NORTHSIGHT CAPITAL, INC. (Form: 10-Q, Received: 11/20/2015 16:55:06)

UNITED STATES

SECURITIES AND EXCHANGE COMMIS SION

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, 2015

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: 000-53661

NORTHSIGHT CAPITAL, INC.

(Exact name of issuer as specified in its charter)


Nevada		26-2727362
(State or Other Jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

7740 East Evans Rd.

Scottsdale, AZ 85260

(Address of Principal Executive Offices)

(480) 385-3893

(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 X . No .

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date 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 X . No .

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


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

The number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:


Class		Outstanding as of November 19, 2015
Common Capital Voting Stock, $0.001 par value per share		111,312,296 shares

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, Financial Statements and Notes to Financial Statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or intended.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

September 30, 2015

C O N T E N T S


Balance Sheets (unaudited)	3
Statements of Operations (unaudited)	4
Statements of Cash Flows (unaudited)	5
Notes to Unaudited Financial Statements	6

NORTHSIGHT CAPITAL, INC.

BALANCE SHEETS


	September 30,
	2015		December 31,
	(unaudited)		2014
ASSETS
Current Assets
Cash	$	45,048	$	20,690
Prepaid expenses		131,000		31,500
Accounts receivable		-		-
Debt issue costs, net of $2,763,639 amortization		169,058		-
Total Current Assets		345,106		52,190

Property and equipment, net of $4,580 and $1,471 depreciation		7,857		10,966
Web Development Costs, net of $55,741 and $9,000 amortization		283,420		327,912
Total Assets	$	636,383	$	391,068

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses	$	220,355	$	34,639
Accounts payable and accrued expenses – related party		209,476		46,676
Notes payable – related party		611,407		-
Advances - related party		-		10,000
Notes payable, net of $22,054 discount		57,846		-
Total Current Liabilities		1,099,084		91,315

Noncurrent Liabilities
Notes payable – related party		400,000		400,000
Total Liabilities	$	1,499,084	$	491,315

Commitments and Contingencies

Stockholders' Deficit
Common stock - 200,000,000 shares authorized having a par value of $.001 per share; 111,312,296 and 104,019,196 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively		111,312		104,019
Stock payable		62,000		-
Additional paid-in capital		16,448,022		10,536,221
Accumulated deficit		(17,484,035)		(10,740,487)
Total Stockholders' Deficit		(862,701)		(100,247)
Total Liabilities and Stockholders' Deficit	$	636,383	$	391,068

See accompanying notes to financial statements.

NORTHSIGHT CAPITAL, INC.

STATEMENTS OF OPERATIONS

(Unaudited)




	For the Three Months Ended				For the Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2015		2014		2015		2014

Revenues	$	3,816	$	-	$	8,229	$	-

Operating Expenses:
General administrative		566,682		571,582		1,085,842		708,239
Settlement Expense		62,000		-		62,000		932,500
Consulting expense - related party		73,500		4,637,500		249,000		4,647,000
Executive compensation		932,000		1,040,500		1,723,500		1,046,500
Professional fees		100,759		125,837		265,660		220,172
Rent - related party		13,500		13,500		40,500		20,500
Travel		6,395		9,025		14,997		16,441
Total operating expenses		1,754,836		6,397,944		3,441,499		7,591,352

Loss from operations		(1,751,020)		(6,397,944)		(3,433,270)		(7,591,352)
Other Income (Expense)
Interest expense		(1,831,701)		2,671		(3,310,278)		(71)

Net Loss	$	(3,582,721)	$	(6,395,273)	$	(6,743,548)	$	(7,591,423)

Weighted Average Number of Common Shares
Outstanding - Basic and Diluted	108,569,253		99,308,727		106,412,405		52,449,487
Loss per Common Share - Basic and Diluted	$	(0.03)	$	(0.06)	$	(0.06)	$	(0.14)

See accompanying notes to financial statements.

NORTHSIGHT CAPITAL, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	2015		2014
Cash Flows From Operating Activities
Net loss	$	(6,743,548)	$	(7,591,423)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		3,109		661
Amortization of web development costs		44,492		-
Amortization of debt issue costs		3,259,504		-
Amortization of debt discount		49,778		-
Stock issued for release		62,000		932,500
Stock issued for executive compensation		1,282,500		980,000
Stock issued pursuant to contracts		380,950		-
Stock issued for consulting		-		4,599,000
Stock issued for contract labor		-		219,000
Stock issued for advertising incentive		750		-
Corporate expenses paid by shareholders		-		71
Changes in operating assets and liabilities:
Prepaid expenses		31,500		(53,500)
Accounts payable and accrued expenses		393,716		15,245
Accounts payable - related party		159,800		67,726
Net Cash Used In Operating Activities		(1,075,449)		(830,720)
Cash Flows From Investing Activities
Purchase of property and equipment				(9,035)
Purchase of web development costs		-		(238,828)
Purchase of domain registrations		-		(154,044)
Net Cash Used In Investing Activities		-		(401,907)
Cash Flows From Financing Activities
Proceeds from sale of common stock, net of offering costs		415,500		2,224,750
Payments for stock repurchase				(75,500)
Proceeds from notes		79,900		-
Proceeds from notes – related party		761,407		-
Payments on notes – related party		(157,000)		(100,000)
Net Cash Provided by Financing Activities		1,099,807		2,049,250

Net Increase In Cash		24,358		816,623
Cash, Beginning of Period		20,690		-
Cash, End of Period	$	45,048	$	816,623

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-
Non-Cash Activities
Issuance of common stock for domain names	$	-	$	31,279
Issuance of note payable for domain names	$	-	$	500,000
Issuance of common stock as settlement of obligations	$	208,000	$	-
Issuance of common stock for contracts	$	131,000	$	-
Issuance of common stock in conjunction with debt agreements	$	64,934	$	-
Cancellation of shares returned to company	$	-	$	1,676
Finders fees settled with stock	$	16,449	$	91,450
Warrants issued in conjunction with debt agreements	$	3,435,460	$	-
Subscriptions receivable – related party	$	-	$	50,000

See accompanying notes to financial statements.

NORTHSIGHT CAPITAL, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

September 30, 2015

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Northsight Capital Inc. (“Northsight” or “the Company”) is an early stage company incorporated in the State of Nevada on May 21, 2008. In May, 2011, Safe Communications, Inc. (n/k/a Kuboo, Inc.) acquired 80% of the Company’s issued and outstanding common stock, and, as a result, became its parent company. On June 25, 2014, the Company completed the acquisition of approximately 7,500 cannabis related Internet domain names, in exchange for which the Company issued 78.5 million shares of its common stock and a promissory note in the principal amount of $500,000. As a result of this transaction, the seller of the domain names became an 81% stockholder of the Company. Kuboo, Inc. continues to be a significant stockholder of the Company. John Venners, a director of Kuboo, Inc., is our EVP, Operations and also sits on our board of directors. See Note 12 - Related Party Transactions.

The Company’s principal business is to provide a wide variety of online directories for a broad range of businesses engaged in the lawful sale and distribution of cannabis and hemp related products. The following constitute the Company’s major product categories: a monthly listing in one or more of the Company’s online directories, paid advertising in one or more of the Company’s online directories and leasing to customers one or more Internet domain names for the customer’s exclusive use.

The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The results of operations for the three and nine month period ended September 30, 2015, are not necessarily indicative of the operating results for the full year.

NOTE 2 – LIQUIDITY/GOING CONCERN

The Company is an early stage enterprise and has accumulated losses of $17,484,035 and has had consistent negative cash flows from operating activities since inception (May 2008). These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. During the nine months ended September 30, 2015 the Company (i) raised $415,500 in capital through the sale of common stock and (ii) received a net $601,407 in loans from its controlling shareholder and her spouse. The Company does not currently have sufficient cash to fund operating expenses. Management plans to (i) raise additional capital as soon as possible, to fund continued operations of the Company and (ii) continue its efforts to generate revenues and income from operations.

In the event the Company does not generate sufficient funds from revenues or financing through the issuance of its common stock or from debt financing, the Company will be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-03, Interest — Imputation of Interest (Subtopic 835-30) — Simplifying the Presentation of Debt Issuance Costs, which provides guidance on simplifying the presentation of debt issuance costs, requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheets as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU No, 2015-15, Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (“ASU 2015-15”), which further clarifies ASU 2015-03 as it relates to presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 allows an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Both ASU 2015-03 and ASU 2015-15 require retrospective adoption and will be effective for financial statement periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company has not early adopted ASU 2015-03 or ASU 2015-15 and the adoption of these standards is not expected to have a material effect on its financial statements or disclosures.

NOTE 4 – WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS

In accordance with ASC 350.50, during the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company capitalized $0 and $339,162, respectively, towards the development of multiple websites on which third parties can advertise the sale and distribution of cannabis related products and services: an online “yellow pages.” The Company does not intend to engage in the sale or distribution of marijuana or related products. During the nine months ended September 30, 2015 the Company recorded website development expenses of $40,232 which is included in general and administrative expenses on the Company’s condensed statements of operations.

