20,000 as goodwill.

On December 5, 2014, the Company and Jessica Vance entered into a Mutual Settlement and Release of Claims Agreement, (“MSRCA”), which superseded all prior agreements between the parties. Pursuant to the MSRCA, the Company and Jessica Vance agreed to the following

Subsequent to the year ended December 31, 2014, the Company decided not to make any additional payments relating to Suzie Q’s and decided that it would not proceed with purchasing Suzie Q’s assets in light of significant unresolved tax liability associated with Suzie Q’s and its assets (see Note 14).

Seattle Green Care

On August 3, 2014, the Company entered into an asset purchase agreement with Seattle Green Care whereby the Company acquired the domain name registration for SeattleGreenCare.com, the phone number for Seattle Green Care, the WordPress files for SeattleGreenCare.com, the vendor list, Seattle Green Care logo, Seattle Green Care customer list and other forms of minor business operations for a total consideration of $12,500 cash. As of December 31, 2014, the Company has paid Seattle Green Care the total consideration of $12,500 and has recorded the balance as goodwill.

Basis of presentation

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

Development stage enterprise

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

Use of estimates

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

Revenue recognition

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

Research and development

The Company records research and development expense as incurred.

Net loss per common share

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

As of December 31, 2014, there are 27,183,682,796 potentially dilutive shares of common stock outstanding all of which are derived from our outstanding convertible promissory notes. At December 31, 2014, the Company has 10,000,000 shares of Series A preferred stock outstanding of which after twelve months can be convertible at the option of the holder into one hundred (100) common shares per one share of Series A preferred stock.  Of the 10,000,000 shares of Series A preferred stock outstanding as of December 31, 2014, 7,000,000 have been outstanding for over one (1) year. Therefor there are an additional 700,000,000 potentially dilutive shares of common stock outstanding if the holder of shares of Series A preferred stock were to convert.

As of December 31, 2014, combined the Company has 727,183,682,796 potentially dilutive shares of common stock outstanding.

Income taxes

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

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

Concentration of cash

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

Recent accounting pronouncements

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

NOTE 2 – GOING CONCERN

The Company is a development stage company and the management of the Company has devoted substantially all of its efforts to locating real estate properties for development and construction and to the production and/or distribution of recorded music from the music artists it has developed and from the music catalogs that it has acquired as well as development of its future planned marijuana operations. The Company expects operating costs to continue to exceed funds generated from operations until significant revenues are generated from its operations and from new financing sources. The Company had only generated minimal revenues from its operations through December 31, 2014 mainly due to the unsuccessful and disappointing sale of recorded music from the music artists it has under contract. As a result, the Company expects to continue to incur operating losses in the near term, and the operations in the near future are expected to continue to require working capital. The ability of the Company to continue as a going concern is in turn dependent on its ability to raise capital to meet its operating requirements.

The Company’s independent auditors, in their report on the financial statements for the years ended December 31, 2014 and 2013, expressed substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

NOTE 3 – REVERSE MERGER WITH ESMG, INC.

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

Intellectual Property - Music

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

Artist

Jesse Scott

V.I.C.

Hurricane Chris

Tion Phipps

Choo Biggz

Bruce-E-Bee

Downtown Attraction

Kamp Hustle

Bungle Knot Dred

Other various Hip Hop catalog artists

Intellectual Property - Picture

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

NOTE 4 – ACQUISITIONS & GOODWILL

D & B MUSIC, INC.

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

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

The cost of $357,111 represents:

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

Top Sail Productions, LLC

On May 30, 2013, the Company completed and funded the acquisition of Top Sail Productions, LLC (“Top Sail”), a music production company and record label with a multi-year US distribution agreement through WEA, a Warner Music Group Company. The Company purchased Top Sail from Chuck Gullo, the principal of Top Sail, who will continue as Senior Executive Consultant to assist in the operation of Top Sail and other entertainment entities owned by the Company. The Company purchased the membership interests in Top Sail for a total of $440,000. The initial payment was $75,000 cash and 5,000,000 restricted common shares in the Company. The remaining $350,000 balance is being paid in installments as follows; $6,250 for 12 months commencing July 1, 2013, $10,417 for 12 months commencing July 1 2014, $12,500 per month commencing July 1, 2015. As of December 31, 2014, the Company paid Chuck Gullo a total of $210,483 which is in accordance with the payment plan.

