UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2016

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

For the transition period from ______________ to _______________

Commission file number 333-174759

(215) 350-2255

(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 ¨ 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 ¨ 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. (Check One):

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

The number of shares issued, issuable, and outstanding of the issuer's common stock, $0.001 par value per share, was 36,643,949 as of October 17, 2016.

EMS FIND, INC.

FORM 10-Q

SEPTEMBER 30, 2016

INDEX

PART I – FINANCIAL INFORMATION

TABLE OF CONTENTS

ITEM 1. FINANCIAL STATEMENTS 

See accompanying notes to unaudited condensed consolidated financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

EMS Find, Inc. (the "Company," "we," "our," or "EMS Find") was incorporated in the State of Nevada on March 22, 2011, under the name of Lightcollar, Inc. On March 20, 2015, the Company amended its articles of incorporation and changed its name from Lightcollar, Inc. to EMS Find, Inc.

On December 23, 2014, the Company authorized a forward split (the "Forward Split") of its issued and authorized common shares, whereby every one (1) old share of common stock was exchanged for five (5) new shares of the Company's common stock. As a result, the issued and outstanding shares of common stock was increased from five million six hundred fifty thousand (5,650,000) common shares prior to the Forward Split to twenty-eight million two hundred fifty thousand (28,250,000) common shares following the Forward Split. Fractional shares were rounded upward.

On March 10, 2015, the Company, with the approval of a majority vote of its shareholders filed a Certificate of Designation establishing the designations, preferences, limitations and relative rights of the Company's Series A preferred stock (the "Series A Designation" and the "Series A Preferred Stock"). The terms of the Certificate of Designation of the Series A Preferred Stock, which was filed with the State of Nevada on March 12, 2015, include the right to vote in aggregate, on all shareholder matters equal to 1,000 votes per share of Series A Preferred Stock, Series A Preferred Stock shares are not convertible into shares of our common stock.

Effective March 20, 2015, the Company, with the approval of its board of directors and its majority shareholders by written consent in lieu of a meeting, filed a Certificate of Amendment (the "Certificate of Amendment") with the Secretary of State of Nevada. As a result of the Certificate of Amendment, the Company, among other things, (i) changed its name to "EMS Find, Inc.," and (ii) changed its symbol to "EMSF."

On March 23, 2015, the Company issued 50,000 shares of Series A Preferred Stock in consideration for services on the Company's Board of Directors.

On March 31, 2015, the Company issued 450,000 shares of Series A Preferred Stock in consideration for services on the Company's Board of Directors.

On March 31, 2015, the Company signed the share exchange agreement with EMS Factory, Inc. ("EMS Factory"), a company incorporated under the laws of the State of Pennsylvania, and the shareholder of EMS Factory (the "Selling Shareholder") pursuant to a share exchange agreement by and among the Company, EMS Factory and the Selling Shareholder. The Company acquired 100% of the issued and outstanding securities of EMS Factory in exchange for the issuance of 10,000,000 shares of the Company's restricted Common Stock, par value $0.001 per share and 500,000 shares of the Company's Series A Preferred Stock, par value $0.001. The Company also has an agreement with an investor to fund $300,000 over the next one hundred and twenty days, to support the continued development and commercialization of EMS Factory's technology, in the following manner:

As a result of the Agreement the Selling Shareholder acquired up to 49% of the voting rights of Company's currently issued and outstanding shares of common stock. Upon completion of the agreement, EMS Factory became a wholly-owned subsidiary and the Company acquired the business and operations of EMS factory. Further, on the Closing date of the Agreement, Steve Rubakh, was appointed the President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a Director of the Company, and Mr. Matveev Anton resigned all of his positions with the Company.

Basis of Presentation

The accompanying unaudited consolidated financial statements of EMS Find, Inc. and its wholly-owned subsidiaries, EMS Factory, Inc. and Viva Entertainment, have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations for the interim period ended September 30, 2016 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2017. All intercompany balances and transactions have been eliminated. In the opinion of the Company's management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company's results of operations, financial position and cash flows. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company's Form 10-K for the year ended June 30, 2016 filed on September 27, 2016 and Management's Discussion and Analysis of Financial Condition and Results of Operations. For accounting purposes and due to the accounting for the reverse merger, the Company is using the accounting year end of EMS Factory, Inc., for the presentation in this filing.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

Nature of Business

The Company transitioned its operations from acting as a licensed ambulance provider to providing medical transportation information and acting as an intermediary coordinating dispatch services for providers, patients and medical transport companies. The Company is designing, developing, marketing, and operating software assets mainly in on-demand mobile healthcare sector.

Principles of Consolidation

The consolidated financial statements include the accounts of EMS Find and its wholly-owned subsidiaries, EMS Factory and Viva Entertainment. All significant inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company maintains cash balances in non-interest-bearing accounts that currently do not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The Company had cash balances of $11,269 and $1,974 as of September 30, 2016 and June 30, 2016 respectively.