The Company amortizes these assets over their related useful lives (approximately 1 to 5 years), using a straight-line basis. Assets are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable, or at least annually. Measurement of the amount of impairment, if any, is based upon the difference between the asset's carrying value and estimated fair value. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary. During the three and nine months ended September 30, 2015 the Company recorded amortization expense of $18,091 and $44,491, respectively, related to websites previously launched. During the year ended December 31, 2014 the company fully impaired its capitalized domain registration assets.

The following table shows the Company’s expected amortization over the next five years based upon currently amortized websites:


2015 (3 months)	$	16,158
2016		64,632
2017		64,632
2018		64,632
2019		58,392
	$	268,446

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2015 and December 31, 2014:


	As of September 30, 2015		As of December 31, 2014		Estimated Useful Life
Furniture and equipment		12,437		12,437	3 years
Total		12,437		12,437
Less: Accumulated depreciation		(4,580)		(1,471)
	$	7,857	$	10,966

The Company records depreciation expense on a straight-line basis over the estimated life of the related asset (approximately 3 years). The Company recorded depreciation expense of $3,109 and $1,471 during the nine months ended September 30, 2015 and year ended December 31, 2014, respectively.

NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY

At September 30, 2015, the Company had a balance in related party accounts payable and accrued expenses of $209,476 which consisted of the following:


Party Name:	Relationship:			Amount
Howard Baer	Spouse of majority shareholder	Consulting fees		90,000
John Venners	Director/EVP, President and CEO of Kuboo, Inc.	Consulting fees		103,500
John Venners	Director/EVP, President and CEO of Kuboo, Inc.	Advances		3,000
Kuboo, Inc.	Former parent company, significant shareholder	Rent, contract labor		12,976
			$	209,476

NOTE 7 – NOTES PAYABLE RELATED PARTY

On June 23, 2014, the Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. The note originally bore interest at the rate of 3.25% per annum and the first $100,000 in principal was payable upon the Company’s receipt of an aggregate of $1,000,000 in funding (whether debt or equity). The remaining $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue (see Note 13 - Commitments and Contingencies).

On July 25, 2014, the Company amended and restated its promissory note in the principal amount of $500,000 owing to Kae Yong Park (the Company’s then majority shareholder) to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note until August 25, 2014, at which time it was paid. The Company subsequently recaptured all previously recorded interest expense related to the note.

On May 19, 2015, the Company issued Park a non-interest bearing, unsecured demand promissory note to evidence all unpaid advances received by the Company to that point and to cover all additional advances received afterward. Unpaid principal under the note is due and payable upon the earlier of (i) an “event of default” (as defined), (ii) written demand and (iii) the Company’s receipt of capital (to the extent of net proceeds received) from any capital raising transaction after May 15, 2015, whether in the form of debt, equity or otherwise.

On September 21, 2015, the Company amended and restated its promissory note to Park to include all advances to date and provide certain assets, including all internet domain names, websites and related assets as collateral. Repayment terms remain the same, and Park has to date not enforced the provision requiring repayment upon receipt of net proceeds from capital raising transactions. On September 30, 2015, the Company amended and restated the note to include an additional $50,000 advanced to the Company. At September 30, 2015, the Company had a balance due on the note of $611,407 (see Note 14 – Subsequent Events).

The following table summarizes the Company’s debt under this note for the nine months ended September 30, 2015:


Amount due to Park - December 31, 2014	$	10,000
Advances received from Park		758,407
Repayments made to Park		(157,000)
Balance due to Park – September 30, 2015	$	611,407

NOTE 8 – NOTES PAYABLE

On July 1, 2015, the Company entered into a seven (7) day loan agreement with two parties for aggregate proceeds of $34,900. The note bears interest at the rate of three percent (3%) annually. In addition to the loans, the Company issued an aggregate 349,000 shares of common stock valued at $26,016 and warrants to purchase an aggregate 100,000 shares of the Company’s common stock at an exercise price of $0.25 per share valued at $6,898. The relative fair value of the shares and warrants associated with these notes have been recorded as debt discount to be amortized over the life of the loans. As of September 30, 2015 these notes have not yet been repaid.

On August 10, 2015, the Company entered into a one hundred twenty (120) day loan agreement with an existing investor for aggregate proceeds of $45,000 (two installments of $22,500 each). The note bears interest at the rate of three percent (3%) annually. As additional consideration for these loans, the Company issued an aggregate 1,200,000 shares of common stock valued at $38,918. The relative fair value of the shares associated with these notes have been recorded as debt discount to be amortized over the life of the loans).

The following table summarizes the Company’s notes payable for the nine months ended September 30, 2015:


Balance – December 31, 2014	$	-
Loan proceeds received		79,900
Discounts on debt		(71,832)
Amortization of discounts on debt		49,778
Repayments on loans		-
Balance – September 30, 2015	$	57,846

The Company had unamortized discounts on debt of $22,054 at September 30, 2015.

NOTE 9 – DEBT ISSUE COSTS

On May 15, 2015, the Company issued 2,000,000 warrants in conjunction with a debt agreement of its majority shareholder and her spouse with a third party under which the third party loaned funds to the majority shareholder and her spouse, and such persons in turn loaned a portion of such funds to the Company. Pursuant to the terms of the debt agreement, the Company issued an additional 1,000,000 warrants on July 15, 2015 in conjunction with the agreement’s automatic thirty (30) day extension. On August 5, 2015, the Company issued an additional 2,000,000 warrants as consideration for an additional sixty (60) day extension on the debt agreement. See Note 14 – Subsequent Events. The Company has valued these warrants using the Black-Scholes method and has recorded the value of as debt issue costs to be amortized over the life of the underlying note (see Note 11 – Stock Warrants).

The following table summarizes the Company’s debt issue costs for the nine months ended September 30, 2015:


Debt issue costs – December 31, 2014	$	-
Fair value at the commitment date for warrants issued in conjunction with debt agreements		3,428,562
Amortization of debt issued costs		(3,259,504)
Debt issue costs – September 30, 2015	$	169,058

The fair value at the commitment date for the above warrants were based upon the following management assumptions:


	Commitment Date
Expected dividends		0%
Expected volatility		150% - 159%
Expected term:		2 years
Risk free interest rate		0.55% – 0.73%

NOTE 10 - EQUITY

During the three months ended March 31, 2015, the Company sold 691,000 shares of its common stock for an aggregate $169,000 in cash proceeds. The Company incurred a finder’s fee of $15,400, which the company has satisfied through the issuance of 61,600 shares of common stock.

During the three months ended June 30, 2015, the Company sold 760,000 shares of its common stock for an aggregate $190,000 in cash proceeds. The Company incurred cash finder’s fees of $18,500 in connection with these sales.

During the three months ended June 30, 2015, the Company issued 3,000 shares of its common stock valued at $750 as an advertising incentive, the value of which has been recorded against revenue in the Company’s statements of operations.

In January and April 2015, the Company issued 250,000 shares of common stock valued at $252,500 and $230,000, respectively, to its then Chief Executive Officer, John Bluher, pursuant to his employment letter.

During the three months ended September 30, 2015, the Company sold 616,000 shares of its common stock for an aggregate $75,000 in cash proceeds. The Company incurred a finder’s fee of $1,050, which the company has satisfied through the issuance of 7,500 shares of common stock.

During the three months ended September 30, 2015, the Company issued an aggregate 1,549,000 shares of its common stock valued at $64,934 in conjunction with debt agreements.

During the three months ended September 30, 2015, the Company issued an aggregate 405,000 shares of its common stock valued at $380,950 for services pursuant to multiple contracts.

On July 1, 2015 the Company issued 100,000 shares of its common stock valued at $131,000 as consideration for an exclusive option to acquire the web portal LaMarihuana.com, subject to satisfaction of conditions.

On July 15, 2015 the Company issued 1,000,000 shares of its common stock valued at $800,000 to its then Chief Executive Officer, William Lupo, pursuant to his employment letter. Upon Mr. Lupo’s resignation on September 15, 2015, a separation agreement has been signed in which he has agreed to return 500,000 of these shares to the Company.

On September 16, 2016, in conjunction with John Bluher’s resignation as President, the Company issued 1,600,000 shares of its common stock, valued at $208,000, as payment in full of all amounts due Mr. Bluher under his employment letter.