Suzie Q’s NPO

On July 22, 2014, the Company executed an amendment to the Asset Purchase Agreement, (the “Agreement”), with Jessica Vance, the owner of Suzie Q’s NPO, (“Suzie Q’s”), dated March 7, 2014. Pursuant to the Agreement, the Company acquired the business operations of Suzie Q’s, minimal equipment and furniture to operate the business, the customer/patient list and the exclusive rights to use the name “Suzie Q.” Suzie Q’s is a Washington state non-profit corporation. The Company paid a total of $20,000 cash pursuant to the acquisition of Suzie Q’s. The Company did not take over the lease on the location. The equipment and furniture had an approximate historical cost of $7,760 and a net book value of $0 as of the date of the Agreement. The Company recorded the excess consideration paid of $20,000 as goodwill.

On December 5, 2014, the Company and Jessica Vance entered into a Mutual Settlement and Release of Claims Agreement, (“MSRCA”), which superseded all prior agreements between the parties. Pursuant to the MSRCA, the Company and Jessica Vance agreed to the following

Subsequent to the year ended December 31, 2014, the Company decided not to make any additional payments relating to Suzie Q’s and decided that it would not proceed with purchasing Suzie Q’s assets in light of significant unresolved tax liability associated with Suzie Q’s and its assets (see Note 14).

Seattle Green Care

On August 3, 2014, the Company entered into an asset purchase agreement with Seattle Green Care whereby the Company acquired the domain name registration for SeattleGreenCare.com, the phone number for Seattle Green Care, the WordPress files for SeattleGreenCare.com, the vendor list, Seattle Green Care logo, Seattle Green Care customer list and other forms of minor business operations for a total consideration of $12,500 cash. As of December 31, 2014, the Company has paid Seattle Green Care the total consideration of $12,500 and has recorded the balance as goodwill.

NOTE 5 - ACCOUNTS RECEIVABLE AND INVENTORY

Accounts receivable represents the net amount due from WEA/Warner Music Group from the sale of Top Sale Productions’ music CDs, and ESMG’s digital music releases. As of December 31, 2014 and December 31, 2013, the Company had accounts receivable balances net of allowance for doubtful accounts of $11,044 and $26,026.

Inventory represents the finished cost of Top Sail Productions’ music CDs (including prepaid royalties to music artists) available for resale to consumers, less a reserve for defective CDs of $3,729. As of December 31, 2014 and December 31, 2013, the Company had net inventory balances of $42,684 and $70,528.

NOTE 6 – PREPAID EXPENSES

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

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

As of December 31, 2014 and 2013, the Company had a prepaids balance of $0 and $20,000.

NOTE 7 – FIXED ASSETS: PROPERTY & EQUIPMENT

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

Depreciation expense for the years ended December 31, 2014 and 2013 was $2,953 and $1,527.

NOTE 8 - ACCRUED LIABILITIES

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

As of December 31, 2014 and December 31, 2013, the Company had an accrued salary liability to its CEO, David Michery, in the amount of $27,743 and $83,808. As of December 31, 2014 and December 31, 2013, the Company had an accrued salary liability to its former CFO, Alan Bailey, in the amount of $24,404 and $41,904.

NOTE 9 – NOTES PAYABLE

GGAG, Inc.