Property and Equipment

Property and equipment consists of ambulances and medical equipment and are stated at cost. Ambulance and medical equipment is depreciated using the straight-line method over the estimated service life of five years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal.

Accounting for Derivatives

The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date.

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

Revenue Recognition

Our revenue is derived from the service revenue from ambulance transportation services.

The Company's revenue recognition policy is in accordance with the requirements of Staff Accounting Bulletin ("SAB") No. 104, Revenue Recognition ("SAB 104"), and other applicable revenue recognition guidance under US GAAP. Sales revenue is recognized for our retail and wholesale customers when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales terms are fixed or determinable, (iii) title and risk of loss have transferred, and (iv) collectability is reasonably assured — generally when products are shipped to the customer and services are rendered, except in situations in which title passes upon receipt of the products by the customer. In this case, revenues are recognized upon services rendered.

Income Taxes

The Company adopted the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of June 30, 2016, tax year 2015 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years.

The Company adopted ASC 740-10, “Definition of Settlement in FASB Interpretation No. 48,” (“ASC 740-10”), which was issued on May 2, 2007. ASC 740-10 amends FIN 48 to provide guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term “effectively settled” replaces the term “ultimately settled” when used to describe recognition, and the terms “settlement” or “settled” replace the terms “ultimate settlement” or “ultimately settled” when used to describe measurement of a tax position under ASC 740-10. ASC 740-10 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The adoption of ASC 740-10 did not have an impact on the accompanying financial statements.

Net Earnings (Loss) Per Share

In accordance with ASC 260-10, "Earnings Per Share," basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Dilutive common stock equivalent shares which may dilute future earnings per share consist of convertible notes convertible into 928,402 common shares. Equivalent shares are not utilized when the effect is anti-dilutive (see Note 4).

Recent Pronouncements

On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-16—Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods.

 EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-17—Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The standard requires management to evaluate, for each reporting period, whether there are conditions or events that raise substantial doubt about a company's ability to continue as a going concern within one year from the date the financial statements are issued. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of the ASU to have a significant impact on our consolidated financial statements.

NOTE 2 – GOING CONCERN

The Company has not generated any revenues, has recurring net losses, a working capital deficiency as of September 30, 2016 of $937,224, and used cash in operations of $90,371 and $204,375 for the three months ended September 30, 2016 and 2015, respectively. In addition, as of September 30, 2016, the Company had an accumulated deficit of $5,346,234. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management's plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company's current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

NOTE 3 – PROPERTY AND EQUIPMENT

Assets held for Sale

Depreciation and amortization expense for the three months ended September 30, 2016 and 2015 was $0 and $47, respectively. After the merger in March 2015, the Company discontinued all of its ambulance services. The Company wrote down $8,200 as of June 30, 2015 for its assets held for sale and took a loss of $13,097 on a sale of three of its vehicles it used for its medical transportation business. On March 28, 2016, the Company sold various assets valued at $35,521, net of accumulated depreciation, for $23,422. With the fees associated with the sale, the Company recorded a loss on the sale of $22,855.

NOTE 4 – RELATED PARTY TRANSACTIONS

In April 2015, the Company entered a month-to-month lease agreement for an office space for $1,250 per month owned by a relative of Steve Rubakh (“Rubakh”), an officer and director of the Company. The lease was terminated on August 30, 2015.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

On August 5, 2015, Shang Fei resigned from the Company as a board member and surrendered his 500,000 shares of Series A Preferred Stock which the company had issued to him in March 2015. Mr. Shang Fei also has provided the Company with $260,000 of capital of which $210,000 and a prior loan for expenses of $19,095 was converted into 212,050 shares of common stock.

On September 25, 2015, the Company authorized the issuance of 125,000 shares of common stock as part of an agreement with Daniel Grillo (“Grillo”), a director of the Company, for services from September 25, 2015 through March 31, 2016. The shares are amortized over the period of the agreement. See Note 6.

On October 28, 2015, Viva Entertainment, a subsidiary of the Company, entered into an employment agreement with Johnny Falcones (“Falcones”), for the period October 28, 2015 through December 31, 2018. Falcones was issued on January 2, 2016, warrants to purchase 3,000,000 shares of common stock of the Company, with an exercise price of $0.74. Additionally, Falcones would receive three year warrants to purchase up to 5% of the common stock of Viva Entertainment, at an exercise price of $0.50, which are exercisable in the event that Viva Entertainment is spun out of the Company. Furthermore, Falcones was to receive 375,000 shares of common stock of the Company on a monthly basis, starting on February 1, 2016, for a period of four months, for an aggregate total of 1,500,000 shares of common stock of the Company. On April 6, 2016, as part of the sale of Viva Entertainment, these warrants held by Falcones were cancelled and his employment agreement terminated. See Notes 1 and 6.

On January 2, 2016, the Company issued 3,000,000 warrants for common stock of the Company to Rubakh as a compensation incentive. The warrants mature on January 2, 2021. The exercise price is $0.74 and the warrant has a cashless exercise option. The common stock of the Company current price on the date of issuance was $0.47. The warrants were valued at $0.383 using a Black-Scholes calculation. The Company recorded an expense of $1,149,000. See Note 6.