NOTE 11 – STOCK WARRANTS

On May 15, 2015, the Company entered into an agreement to grant a warrant good for two years to purchase 2,000,000 shares of the Company’s stock at $0.05 per share in conjunction with a sixty day loan taken out by the Company’s then majority shareholder, Kae Yong Park, and her spouse, Howard Baer; a portion of these loan proceeds were advanced by Park/Baer to the Company to fund operations. The note to Park and Baer commenced on May 15 ^th with an initial term of sixty days with an automatic thirty day extension, if not paid in full by the maturity date. The Company had agreed that, if the note were automatically extended, it would grant an additional warrant to purchase 1,000,000 shares of the Company’s stock (on the same terms as the original warrant) as consideration for the extension. On July 15, 2015, the Company issued an additional 1,000,000 warrants in consideration for the thirty day extension. On August 5, 2015, the Company issued an additional 2,000,000 warrants with the same terms as the previously issued warrants for an additional sixty day extension. These warrants have been accounted for as debt issue costs (see Note 8 – Debt Issue Costs).

On July 1, 2015, the Company issued three year warrants to purchase 100,000 shares of the Company’s common stock, at an exercise price of $0.25 per share in conjunction with debt agreements (see Note 8 – Notes Payable).

On September 29, 2015, the Company issued two year warrants to purchase 416,000 shares of the Company’s common stock, at an exercise price of $0.25 per share, in conjunction with an equity sale.

A summary of the Company’s warrant activity for the three months ended September 30, 2015 is as follows:


	Number of Warrants		Weighted Average Exercise Price
Outstanding – December 31, 2014		-	$	-
Granted		5,516,000		0.07
Exercised/settled		-		-
Balance as September 30, 2015		5,516,000	$	0.07

The Company’s outstanding warrants at September 30, 2015 is as follows:



Warrants Outstanding							Warrants Exercisable
Exercise Price Range	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Intrinsic Value
$0.05 - $0.25		5,516,000		1.78	$	0.07		5,516,000	$	0.05		250,000

NOTE 12 – RELATED PARTY TRANSACTIONS

Effective May 2, 2014, the Company entered into an asset purchase agreement with Kae Park (the “Seller”), who became a related party upon the closing of the acquisition, which occurred on June 23, 2014.

Under this agreement, the Company agreed to acquire approximately 7,500 cannabis related Internet domain names, in exchange for which, the Company:

(a)

Issued to the Seller on the closing date 78.5 million shares of the Company’s restricted common stock which represented approximately 81% of the Company’s issued and outstanding common stock upon the closing;

(b)

Issued to the Seller a promissory note in the principal amount of $500,000. The note originally bore interest at the rate of 3.25% per annum and was payable as follows: upon the Company’s receipt of an aggregate of $1,000,000 in funding (whether debt or equity), $100,000 was to be paid, and the Company was required to pay the remaining balance of $400,000 in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue; and

(c)

Is obligated to pay a monthly royalty to the Seller equal to the product of (i) six percent (6%) and (ii) the excess of the Company’s gross monthly revenue over $150,000 (“Royalty Payment”). The Royalty Payment is payable for a period of thirty six months from and after the first month in which the Company has gross revenues in excess of $150,000.

On July 25, 2014, the Company amended and restated the promissory note to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note, until August 25, 2014, at which point such $100,000 was paid.

In addition, the Seller was required to provide such consulting services as the Company may require during the twelve month period following the closing of the acquisition. In consideration for these services, the Company is required to pay the Seller $9,500 per month, for a period of twelve months, commencing on the closing date and, on the first of each month thereafter.

The Company is headquartered in Scottsdale, Arizona where it rents space from Kuboo, Inc., its former parent company and a significant shareholder. Currently, the Company is renting approximately 1,500 square feet of space on a month-to-month basis. The monthly rent for this facility is $4,500.

During the three months ended March 31, 2015, the Company incurred expenses of $35,700 payable to Kuboo, Inc. for rent ($13,500) as well as its portion of salaries ($22,200) related to its use of certain Kuboo employees. During this same period, the Company made payments to Kuboo, Inc. of $26,000 for said expenses.

During the three months June 30, 2015, the Company incurred expenses of $27,800 payable to Kuboo, Inc. for rent ($13,500) as well as its portion of salaries ($14,300) related to its use of certain Kuboo employees. During this same period, the Company made payments to Kuboo, Inc. of $29,500 for said accrued expenses. At June 30, 2015, the Company had a payable to Kuboo, Inc. of $45,176 for rent and contract labor.

During the three months September 30, 2015, the Company incurred rent expense of $13,500 payable to Kuboo, Inc. During this same period, the Company made payments to Kuboo, Inc. of $45,700 for accrued expenses. At September 30, 2015, the Company had a payable to Kuboo, Inc. of $12,976 for rent and contract labor.

During the three and nine months ended September 30, 2015, the Company paid $1,000 and $23,000, respectively, to Energy Plus, LLC, a company owned by John Venners, a director and Executive Vice President of the Company, for consulting services rendered.

During the nine months ended September 30, 2015, the Company’s controlling shareholder, Kae Yong Park and her spouse Howard Baer, advanced an aggregate of $758,407 to the Company for short-term capital needs, of which $157,000 has been repaid. The advances are non-interest bearing and payable on demand. At September 30, 2015, the Company had a note payable for these advances to Ms. Park/Mr. Baer of $611,407. See Note 14 – Subsequent Events

During the Nine months ended September 30, 2015, one of the Company’s directors, John Venners, advanced $3,000 to the Company for short-term capital needs. The advance is non-interest bearing and payable on demand.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

In May 2014, The Company entered into an asset purchase agreement pursuant to which it agreed to pay the seller $9,500 per month for a period of 12 months, for consulting services to be provided. This agreement also requires the Company to pay a monthly royalty equal to six percent of gross monthly revenues over $150,000. The royalty payment is payable for a period of thirty-six months from and after the first month in which the Company’s gross revenues are in excess of $150,000 (see Note 12 - Related Party Transactions).

On June 23, 2014, the Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. The original note bore interest at the rate of 3.25% per annum and was payable as follows: upon the Company’s receipt of an aggregate of $1,000,000 in funding (whether debt or equity), $100,000 was required to be paid. The remaining $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue.

On May 15, 2015 the Company entered into an agreement (the “Funding Agreement”) with its then majority shareholder, Kae Park, and her spouse Howard Baer (collectively “Park”), under which Park committed to advance the Company a minimum of $200,000, on an unsecured and non-interest bearing basis, subject to Park’s receipt of funding from a third party lender of $300,000. On May 14, 2015, Park secured a note from a third party and has since advanced the required funds to the Company. In connection with the third party loan, Park originally pledged 55 million shares of her Company common stock as collateral pursuant to a Pledge Agreement (such pledged shares, as adjusted under the Pledge Agreement, the “Pledged Shares”).

Under the pledge agreement, if Park defaults on the repayment of the $300,000 note, the lender has the right to take ownership of the Pledged Shares, without any obligation to remit to Ms. Park proceeds from the collateral in excess of the unpaid obligations under the note. Under the Funding Agreement, if the Park Lender takes ownership of the Pledged Shares, the Company (i) must to issue Ms. Park 10 million shares of Company common stock (currently leaving Ms. Park with a net loss of approximately 22 million shares) and (ii) shall not effect a reverse split of its common stock for a period of two years.

On August 7, 2015, Lee Ori ("Plaintiff") instituted a legal action in Missouri against us, Wealthcorp, LLC, Winterwalk Capital, LLC, Christopher S. Walkup ("Walkup"), Marshall P. Winters and Paradigm Healthcare Solutions, LLC.

The complaint alleged that (i) Walkup represented to the Plaintiff that he had the right to subscribe to shares of our common stock at a per share price of $.25 and (ii) that Walkup was the Company’s agent and individually and in such alleged agency capacity offered to sell Plaintiff an aggregate of 1,075,000 shares of company common stock for a total purchase price of $425,000. The Complaint alleges that we are liable to the Plaintiff for the acts and omissions of Walkup, based on the allegation that he was our agent. The complaint seeks from us and Walkup (1) 1,075,000 shares of our common stock and (2) money damages in the amount of $425,000.

Without admitting any responsibility, Company has agreed to issue 400,000 restricted shares of common stock valued at $62,000 to the Plaintiff as consideration for the settlement. These shares had not yet been issued as of the date of these financial statements. In addition, the Company has agreed to issue an additional 275,000 shares as liquidated damages if it breaches a certain material representation to be included in the settlement agreement. The Company will value these if and when the shares become issuable.

NOTE 14 – SUBSEQUENT EVENTS

On October 21, 2015, the Company appointed John B. Hollister as its interim CEO, and entered into an agreement which provides for a starting base salary of $400,000 per year, a signing bonus of $35,000 and warrants to purchase an aggregate five million shares of the Company’s common stock at $0.09 per share. The warrants are issuable as follows: 500,000 warrants within 5 business days of signing and 375,000 warrants to be issued in twelve quarterly installments of 375,000, commencing December 31, 2015, for so long as Mr. Hollister is employed by the Company.

Mr. Hollister has agreed to defer the payment of his salary and signing bonus as follows:

Prior to Receipt of $250,000 of Equity Capital. Mr. Hollister agreed to defer (i) all salary payments until the Company raises a minimum of $250,000 in equity funding and (ii) payment of the signing bonus until the Company raises a minimum of $500,000 in equity funding.