On May 21, 2013, ESMG, Inc. entered into a $250,000 promissory note with GGAG, Inc. On November 25, 2013, GGAG executed a debt and assignment agreement with Magna Group, LLC whereby GGAG assigned $50,000 of principal debt. On January 3, 2014, GGAG executed another debt and assignment agreement with Magna Group, LLC whereby GGAG assigned $50,000 of principal debt. In connection with the two debt and assignment agreements, the Company issued a convertible promissory note to Magna Group, LLC in the said amounts which are convertible at a 45% discount to the lowest trading price in the ten (10) days prior to conversion. In the year ended December 31, 2014, Magna Group, LLC converted the entire $100,000 of principal convertible debt into 1,369,851,114 shares of common stock in the Company.

Pegasus Group, Inc.

Pursuant to the acquisition of D&B Music, Inc. by the Company, the Company assumed the debt of D&B Music, Inc. which included a promissory note to Pegasus Capital, Inc. (formerly Pegasus Group, Inc.) in the principal amount of $242,000. On August 10, 2013, Pegasus Capital, Inc. assigned $30,000 of principal debt to Sherry Harden who in turn converted that debt into 30,000,000 free trading shares of common stock in the Company.

On January 13, 2014, Sherry Harden entered into a debt purchase agreement with Pegasus Capital, Inc. for a $5,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $5,000 portion of debt assigned to Mrs. Harden through the debt purchase agreement. As of December 31, 2014, Mrs. Harden converted the entire $5,000 of principal into 100,000,000 unrestricted common shares of the Company.

On January 13, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $5,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $5,000 portion of debt assigned to SFH Captial, LLC. As of December 31, 2014, SFH Capital, LLC converted the entire $5,000 of principal into 100,000,000 unrestricted common shares of the Company.

On February 13, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $22,500 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into a convertible debenture for that $22,500 portion of debt assigned to SFH Capital, LLC. As of December 31, 2014, SFH Capital, LLC converted the entire $22,500 of principal into 225,154,110 unrestricted common shares of the Company.

On February 28, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $90,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $90,000 portion of debt assigned to SFH Capital, LLC. As of December 31, 2014, SFH Capital, LLC has converted $5,000 of principal debt into 100,000,000 shares of common stock in the Company.

Southridge Partners II, LP

On June 18, 2014, the Company and Southridge Partners II, LP (“Southridge”) entered into a settlement agreement concerning the complete settlement and disposition of all claims by Southridge which include a convertible note issued by the Company to Southridge on September 30, 2013 and due on June 30, 2014 in the amount of $35,000. In the year ended December 31, 2014, the Company executed the settlement agreement by issuing Southridge 209,583,076 share of common stock as full consideration for payment of said convertible note.

Gorilla Pictures

On January 31, 2013, the Company executed a stock purchase agreement with ESMG, Inc. which was treated as a reverse merger. Moreover, the Company assumed a $275,000 promissory note originally issued to Gorilla Pictures on November 6, 2012.

On October 6, 2014, Firehole River Capital, LLC (the “Assignee”) entered into a purchase and assignment agreement with Gorilla Pictures (the “Assignor”) whereby a portion of $75,000 from an original note issued to the Assignor on November 6, 2012, was purchased by the Assignee. The new convertible note issued by the Company to the Assignee has a conversion rate equal to 50% of the lowest closing price of the Company’s common stock for the last 10 trading days prior to conversion. As of December 31, 2014, Firehole River Capital, LLC has converted $42,500 of principal leaving a balance of $40,000 on this note.

Note payable short-term debt balances as of December 31, 2014 and December 31, 2013 are made up of the following:

Short Term Notes Payable in Default

As of December 31, 2014, the Company has approximately $429,500 of short term notes payable in default.

NOTE 10 – SHORT-TERM CONVERTIBLE DEBT AND DERIVATIVE LIABILITY

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

Redwood Fund II

On June 18, 2014, the Company and Redwood Fund II (“Redwood”) entered into a settlement agreement concerning the complete settlement and disposition of all claims by Redwood which include a convertible note issued by the Company to Redwood on April 29, 2013 and due on January 29, 2014. In the year ended December 31, 2014, the Company executed the settlement agreement by issuing Redwood 474,444,444 share of common stock as full consideration for payment of said convertible note.