On January 2, 2016, the Company issued 3,000,000 warrants for common stock of the Company to Falcones as a compensation incentive. The warrants mature on January 2, 2021. The exercise price was $0.74 and the warrant had a cashless exercise option. The common stock of the Company current price on the date of the issuance was $0.47. The warrants were value at $0.383 using a Black-Scholes calculation. The Company recorded an expense of $1,149,000. See Note 6. As part of the April 6, 2016 sale of Viva Entertainment (see Notes 1 and 6), these warrants were cancelled effective the date of issuance.

On March 15, 2016, the Company issued 242,424 shares of common stock to Sophia Rubakh, a relative of Rubakh, in consideration of various consulting administrative and marketing services provided to the Company. The shares were issued with a value of $0.21, or $50,909. See Note 6.

On June 1, 2016, the Company entered into a convertible promissory note with Rubakh, converting $81,364 of payables to Rubakh into the note. The note is non-interest bearing and matures on December 1, 2016. The note has a conversion rate of $0.03 per share. The closing price of the Company’s common stock on the previous day was $0.08. On June 27, 2017, Rubakh converted the principal of $81,364 into 2,712,133 shares of common stock. The conversion resulted in a loss of $298,335. Additionally, beneficial conversion feature expense of $61,134 had been recorded as of the date of conversion. See Notes 5 and 6.

On June 27, 2016, Rubakh converted his convertible promissory note in the amount of $81,364 into 2,712,133 shares of common stock. The conversion price was $0.03 whereas the current stock price was $0.14 therefore, a loss of $298,335 was recorded. See Notes 5 and 6.

On July 1, 2016, the Board of Directors of the Company agreed with Rubakh to reduce his compensation to $75,000 per year and to terminate the monthly issuance of 30,000 shares of common stock and in exchange, Rubakh will receive 30,000 shares of Series B Preferred Stock on a quarterly basis. The initial issuance effective for the period April 1, 2016 through June 30, 2016 was issued on August 29, 2016, and the second issuance for the period July 1, 2016 through September 30, 2016 was issued on September 1, 2016.

On July 1, 2016, the Board of Directors of the Company agreed with Rubakh to convert $6,000 of accrued compensation into 300,000 shares of common stock, at a conversion rate of $0.02 per share. The current price of the common stock was $0.125, therefore, a loss on conversion of $31,500 was recorded. See Note 6.

For the three months ended September 30, 2016, the Company authorized the issuance of 60,000 shares of Series B preferred stock as part of Rubakh's compensation package. Stock-based compensation of $639,000 was recorded. See Note 6.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

NOTE 5 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE, NET OF DISCOUNTS

Notes payable and convertible notes payable, all classified as current at September 30, 2016 and June 30, 2016, consist of the following:

On March 23, 2015, the Company issued a note to Green Construction for $30,400 with 10% interest per annum, as of June 30, 2015 the note had accrued interest of $822. The note was due on October 15, 2015. On July 30, 2015, the Company issued 26,885 to satisfy this debt.

On October 22, 2015, the Company entered into a Securities Purchase Agreement ("Purchase Agreement"), dated as of October 22, 2015, with LG Capital Funding, LLC ("LG"), pursuant to which the Company sold LG a convertible note in the principal amount of $125,000 (the first of four such Convertible Notes each in the principal amount of $125,000 provided for under the Purchase Agreement), bearing interest at the rate of 8% per annum (the "Convertible Note"). Each of the Convertible Notes issuable under the Purchase Agreement provides for a 15% original issue discount ("OID"), such that the purchase price for each Convertible Note is $106,250, and at each closing LG is entitled to be paid $6,000 for legal and other expenses. The Convertible Note provides LG the right to convert the outstanding balance, including accrued and unpaid interest, of such Convertible Note into shares of the Company's common stock at a price ("Conversion Price") for each share of common stock equal to 80% of the lowest trading price of the common stock as reported on the National Quotations Bureau for the OTCQB exchange on which the Company's shares are traded or any exchange upon which the common stock may be traded in the future, for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. The Convertible Note is payable, along with interest thereon, on October 22, 2016. As of September 30, 2016, $9,206 of interest has been accrued. The convertible note has an OID of 15%, which was recorded at $18,750 of which $8,248 was amortized as of September 30, 2016. The Company recorded a debt discount of $44,643 which, as of September 30, 2016, $41,959 has been amortized. The Company has recorded a derivative liability of $156,853 as of September 30, 2016.

On December 3, 2015, the Company issued the second convertible note to LG, as discussed, for $125,000. As of September 30, 2016, $3,260 of interest has been accrued. The Company has recorded an OID of 15%, which was recorded at $18,750 of which $6,096 was amortized as of September 30, 2016. The Company recorded a debt discount of $85,165 which, as of September 30, 2016, $27,690 has been amortized. The Company has recorded a derivative liability of $214,276 as of September 30, 2016.

On July 21, 2016, the Company entered into a convertible promissory note with Old Main Capital, LLC (“Old Main”) for $33,333. The note matures on July 21, 2017 and bears interest at 10%. The convertible promissory note provides for an OID of $3,333, a deduction of $1,250 for Old Main’s legal fees, and $2,500 for Old Main’s legal fees related to the equity purchase agreement. Therefore, the net proceeds to the Company was $26,250. The conversion price is the lower of 65% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date or the closing bid price on the original issue date. As of September 30, 2016, $648 of the OID had been amortized, $6,484 of the debt discount had been amortized, and there was accrued interest of $658.

On July 25, 2016, the Company entered into an equity purchase agreement with River North Equity, LLC (“River North”) for up to $2,000,000. On July 25, 2016, the Company entered into a convertible promissory note with River North for $40,000. The convertible promissory note has a maturity date of March 29, 2017 and is non-interest bearing. The conversion price is the lower of 65% of the lowest traded price for the twenty consecutive trading days immediately preceding the applicable conversion date. The convertible promissory note provides for an OID of $3,333, a deduction of $4,000 for River North’s legal fees, and a debt discount of $33,333. As of September 30, 2016, $904 of the OID had been amortized, $9,042 of the debt discount had been amortized, and there was accrued interest of $745.

On August 10, 2016, the Company entered into a securities purchase agreement with Global Opportunity Group, LLC (“Global”) for $16,500. The Company received net proceeds of $15,000. Additionally, the Company issued 165,000 warrants for common stock with an exercise price of $0.15 per share and have a cashless exercise option (see Note 6). The convertible promissory note provides for an OID of $1,500, a deduction of $1,000 for Global’s legal fees, and a debt discount of $16,500. As of September 30, 2016, $115 of the OID had been amortized, $1,266 of the debt discount had been amortized, and there was accrued interest of $157.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

On August 18, 2016, Global purchased $60,000 of the December 2015 LG note. The conversion feature was 50% of the previous 20 days’ lowest traded price. The acquisition was in two tranches, $30,000 each, thirty days apart. Subsequent to the acquisition of the first $30,000, LG completed the following conversions: on August 29, 2016, $5,000 ($4,500 principal and legal fees of $500) into 250,000 shares, converted at a rate of $0.02 per share, with a loss on conversion of $15,500 as the current stock price was $0.082; on September 2, 2016, $10,000 ($9,500 principal and legal fees of $500) into 500,000 shares, converted at a rate of $0.02 per share, with a loss on conversion of $25,000 as the current stock price was $0.07; on September 13, 2016, $8,500 ($8,000 principal and legal fees of $500) into 680,000 shares, converted at a rate of $0.0125 per share, with a loss on conversion of $18,700 as the current stock price was $0.04, and; on September 26, 2016, $8,500 ($8,000 principal and legal fees of $500) into 1,202,677 shares, converted at a rate of $0.0071 per share, with a loss on conversion of $31,871 as the current stock price was $0.0275 (see Note 6). Subsequent to September 30, 2016, on October 7, 2016, Global converted $6,000 ($5,500 principal and legal fees of $500) into 1,000,000 shares, converted at a rate of $0.006 per share, with a loss on conversion of $13,000 as the current stock price was $0.019 (see Note 8).

On August 23, 2016, the Company entered into a securities purchase agreement with EMA Financial, LLC (“EMA”), for $33,000. The Company received net proceeds of $29,700. The convertible promissory note provides for an OID of $3,300, a deduction of $3,000 for EMA’s legal fees, and a debt discount of $33,000. As of September 30, 2016, $344 of the OID had been amortized, $3,436 of the debt discount had been amortized, and there was accrued interest of $564.

On September 12, 2016, LG converted $8,500 of principal of the October 22, 2015 convertible promissory note (see Note 6) into 680,000 shares of common stock. The conversion price, based on a 50% discount, was $0.0125. A loss on conversion will be recorded accordingly.

NOTE 6 – STOCKHOLDERS' DEFICIT

Preferred Stock

Series A Preferred Stock

On March 10, 2015, the Company, with the approval of a majority vote of its Board of Directors approved the filing of a Certificate of Designation establishing the designations, preferences, limitations and relative rights of the Company's Series A preferred stock (the "Series A Designation" and the "Series A Preferred Stock"). The terms of the Certificate of Designation of the Series A Preferred Stock, which was filed with the State of Nevada on March 12, 2015, include the right to vote in aggregate, on all shareholder matters equal to 1,000 votes per share of Series A Preferred Stock and each Series A Preferred Stock share are not convertible into shares of our common stock.

The Company has 1,000,000 shares of Series A Preferred Stock authorized.

On March 23, 2015, the Company issued 50,000 shares of Series A Preferred Stock in consideration for services on the Company's Board of Directors.

On March 31, 2015, the Company issued 450,000 shares of Series A Preferred Stock in consideration for services on the Company's Board of Directors.

On March 31, 2015, the Company issued 500,000 shares of Series A Preferred Stock as part of the share exchange agreement with EMS Factory, Inc.

On August 5, 2015, Shang Fei resigned from the Company as a board member and surrendered his 500,000 shares of Series A Preferred Stock which the company had issued to him in March 2015. Mr. Shang Fei also has provided the Company with $260,000 of capital of which $210,000 and a prior loan for expenses of $19,095 was converted into 212,050 shares of common stock.

Series B Preferred Stock

On December 21, 2015, the Company filed a Certificate of Designation for its new Series B Convertible Preferred Stock with the State of Nevada following approval by the board of directors of the Company. Five Hundred (500,000) Thousand shares of the Company's authorized preferred stock are designated as the Series B Convertible Preferred Stock (the "Series B Preferred Stock"), par value of $0.001 per share and with a stated value of $0.001 per share (the "Stated Value"). Holders of Series B Preferred Stock shall be entitled to receive dividends, when and as declared by the Board of Directors out of funds legally available therefor. At any time and from time to time after the issuance of shares of the Series B Preferred Stock, each issued share of Series B Preferred Stock is convertible into One (100) Hundred shares of Common Stock ("Conversion Ratio"). The holders of the Series B Preferred Stock shall have the right to vote together with holders of Common Stock, on an as "converted basis", on any matter that the Company's shareholders may be entitled to vote on, either by written consent or by proxy. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Series B Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series B Preferred Stock an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable prior to any distribution or payment shall be made to the holders of any junior securities. If, at any time while any shares of Series B Preferred Stock remain outstanding ("Outstanding Shares"), the Company effectuates a stock split or reverse stock split of its Common Stock or issues a dividend on its Common Stock consisting of shares of Common Stock, the Conversion Ratio will be equitably adjusted to reflect such action with respect to Outstanding Shares at the record date of such split.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

On July 1, 2016, the Board of Directors of the Company agreed with Rubakh to reduce his compensation to $75,000 per year and to terminate the monthly issuance of 30,000 shares of common stock and in exchange, Rubakh will receive 30,000 shares of Series B Preferred Stock on a quarterly basis with the initial issuance effective for the period April 1, 2016 through June 30, 2016 were issued on August 29, 2016, and the second issuance for the period July 1, 2016 through September 30, 2016 were issued on September 1, 2016. Stock-based compensation of $639,000 was recorded. See Note 4.

Common Stock

On July 22, 2015, the Company sold 48,245 shares of common stock for $55,000.

On July 30, 2015, the Company issued 26,885 shares of common stock for debt converted of $31,465. The balance of $115 was forgiven.

On August 5, 2015, Shang Fei resigned from the Company as a board member and surrendered his 500,000 shares of Series A Preferred Stock which the company had issued to him in March 2015. Mr. Shang Fei also has provided the Company with $260,000 of capital of which $210,000 and a prior loan for expenses of $19,095 was converted into common stock. On August 6, 2015, the Company issued 17,606 shares of common stock for debt converted of $19,015 and 194,444 shares of common stock for debt converted of $210,000, for a total of 212,050 shares of common stock. See Note 4.

On September 25, 2015, the Company authorized the issuance of 125,000 shares of common stock as part of an agreement with Grillo, a director of the Company, for services from September 25, 2015 through March 31, 2016. The shares are amortized over the period of the agreement. See Note 4.

On March 15, 2016, the Company issued 242,424 shares of common stock to Sophia Rubakh, a relative of Rubakh, in consideration of various consulting administrative and marketing services provided to the Company. The shares were issued with a value of $0.21, or $50,909. See Note 4.

On April 25, 2016, the Company issued 500,000 shares of common stock to Falcones as compensation for his services. The shares were issued with a value of $0.21 or $105,000.

On June 27, 2016, Rubakh converted his convertible promissory note in the amount of $81,364 into 2,712,133 shares of common stock. The conversion price was $0.03 whereas the current stock price was $0.14 therefore, a loss of $298,335 was recorded. See Notes 4 and 5.

On July 1, 2016, the Board of Directors of the Company agreed with Rubakh to convert $6,000 of accrued compensation into 300,000 shares of common stock, at a conversion rate of $0.02 per share. The current price of the common stock was $0.125, therefore, a loss on conversion of $31,500 was recorded. See Note 4.

On August 29, 2016, Global converted $5,000 ($4,500 principal and legal fees of $500) of its note dated August 10, 2016 (see Note 5), into 250,000 shares, converted at a rate of $0.02 per share, with a loss on conversion of $15,500 as the current stock price was $0.082.

On September 2, 2016, Global converted $10,000 ($9,500 principal and legal fees of $500) of its note dated August 10, 2016 (see Note 5), into 500,000 shares, converted at a rate of $0.02 per share, with a loss on conversion of $25,000 as the current stock price was $0.07.

On September 13, 2016, Global converted $8,500 ($8,000 principal and legal fees of $500) of its note dated August 10, 2016 (see Note 5), into 680,000 shares, converted at a rate of $0.0125 per share, with a loss on conversion of $18,700 as the current stock price was $0.04.

On September 26, 2016, Global converted $8,500 ($8,000 principal and legal fees of $500) of its note dated August 10, 2016 (see Note 5), into 1,202,677 shares, converted at a rate of $0.0071 per share, with a loss on conversion of $31,871 as the current stock price was $0.0275.

On October 7, 2016, Global converted $6,000 ($5,500 principal and legal fees of $500) of its note dated August 10, 2016 (see Notes 5 and 8), into 1,000,000 shares, converted at a rate of $0.006 per share, with a loss on conversion of $13,000 as the current stock price was $0.019.

For the three months ended September 30, 2016, the Company authorized the issuance of 60,000 shares of Series B preferred stock as part of Rubakh's compensation package. Stock-based compensation of $639,000 was recorded. See Note 4.

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

Warrants

The Company has granted warrants to officers and directors. Warrant activity for officers and directors for the three months ended September 30, 2016 is as follows:

On January 2, 2016, the Company issued 3,000,000 warrants for common stock of the Company to Rubakh as a compensation incentive. The warrants mature on January 2, 2021. The exercise price is $0.74 and the warrant has a cashless exercise option. The common stock of the Company current price on the date of issuance was $0.47. The warrants were valued at $0.383 using a Black-Scholes calculation. The Company recorded an expense of $1,149,000. See Note 5.

On January 2, 2016, the Company issued 3,000,000 warrants for common stock of the Company to Falcones as a compensation incentive. The warrants mature on January 2, 2021. The exercise price is $0.74 and the warrant has a cashless exercise option. The Company recorded an expense of $1,149,000 (see Note 5). As part of the April 6, 2016 sale of Viva Entertainment (see Notes 1 and 7), these warrants were cancelled effective the date of issuance, therefore there were no expenses recorded related to the issuance.

The Company has granted warrants to non-employees. Warrant activity for non-employees for the three months ended September 30, 2016 is as follows:

EMS FIND, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2016

(unaudited)

On April 20, 2016, the Company issued 60,000 warrants for common stock of the Company to LG. The issuance was related to the Purchase Agreement dated October 22, 2015 (see Note 6). The warrants expire on April 20, 2019. The exercise price is $0.25 and the warrants have a cashless exercise option. The Company recorded an expense of $10,320.

On August 10, 2016, in conjunction with an agreement between the Company and Global Opportunity (see Note X) for financing, the Company issued 165,000 warrants for common stock to Global Opportunity. The warrants expire on August 10, 2021. The exercise price is $0.15 and the warrants have a cashless exercise option. The Company recorded an expense of $4,950.

NOTE 7 – DISCONTINUED OPERATIONS

As of the second quarter of 2015, the subsidiary, EMS Factory, Inc. discontinued operations which is reflected in the consolidated statements of income and consolidated statements of cash flows. Assets classified as held for sale are reported in the consolidated balance sheet. The Company will sell the remainder if the fixed assets and currently has no cost associated to the assets. The Company reported a loss of $0 and loss of $79,935 during the period ending September 30, 2016 and 2015, respectively.

Reconciliation of the Items Constituting Profit and (Loss)

from Discontinued Operations

(unaudited)

NOTE 8 – SUBSEQUENT EVENTS

On October 7, 2016, Global converted $6,000 ($5,500 principal and legal fees of $500) of its note dated August 10, 2016 (see Notes 5 and 6), into 1,000,000 shares, converted at a rate of $0.006 per share, with a loss on conversion of $13,000 as the current stock price was $0.019.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are "forward-looking statements" within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations." You can expect to identify these statements by forward-looking words such as "may," "might," "could," "would," "will," "anticipate," "believe," "plan," "estimate," "project," "expect," "intend," "seek" and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the "Risk Factors" section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

GENERAL

We were incorporated in the State of Nevada on March 22, 2013 under the name Lightcollar, Inc. On March 22, 2015, we changed our name to EMS Find, Inc. Effective March 31, 2015, we entered into a Share Exchange Agreement with the sole shareholder of EMS Factory, Inc., a Pennsylvania corporation (“EMS Factory”), and following the closing under the Share Exchange Agreement, EMS Factory became a wholly-owned subsidiary of the Company, with the former stockholder of EMS Factory owning approximately 35% of the outstanding shares of common stock of the combined company. Our offices are located at 73 Buck Road, Suite 2, Huntingdon Valley, Pennsylvania 19006.

The Company develops and markets B2B & B2C on-demand mobile platform, designed to connect health care providers and consumers to a network of medical transport companies throughout the United States and Canada and, on the internet and through mobile applications, and plans to provide specialized online marketing solutions for these businesses that boost customer awareness and merchant visibility on the internet and through mobile applications.

On April 6, 2016 we completed the sale of our subsidiary Viva Entertainment Group, Inc. (“Viva Entertainment”) to Black River Petroleum Corp., a Nevada publicly-traded company (“Black River”), at a closing where, in exchange for all sale of all of the outstanding shares of Viva Entertainment, Black River issued to the Company its 10% promissory note in the principal amount of $100,000, due September 30, 2016. In connection with the sale, Viva Entertainment’s Chief Executive Officer, Johnny Falcones (“Falcones”), a member of our Board of Directors, resigned from all positions at our Company and was elected as the sole director and President and Chief Executive Officer of Black River, to manage the development and marketing of Viva Entertainment’s over the top (IPTV/OTT) application for connected TV’s, desktop computers, tablets, and smart phones.

Financial Operations Overview

Revenue

To date, we have not generated any revenues from product sales and expect to start bring in revenue toward the end of the 2016 calendar year. Revenues to date have been generated substantially from the now discontinued Ambulance services. Since our inception through June 30, 2016, we have generated approximately $1.1 million in revenue. We have since discontinued these services and are focusing on new revenue sources.

We are incurring increased costs as a result of being a publicly-traded company. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, have required changes in corporate governance practices of public companies and will require us to comply with these rules. These new rules and regulations have will increase our legal and financial compliance costs and have made some activities more time-consuming and costly. In addition, these new rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance, which we currently cannot afford to do. As a result of the new rules, it may become more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as executive officers. We cannot predict or estimate the amount of additional costs we may incur as a result of being a public company or the timing of such costs.

To fund future operations, we will need to raise additional capital. The amount and timing of future funding requirements will depend on many factors, including the timing and results of our ongoing development efforts, the potential expansion of our current development programs, potential new development programs and related general and administrative support. We anticipate that we will seek to fund our operations through public or private equity or debt financings or other sources, such as potential collaboration agreements. We cannot be certain that anticipated additional financing will be available to us on favorable terms, or at all.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2016 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2015

Revenues

Our revenue was $0 and $0 for the three months ended September 30, 2016 and 2015.

General and Administrative Expenses

For the three months ended September 30, 2016, our general and administrative expenses were $755,316 compared to $186,298 for the three months ended September 30, 2015, resulting in an increase of $569,018, primarily contributable to stock-based compensation of $43,950 offset by a reduction in executive compensation.

Net Loss

For the three months ended September 30, 2016, our net loss was $234,020 compared to a net loss of $235,402 for the three months ended September 30, 2015. The net loss for the three months ended September 30, 2016 was partially contributable to beneficial conversion feature ("BCF") expense, $74,980, original issue discount ("OID"), $15,843, the loss on the conversion of debt into common stock, $115,274, offset by the change in the fair value of embedded conversion options, $733,774.

LIQUIDITY AND CAPITAL REQUIREMENTS

Overview

As of September 30, 2016, the Company had $11,269 in cash. We do not have sufficient resources to effectuate our business. We expect to incur a minimum of $50,000 in expenses during the next twelve months of operations. We estimate that these expenses will be comprised primarily of general expenses including overhead, legal and accounting fees.

Liquidity and Capital Resources during the three months ended September 30, 2016 compared to the three months ended September 30, 2015

We used cash in operations of $90,371 for the three months ended September 30, 2016 compared to cash used in operations of $204,375 for the three months ended September 30, 2015. The negative cash flow from operating activities for the three months ended September 30, 2016 is attributable to the Company's net loss from operations of $234,020 primarily due to the issuance of common stock for services, $643,950, BCF expense, $74,980, and the loss on conversion of debt into common stock, $115,274, offset by the change in the fair value of embedded conversion options, $733,774. Cash used in operations for the three months ended September 30, 2015 is attributable to the Company's net loss of $235,402.

We used cash in investing or financing activities of $0 and $0 for the three months ended September 30, 2016 and 2015.

We had cash provided by financing activities of $99,666 for the three months ended September 30, 2016 compared to $247,600 for the same period in 2015.

We will have to raise funds to pay for our expenses. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable company.

Going Concern

The Company has not generated any revenues, has recurring net losses, a working capital deficiency as of September 30, 2016 of $778,264, and used cash in operations of $90,371 and $204,375 for the three months ended September 30, 2016 and 2015, respectively. In addition, as of September 30, 2016, the Company had an accumulated deficit of $5,393,777. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management's plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company's current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

Estimated 2017 Capital Requirements

We estimate our capital requirements over the next twelve months for the development and marketing of our EMS on demand mobile platform app to be $1,000,000 to $3,000,000.

We have obtained working capital through various convertible note financings with various third parties.

USE OF ESTIMATES

The preparation of the financial statements requires the Company to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to oil and gas properties, intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included in these financial statements. Certain amounts for prior periods have been reclassified to conform to the current presentation.

Management believes that it is reasonably possible that the following material estimates affecting the financial statements could happen in the coming two years:

Off Balance Sheet Arrangements

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

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

The Securities and Exchange Commission recently issued "Financial Reporting Release No. 60 Cautionary Advice About Critical Accounting Policies" ("FRR 60"), suggesting companies provide additional disclosures, discussion and commentary on their accounting policies considered most critical to its business and financial reporting requirements. FRR 60 considers an accounting policy to be critical if it is important to the Company's financial condition and results of operations, and requires significant judgment and estimates on the part of management in the application of the policy.

The Company accounts for stock-based compensation to non-employees under ASC 718, "Compensation-Stock Compensation" ("ASC 718"). The compensation cost of the awards is based on the grant date fair-value of these awards and recognized over the requisite service period, which is typically the vesting period. The Company uses the Black-Scholes Option Pricing Model to determine the fair-value of stock options issued for compensation.

The Company accounts for non-employee share-based awards based upon ASC 505-50, "Equity-Based Payments to Non-Employees." ASC 505-50 requires the costs of goods and services received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete. Generally, our awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple reporting periods, we estimate the fair value of the award as of the end of each reporting period and recognize an appropriate portion of the cost based on the fair value on that date. When the award vests, we adjust the cost previously recognized so that the cost ultimately recognized is equivalent to the fair value on the date the performance is complete. Dilutive common stock equivalent shares which may dilute future earnings per share consist of warrants to purchase 3,225,000 at September 30, 2016 shares of common stock and convertible notes convertible into approximately 15,990,474 common shares. Equivalent shares are not utilized when the effect is anti-dilutive.

NON-GAAP FINANCIAL MEASURES

Adjusted Net Earnings

In addition to reporting net loss from operations as defined under generally accepted accounting principles (“GAAP”), the Company presents adjusted net earnings from operations (adjusted net earnings), which is a non-GAAP performance measure. Adjusted net earnings consist of net loss from operations after adjustment for those items shown in the table below. Adjusted net earnings does not represent, and should not be considered an alternative to, GAAP measurements such as net loss from operations (its most comparable GAAP financial measure), and the Company’s calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items shown below, the Company believes that the measure is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies. The Company’s management does not view adjusted net earnings in isolation and also uses other measurements, such as net loss from operation and revenues to measure operating performance. The following table provides a reconciliation of net loss from operations, the most directly comparable GAAP measure, to adjusted net earnings for the periods presented:

Adjusted EBITDA

In addition to reporting net loss from operations as defined under GAAP, the Company also presents adjusted net earnings before interest, income taxes, depreciation, depletion, and amortization from operations (adjusted EBITDA), which is a non-GAAP performance measure. Adjusted EBITDA consists of net loss from operations after adjustment for those items shown in the table below. Adjusted EBITDA does not represent, and should not be considered an alternative to, GAAP measurements such as net loss from operations (its most comparable GAAP financial measure), and the Company’s calculations thereof may not be comparable to similarly titled measures reported by other companies.

By eliminating the items shown below, the Company believes the measure is useful in evaluating its fundamental core operating performance. The Company also believes that adjusted EBITDA is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies. The Company’s management uses adjusted EBITDA to manage its business, including in preparing its annual operating budget and financial projections. The Company’s management does not view adjusted EBITDA in isolation and also uses other measurements, such as net loss from operations and revenues to measure operating performance. The following table provides a reconciliation of net loss from operations, the most directly comparable GAAP measure, to adjusted EBITDA for the periods presented:

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term "disclosure controls and procedures" to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer's management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and interim chief financial officer to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

To remediate our internal control weaknesses, management intends to implement the following measures:

The additional hiring is contingent upon The Company's efforts to obtain additional funding through equity or debt and the results of its operations. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

Changes in Internal Control Over Financial Reporting

Except as set forth above, due to the new business plan, we are in the process of finalizing our controls over the new business process.

Limitations on the Effectiveness of Controls

The Company's management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There are no pending legal proceedings in which we are a party or in which any of our directors, officers or affiliates, any owner of record or beneficiary of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us. Our property is not the subject of any pending legal proceedings.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On July 1, 2016, the Board of Directors of the Company agreed with Rubakh to convert $6,000 of accrued compensation into 300,000 shares of common stock, at a conversion rate of $0.02 per share.

On August 29, 2016, Global converted $5,000 ($4,500 principal and legal fees of $500) of its note dated August 10, 2016, into 250,000 shares, converted at a rate of $0.02 per share.

On September 2, 2016, Global converted $10,000 ($9,500 principal and legal fees of $500) of its note dated August 10, 2016, into 500,000 shares, converted at a rate of $0.02 per share.

On September 13, 2016, Global converted $8,500 ($8,000 principal and legal fees of $500) of its note dated August 10, 2016, into 680,000 shares, converted at a rate of $0.0125 per share.

On September 26, 2016, Global converted $8,500 ($8,000 principal and legal fees of $500) of its note dated August 10, 2016, into 1,202,677 shares, converted at a rate of $0.0071 per share.

On October 7, 2016, Global converted $6,000 ($5,500 principal and legal fees of $500) of its note dated August 10, 2016, into 1,000,000 shares, converted at a rate of $0.006 per share.

For the three months ended September 30, 2016, the Company authorized the issuance of 60,000 shares of Series B preferred stock as part of Rubakh's compensation package.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

(a)     Exhibits.

________________

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

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