$250,000 in Equity Proceeds . Once the Company raises at least $250,000 in equity capital, Mr. Hollister shall be paid (i) fifty (50%) percent of the amount of his then accrued and unpaid salary and (ii) fifty (50%) percent of the amount of regular salary from and after the receipt of such funds.

$500,000 in Equity Proceeds. Provided that the Company raises at least $500,000 in equity capital within ninety (90) days of the Agreement date, Mr. Hollister shall be paid (i) all of his then accrued and unpaid salary and (ii) his signing bonus, and he will continue to be paid fifty (50%) percent of the amount of regular salary from and after the receipt of such funds.

$1,000,000 in Equity Proceeds. Once the Company raises at least $1,000,000 in equity capital, Mr. Hollister shall be paid (i) all of his then accrued and unpaid salary and (ii) the full amount of his regular salary from and after the receipt of such funds.

Upon successful completion of at least $1,000,000 in equity capital raised, Mr. Hollister’s title will change to CEO and his position will no longer be interim in nature.

Since September 30, 2015, Kae Yong Park, our controlling shareholder, and her spouse, Howard R. Baer, have made additional advances to the Company in the aggregate amount of $183,500, leaving a balance due of $794,907 at November 19, 2015. These advances are secured by certain Company assets, including all of its internet domain names, websites and related assets, non-interest bearing and payable on demand.

On October 3, 2015, the Company issued a two year warrant to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.05 per share in consideration for a further sixty day extension of the $300,000 third party loan described in Note 13 – Commitments and Contingencies.

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

Forward-looking Statements

Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Overview

On June 23, 2014, the Company acquired approximately 7,500 cannabis related Internet domain names from Kae Yong Park (who became our majority shareholder in connection with such acquisition). The list of domain names we acquired is filed as Exhibit 99.3 to the Form 8-K Current Report filed with the Commission on June 25, 2014. In consideration of the acquisition of these assets from Kae Yong Park, we issued her 78.5 million shares of our common stock. In addition, we issued a promissory note in the aggregate principal amount of $500,000, the payment of $400,000 of which is contingent upon our achieving $150,000 in monthly revenues. See Note 12 - Related Party Transactions and Note 13 - Commitments and Contingencies.

The note was amended and restated to provide that the first $100,000 installment payment due under the Note would be made July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Kae Yong Park has waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note, until August 25, 2014. Such $100,000 has since been paid to Ms. Park. The remaining balance of $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue.

The Company has already launched several websites and portals and, subject to availability of sufficient funding (which the Company does not currently have), intends to build additional websites/portals around its owned internet domain names. These websites/portals will serve as directories for businesses engaged in the lawful sale and distribution of cannabis and hemp related products.

Recent Funding History

In addition to the asset acquisition and commencement of business operations described above, the Company has between January 5 and November 19, 2015, raised gross proceeds of $434,000 from the sale of 2,067,000 shares of common stock at an average per share price of $0.21.

Most recently, during September and October, 2015, the Company raised an aggregate of $75,000 from an existing investor through the sale of Units (consisting of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $.25 per share), as follows: 416,667 Units (at a per unit price of $.06) and 714,285 Units at a per unit price of $.07. In order to induce this investor to make these purchases from the Company, our controlling shareholder sold the investor an aggregate of 12,408,735 shares of common stock, at an average per share price of $.016. Accordingly, the Company has been experiencing enormous difficulty raising capital in recent months.

Between December 31, 2014 and November 19, 2015, Kae Yong Park, our majority shareholder, and her spouse, Howard R, Baer (collectively, Park), made $959,407 of cash advances to us to fund our basic operations, $164,500 of which has been repaid, leaving a balance due of $794,907, as of November 19, 2015. The Company has used these limited funds to fund its basic operations on a scaled back basis.

As noted above, as of November 19, 2015, the Company was indebted to Park in the aggregate the amount of $794,907. To evidence this indebtedness, on May 19, 2015, the Company issued Park a non-interest bearing, unsecured demand promissory note in the original principal amount of $403,000 ($794,907 currently outstanding) (“Company Note”). Unpaid principal under the Company Note is due and payable upon the earlier to occur of (i) an “event of default” (as defined), (ii) written demand and (iii) the Company’s receipt of capital (to the extent of net proceeds received) from any capital raising transaction after May 15, 2015, whether in the form of debt, equity or otherwise. Park has to date not enforced the provision requiring repayment upon receipt of net proceeds from capital raising transactions.

On September 21, 2015, the Company amended and restated the Company Note to include all advances to date for a total note of $632,307 and provide certain assets, including all internet domain names, websites and related assets as collateral. Repayment terms remain the same, and Park has to date not enforced the provision requiring repayment upon receipt of net proceeds from capital raising transactions. On September 30, 2015, the Company amended and restated the Company Note in connection with an additional $50,000 advanced to the Company.

Advances after May 14, 2015 were made pursuant to an agreement entered into with the Company on May 15, 2015 (the “Funding Agreement”). Under the Funding Agreement, Park committed to advance the Company a minimum of $200,000, on an unsecured and non-interest bearing basis, subject to Park’s receipt of funding from a third party lender of $300,000. On May 14, 2015, Park secured a commitment from a third party (“Park Lender”) to advance Park $300,000 in two tranches, $100,000 on May 14, 2015 and $200,000 on or before May 22, 2015. Park advanced total a total of $222,400 under this agreement to the Company between May 15, 2015 and June 30, 2015.

In order to secure the funding commitment from the Park Lender and enable Park to fund the Company, (i) the Company agreed to issue the Park Lender warrants to purchase 2 million shares of common stock at an exercise price of $.05 per share and (ii) Kae Yong Park pledged to the Park Lender 55 million shares of her Company common stock as collateral for Park’s repayment of amounts Park borrowed from the Park Lender. Under the note payable by Park to the Park Lender (“Park Note”), Park was required to repay the $300,000 Park Note within sixty days, unless the Company has not paid her back within such time period, in which event, there would be an automatic thirty day extension of the maturity date of the Park Note (for a total of ninety days), in consideration for which the Company was required to issue to the Park Lender a warrant to purchase 1 million shares of Company common stock at an exercise price of $.05 per share. On July 15, 2015, The Park Note was extended for thirty and a warrant to purchase 1 million shares was issued. On August 5, 2015 the Park Note was extended further until October 15, 2015, in consideration for which the Company has issued the Park Lender warrants to purchase an additional 2 million shares of common stock at $.05 per share. Finally, on October 3, 2015 the Park Note was extended further until December 15, 2015, in consideration for which the Company has issued the Park Lender warrants to purchase an additional 2 million shares of common stock at $.05 per share. Thus, the company has issued the Park Lender warrants to purchase an aggregate of 5,000,000 shares at an exercise price of $.05 per share, in consideration of cumulative extensions of the Park Note of 150 days.

Under the Pledge Agreement, if Park defaults on the repayment of the $300,000 Park Note, the Park Lender has the right to take ownership of all of Ms. Park’s shares of Company common stock pledged thereunder (currently approximately 32 million shares), without any obligation to remit to Ms. Park proceeds from the collateral in excess of the unpaid obligations under the Park Note. Under the Funding Agreement, if the Park Lender takes ownership of Ms. Park’s pledged shares, the Company (i) must to issue Ms. Park 10 million shares of Company common stock (leaving Ms. Park with a net loss of about 22 million shares) and (ii) shall not effect a reverse split of its common stock for a period of two years.

Neither Ms. Park nor Mr. Baer are not under any obligation to provide any further funding to the Company. The Company has an immediate and urgent need for additional capital. See “Liquidity and Capital Resources.”

Results of Operations

Three Months Ended September 30, 2015 Compared to the Three Months Ended September 30, 2014

The Company incurred a net loss of approximately $3.6 million for the quarter ended September 30, 2015, compared with a net loss of approximately $6.4 million during the comparable prior quarter. The (all numbers approximate) $2.8 million decrease in net loss is due primarily to a $4.6 million decrease in related party consulting expense and a $100,000 decrease in executive compensation, partially offset by a $1.8 million increase in interest expense. The $4.6 million decrease in related party consulting expense relates primarily to one time stock gifts to Company related persons by the Company’s majority shareholder in 2014, which stock gifts were accounted for as consulting expense in the Company’s statement of operations. The increase in interest expense is primarily due to the amortization of one time debt issue costs and discounts on short term debt issued during the current period.

Nine Months Ended September 30, 2015 Compared to the Nine Months Ended September 30, 2014

Explanatory Note

The Company did not fully commence operations until the latter part of the second quarter of 2014. Consequently, the nine months ended September 30, 2014 does not reflect nine months of operations. As a result, the Company believes that comparing the nine months ended September 30, 2015 with the comparable prior period is only of limited utility.