WHC Capital, LLC (“WHC”)

On May 12, 2014, the Company and WHC Capital, LLC (“WHC”) entered into a settlement agreement concerning the complete settlement and disposition of all claims by WHC which include convertible notes issued by the Company to WHC on (i) June 27, 2013 for $100,000, (ii) June 27, 2013 for $50,000, (iii) August 8, 2013 for $100,000, (iv) September 8, 2013 for $100,000, (v) October 22, 2013 for $50,000, (vi) November 30, 2013 for $50,000, and (vii) December 27, 2013 for $50,000. Pursuant to the settlement agreement, the Company will pay WHC $150,000 cash as well as issue a total of 280,000,000 shares of common stock to settle the seven (7) convertible notes in full. As of December 31, 2014, WHC has been paid $150,000 cash and been issued 280,000,000 shares of common stock in full consideration of all outstanding convertible notes payable, leaving a balance owed to WHC of $0.

LG Capital Funding, LLC

On February 20, 2014, the Company issued a convertible note of $50,000 to LG Capital Funding, LLC. Under the terms of the note, the Company is to repay any principal balance and interest, at 8% per annum at the maturity date of February 20, 2015. The Company may prepay the convertible promissory note prior to maturity at varying prepayment penalty rates specified under the agreement. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the five (5) trading days prior to the conversion date.  The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of December 31, 2014, LG Capital Funding, LLC has converted $50,000 of principal and $471 of accrued interest into 609,725,000 shares of common stock, leaving a $0 principal balance on this note.

On April 1, 2014, the Company issued a convertible note of $100,000 to LG Capital Funding, LLC. Under the terms of the note, the Company is to repay any principal balance and interest, at 8% per annum at the maturity date of April 1, 2015. The Company may prepay the convertible promissory note prior to maturity at varying prepayment penalty rates specified under the agreement. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the five (5) trading days prior to the conversion date.  The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of December 31, 2014, LG Capital Funding, LLC has converted $6,625 of principal into 139,963,600 shares of common stock, leaving a balance $93,375 on this note.

On October 14, 2014, the Company received $95,000 pursuant to a back end convertible note of $100,000 dated April 1, 2014 with LG Capital Funding, LLC. Under the terms of the note, the Company is to repay any principal balance and interest, at 8% per annum at the maturity date of April 1, 2015. The Company may prepay the convertible promissory note prior to maturity at varying prepayment penalty rates specified under the agreement. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the five (5) trading days prior to the conversion date.  The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted.

Inter-Mountain Capital Corp.

On April 21, 2014, the Company entered into a collateralized secured convertible promissory note with Inter-Mountain Capital Corp ("Inter-Mountain"), a Delaware corporation, for an 9% convertible promissory note with an aggregate principal amount of $2,207,500, of which the company is to assume $200,000 in original interest discount ("OID") and legal fees and other expenses of Inter-Mountain totaling $10,000, which together with any unpaid accrued interest is due on March 21, 2016. The note is to be issued in tranches with an initial tranche of $557,500, of which $500,000 was received on April 22, 2014, assuming $57,500 in OID. The Company received a second tranche of $110,000, of which the Company received $100,000 on August 8, 2014, assuming $10,000 of OID. The Company received a third tranche of $27,500, of which the Company received $25,000 on November 13, 2014, assuming $2,500 of OID. This convertible note together with any unpaid accrued interest is convertible into shares of common stock at a fixed conversion price of $0.0075. The remaining tranches of $275,000 of funding to the Company under the note will consist of $250,000 in principal and the $25,000 in OID, which have not yet been funded. As of December 31, 2014, Inter-Mountain Capital Corp has converted $59,400 of principal debt into 495,000,000 shares of common stock in the Company.

Adar Bays, LLC

On May 27, 2014, the Company issued a convertible note of $75,000 to Adar Bays, LLC. Under the terms of the note, the Company is to repay any principal balance and interest, at 8% per annum at the maturity date of May 27, 2015. The Company may prepay the convertible promissory note prior to maturity at varying prepayment penalty rates specified under the agreement. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the five (5) trading days prior to the conversion date.  The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of December 31, 2014, Adar Bays, LLC has not converted any debt.

SFH Capital, LLC

On January 13, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $5,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $5,000 portion of debt assigned to SFH Capital, LLC. As of December 31, 2014, SFH Capital, LLC converted the entire $5,000 of principal into 100,000,000 unrestricted common shares of the Company.

On February 13, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $22,500 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into a convertible debenture for that $22,500 portion of debt assigned to SFH Capital, LLC. As of December 31, 2014, SFH Capital, LLC converted the entire $22,500 of principal into 225,154,110 unrestricted common shares of the Company.

On February 28, 2014, SFH Capital, LLC entered into a debt purchase agreement with Pegasus Capital, Inc. for a $90,000 portion of the promissory note originally in the amount of $242,000 dated February 1, 2009. On the same date, the Company then entered into convertible debenture for that $90,000 portion of debt assigned to SFH Capital, LLC. As of December 31, 2014, SFH Capital, LLC has converted $5,000 of principal debt into 100,000,000 shares of common stock in the Company.

On June 27, 2014, the Company executed a convertible promissory note with SFH Capital, LLC in the amount of $50,000 bearing interest of 10% per annum and maturing on June 27, 2015. The $50,000 was wired directly to WHC Capital, LLC whom is another note holder of the Company. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the ten (10) trading days prior to the conversion date.  The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of December 31, 2014, SFH Capital, LLC has not converted any of this debt.

On August 5, 2014, the Company executed a convertible promissory note with SFH Capital, LLC in the amount of $50,000 bearing interest of 10% per annum and maturing on August 5, 2015. The $50,000 was wired directly to WHC Capital, LLC whom is another note holder of the Company. The convertible promissory note is convertible into shares of the Company’s common stock any time after the issuance of the convertible note. The conversion price is calculated by multiplying 50% (50% discount) by the lowest trading prices anytime during the ten (10) trading days prior to the conversion date.  The conversion feature is considered a derivative liability as the conversion feature is variable with no floor as to the number of common shares which could be converted. As of December 31, 2014, SFH Capital, LLC has not converted any of this debt.

Beaufort Capital Partners, LLC

On June 30, 2014, the Company executed a convertible note agreement with Beaufort Capital Partners, LLC in the amount of $100,000, interest of 12% per annum, payable by December 30, 2014 and convertible into common shares of the Company at a 38% discount to market based on the (3) three lowest closing prices within (10) ten trading days prior to conversion. As of December 31, 2014, Beaufort Capital Partners, LLC has not converted any of this debt.

Eastmore Capital, LLC

On August 13, 2014, the Company executed a convertible note agreement with Eastmore Capital, LLC in the amount of $110,000, interest of 12% per annum, payable by August 12, 2015 and convertible into common shares of the Company at a 40% discount to market based on the lowest closing prices within (10) ten consecutive trading days prior to conversion. As of December 31, 2014, Eastmore Capital, LLC has not converted any of this debt.

Left Coast Pictures, Inc.

On July 7, 2014, the Company executed a convertible note agreement with Left Coast Pictures, Inc. in the amount of $25,000, interest of 5% per annum, payable by January 7, 2015 and convertible into common shares of the Company at a 50% discount to market based on the lowest closing prices within (10) ten trading days prior to conversion. As of December 31, 2014, Left Coast Pictures, Inc. has not converted any of this debt.