The Company incurred a net loss of approximately $6.7 million for the nine months ended September 30, 2015, compared with a net loss of approximately $7.6 million during the comparable prior period. The (all numbers approximate) $900,000 decrease in net loss is due primarily to a $4.4 million decrease in related party consulting expense related to one time stock gifts in the prior year period and a $900,000 decrease in settlement expense, partially offset by a $3.3 million increase in interest expense, a $700,000 increase in executive compensation and a $400,000 increase in general and administrative expenses. The increase in interest expense is primarily due to the amortization of one time debt issue costs and discounts on short term debt issued during the current period. The increase in executive compensation is primarily due to non-cash stock payments which were not offered in the prior year period.

Cash used in operating activities during the nine months ended September 30, 2015 (all numbers approximate) was $1.1 million, an increase of approximately $300,000 million over the $800,000 used during the comparable prior period. The $300,000 increase was due primarily to a (all numbers approximate) $4.8 million decrease in stock issued for consulting and contract labor, and a $900,000 decrease in stock issued for releases, partially offset by $800,000 decrease in net loss, a $3.3 million increase in amortization expense, a $300,000 increase in stock issued for executive compensation, a $400,000 increase in stock issued pursuant to contracts and a $500,000 increase in accounts payable and accrued liabilities.

Cash used in investing activities for the nine months ended September 30, 2015 was zero as compared to approximately $400,000 in the prior period due to the Company halting capital investments in the current period.

Cash provided by financing activities for the nine months ended September 30, 2015 was approximately $1.1 million as compared to approximately $2 million in the prior comparable period. The $900,000 decrease is due to a decrease of $1.8 million in net proceeds from common stock issuances, partially offset by an $800,000 increase in net proceeds from related party advances and notes. The Company encountered much greater difficulty raising equity capital during the nine months ended September 30, 2015, when compared with the comparable prior period.

Liquidity and Capital Resources

As of September 30, 2015 and November 19, 2015, we had only minimal cash on hand. Consequently, we continue to have an immediate and urgent need for additional capital. As disclosed above, in order to fund our basic operations, (i) since January 5, 2015, we have raised gross proceeds of $434,000 from the sale of 2,067,000 shares of common stock at an average per share price of $.21, (ii) in July 2015, we received $34,900 (in consideration for which we issued a 7 day promissory note and agreed to issue 349,000 shares of common stock and 100,000 warrants to purchase shares at $0.25 per share), (iii) in August 2015, we received $45,000 (in consideration for which we issued a 120 day promissory note and agreed to issue 1,200,000 shares of common stock), and (iv) between December 31, 2014 and November 19, 2015, Kae Yong Park, our majority shareholder, and her spouse, Howard Baer, have collectively made $959,407 of cash advances to us, $164,500 of which has been repaid, leaving a balance due of $794,907, as of November 19, 2015. However, most recently, during September and October, 2015, the Company raised an aggregate of $75,000 from an existing investor through the sale of Units (each consisting of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $.25 per share), as follows: 416,667 Units (at a per unit price of $.06) and 714,285 Units at a per unit price of $.07. In order to induce this investor to make these purchases from the Company, our controlling shareholder sold the investor an aggregate of 12,408,735 shares of common stock, at an average per share price of $.016. Accordingly, the Company has been experiencing enormous difficulty raising capital in recent months. See “Recent Funding Developments” above. Neither Ms. Park nor Mr. Baer have any obligation to provide further funding to us.

We have not yet realized significant operating revenues. We are however incurring significant costs and expenses in connection with the development of our new business, implementation of our business plan and ongoing compliance costs associated with being a public company. Consequently, we are currently experiencing negative cash flows from operations.

Our operations will use increasing amounts of cash in coming quarters as we further ramp up our operations, unless and until we are able to generate revenue from our operating activities

Based on our current business plan, we anticipate that our operating and website development activities will use approximately $300,000 in cash per month over the next twelve months, or $3.6 million. We currently have virtually no cash on hand. We believe that our operations will not begin to generate positive cash flows until at least the second quarter of 2016. Accordingly, we have an immediate and urgent need for capital to fund our operating activities.

In order to remedy this liquidity deficiency, we are actively seeking to raise additional funds through the sale of equity and debt securities, and ultimately we will need to generate substantial positive operating cash flows. We expect our internal sources of funds to consist of cash flows from operations, but not until we begin to realize substantial revenues from the sale of services. As previously stated, we currently have no meaningful revenue, and our operations are generating negative cash flows, and thus adversely affecting our liquidity. We have been attempting to raise additional funds through equity and/or debt financing, but, as disclosed above, have encountered great difficulty in securing additional equity funding. We expect that our operations will begin to generate revenues during the second quarter of 2016, which should help ameliorate our liquidity deficiency. If we are unable to raise additional funds almost immediately, we will not be able to implement our business plan, and it is unlikely that we will be able to continue as a going concern.

In the event we do not generate sufficient funds from revenues or financing through the issuance of common stock or from debt financing, we will be unable to implement our business plan and pay our obligations as they become due, any of which circumstances would have a material adverse effect on our business prospects, financial condition, and results of operations. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities. See Note 2 to the Financial Statements - Liquidity/Going Concern.

Subject to the availability of funds, which we currently do not have, we expect to incur approximately $300,000 in website development expenditures over the next 12 months (included in the $3.6 million estimate of cash required over the next twelve months). The purpose of these expenditures will be for the development of various Websites/portals we intend to create and acquisition of additional domain names.

We expect to fund these website development expenditures through a combination of cash flows from operations and proceeds from equity and or debt financing. If we are unable to generate positive cash flows from operations, and/or raise additional funds (either through debt or equity), we will be unable to fund our website development expenditures, in which case, there could be an adverse effect on our business and results of operations.

We hope to raise additional funds in the near term from the further sales of shares of common stock, but, again have recently encountered great difficulty in our efforts to secure additional equity funding. Additional sales of common stock will reduce the percentage interest of existing shareholders in our company. Although it is possible, we do not believe it is likely that we will raise funds through the sale of debt securities in the near term.

As described above, In June, 2014, we issued Kae Yong Park a promissory note in the principal amount of $500,000, as partial consideration for the acquisition of approximately 7,500 cannabis related internet domain names. We have since paid $100,000 in principal to Ms. Park. The remaining balance of $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month we realize at least $150,000 in gross revenue. This remaining $400,000 balance is currently classified as a noncurrent liability. We believe that we will be able to make the approximate $11,000 monthly payment when (and if) we achieve the monthly $150,000 revenue threshold which triggers our repayment obligation.

As noted above, as of November 19, 2015, the Company was indebted to Park in the aggregate the amount of $794,907. To evidence this indebtedness, Company has issued Park a non-interest bearing, secured demand promissory note in the $682,307 ($794,907 currently outstanding) (“Company Note”). Unpaid principal under the Company Note is due and payable upon the earlier to occur of (i) an “event of default” (as defined), (ii) written demand and (iii) the Company’s receipt of capital whether in the form of debt, equity or otherwise.

Off-balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not required.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls over Procedures

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including the CEO and Financial Controller, to allow timely decisions regarding required disclosures.

Under the supervision and with the participation of our management, including our CEO and financial controller, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our CEO and financial controller concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls were not effective.

Changes in Internal Control over Financial Reporting

None

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The complaint alleged that (i) Walkup represented to the Plaintiff that he had the right to subscribe to shares of our common stock at a per share price of $.25 and (ii) that Walkup was our agent and individually and in such alleged agency capacity offered to sell Plaintiff an aggregate of 1,075,000 shares of company common stock for a total purchase price of $425,000. The Complaint alleges that we are liable to the Plaintiff for the acts and omissions of Walkup, based on the allegation that he was our agent. The complaint seeks from us and Walkup (1) 1,075,000 shares of our common stock and (2) money damages in the amount of $425,000.

Without admitting any responsibility, the Company and the Plaintiff have agreed to settle this matter and are currently negotiating a definitive agreement. The Company has agreed to issue 400,000 restricted shares of common stock valued at $62,000 to the Plaintiff as consideration for the settlement. In addition, the Company has agreed to issue an additional 275,000 shares as liquidated damages if it breaches a certain material representation contained in the settlement agreement. The Company will value these if and when the shares become issuable.

Item 1A. Risk Factors

Not required.

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

On August 14, 2015, the Company sold 200,000 shares of its common stock for total gross proceeds $50,000 ($0.25 per share).

On July 1, 2015, the Company received $34,900, in consideration for which we issued 7 day promissory note and agreed to issue 349,000 shares of common stock and 100,000 warrants to purchase shares at $0.25 per share.

In August 2015, we received $45,000, in consideration for which we issued a 120 day promissory note and agreed to issue 1,200,000 shares of common stock.

During September and October, 2015, the Company raised an aggregate of $75,000 from an existing investor through the sale of Units (each consisting of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $.25 per share), as follows: 416,667 Units (at a per unit price of $.06) and 714,285 Units at a per unit price of $.07. In order to induce this investor to make these purchases from the Company, our controlling shareholder sold the investor an aggregate of 12,408,735 shares of common stock, at an average per share price of $.016

The Company believes that the foregoing transactions were exempt from the registration requirements under the Securities Act of 1933, as amended (“the Act”), based on the following facts: there was no general solicitation, there was a limited number of purchasers, each of whom we believe was an “accredited investor” (within the meaning of Regulation D under the Securities Act of 1933, as amended) and was sophisticated about business and financial matters, and all shares issued were subject to restriction on transfer, so as to take reasonable steps to assure that the purchaser was not an underwriter within the meaning of Section 2(11) under the Act.

Item 3. Defaults upon Senior Securities

None; not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Item 6. Exhibits

(a)

Exhibits

Identification of Exhibit

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “ Agreement ”) dated as of September 30, 2015, is made by Northsight Capital, Inc., a Nevada corporation with a principal place of business at 7740 E. Evans Rd, Suite A101, Scottsdale AZ 85260 (the “ Company ”), in favor of Kae Yong Park and her spouse, Howard R. Baer, each an individual, with a mailing address of P.O. Box 14110 Scottsdale, AZ 85267 (collectively, the “ Secured Party ”).

W I T N E S S E T H

WHEREAS, it is the intention of the Company to grant to the Secured Party a security interest in all of its internet domains, websites and related assets, pursuant to this Agreement;

WHEREAS, the Secured Party has or will from time to time made loans to the Company, and the Company is, as of the date hereof, indebted to the Secured Party in the aggregate amount of SIX HUNDRED EIGHTY TWO THOUSAND THREE HUNDRED SEVEN DOLLARS ($682,307) (including fifty thousand dollars ($50,000) advanced on the date hereof). The obligation to pay such indebtedness and any further amounts advanced by the Secured Party to the Company is evidenced by that certain Second Amended and Restated Secured Promissory Note executed as of the date hereof (“ Note ”); The Note supersedes that certain first amended and restated promissory note of the Secured Party dated September 21, 2015 in the principal amount of $632,307. On September 21, 2015, the Company entered into a letter agreement with the Secured Party (and her spouse, wherein the company agreed to enter into this security agreement to secure all amounts due under the first amended and restated note.

WHEREAS, the Secured Party, in its sole and absolute discretion, may make additional loans to the Company, which Company shall be obligated to repay pursuant to the Note;

WHEREAS, in connection with such loans heretofore or hereafter extended by Secured Party to Company, Secured Party has requested that Company execute this Security Agreement and the other Loan Documents, and otherwise confirm and agree that all credit or other financial accommodations previously or heretofore or hereafter extended by her to the Company, including, without limitation, those evidenced by the Note, are and shall be secured by the Company’s assets, as specified herein, subject in all respects to the terms and conditions hereof;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and each intending to be bound hereby, the Secured Party and the Company hereby agree as follows:

Definitions; Amendments and Acknowledgement of Secured Obligations .

1.1

Definitions . As used in this Agreement, the following terms shall have the following definitions:

“ Accounts ” means all of a Company’s now owned or hereafter acquired right, title, and interest with respect to “accounts” (as that term is defined in the UCC), and any and all supporting obligations in respect thereof.

“ Agreement ” means this Security Agreement and any extensions, riders, supplements, notes, amendments, or modifications to or in connection with this Security Agreement.

“ Bankruptcy Code ” means the United States Bankruptcy Code (11 U.S.C. § 101 et seq .), as the same may be amended, supplemented and otherwise modified, and any successor statute.

“ Collateral ” means all tangible and intangible personal property of the Company described below, now existing or hereafter acquired, wherever located, including, without limitation: the Company’s Books; the General Intangibles, including without limitation, all of the Company’s internet domain names and websites and related assets and technology (now owned or hereafter acquired); and the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the Collateral, and any and all Accounts, Company’s Books, Equipment, General Intangibles, Negotiable Collateral, money, deposit accounts, supporting obligations, or other tangible or intangible property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest therein, and the proceeds thereof.

“ Company ” has the meaning set forth in the preamble to this Agreement.

“ Company’s Books ” means the Company’s now owned or hereafter acquired books and records (including all of its records indicating, summarizing, or evidencing its assets (including the Collateral) or liabilities, all of its records relating to its business operations or financial condition, and all of its goods or General Intangibles related to such information).

“ Event of Default ” means the occurrence of any of the following: (i) the Company’s default or failure to make any payment when due hereunder or to pay or perform any other obligation when due to the Secured Party, whether now existing or hereafter arising, including, without limitation, the Company’s obligations to the Secured Party under the Note (which is in the principal amount of $682,307 as of the date hereof) or the occurrence of an “Event of Default” (as defined in the Note) under the Note; (ii) if any covenant, representation, warranty, statement or certificate made to the Secured Party by the Company is breached or proves to have been or becomes untrue, except to the extent any of the foregoing items relate solely to an earlier date; (iii) the dissolution of the Company; (iv) with respect to the Company, the commencement of an action seeking reorganization, liquidation, dissolution or other relief under federal or state bankruptcy or insolvency statutes or similar laws, or seeking the appointment of a receiver, trustee or custodian for the Company or all or part of its assets, or the commencement of an involuntary proceeding against the Company under federal or state bankruptcy or insolvency statues or similar laws; or (v) if the Company makes an assignment for the benefit of creditors, or is unable to pay its debts as they mature.

“ General Intangibles ” means all of the Company’s now owned or hereafter acquired right, title, and interest with respect to general intangibles (including payment intangibles, commercial tort claims, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill, patents, patent applications, trade names, trademarks, trademark applications, servicemarks, servicemark applications, copyrights, copyright applications, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, internet domain names, websites and related technology and assets and information contained on computer disks or tapes, software, literature, reports, catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and tax refund claims), and any and all supporting obligations in respect thereof, and any other personal property other than goods, Accounts, Investment Property, and Negotiable Collateral.

“ Loan Documents ” means this Agreement, the Note, any other note or notes executed by Company in favor of Secured Party, and all other documents, instruments, agreements, amendments, restatements, supplements and modifications executed in connection with any of the foregoing.

“ Negotiable Collateral ” means all of the Company’s now owned and hereafter acquired right, title, and interest with respect to letters of credit, letter of credit rights (whether or not the letter of credit is evidenced by a writing), banker’s acceptances, instruments, promissory notes, drafts, documents, and chattel paper (including electronic chattel paper and tangible chattel paper), and any and all supporting obligations in respect thereof.

“ Note ” has the meaning set forth in the preambles to this Agreement.

“ Secured Obligations ” means all liabilities, obligations, or undertakings owing by the Company of any kind or description arising out of or outstanding under, advanced or issued pursuant to, or evidenced by this Agreement, the Note or the other Loan Documents, irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, voluntary or involuntary, whether now existing or hereafter arising, and including all interest (including interest that accrues after the filing of a case under the Bankruptcy Code) and any and all costs, fees (including attorneys’ fees), and expenses which the Company is required to pay pursuant to any of the foregoing, by law, or otherwise.

“ Secured Party ” has the meaning set forth in the preamble to this Agreement.

“ Secured Party’s Liens ” means the liens granted by the Company to the Secured Party under this Agreement and the other Loan Documents.

“ UCC ” means the Uniform Commercial Code as in effect from time to time in The State of Arizona or any other applicable jurisdiction.

1.2

Acknowledgment of Secured Obligations . The Company hereby acknowledges that it is unconditionally liable to the Secured Party for the full and prompt payment and performance of each of the obligations set forth in the Note and incorporated herein by reference, plus any amounts that may be hereafter borrowed from the Secured Party, plus all interest, fees, charges and other amounts that may arise under the terms of the various documents executed or delivered by the Company evidencing or relating to such obligations, including, without limitation, the Note, plus all reasonable attorneys’ fees and costs of collection incurred in connection with such obligations by the Secured Party, and that the Company has no defenses, counterclaims or set-offs with respect to the full and prompt payment of any or all of the foregoing.

Creation of Security Interest .

2.1

Grant of Security Interest . The Company hereby grants to the Secured Party a continuing security interest in all of its right, title, and interest in all currently existing and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all of the Secured Obligations in accordance with the terms and conditions of the Note, this Agreement, the Loan Documents or any other agreement executed between the Company and the Secured Party, and in order to secure prompt performance by the Company of the Company’s covenants and duties under the Note. The Secured Party’s Liens in and to the Collateral shall attach to all Collateral without further act on the part of the Secured Party or the Company. Anything contained in the Note, this Agreement, the Loan Documents or any other agreement executed between the Company and the Secured Party to the contrary notwithstanding, the Company does not have any authority, express or implied, to dispose of any item or portion of the Collateral other than in the ordinary course of business.

2.2

Negotiable Collateral . In the event that any Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral, and if and to the extent that perfection or priority of the Secured Party’s security interest is dependent on or enhanced by possession, the Company, promptly upon the request of the Secured Party, shall endorse and assign such Negotiable Collateral to the Secured Party and deliver physical possession of such Negotiable Collateral to the Secured Party.

2.3

Collection of Accounts, General Intangibles, Negotiable Collateral . At any time after the occurrence and during the continuation of an Event of Default, the Secured Party or the Secured Party’s designee may (a) notify account debtors of the Company that the Accounts, chattel paper, or General Intangibles comprising the Collateral have been assigned to the Secured Party or that the Secured Party has a security interest therein, or (b) collect such Accounts, chattel paper, or General Intangibles. The Company agrees that it will hold in trust for the Secured Party, as the Secured Party’s trustee, any collections that it receives and promptly will deliver said collections to the Secured Party in their original form as received by the Company. Any collection costs and expenses incurred by the Secured Party pursuant to this Section 2.3 shall be payable upon demand for the same and until paid in full in cash shall be added to the principal amount of the Secured Obligations and shall bear interest (calculated on the basis of a 365-day year) from the date incurred until paid in full in cash at the highest rate applicable under the Note.

2.4

Delivery of Additional Documentation Required . The Company promptly shall notify the Secured Party in writing upon the Company acquiring any commercial tort claim(s). In addition, at any time upon the request of the Secured Party, the Company shall execute and deliver to the Secured Party, any and all financing statements, original financing statements in lieu of continuation statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, and all other documents (the “ Additional Documents ”) that the Secured Party may reasonably request, in form and substance satisfactory to the Secured Party, to perfect and continue perfected or better perfect the Secured Party’s Liens in the Collateral (whether now owned or hereafter arising or acquired), and in order to fully consummate all of the transactions contemplated hereby and under the Note. In addition, on such periodic basis as the Secured Party shall reasonably require, the Company shall (a) provide the Secured Party with a report of all new patentable, copyrightable, or trademarkable materials acquired or generated by the Company during the prior period, (b) cause all patents, copyrights, and trademarks acquired or generated by the Company that are necessary in the conduct of the Company’s business and that are not already the subject of a registration with the appropriate filing office (or an application therefor diligently prosecuted) to be registered with such appropriate filing office in a manner sufficient to impart constructive notice of the Company’s ownership thereof, unless the Company, with respect to patents and trademarks, but not copyrights, in its commercially reasonable discretion, determined otherwise, and (c) cause to be prepared, executed, and delivered to the Secured Party supplemental schedules hereto to identify, among other things, such patents, copyrights, and trademarks as being subject to the security interests created thereunder.

2.5

Power of Attorney . The Company hereby irrevocably makes, constitutes, and appoints the Secured Party (and any agent designated by the Secured Party) as the Company’s true and lawful attorney, with power to: (a) if the Company refuses to, or fails timely to execute and deliver any of the documents described in Section 2.4 , sign the name of the Company on any of the documents described in Section 2.4 ; (b) at any time that an Event of Default has occurred and is continuing, sign the Company’s name on any invoice or bill of lading relating to the Collateral, drafts against account debtors, or notices to account debtors; (c) send requests for verification of Accounts comprising Collateral; (d) endorse the Company’s name on any collection item that may come into Secured Party’s possession; (e) at any time that an Event of Default has occurred and is continuing, make, settle, and adjust all claims under the Company’s policies of insurance with respect to the Collateral and make all determinations and decisions with respect to such policies of insurance; and (f) at any time that an Event of Default has occurred and is continuing, settle and adjust disputes and claims respecting the Accounts, chattel paper, or General Intangibles comprising the Collateral directly with account debtors, for amounts and upon terms which the Secured Party determines to be reasonable, and the Secured Party may cause to be executed and delivered any documents and releases which the Secured Party determines to be necessary. The appointment of the Secured Party as the Company’s attorney, and each and every one of the Secured Party’s rights and powers, being coupled with an interest, is irrevocable until, and shall terminate when, all of the Secured Obligations have been fully and finally repaid and performed.

2.6

Right to Inspect . The Secured Party (and any of its agents) shall have the right, from time to time hereafter to inspect the Company’s Books and to check, test, and appraise the Collateral in order to verify the Company’s financial condition or the amount, quality, value, condition of, or any other matter relating to, the Collateral.

Representations and Warranties .

The Company hereby represents and warrants to Secured Party as follows:

(a)

except for the Secured Party’s Liens, the Company is the sole owner of each item of the Collateral, having rights in or the power to transfer the Collateral and having good and marketable title thereto, free and clear of any and all liens, claims, or rights of others; and in this regard, no security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any portion of the Collateral is on file or of record in any public office, except as may have been filed in favor of the Secured Party;

(b)

the name of the Company and the type and state of organization set forth in the preamble to this Agreement is the Company’s correct corporate name and type and state of organization, and the Company is not now doing business and has not during the last five (5) years done business under any other name,; and all trade names under which the Company presently conducts or ever conducted business are disclosed in its SEC filings; and

(c)

the address of the Company set forth in the preamble to this Agreement is the address of the Company’s principal place of business and chief executive office and said address is the only location where Collateral is located or maintained.

Affirmative Covenants .

The Company covenants and agrees that from and after the date of this Security Agreement and until the Secured Obligations are repaid in full in cash or converted into shares of common stock in accordance with the Note:

4.1.

Notices Regarding Collateral . the Company will advise the Secured Party promptly, in reasonable detail, (i) of any lien or claim made or asserted against any of the Collateral, and it will defend the Collateral against and take such other action as is necessary to remove, any lien or claim in or to the Collateral; (ii) of any material change in the composition of the Collateral; and (iii) of the occurrence of any other event that would have a material adverse effect on the Collateral taken as a whole or the Secured Party’s Liens.

4.2.

Maintenance of Insurance . The Company will maintain insurance policies in amounts not less than that usually carried by one engaged in the same or similar business and with companies reasonably satisfactory to the Secured Party and covering such risks as are customary in the same or a similar business. After an Event of Default, all insurance proceeds with respect to the Collateral received by Company shall be released to the Secured Party.

4.3.

Organization . The Company will not change its type or state of organization or its legal name.

Secured Party’s Rights and Remedies .

5.1

Rights and Remedies . Upon the occurrence of an Event of Default, the Secured Party shall have the following additional rights and remedies:

(a)

All of the rights and remedies of a secured party, under the UCC or any other applicable law or at equity, all of which rights and remedies shall be cumulative and non-exclusive, to the extent permitted by law.

(b)

The right to (i) take possession of the Collateral, without resort to legal process and without prior notice to the Company, for which purpose the Company irrevocably appoints the Secured Party its attorney-in-fact to enter upon any premises on which the Collateral or any part thereof may be situated and remove the Collateral therefrom, or (ii) require the Company to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party. The Company shall make available all premises, locations and facilities necessary for the Secured Party’s taking possession of the Collateral or for removing or putting the Collateral in saleable form.

(c)

The right to sell or otherwise dispose of all or any part of the Collateral by one or more public or private sales. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Secured Party will give the Company at least ten (10) days’ prior written notice of the time and place of any public sale thereof or the time after which any private sale or other intended disposition (which may include, without limitation, or public sale or lease of all or part of the Collateral) is to be made. The Company agrees that ten (10) days is a reasonable time for such notice. The Secured Party, its employees, attorney and agents may bid and become purchasers at any such sale, if public, and may purchase at any private sale any of the Collateral that is of a type customarily sold on a recognized market or which is subject to widely distributed standard price quotations. If there is a deficiency after such sale and the application of the net proceeds from such sale, the Company shall be responsible for the same with interest.

(d)

The Secured Party shall have the right (and Company irrevocably appoints the Secured Party as attorney-in-fact for the Company for this purpose, such appointment being coupled with an interest), without prior notice to the Company and without resort to legal process, to notify all account debtors (as that term is defined in the UCC) at any time and direct such persons to make payments directly to the Secured Party, and to perform all acts the Company could take to collect any Account comprising the Collateral; including, without limitation, the right to notify postal authorities to change the address for delivery, open mail, endorse checks, bring collection suits, and realize upon supporting obligations securing an account. At the Secured Party’s request, all bills and statements sent by the Company to account debtors shall state that they have been assigned to, and are solely payable to the Secured Party, and the Company shall direct all account debtors to pay directly to the Secured Party any sums due or to become due on account thereof.

(e)

The Secured Party may without demand or notice apply and set off any or all of the deposit accounts and securities accounts against any and all obligations even though such Obligations are unmatured, and regardless of the Collateral securing the Secured Obligations.

5.2

Remedies Cumulative . The Secured Party’s rights and remedies under this Agreement, the Note, the other Loan Documents and all other agreements between the Secured Party and the Company shall be cumulative. The Secured Party shall have all other rights and remedies not inconsistent herewith as provided under the UCC, by law, or in equity. No exercise by the Secured Party of one right or remedy shall be deemed an election, and no waiver by the Secured Party of any Event of Default on the Company’s part shall be deemed a continuing waiver. No delay by the Secured Party shall constitute a waiver, election, or acquiescence by it.

Taxes and Expenses Regarding the Collateral . If the Company fails to pay any monies (whether taxes, rents, assessments, renewal fees for domains, insurance premiums, or, in the case of leased properties or assets, rents or other amounts payable under such leases) due to third persons, or fails to make any deposits or furnish any required proof of payment or deposit, all as required under the terms of this Agreement, then, the Secured Party, in its sole discretion and without prior notice to the Company, may do any or all of the following: (a) make payment of the same or any part thereof; (b) obtain and maintain insurance policies insuring the Company’s ownership and use of the Collateral, and take any action with respect to such policies as the Secured Party deems prudent. Any amounts paid or deposited by the Secured Party shall be payable upon demand for the same and until paid in full in cash shall be added to the principal amount of the Secured Obligations and shall bear interest (calculated on the basis of a 365-day year) from the date incurred until paid in full in cash at the highest rate applicable under the Note. Any payments made by the Secured Party shall not constitute an agreement by the Secured Party to make similar payments in the future or a waiver by the Secured Party of any Event of Default under this Agreement. The Secured Party need not inquire as to, or contest the validity of, any such expense, tax, security interest, encumbrance, or lien and the receipt of the usual official notice for the payment thereof shall be conclusive evidence that the same was validly due and owing.

Waivers; Indemnification .

7.1

Demand; Protest; etc . Except as otherwise specifically and explicitly set forth in this Agreement and to the extent permitted by law, the Company waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by the Secured Party, on which the Company may in any way be liable.

7.2

No Liability for Collateral . The Secured Party shall not have any obligation to protect, secure, perfect or insure any of the Collateral at any time held as security for the Secured Obligations. Beyond the custody thereof, in accordance with the same procedures it employs with regard to its own property, the Secured Party shall not have any duty as to any Collateral in its possession or control or in the possession or control of any of its agents or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. All risk of loss, damage, or destruction of the Collateral shall be borne by the Company.

7.3

Indemnification; Reimbursement of Expenses .

(a)

The Company agrees to defend, indemnify, save, and hold the Secured Party (and its agents) (each an “ Indemnified Person ”) harmless against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other person, and (b) all losses (including reasonable attorneys’ fees and disbursements) in any way suffered, incurred, or paid by the Secured Party as a result of or in any way arising out of, following, or consequential to transactions with the Company, whether under this Agreement, the Note, the other Loan Documents or otherwise (all of the foregoing, collectively, the “ Indemnified Liabilities ”). Notwithstanding the foregoing, the Company shall not have any obligation under this Section 7.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement.

(b)

All expenses incurred in connection with the performance of any of the agreements set forth herein shall be borne by Company. All fees, costs and expenses, of whatever kind or nature, including reasonable attorneys' fees and legal expenses, incurred by Secured Party in connection with the filing or recording of any documents (including all taxes in connection therewith) in public offices, the payment or discharge of any taxes, reasonable counsel fees, maintenance fees, encumbrances or otherwise in protecting, maintaining or preserving the Collateral or in defending or prosecuting any actions or proceedings arising out of or related to the Collateral (including, without limitation, based on the Company’s failure to perform or comply with any provision contained herein) shall be borne by the Company and shall constitute Secured Obligations. All of such fees and expenses shall be payable upon demand for the same and until paid in full in cash shall be added to the principal amount of the Secured Obligations and shall bear interest (calculated on the basis of a 365-day year for the actual days elapsed) from and after the date incurred at the highest rate applicable to any of the Secured Obligations as set forth in the Note.

Notices . Except as otherwise specified herein, all notices, requests, demands or other communications to or on the Company or the Secured Party shall be in writing and shall be given or made to the party to which such notice is required or permitted to be given or made at the address set forth on the signature pages hereto or at such other address as any party hereto may hereafter specify to the other in writing, and (unless otherwise specified herein) shall be deemed delivered on receipt if delivered by hand or sent by facsimile, or one (1) business day after sending if sent by nationally recognized courier service, if sent with instructions to deliver the next business day, or five (5) business days after mailing, and all mailed notices shall be by registered or certified mail, postage prepaid.

Choice of Law and Venue; Jury Trial Waiver .

(a)

This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Nevada, without regard to the conflict of laws provisions thereof. For purposes of any action or proceeding involving this Agreement or any other agreement or document referred to herein, the Company hereby expressly submits to the jurisdiction of all federal and state courts located in the State of Arizona and consents that any order, process, notice of motion or other application to or by any of said courts or a judge thereof may be served within or without such court's jurisdiction by registered mail or by personal service, provided a reasonable time for appearance is allowed, and hereby waives any right to contest the appropriateness of any action brought within such jurisdiction based upon lack of personal jurisdiction, improper venue or forum non conveniens.

(b)

THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR AGREEMENT REFERRED TO HEREIN, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

10.

General Provisions .

10.1

Effectiveness . This Agreement shall be binding and deemed effective when executed by the Company and accepted and executed by the Secured Party.

10.2

Successors and Assigns . This Agreement shall bind and inure to the benefit of the respective successors, heirs and assigns of each of the parties; provided , however , that the Company may not assign this Agreement or any rights or duties hereunder without the Secured Party’s prior written consent and any prohibited assignment shall be absolutely void. No consent to an assignment by the Secured Party shall release the Company from its Secured Obligations. The Secured Party may assign this Agreement and its rights and duties hereunder and no consent or approval by the Company is required in connection with any such assignment. The Secured Party reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any part of, or any interest in its rights and benefits hereunder. In connection therewith, the Secured Party may disclose all documents and information which the Secured Party now or hereafter may have relating to the Company or its business. To the extent that the Secured Party assigns its rights and obligations to a third person, the Secured Party thereafter shall be released from such assigned obligations to the Company.

10.3

Section Headings . Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each section applies equally to this entire Agreement.

10.4

Interpretation . Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against the Secured Party or the Company, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

10.5

Complete Agreement . This Agreement, together with the Loan Documents and any other document executed in connection therewith, contains the entire agreement among the parties with respect to the transactions contemplated hereby, and supersedes all negotiations, presentations, warranties, commitments, offers, contracts and writings prior to the date hereof relating to the subject matters hereof.

10.6

Severability of Provisions . Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

10.7

Amendments in Writing . This Agreement can only be amended by a writing signed by the Secured Party and the Company.

10.8

Counterparts; Telefax Execution . This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefax or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefax or electronic mail also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

10.9

Revival and Reinstatement of Obligations . If the incurrence or payment of the Secured Obligations by the Company or the transfer by the Company to the Secured Party of any property of the Company should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, and other voidable or recoverable payments of money or transfers of property (collectively, a “ Voidable Transfer ”), and if the Secured Party is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Secured Party is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees of the Secured Party related thereto, the liability of the Company automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

10.10

Restriction on Reverse Splits. The Company shall not effect a reverse split of its Common Stock for a period of two years after the date hereof, without the express written consent of the Secured Party, which the Secured Party may withhold, condition or delay in its sole and absolute discretion. This section shall survive the termination of this Agreement.

[Intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal as of the date first above written.


3.1	Articles of Incorporation, as amended (1)

3.2	Bylaws (1)

4.1	Common Stock Purchase Warrant issued to Safe Communications, Inc. (2)

10.1	Common Stock Purchase Agreement dated as of May 27, 2011, by and between the Company, Safe Communications, Inc. and certain shareholders of the Company (3)

10.2	Principal Shareholders Agreement, dated as of May 27, 2011, by and between the Company and certain shareholders of the Company (4)

10.3	Agreement between the Company, Kuboo, Inc and the Principal Shareholders, dated as of April 9, 2014 (5)

10.4	Asset Purchase Agreement between the Company and Kae Park, dated May 2, 2014 (6)

10.5	Amended and Restated Promissory Note issued to Kae Yong Park July 25, 2014 (7)

10.6	Agreement with John Bluher, CEO, dated August 13, 2014 (8)

10.8	Agreement with Howard R. Baer dated December 2, 2014 (9)

10.9	Agreement with Kae Yong Park and Howard R. Baer regarding Funding (8)

10.10	Amended and Restated Promissory Note Issued to Kae Yong Park and Howard R. Baer *

10.11	Agreement with Sandor Capital Master Fund (8)

10.12	Lease Agreement with Kuboo, Inc. dated May 19, 2015 (8)

10.13	Security Agreement with Kae Yong Park and Howard R. Baer *

10.14	Employment agreement of John B. Hollister dated October 21, 2015 *

31	Certification of Principal Executive and Principal Financial Officer as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002

32	Certification of Principal Executive and Principal Financial Officer pursuant to 18 U.S.C section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



Date:	11/19/2015	By:	/s/ John B. Hollister
			John B. Hollister, Interim CEO
			(Principal Executive and Principal Financial Officer)



Date:	11/19/2015	By:	/s/ John B. Hollister
			John B. Hollister, Interim CEO
			(Principal Executive and Principal Financial Officer)