Firehole River Capital, LLC

On October 2, 2014, the Company issued a convertible note and securities purchase agreement to Firehole River Capital, LLC in the amount of $82,500 of which $75,000 was received net of legal fees. The convertible note bears interest of 12%, matures on June 2, 2015, and is convertible into shares of the Company’s stock at a conversion rate of 50% of the lowest trading price during the 10 days prior to conversion. As of December 31, 2014, Firehole River Capital, LLC has not converted any of this debt.

On October 6, 2014, Firehole River Capital, LLC (the “Assignee”) entered into a purchase and assignment agreement with Gorilla Pictures (the “Assignor”) relating to the purchase of a portion of the Company’s note issued to the Assignor, and the Company issued Assignee a convertible note for the portion of the debt purchased by Assignee in the amount of $75,000. As of December 31, 2014, Firehole River Capital, LLC has converted $42,500 of principal leaving a balance of $32,500 on the note.

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

Nature of Derivative Liability

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

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

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

NOTE 11 – STOCKHOLDERS EQUITY

Authorized Preferred Stock

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

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

Preferred Stock Issuances

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

On November 11, 2014, the Company issued 3,000,000 shares of preferred stock to its chief executive officer for services rendered. The Company valued the preferred share at par $0.00001 which resulted in an expense of $30.

As of December 31, 2014 and 2013 the Company has 10,000,000 and 7,000,000 shares of preferred stock outstanding.

Authorized Common Stock

On or about October 10, 2012, the Company’s board of directors adopted a resolution approving an amendment to our Articles of Incorporation to effectuate an increase of the authorized capital stock from 25,000,000 shares, par value $0.001, to 500,000,000 shares, par value $0.001, and additionally authorized a 20 for 1 forward split, increasing the number of issued and outstanding common shares from 9,245,600 common shares to 184,912,000 common shares, which corporate actions were subsequently effected. The forward split did not affect the number of authorized common shares or par value.

Effective June 30, 2013, the Company amended its Articles of Incorporation increasing the authorized shares of capital stock from 500,000,000 shares, par value $0.001, to 2,000,000,000 shares, par value $0.00001, with 10,000,000 preferred shares, par value $0.00001, authorized and 4,990,000,000 common shares, par value $ 0.00001, authorized.

On or about August 10, 2013, the Company filed a Certificate of Designation with the State of Delaware designating 10,000,000 shares of preferred stock as “Series A Preferred Stock,” which shares would rank senior to the common stock with respect to distributions or payments in the event of any liquidation, dissolution, or winding up of the Company, and with each share of Series A Preferred Stock entitling the holder thereof to 1,000 votes.

Effective November 25, 2013, the Company amended its Articles of Incorporation to increase the Company’s authorized shares of capital stock from 2,000,000,000 shares, par value $0.00001, to 5,000,000,000 shares, par value $0.00001, with 10,000,000 preferred shares, par value $0.00001, authorized and 4,990,000,000 common shares, par value $ 0.00001, authorized.

On September 16, 2014, the Company amended its Articles of Incorporation to increase its authorized capital stock to 9,010,000,000 shares, with 9,000,000,000 common shares, par value $0.00001 par value, authorized and 10,000,000 preferred shares, par value $0.00001, authorized.

Effective March 23, 2015, the Company amended its Articles of Incorporation under the laws of the State of Delaware to effectuate a reverse stock split of its common and preferred stock at a reverse stock ratio of one post-split share of stock for each 1,000 shares of pre-split stock. Pursuant to the amendment, the total authorized capital which the Company shall have the authority to issue was reduced to 2,010,000,000, of which 2,000,000,000 shares shall be common stock, $0.00001 par value per share, and 10,000,000 shares shall be preferred stock, $0.00001 par value per share. The Company did not adjust any financial activity in the audited financial statements included in this Form 10-K to account for the reverse stock split as it was effectuated with the State of Delaware subsequent to December 31, 2014.

Common Stock Issuances

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

In the year ended December 31, 2014, the Company issued 7,259,656,818 shares of common stock of which 372,218,912 shares were for $374,363 cash and 6,887,437,906 shares for the reduction of $878,223 in convertible debt. The Company also canceled 135,880,000 shares to its CEO David Michery to allow the Company to issue additional shares to other parties because it reached its maximum authorized shares in early 2014. The Company has since increased its authorized shares of common stock.

Stock Payable

As of December 31, 2014 and 2013, the Company had a stock payable balance of $7,500 and $0. The Company executed a consulting agreement in October of 2014 whereby the Company is to issue 25,000,000 shares of common stock for services rendered. The Company valued the shares at the trading price on the date of issuance which resulted in a consulting expense of $7,500. As of December 31, 2014, the Company has yet to issue the shares and therefor recorded a stock payable of $7,500.

Warrants

On June 30, 2014, the Company issued to Beaufort Capital Partners LLC warrants to purchase 67,000,000 shares of common stock of the Company at an exercise price of $.0015 per share. The warrants were issued to the Beaufort Capital Partners LLC pursuant to a convertible note dated June 30, 2014 in the amount of $100,000.

During the years ended December 31, 2014, no warrants were exercised. The following table summarizes the outstanding warrants.

NOTE 12 – COMMITMENTS & CONTINGENCIES

Joint Venture Agreement with CanMed Ventures, Inc.

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

As of December 31, 2014, the Company has not made any payments or advanced any assets pursuant to the joint venture agreement with CanMEd.

Legal Status of Marijuana Industry in Canada

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

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

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

Office lease

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

Minimum future rental payments under the agreement are as follows:

NOTE 13 – RELATED PARTY TRANSACTIONS

Due from related party

On December 8, 2013, the Company executed a line of credit agreement with Mullen Motors Company, (“Mullen”), a private company owned by our CEO, David Michery, in the amount up to $150,000 at zero percent interest until December 31, 2014 and payable in full by December 31, 2015. Starting January 1, 2015, the line of credit will accrue interest at 4% per annum. As of December 31, 2014 and 2013, the Company had a due from related party balance relating to advances to Mullen in the amounts of $104,915 and $0.

Due to related party

The Company was advanced money from its CEO for working capital purposes at zero percent interest and payable on demand. As of December 31, 2014 and 2013, the Company had a due to related party balance relating to the advances from our CEO in the amounts of $19,348 and $13,928.

Merger of D & B Music, Inc.

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

Employment agreements with CEO and former CFO

On February 7, 2013, the Company executed an employment agreement with its CEO, David Michery and its former CFO, Alan Bailey. The employment agreement with Mr. Michery is for two years with an annual salary of $240,000. The employment agreement with Mr. Bailey is for two years with an annual salary of $120,000. On February 14, 2014, Mr. Bailey resigned as CFO of the Company and his employment agreement was terminated. As of December 31, 2014 and December 31, 2013, the Company had an accrued salary liability to its CEO, David Michery, in the amount of $27,723 and $83,808. As of December 31, 2014 and December 31, 2013, the Company had an accrued salary liability to its former CFO, Alan Bailey, in the amount of $24,404 and $41,904. In the years ended December 31, 2014 and 2013, the Company paid $301,065 and $130,000 in cash payments to Mr. Michery pursuant to his employment agreement. In the year ended December 31, 2014, the Company paid $17,500 in cash payments to Mr. Bailey pursuant to his outstanding salary liability. It should be noted that Mr. Michery was not paid in excess of his employment agreement in fiscal year 2014 as he accrued approximately $110,000 in accrued salary in fiscal year 2013, and the accrued salary balance carried forward into 2014.

NOTE 14 – SUBSEQUENT EVENTS

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

NOTE 15 – RESTATEMENT OF DECEMBER 31, 2013 FINANCIAL STATEMENTS

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

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

PRIMCO MANAGEMENT INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

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

PRIMCO MANAGEMENTS INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

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

PRIMCO MANAGEMENTS INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS