UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~August~~March 31, ~~2014~~2015

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

For the transition period from ~~_______~~____________ to ~~_______~~___________

Commission file number: 000-54798

~~CANNABIS~~MONARCH ~~KINETICS~~AMERICA, ~~CORP~~INC. (Exact name of registrant as specified in its charter)

Nevada		99-0372219
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~3240~~1150 W. ~~71st~~Custer ~~Avenue, Unit 5~~Place

~~Westminster~~Denver, CO ~~80030~~80223

(Address of ~~principal~~Principal ~~executive~~Executive ~~offices~~Offices, Zip Code)

(~~720~~844) 852-~~319-5602~~1537

(Registrant’'s ~~telephone~~Telephone ~~number~~Number, ~~including~~Including ~~area~~Area ~~code~~Code)

~~________________________________________________________________~~_____________________________________________________________

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

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

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

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

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

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

As of ~~October~~May 1519, ~~2014~~2015, 31 104,~~208~~994,~~206~~372 shares of common stock, par value $0.001 per share, were issued and outstanding.

TABLE OF CONTENTS

		PAGE
PART I FINANCIAL INFORMATION
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		~~F-1~~4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		611
Item 4.	Controls and Procedures		612
PART II OTHER INFORMATION
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		713
Item IA.	Risk Factors		7
Item 1A.	Risk Factors		13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		713
Item 3.	Defaults Upon Senior Securities		713
Item 4.	Mine Safety Disclosures		713
Item 5.	Other Information		713
Item 6.	Exhibits		814
SIGNATURES			15
INDEX TO EXHIBITS

~~PART~~Explanatory ~~I FINANCIAL INFORMATION~~Note

Monarch America, Inc. filed an Annual Report on Form 10-K for the fiscal year ended November 30, 2014 with the Securities and Exchange Commission on March 3, 2014. However, as a result of the consummation by the Company of Jeremy N. Stout, Inc. d/b/a The Big Tomato and now known as The Big Tomato, Inc., the fiscal year of the Company became December 31st. Accordingly, in addition to the filing of the Form 10-K for the year ended November 30, 2014 (without regard to the merger of The Big Tomato), the Company filed an Annual Report for the fiscal year ended December 31, 2014 including the stand-alone financials of The Big Tomato, Inc. (f/k/a Jeremy Stout, Inc. d/b/a The Big Tomato).

The consolidated financial statements in Item 1 of this filing and the financial results presented below are presented under predecessor entity reporting; and because the acquiring entity had minimal operations in the previous time period, historical information of the acquirer is not presented.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

~~(formerly~~Condensed ~~Lingas~~Consolidated ~~Ventures,~~Financial ~~Inc.~~Statements (Unaudited)

Condensed Consolidated Financial Statements

(Expressed in US dollars)

For the period ended ~~August~~March 31, ~~2014~~2015

Condensed Consolidated Balance Sheets (unaudited)	F-1	~~F-2~~
Condensed Consolidated Statements of Operations (unaudited)		F-32
Condensed Consolidated Statements of Cash Flows (unaudited)		F-43
Notes to the Condensed Consolidated Financial Statements (unaudited)		F-54

~~F-1~~4

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

(formerly Lingas Ventures, Inc.)

Condensed Consolidated Balance Sheets

(Expressed in US dollars)

	August 31,2014$			November 30,2013$
	(unaudited)
ASSETS
Cash		75,396			19,449
Prepaid expenses		3,421			–
Total Current Assets		78,817			–
Note receivable – Related Party		60,131			–
Total Assets		138,948			19,449
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities		13,150			2,615
Due to related parties		195,250			57,569
Subscriptions received		10,000			–
Total Liabilities		218,400			60,184
STOCKHOLDERS’ DEFICIT
Preferred Stock
Authorized: 10,000,000 shares, par value of $0.001 per share
Series A Preferred Stock, 5,500,000 shares authorized 274,998 shares issued and outstanding (November 30, 2013 – no shares)		275			–
Series B Preferred Stock, 750,000 shares authorized 19,525 shares issued and outstanding (November 30, 2013 – no shares)		20			–
Common Stock
Authorized: 2,610,000,000 shares, par value of $0.001 per share
Issued and outstanding: 29,133,201 shares (November 30, 2013 – 29,000,001 shares)		29,133			29,000
Additional paid-in capital		380,112			21,000
Accumulated deficit		(488,992	)		(90,735	)
Total Stockholders’ Deficit		(79,452	)		(40,735	)
Total Liabilities and Stockholders’ Deficit		138,948			19,449

(unaudited)

	March 31, 2015 $			December 31, 2014 $
	Successor			Predecessor
ASSETS

Cash		226,060			13,018
Inventory		503,558			277,610
Prepaid expenses and deposits		4,105			5,326

Total Current Assets		733,723			295,954

Note Receivable – Related party		27,723			–
Property and equipment		289,624			7,289
Goodwill		5,927,587			–
Total Assets		6,978,657			303,243

LIABILITIES

Current Liabilities

Accounts payable and accrued liabilities		547,608			254,330
Due to related parties		–			68,194
Current portion of promissory notes payable		2,150,000			–

Total Current Liabilities		2,697,608			322,524

Promissory notes payable		1,000,000

Total Liabilities		3,697,608			322,524

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock
Authorized: 10,000,000 shares, par value of $0.001 per share
Series A Preferred Stock, 5,500,000 shares authorized 274,998 shares issued and outstanding		275			–
Series B Preferred Stock, 750,000 shares authorized 38,897 shares issued and outstanding		39			–

Common Stock
Authorized: 2,610,000,000 shares, par value of $0.001 per share
Issued and outstanding: 104,994,372 shares		104,994			5,000

Additional paid-in capital		4,869,282			5,459
Accumulated deficit		(1,693,541	)		(29,740	)
Total Stockholders’ Equity (Deficit)		3,281,049			(19,281	)

Total Liabilities and Stockholders’ Equity (Deficit)		6,978,657			303,243

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

F-21

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

(formerly Lingas Ventures, Inc.)

Condensed Consolidated Statements of Operations

(Expressed in US dollars)

(unaudited)

	Three monthsendedAugust 31,2014$			Three monthsendedAugust 31,2013$			Nine monthsendedAugust 31,2014$			Nine monthsendedAugust 31,2013$
	Three months endedMarch 31, 2015$			Three months endedMarch 31, 2014$
Operating Expenses
	Successor			Predecessor
General and administrative		222,034			13,604			398,257			37,361
Revenues		1,157,388			686,895
Net Loss		(222,034	)		(13,604	)		(398,257	)		(37,361	)
Cost of sales		(744,019	)		(453,224	)
Net Loss per Share – Basic and Diluted		(0.01	)		(0.00	)		(0.01	)		(0.00	)
Gross Margin		413,369			233,671
Weighted Average Shares Outstanding – Basic and Diluted		29,108,748			29,000,000			29,038,402			29,000,000
Operating Expenses
General and administrative		(858,891	)		(135,415	)
Net (Loss) Income Before Other Expenses		(445,522	)		98,256
Other Expenses
Interest expense		(59,725	)		(38	)
Interest income		546			2,813
Net (Loss) Income		(504,701	)		101,031
Less: Series B preferred stock dividends		(4,604	)		–
Net (Loss) Income Attributable to Common Shareholders		(509,305	)		101,031
Net (Loss) Income per Common Share – Basic and Diluted		(0.00	)
Weighted Average Common Shares Outstanding – Basic and Diluted		103,181,280

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

F-32

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

(formerly Lingas Ventures, Inc.)

Condensed Consolidated Statements of Cash Flows

(Expressed in US dollars)

(unaudited)

	Nine monthsendedAugust 31,2014$			Nine monthsendedAugust 31,2013$
	Three months ended March 31, 2015$			Three months ended March 31, 2014$
	Successor			Predecessor
Operating Activities
Net loss		(398,257	)		(37,361	)
Net (loss) income		(504,701	)		101,031
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Shares issued for services		48,309			–
Depreciation		1,480			5,156
Common stock issued for services		363,589			–
Changes in operating assets and liabilities:
Prepaid expenses		(3,~~421~~721	)		~~1,250~~(61	)
Accrued interest on notes receivable		(~~131~~520	)		–
Accounts payable and accrued liabilities		10,535			9,030
Accrued interest on notes payable		57,874			–
Due to related parties		214,608			3,369
Accounts payable and accrued liabilities		32,775			33,678
Net Cash Used In Operating Activities		(128,357	)		(23,712	)
Inventory		(218,231	)		(39,503	)
Net Cash Provided by (Used In) Operating Activities		(264,013	)		100,301
Investing Activities
Issuance of notes receivable to related party		(60,000	)		–
Cash paid for the acquisition of The Big Tomato, Inc., net of cash acquired		(386,982	)
Net Cash Used in Investing Activities		(60,000	)		–
Purchase of property and equipment		(228,421	)		–
Net Cash Used In Investing Activities		(615,403	)		–
Financing Activities
Repayments to related party		–			(17,500	)
Payment of note payable – related party		(12,500	)		–
Proceeds from issuance of Series B preferred stock		234,304			–
Borrowing on debt		650,000			–
Subscriptions received		10,000			–
Distribution		–			(53,811	)
Net Cash Provided by (Used in) Financing Activities		244,304			(17,500	)
Net Cash (Used in) Provided by Financing Activities		637,500			(53,811	)
Increase (Decrease) in Cash		55(241,~~947~~916	)		~~(41~~46,~~212~~490	)
Cash – Beginning of Period		19467,~~449~~976			41,~~878~~522
Cash – End of Period		75226,~~396~~060			~~666~~88,012
Supplemental Disclosures:
Interest paid		–			–
Income tax paid		–			–
Non-Cash Transactions:
Forgiveness of related party debt		68,677			–
Notes payable related to Plan of Merger		2,000,000			–
Series A preferred stock issued for debt		8,250			–
Common stock issued pursuant to Plan of Merger		3,564,000			–
Extinguishment of related party debt at acquisition		55,694			–
Accounts payable for property and equipment		50,840

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

F-43

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

(formerly Lingas Ventures, Inc.)

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

1.	Nature of Operations and Continuance of Business

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp. (formerly Lingas Resources~~ Inc.) (the “Company”) was incorporated in the state of Nevada on September 14, 2010. The Company was formerly a mineral exploration company with the purpose of acquiring and developing mineral properties. The Company’s ~~will~~principal ~~now~~business beis now focusing on various opportunities in the recreational and medical marijuana industry. Effective January 1, 2015, the Company completed a Plan of Merger with Jeremy N. Stout, Inc. (d/b/a The Big Tomato), which is now The Big Tomato, Inc. (“TBT”), a Colorado corporation, whereby the Company acquired all of the outstanding shares of TBT. TBT is an established Denver area store, warehouse distribution facility, and online hydroponics and indoor garden supplier.

Going Concern

These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of ~~August~~March 31, ~~2014~~2015, the Company has ~~not recognized any revenue, has~~ a working capital deficit of $791,~~452~~963,885, and has an accumulated deficit of $~~488~~1,~~992~~693,541. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management is currently seeking out other opportunities to execute consulting arrangements with grow facilities. Large warehouse grow operations would require large supply orders, which would be fulfilled by the TBT. The Company is also seeking out other sources for financing and other partners to invest into the company.

2.	Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended ~~November~~December 3031, ~~2013~~2014, included in the Company’s Annual Report on Form 10-K filed on March 1731, ~~2014~~2015, with the SEC.

The consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at ~~August~~March 31, ~~2014~~2015, and the results of its operations and cash flows for the three ~~and nine~~ months ended ~~August~~March 31, ~~2014~~2015 and ~~2013~~2014. The results of operations for the three ~~and nine~~ months ended ~~August~~March 31, ~~2014~~2015, are not necessarily indicative of the results to be expected for future quarters or the full year.

~~The consolidated financial statements include the accounts of the Company and its wholly~~F-~~owned subsidiary, HBH Industries Inc. Intercompany balances and transactions are eliminated upon consolidation.~~4

~~The~~Monarch ~~Company~~America ~~has limited operations and is considered to be in the development stage~~Inc. In the nine months ended August 31, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, HBH Industries Inc. and The Big Tomato, Inc. (f/k/a Jeremy N. Stout, Inc. (d/b/a The Big Tomato)). Intercompany balances and transactions are eliminated upon consolidation.

On January 14, 2015, Monarch acquired TBT (See Note 3). The operations of Monarch were insignificant in comparison to those of The Big Tomato, so the consolidated financial statements are presented under predecessor reporting wherein the prior historical information consists of solely the Tomato’s results of operations and cash flows. The consolidated financial statements included herein are presented for the three months ended March 31, 2015, and 2014, under predecessor entity reporting. The results of operations and cash flows obtained through the use of January 1, 2015, rather than January 14, 2015, are not considered to be materially different; therefore, the successor period is presented beginning January 1, 2015.

Revenue Recognition

The Company derives the majority of its revenue from the sale of hydroponic and indoor garden supplies at its retail store, in which the products are delivered to the customer immediately. The Company also has an online store, but there are minimal e-commerce sales. The Company recognizes revenue, net of sales tax, when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured which is typically when the customer takes possession of the merchandise at the point of sale, or if from the online store, when title transfers upon shipment from the Company’s warehouse.

Stock-based Compensation

WeThe ~~account~~Company accounts for the grant of stock awards in accordance with ASC 718, “Compensation-Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock based compensation. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, in accordance with ASC 815-15 “Derivative and Hedging” the Company valued the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or noncurrent based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

F-5

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

(formerly Lingas Ventures, Inc.)

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

~~Derivative~~3. ~~Financial Instruments:~~Acquisition

~~The~~On ~~Company~~January ~~evaluates~~14, ~~its~~2015, ~~financial~~the ~~instruments~~Company tocompleted ~~determine~~a ifPlan ~~such~~of ~~instruments~~Merger ~~are~~with ~~derivatives~~Jeremy orN. ~~contain~~Stout, ~~features~~Inc. ~~that~~(d/b/a ~~qualify~~The asBig ~~embedded~~Tomato), ~~derivatives.~~whereby ~~For~~the ~~derivative~~Company ~~financial~~agreed ~~instruments~~to ~~that~~acquire ~~are~~all ~~accounted~~of ~~for as liabilities,~~ the ~~derivative~~outstanding ~~instrument~~shares isof ~~initially~~The ~~recorded~~Big atTomato ~~its~~in ~~fair~~consideration ~~value~~for ~~and~~cash isof ~~then re-valued at each reporting date~~$400,000, ~~with~~promissory ~~changes~~notes in the ~~fair~~aggregate ~~value~~amount ~~reported~~of in$2,000,000 ~~the~~and ~~statements~~8,100,000 shares of ~~operations.~~restricted ~~For~~common stock~~-based~~ ~~derivative financial instruments, in accordance~~ with ~~ASC~~a ~~815-15~~fair ~~“Derivative~~value, ~~and~~based ~~Hedging”~~on the ~~Company~~closing ~~valued~~market ~~the~~price ~~derivative instruments at inception and~~ on ~~subsequent~~the ~~valuation~~acquisition ~~dates.~~date, ~~The classification~~ of ~~derivative instruments~~$3,564,000. ~~including~~Each ~~whether~~note ~~such~~will ~~instruments should~~ be ~~recorded~~payable asin ~~liabilities~~eight orequal asinstallments ~~equity~~of $125,000 isplus ~~evaluated~~interest at ~~the~~8% ~~end~~per ofannum, ~~each~~commencing ~~reporting~~April ~~period~~1, 2015. ~~Derivative~~Each ~~instrument~~note ~~liabilities~~will ~~are~~be ~~classified~~secured inby ~~the~~all ~~balance sheet as current or non-current based on whether or not net-cash settlement~~ of the ~~derivative~~assets ~~instrument~~and ~~could~~shares ~~be required within 12 months~~ of the ~~balance~~The ~~sheet~~Big ~~date~~Tomato, Inc.

3As a result of the acquisition, amounts owed to Monarch America by the Big Tomato were extinguished. ~~Related~~These ~~Party~~amounts ~~Transactions~~related to $25,539 of trade payables and $30,156 of a note payable and accrued interest. Even though the amounts continued to be carried on the Tomato’s standalone accounting records, the amounts are eliminated in consolidation.

~~a) At~~The ~~August~~operations ~~31,~~of ~~2014~~Monarch were insignificant in comparison to those of The Big Tomato, so the ~~Company~~consolidated ~~owed~~financial $0statements ~~(November~~are ~~30,~~presented ~~2013~~under -predecessor ~~$57,569)~~reporting towherein the ~~former~~prior ~~President~~historical ~~and~~information ~~Director~~consists of solely the ~~Company~~Tomato’s results of operations and cash flows. OnThe consolidated financial statements included herein are presented for the three months ended March 1931, 2015, and 2014, ~~the~~under ~~former~~predecessor ~~President~~entity ~~and~~reporting. ~~Director~~The results of operations and cash flows obtained through the ~~Company~~use ~~forgave~~of ~~$57~~January 1,~~569~~ of2015, ~~amounts~~rather ~~owed~~than toJanuary ~~him~~14, in2015, ~~addition~~are not considered to ~~assuming~~be ~~responsibility~~materially ofdifferent; ~~all~~therefore, ~~outstanding~~the ~~accounts~~successor ~~payable~~period ~~and~~is ~~accrued~~presented ~~liabilities~~beginning ofJanuary ~~$11~~1,~~108~~ ~~pursuant~~2015.The toallocation aof ~~Stock~~the ~~Exchange~~purchase ~~Agreement.~~price ~~The~~and ~~total~~the ~~liabilities~~estimated ~~forgiven~~fair ~~and~~market ~~assigned~~values of ~~$68,677~~the ~~have~~assets ~~been~~acquired ~~recorded~~and asliabilities ~~additional~~assumed ~~paid~~are summarized in ~~capital~~the table below.

b) At August 31, 2014, the Company owed $195,250 (November 30, 2013 - $0) to directors and officers of the Company for management fees and loans to fund operations. The amounts are unsecured, non-interest bearing and due on demand.

	$

Cash		13,018
Prepaid expenses and deposits		5,326
Inventory		277,610
Property and equipment		7,289
Accounts payable and accrued liabilities		(254,330	)
Loans payable to related parties		(12,500	)
Goodwill		5,927,587

Net assets acquired		5,964,000

c) On May 1, 2014, directors and officers of the Company were issued 5,700 shares of common stock with a fair value of $17,100 in consideration for services performed.

d) On May 8, 2014, directors and officers of the Company were issued 15,000 shares of common stock with a fair value of $30,000 in consideration for services performed.

e) On June 25, 2014, directors and officers of the Company were issued 112,500 shares of common stock with a fair value of $1,125 in consideration for services performed.

f) On June 20, 2014, the Company entered into an exchange agreement pursuant to which directors and officers of the Company agreed to convert an aggregate of $8,250 owed by the Company into 274,998 shares of Series A Convertible Preferred Stock of the Company.

g) During the nine months ended August 31, 2014, the Company paid or accrued management fees of $250,725 to directors and officers of the Company, of which $48,225 was paid through the issuance of 133,200 shares of common stock (Note 6).

4. Note Receivable – Related Party

On August 15, 2014, the Company issued a Promissory Note to a related party, whereby the Company agreed to lend up to an aggregate of $3,000,000, which bears interest at 8% per annum, is unsecured and matures on August 15, 2017. The borrower may borrow in increments of up to $750,000. On August 21, 2014, the Company advanced $60,000 under the Promissory Note. At August 31, 2014, the Company recognized accrued interest receivable of $131.

F-6

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

(formerly Lingas Ventures, Inc.)

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

54. ~~Preferred Stock~~Inventory

a) On May 23, 2014, the Company received proceeds of $7,500 for the subscription of 625 shares of Series B preferred stock.

Inventory consists of the following:	March 31, 2015 $		December 31, 2014 $
	Successor		Predecessor

Finished Goods		503,558		252,072
Inventory on Consignment		–		25,538
Raw Materials		–		–
Total		503,558		277,610

~~b) On~~5. ~~May~~Property ~~28,~~and ~~2014, the Company received proceeds of $100,000 for the subscription of 8,333 shares of Series B preferred stock.~~Equipment

c) On June 4, 2014, the Company received proceeds of $60,000 for the subscription of 5,000 shares of Series B preferred stock.

	Cost $		Accumulated Depreciation $		March 31, 2015 Net Carrying Value $		December 31, 2014 Net Carrying Value $
					Successor		Predecessor

Furniture and equipment		57,938		53,544		4,394		5,618
Leasehold Improvements		308,563		24,747		283,816		–
Software and website		34,191		34,191		–		–
Vehicles		11,493		10,079		1,414		1,671
Total		412,185		122,561		289,624		7,289

d) On June 10, 2014, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (“Series B Stock”) designating 750,000 shares of the Company’s authorized preferred stock as Series B Stock, par value $0.001 per share. The Series B Preferred Stock is convertible at any time at the option of the holder into shares of common stock at a conversion ratio of 6 ~~shares of common stock for each share of Series B Stock~~. ~~Dividends~~Notes ~~accrue~~Receivable on– ~~each~~Related share of Series B Stock, at the rate of 4% per annum of the price paid for each share or $12 per share. Until November 30, 2016, the Company has the right to pay the dividend in additional shares of Series B Stock. A holder of Series B Stock shall be entitled to the number of votes per share equal to the number of shares of common stock into which such Series B Stock is convertible. None of the Series B Preferred Stock is redeemable at the holder’s option or callable by the Company.Party

e) On ~~June~~August 1815, 2014, the Company ~~received~~issued ~~proceeds~~a Promissory Note to a related party, Steve Brandt, whereby the Company agreed to lend up to an aggregate of $13,~~800~~000,000, ~~for~~which ~~the~~bears ~~subscription~~interest at 8% per annum, is unsecured and matures on August 15, 2017. Steve Brandt is a large shareholder of ~~150~~Monarch, holding more than 10% of shares outstanding. The borrower may borrow in increments of ~~Series~~up Bto ~~preferred~~$750,000. ~~stock~~On August 21, 2014, the Company advanced $60,000 under the Promissory Note. During the year ended December 31, 2014, the borrower repaid $34,000 of principal. As at March 31, 2015, the Company has recognized accrued interest receivable of $1,723.

f) On June 19, 2014, the Company received proceeds of $5,004 for the subscription of 417 shares of Series B preferred stock.

g) On June 23, 2014, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (“Series A Stock”) designating 5,500,000 shares of the Company’s authorized preferred stock as Series A Stock, par value $0.001 per share. The Series A Preferred Stock is convertible at any time at the option of the holder into shares of common stock at a conversion ratio of 200 shares of common stock for each share of Series A Stock. A holder of Series A Stock shall be entitled to the number of votes per share equal to the number of shares of common stock into which such Series A Stock is convertible. None of the Series A Preferred Stock is redeemable at the holder’s option, no dividend rights nor callable by the Company.

h) On June 25, 2014, the Company received proceeds of $5,000 for the subscription of 417 shares of Series B preferred stock.

i) On July 1, 2014, the Company received proceeds of $5,000 for the subscription of 417 shares of Series B preferred stock.

j) On August 4, 2014, the Company received proceeds of $50,000 for the subscription of 4,167 shares of Series B preferred stock.

k) On August 5, 2014, the Company filed a Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (“Series B Stock”), whereby the Company removed the payment of dividends in additional shares of Series B Stock, increased the conversion rate of the Series B Stock to 24 shares of common stock, and eliminated the right of holders of the Series B Stock to have a veto right on the ability of the Company to issue debt.

l) At August 31, 2014, the Company received subscriptions of $10,000 for 833 shares of Series B preferred stock, which have not been issued at August 31, 2014, and have been included in subscriptions received.

For both Series A and B preferred stock, the Company analyzed the embedded conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option should be classified as equity. The Company also analyzed the conversion option for beneficial conversion features consideration under ASC 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none.

F-7

~~Cannabis~~Monarch ~~Kinetics~~America ~~Corp~~Inc.

(formerly Lingas Ventures, Inc.)

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

67. ~~Common~~ ~~Stock~~Promissory Notes Payable

On May 15, 2014, a 1 for 10 reverse split of the Company’s issued and outstanding common shares was effective. The Company accounted for the reverse stock split retrospectively and is presented accordingly in the Company’s financial statements as of August 31, 2014, and November 30, 2013.

	a)	On December 5, 2014, the Company issued a promissory note to Glamis Capital SA (the “Lender”), which provides that the Company can borrow up to an aggregate of $1,500,000 from the Lender until January 30, 2015, in any amount in increments of up to $350,000. Interest accrues on the outstanding principal amount at the rate of 8% and is payable quarterly beginning August 15, 2015. Principal and all accrued interest thereon is due and payable on the earlier to occur of: (i) January 30, 2016; (ii) an issuance by the Company or an acquisition of voting securities of the Company of 30% or more of the then outstanding shares or the combined voting power of the Company’s then outstanding voting securities; (iii) the individuals who are currently members of the Board of Directors of the Company cease for any reason to constitute at least two-thirds of the members of the Board; (iv) a merger, consolidation or other business combination with or into another company; or (v) the sale or other disposition of all or substantially all of the assets of the Company. As of March 31, 2015, the Company borrowed an aggregate of $1,150,000 from the Lender pursuant to this agreement and no further borrowings may be made. As at March 31, 2015, the Company has recognized accrued interest of $18,860.

	b)	On January 1, 2015, the Company issued two promissory notes of $1,000,000 to each of the former shareholders of The Big Tomato pursuant to the Plan of Merger (Note 3). Each note is payable in eight equal installments of $125,000 plus interest at 8% per annum commencing April 1, 2015. Each note is secured by all of the assets of the Company and the shares of the Company. As at March 31, 2015, the Company has recognized accrued interest of $39,014.

~~a) On~~8. ~~May~~Related 1,Party ~~2014, directors and officers of the Company were issued 5,700 shares of common stock with a fair value of $17,100 in consideration for services performed.~~Transactions

~~b) On~~During ~~May~~the 8,three ~~2014,~~months ~~directors~~ended ~~and~~March ~~officers~~31, of2015, the Company ~~were~~incurred ~~issued~~consulting ~~15,000~~fees ~~shares~~ of ~~common~~$8,250 ~~stock~~(2014 ~~with~~- a$nil) ~~fair~~to ~~value~~directors ofand ~~$30,000~~officers inof ~~consideration~~the ~~for services performed~~Company.

~~c) On~~9. ~~June~~Preferred ~~25, 2014, directors and officers of the Company were issued 112,500 shares of common stock with a fair value of $1,125 in consideration for services performed.~~Stock

7On June 23, 2014, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (“Series A Stock”) designating 5,500,000 shares of the Company’s authorized preferred stock as Series A Stock, par value $0. ~~Commitment~~001 per share. The Series A Preferred Stock is convertible at any time at the option of the holder into shares of common stock at a conversion ratio of 200 shares of common stock for each share of Series A Stock. A holder of Series A Stock shall be entitled to the number of votes per share equal to the number of shares of common stock into which such Series A Stock is convertible.

On ~~July~~June 2710, 2014, the Company ~~entered~~filed ~~into~~ a ~~Professional~~Certificate ~~Relations~~of ~~and~~Designation ~~Consulting~~of ~~Agreement~~Preferences, ~~for~~Rights ~~consulting~~and ~~services~~Limitations ~~effective~~of onSeries ~~July~~B ~~29,~~Convertible ~~2014~~Preferred ~~and~~Stock ~~ending~~(“Series onB ~~July~~Stock”) 29designating 750,000 ~~2015.~~shares ~~For~~of the ~~first~~Company’s 6authorized ~~month~~preferred ~~period,~~stock ~~the~~as ~~Company~~Series ~~agreed~~B ~~to pay $12~~Stock,~~500~~ ~~per~~par ~~month~~value ~~and issue~~ $~~150,000~~0.001 ~~worth~~per ofshare. ~~restricted~~The ~~common~~Series ~~stock~~B ofPreferred ~~the~~Stock ~~Company,~~is ~~determined~~convertible byat ~~dividing~~any ~~$150,000~~time byat the ~~closing~~option ~~share~~of ~~price on~~ the ~~day~~holder ~~preceding~~into ~~the~~shares ~~execution~~ of ~~the~~common ~~agreement.~~stock ~~For~~at ~~the~~a ~~remaining~~conversion 6ratio ~~month~~of ~~period,~~6 ~~the~~shares ~~Company~~of ~~agreed~~common tostock ~~pay~~for ~~$12,500~~each ~~per~~share ~~month~~of ~~and~~Series ~~issue~~B ~~$150,000~~Stock. ~~worth~~Dividends ofaccrue ~~restricted~~on ~~common~~each ~~stock~~share of ~~the~~Series ~~Company~~B Stock, ~~determined~~at bythe ~~dividing~~rate ~~$150,000~~of by4% ~~the~~per ~~average~~annum ~~closing~~of ~~share~~the price paid for ~~the~~each 5share ~~trading~~or ~~days~~$12 ~~preceding~~per ~~January~~share. ~~15,~~Until ~~2015.~~November ~~During~~30, 2016, the ~~nine~~Company ~~months~~has ~~ended~~the ~~August~~right ~~31,~~to ~~2014,~~pay the ~~Company~~dividend ~~recognized~~in ~~consulting~~additional ~~fees~~shares of ~~$12,584~~Series ~~for~~B ~~the~~Stock. ~~consultant,~~A ~~representing~~holder aof ~~cash~~Series ~~payment~~B ofStock ~~$12,500~~shall ~~and~~be ~~the~~entitled ~~fair~~to ~~value~~the number of ~~the~~votes ~~shares~~per ~~issuable~~share ofequal ~~$84.~~to Atthe ~~August~~number ~~31,~~of ~~2014,~~shares ~~the~~of ~~Company~~common ~~has~~stock ~~not~~into ~~issued~~which ~~any~~such ~~shares~~Series ~~pursuant~~B toStock ~~the~~is ~~agreement~~convertible.

8. Subsequent Events

We have evaluated subsequent events through the date of issuance of the financial statements, and did not have any material recognizable subsequent events with the exception of the following:

a) On September 2, 2014, the Company issued 833 shares of Series B preferred stock for proceeds of $10,000 that were received on August 31, 2014.

b) On September 8, 2014, the Company issued 834 shares of Series B preferred stock for proceeds of $10,000.

c) On September 9, 2014, the Company issued 833 shares of Series B preferred stock for proceeds of $10,000.

d) On September 10, 2014, the Company issued 4,165 shares of Series B preferred stock for proceeds of $49,982.50.

e) On September 11, 2014, the Company completed an asset purchase agreement pursuant to which the Company agreed to purchase substantially all of the assets of REM International LLC, a Colorado limited liability company, in consideration for $118,500 in cash and 1,500,000 shares of common stock.

f) On September 19, 2014, the Company issued 417 shares of Series B preferred stock for proceeds of $5,000

g) On September 25, 2014, the Company issued 525,000 shares of common stock for consulting services.

h) On October 2, 2014, the Company entered into a definitive Letter of Intent with The Big Tomato, a Colorado corporation, whereby the Company agreed to purchase all of the operating assets and assume all trade payables and liabilities relating to the inventory and other specified business expenses in consideration for $1,500,000, 250,000 shares of common stock and a newly created class of preferred stock with a market value of $9,000,000 based on the volume weighted average price of the common stock of the Company from October 2, 2014, until the transaction closes. The cash portion of the purchase price is to be secured by The Big Tomato’s business and payable over 2 years in equal semi-annual installments of $325,000 each, commencing 6 months from closing. The sellers may elect to receive the cash installments in cash or shares of preferred stock. Notwithstanding the execution of the Letter of Intent, the sellers of The Big Tomato have renegotiated some of the material terms of the transaction and are requiring the secured note as well as $400,000 in cash and 3,000,000 shares of common stock at closing. The Company and the sellers are working towards a definitive purchase agreement, and while the actual structure of the acquisition may change as a result of sellers' request, the basic material terms have currently been agreed and are as set forth herein. The transaction has not closed as of the date of filing of these financial statements

i) On October 15, 2014, The Company issued 50,000 shares of common stock for consulting services pursuant to the Professional Relations and Consulting Agreement (Note 7).

F-8

Monarch America Inc.

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

On August 5, 2014, the Company filed a Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (“Series B Stock”), whereby the Company removed the payment of dividends in additional shares of Series B Stock, reduced the conversion rate of the Series B Stock to 24 shares of common stock, and eliminated the right of holders of the Series B Stock to have a veto right on the ability of the Company to issue debt.

10.

Common Stock

	a)	On January 1, 2015, The Company issued 8,100,000 shares of common stock with a fair value of $3,564,000 pursuant to the Plan of Merger with The Big Tomato (Note 3).

	b)	On January 1, 2015, The Company issued 20,000 shares of common stock with a fair value of $10,000 for consulting services.

	c)	On January 31, 2015, The Company issued 11,202 shares of common stock with a fair value of $4,368 for consulting services.

	d)	On February 28, 2015, The Company issued 26,494 shares of common stock with a fair value of $4,636 for consulting services.

	e)	On March 1, 2015, The Company issued 750,000 shares of common stock with a fair value of $131,250 for consulting services.

	f)	On March 9, 2015, The Company issued 1,500,000 shares of common stock with a fair value of $210,450 for consulting services.

	g)	On March 31, 2015, The Company issued 32,058 shares of common stock with a fair value of $2,885 for consulting services.

11.

Commitments

	a)	The Company entered into a lease for office premises which originally commenced April 2, 2007. On October 27, 2010 and November 1, 2013, the Company entered into amendment agreements to extend the term of the lease. Under the terms of the November 1, 2013 amendment agreement, the term was extended to October 31, 2018, and the Company must pay base rent of $25,600 in the first 2 years of the lease, $27,200 in the next 2 years of the lease, and $28,800 in the last year of the lease.

	b)	The Company entered into a Shopping Center Lease Agreement which commenced April 1, 2014, and terminates on March 31, 2019. The minimum base rent due under the lease agreement is $5,235 per month for the first year, $5,413 per month for the second year, and $5,568 per month for the remaining term.

	c)	Beginning January 1, 2015, the Company entered into a management contract with Green Sky, Inc., a company wholly-owned by Steve Brandt, to build out a warehouse located in Denver, Colorado for cultivation purposes. As part of that agreement, the Company assumed the rent liability of the warehouse along with other associated build-out costs, estimated to be $500,000. Under the agreement, costs or expenses exceeding $720,000 through August 1, 2015 will be Green Sky’s responsibility. The assumed rent liability provides for the Company to pay Green Sky $20,000 per month to June 30, 2015, $51,200 per month from July 1, 2015 to August 30, 2015, at which point, Green Sky will assume liability of the rent payments going forward.

F-9

Monarch America Inc.

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

Total lease commitments based on the minimum base rent due, excluding common area maintenance charges, over the next five years are as follows:

2015	$	68,184
2016		93,551
2017		94,283
2018		90,816
2019		16,704
Total	$	363,538

	e)	On July 27, 2014, the Company entered into a Professional Relations and Consulting Agreement for consulting services effective on July 29, 2014 and ending on July 29, 2015. For the first 6 month period, the Company agreed to pay $12,500 per month and issue $150,000 worth of restricted common stock of the Company, determined by dividing $150,000 by the closing share price on the day preceding the execution of the agreement. For the remaining 6 month period, the Company agreed to pay $12,500 per month and issue $150,000 worth of restricted common stock of the Company, determined by dividing $150,000 by the average closing share price for the 5 trading days preceding January 15, 2015.The agreement was terminated in April 2015, resulting in the forfeiture of the unvested stock award.

	f)	On January 14, 2015, the Company entered into a two-year employment agreement (the “Employment Agreement”) with each of Jeremy N. Stout and Josh Field for an annual base salary of $120,000 each. Each individual will also be entitled to a bonus based upon the TBT’s annual net income for 2015 and 2016 as follows: (i) $2,500 for every $10,000 of net income generated between $400,000 and $460,000, and (ii) $15,000 plus 7.5% of net income over $460,000. The agreement prohibits the individuals from competing with the business of the Company during the term of the agreement and for one year thereafter, except if the employee is terminated without cause or as a result of a constructive termination.

12.

Segment Reporting

The Company’s Chief Executive Officer (“CEO”) serves as the Company’s chief operating decision maker (“CODM”). Management evaluates the performance of the Company's operating segments based on several factors, including net sales to external customers and operating income. Net sales are recorded on a segment basis and intersegment sales are eliminated as part of the financial consolidation process. There are two reportable operating segments, being soil distribution and hydroponics retail operations.

F-10

Monarch America Inc.

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

The management and consulting segment relates to Monarch America Inc., and its wholly-owned subsidiary, HBH Industries Inc. and is positioned to provide management and consulting services for building out indoor grow and cultivation facilities. This segment also has some exclusive rights for branded products (Monarch America lights, ballasts, and other indoor gardening supplies), and exclusive distribution arrangements (AgriAloe, MiraClays, Ivory Coco, REM international flavored beverage profiles). Coats AgriAloe LLC is a Texas-based developer of patented and proprietary soil amendment products. MiraClays is microscopic crystalline calcium clay, rich in over 70 other minerals and trace elements. The Ivory Coco arrangement consists of an exclusive distribution agreement with Ivory Coco International, LLC, a Colorado-based importer and supplier of Coco Coir, an all-natural soil additive utilized by indoor and outdoor gardening operations.

The retail operations segment relates to The Big Tomato and consists of supplying hydroponics and indoor gardening supplies in Denver, Colorado. The Big Tomato sells various types of products of indoor gardening products; grow boxes, grow lights, hydroponic systems, ballasts, bulbs, nutrients and additives, and other high-end hydroponic and gardening items.

The following tables summarize selected financial data for segment disclosures for the three months ended March 31, 2015, and 2014.

2015 - (Successor)	Management/ Consulting Operations $			Retail Operations $			Total $

Current assets		114,435			619,288			733,723

Total assets		425,974			6,552,683			6,978,657

Revenues		51,854			1,105,534			1,157,388
Cost of sales		(39,000	)		(705,019	)		(744,019	)
General and administrative		(704,051	)		(154,840	)		(858,891	)

Operating (loss) income		(691,197	)		245,675			(445,522	)

2014 – (Predecessor)	Management/ Consulting Operations $		Retail Operations $			Total $

Current assets		–		275,787			295,954
Total assets		–		286,310			303,243

Revenues		–		686,895			686,895
Cost of sales		–		(453,224	)		(453,224	)
General and administrative		–		(135,415	)		(135,415	)

Operating income		–		98,256			98,256

F-11

Monarch America Inc.

Notes to the Condensed Consolidated Financial Statements

(Expressed in US dollars)

(unaudited)

13.

Subsequent Event

On April 29, 2015, the Company entered into a Securities Purchase Agreement with Redwood Management LLC, a Florida limited liability company (“Redwood”), for the sale of an original issue discount convertible debenture (the “Debenture”) in the principal amount of $1,000,000. The Debenture was issued for an original issue discount of 10%, and interest on the Debenture accrues at the rate of 10% per annum, payable in six equal tranches, the first of which was paid on April 29, 2015 and the remainder is due on each of the first five monthly anniversaries of the issuance of the Debenture. The Company received net proceeds from the issuance of the Debenture in the amount of $118,333. Pursuant to the terms of the Secured Redwood Note described below, on each of May 29th and the next consecutive four months, Redwood will pay the Company $150,000 as long as certain conditions are met.

The Debenture, which is due on April 29, 2016, is convertible into shares of the Company’s common stock at the election of Redwood at any time at a conversion price equal to 65% of the lowest trading price of the common stock during the 20 trading day period prior to conversion. Redwood agreed to restrict its ability to convert the Debenture and receive shares of the Company if the number of shares of common stock beneficially held by Redwood and its affiliates in the aggregate after such conversion exceeds 4.99% of the then outstanding shares of common stock; said percentage can increase to 9.99% upon no less than 61 days’ notice from Redwood to the Company. The Company has the right to prepay any portion of the Debenture upon ten days’ notice and payment of a 130% prepayment penalty.

On April 29, 2015, Redwood issued the Company a $750,000 collateralized secured promissory note (the “Secured Redwood Note”). The Secured Redwood Note is secured by the 10% membership interests of Redwood owned by Gary Rogers and John DeNobile.

F-12

Item 2. Management’s Discussion and Analysis or Plan of Operations.

As used in this Quarterly Report on Form ~~10-Q~~10Q (this “Report”), unless the context otherwise indicates, references to the “Company,” the “Registrant,” “we,” “our,” “us,” or “usMonarch” refer to ~~Cannabis~~Monarch ~~Kinetics~~America, ~~Corp~~Inc. ~~unless~~and its wholly-owned subsidiaries. Jeremy N. Stout, Inc. d/b/a The Big Tomato was acquired by and is now a wholly-owned subsidiary of Monarch America as of January 14, 2015, effective January 1, 2015. References to “the ~~context~~Tomato” ~~otherwise~~refer ~~indicates~~to what is now The Big Tomato, Inc., formerly Jeremy Stout, Inc. d/b/a The Big Tomato, Inc.

Forward-Looking Statements

~~The following discussion should be read in conjunction with the financial statements of the Company which are included elsewhere in this Form 10-Q.~~ Certain statements contained in this ~~report~~Report, including statements regarding ~~the anticipated development and expansion of~~ our business, financial condition, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

~~Plan~~All forward-looking statements speak only as of ~~Operation~~the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

On September 11, 2014, Cannabis Kinetics Corp. acquired substantially all of the assets of REM International, LLC, a Colorado limited liability company (“REM”), pursuant to an asset purchase agreement, dated June 6, 2014 (the “Purchase Agreement”), by and among the Company, REM, and Robert E. Matuszewki, the owner of all of the issued and outstanding equity interests in REM. The consideration paid by the Company for the assets was $118,500 and the issuance 1,500,000 shares of the Company’s common stock, par value $0.001 per share. Pursuant to the amendment to the Purchase Agreement, the Company agreed to pay REM $7,000 for the next five months and commencing March 2015 $12,750 for the subsequent six months. On September 11, 2014, the Company paid REM the first installment of $7,000. The assets purchased consist of certain intellectual property, including trademarks and domain names. The Company did not assume any liabilities in connection with the acquisition.Overview

InThe ~~its~~Company ~~effort~~is toactively ~~commence~~involved ~~generating~~in ~~revenues,~~ the ~~Company~~business ~~entered~~of ~~into~~being ana ~~exclusive~~vertically-integrated ~~distribution~~cannabis ~~agreement~~management ~~with~~company. ~~Ivory~~Since ~~Coco~~current ~~International,~~management ~~LLC,~~has ataken ~~Colorado-based~~control ~~importer~~of ~~and~~the ~~supplier~~Company ofin ~~Coco~~March ~~Coir~~2014, anwe ~~all-natural~~are ~~soil~~involved ~~additive~~in ~~utilized~~the bysale ~~indoor~~ and ~~outdoor~~distribution ~~gardening~~of ~~operations.~~hydroponic Aslights and equipment as a result of ~~this~~our ~~agreement,~~acquisition ~~the~~of ~~Company~~The ~~hopes~~Big toTomato, ~~establish~~we ~~distribution~~are ~~and~~aiming to generate sales of specialty soil additives used in the ~~Coco~~growth ~~Coir~~of ~~products.~~marijuana Onand ~~October~~other 5hydroponics and we have acquired certain intellectual property, ~~2014~~including trademarks and domain names, used by the Company ~~placed~~in ~~its~~branding ~~first~~and ~~order~~marketing ~~for~~its ~~Coco~~products ~~Coir~~and services.

OnMonarch ~~October~~also 2,provides ~~2014,~~turnkey ~~the Company entered into a definitive Letter of Intent with The Big Tomato~~solutions, amanagement ~~Colorado~~and ~~corporation,~~consulting ~~whereby~~services ~~the Company agreed~~ to ~~purchase all of~~ the ~~operating~~legally ~~assets~~regulated ~~and~~marijuana ~~assume~~industry. ~~all~~While ~~trade~~not ~~payables~~directly ~~and~~engaged ~~liabilities relating to the inventory and other specified business expenses~~ in ~~consideration for $1,500,000, 250,000 shares of common stock and a newly created class of preferred stock with a market value of $9,000,000 based on~~ the ~~volume~~sale ~~weighted average price~~ of ~~the common stock of the Company from October 2~~marijuana, ~~2014,~~Monarch ~~until~~offers ~~the~~a ~~transaction~~spectrum ~~closes. The cash portion~~ of ~~the~~capabilities ~~purchase~~that ~~price~~we isbelieve to beelevate ~~secured~~the ~~by The Big Tomato’s~~ business ~~and payable over 2 years in equal semi-annual installments~~ of ~~$325,000~~marijuana ~~each,~~and ~~commencing~~hydroponic 6cultivation ~~months~~ from ~~closing. The sellers may elect to receive~~ the ~~cash~~erratically ~~installments in cash or shares of preferred stock. Notwithstanding the execution of the Letter of Intent~~stocked, ~~the~~sparselystaffed ~~sellers of The Big Tomato have re-negotiated some of the material terms of the transaction~~ and ~~are requiring the secured note as well as $400~~managed,~~000~~ inindependent-store ~~cash~~model ~~and~~to ~~3,000,000~~that ~~shares~~ of ~~common~~an ~~stock~~efficient ~~at closing. The Company~~ and ~~the~~consistently ~~sellers~~managed are working towards a definitive purchase agreement, and while the actual structure of the acquisition may change as a result of sellers' request, the basic material terms have currently been agreed and are as set forth hereinorganization.

3Monarch aims to oversee and manage all facets of retail operations, from property management, technology and equipment leasing to inventory control, staffing, and day-to-day operational management.

OnCorporate August 15, 2014, HBH Industries, Inc., a wholly-owned subsidiary of the Company, executed a promissory note with Monarch, Inc., a Colorado corporation which is wholly owned by Steve Brandt, a director of the Company. Pursuant to the terms of such note, HBH Industries agreed to lend Monarch up to an aggregate of $3,000,000, with interest accruing at 8% per annum. The loans to Monarch are unsecured and all amounts will be due on August 15, 2017. On August 21, 2014, HBH Industries advanced $60,000 under the Promissory Note.History

~~Results~~Monarch ofAmerica, ~~Operations~~Inc

~~For~~The Company was incorporated in the ~~three~~State ~~months~~of ~~ended~~Nevada ~~August~~on 31September 14, 2010. On March 19, 2014, John Ngitew and ~~August~~Grace 31Parinas, ~~2013~~the former principal shareholders of the Company, formerly known as Lingas Ventures, Inc., entered into a Stock Purchase Agreement which provided for the sale of shares of common stock of the Company representing 50% of the issued and outstanding share capital of the Company on a fully-diluted basis to Eric Hagen, Jonathan Hunt and Steven Brandt. The consideration paid for the shares was $21,750. In connection with the transaction, Mr. Ngitew released the Company from all debts owed to him. Effective as of March 19, 2014, in connection with the sale of the shares to Messrs. Hagen, Hunt and Brandt, both John Ngitew and Grace Parinas resigned from all their respective positions as officers and directors of the Company. The Board of Directors of the Company elected Eric Hagen as President and Chief Executive Officer, Jonathan Hunt as Vice President and Secretary and Steven Brandt as Vice President and Treasurer, and said three individuals became the directors of the Company.

On May 19, 2014, the Company changed its name to "Cannabis Kinetics Corp." and effectuated a 1 for 10 reverse stock split. As a result of an amendment to the Company's Articles of Incorporation, the Company is authorized to issue 10,000,000 shares of blank check preferred stock. The number of authorized shares of common stock of the Companny, 2,610,000,000, par value $.001 per share, was not affected by the amendment.

On September 11, 2014, the Company acquired substantially all of the assets of REM International, LLC, a Colorado limited liability company (“REM”) pursuant to an asset purchase agreement, dated June 6, 2014 by and among the Company, REM, and Robert E. Matuszewki, the owner of all of the issued and outstanding equity interests in REM. The consideration paid by the Company for the assets was $118,500 and the issuance 1,500,000 shares of the Company’s common stock. Pursuant to an amendment to the asset purchase agreement, dated as of September 11, 2014, the Company agreed to pay REM $7,000 for the five months and commencing March 2015 $12,750 for the subsequent six months. The assets purchased consist of certain intellectual property, including trademarks and domain names. The Company did not assume any liabilities in connection with the acquisition.

On December 5, 2014, the Company borrowed $75,000 from Glamis Capital SA (Glamis Capital) pursuant to the terms of a promissory note. The note provides that the Company can borrow up to an aggregate of $1,500,000 from Glamis until January 30, 2015. Interest accrues on the outstanding principal amount at the rate of 8% and is payable quarterly beginning August 15, 2015. Principal and all accrued interest thereon is due and payable on the earlier to occur of: (i) January 30, 2016; (ii) an issuance by the Company or an acquisition of voting securities of the Company of 30% or more of the then outstanding shares or the combined voting power of the Company’s then outstanding voting securities; (iii) the individuals who are currently members of the Board of Directors of the Company cease for any reason to constitute at least two-thirds of the members of the Board; (iv) a merger, consolidation or other business combination with or into another company; or (v) the sale or other disposition of all or substantially all of the assets of the Company. As of March 30, 2015, the Company borrowed an aggregate of $1,150,000 from Glamis Capital.

On March 26, 2014, the Company borrowed $175,000 from Backenald Trading, Ltd. pursuant to the terms of a promissory note. Interest accrues on the outstanding principal amount at the rate of 8% and is payable quarterly beginning August 31, 2015. Principal and all accrued interest thereon is due and payable on the earlier to occur of: (i) March 26, 2016; (ii) an issuance by the Company or an acquisition of voting securities of the Company of 30% or more of the then outstanding shares or the combined voting power of the Company’s then outstanding voting securities; (iii) the individuals who are currently members of the Board of Directors of the Company cease for any reason to constitute at least two-thirds of the members of the Board; (iv) a merger, consolidation or other business combination with or into another company; or (v) the sale or other disposition of all or substantially all of the assets of the Company.

On March 26, 2014, the Company borrowed $175,000 from Adams Ale, Inc. pursuant to the terms of a promissory note. Interest accrues on the outstanding principal amount at the rate of 8% and is payable quarterly beginning August 31, 2015. Principal and all accrued interest thereon is due and payable on the earlier to occur of: (i) March 26, 2016; (ii) an issuance by the Company or an acquisition of voting securities of the Company of 30% or more of the then outstanding shares or the combined voting power of the Company’s then outstanding voting securities; (iii) the individuals who are currently members of the Board of Directors of the Company cease for any reason to constitute at least two-thirds of the members of the Board; (iv) a merger, consolidation or other business combination with or into another company; or (v) the sale or other disposition of all or substantially all of the assets of the Company.

On December 18, 2014, the Company effectuated a 3-1 forward stock split and shareholders owning shares on such record date received 2 shares of the Company in addition to each share they owned as of such date. As of December 26, 2014, the Company changed its name from Lingas Ventures, Inc. to Monarch America, Inc.

On April 29, 2015, the Company issued to Redwood Management LLC, a Florida limited liability company (“Redwood”), an original issue discount convertible debenture (the “Debenture”) in the principal amount of $1,000,000. The Debenture was issued for an original issue discount of 10%, and interest on the Debenture accrues at the rate of 10% per annum, payable in six equal tranches, the first of which was paid on April 29, 2015 and the remainder are due on each of the first five monthly anniversaries of the issuance of the Debenture. On each of May 29th and the next consecutive four months, Redwood will pay the Company $150,000 as long as (a) the Company shall have duly honored all conversions submitted by Redwood, if any, (b) the Company shall have paid all liquidated damages and other amounts owing to the Redwood, (c) the Common Stock is trading, (d) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares then issuable to Redwood, (e) there is no existing event of default under the Debenture, (f) there has been no public announcement of a pending or proposed fundamental transaction or change of control that has not been consummated, (g) the daily dollar trading volume for the common stock exceeds an average of $15,000 per trading day, (h) the Company’s common stock must be DTC and DWAC Eligible and not subject to a “DTC Chill” and (i) the Company has timely filed all reports required to be filed by the Company after the date hereof pursuant to the Securities Exchange Act of 1934, as amended. Notwithstanding, upon at least 2 business days the Company may prohibit Redwood from making any prepayment otherwise due under the Secured Redwood Note. The Debenture, which is due on April 29, 2016, is convertible into shares of the Company’s common stock at the election of Redwood at any time at a conversion price equal to 65% of the lowest trading price of the common stock during the 20 trading day period prior to conversion. Failure of the Company to deliver shares to Redwood within three days of conversion results the Company paying $10 per trading day for the first four days and $20 per day thereafter.

The Big Tomato

Founded in May 2001, The Big Tomato provides thousands of indoor gardeners and commercial growers with top quality hydroponic and indoor gardening supplies at competitive costs. The Big Tomato sells various types of products of indoor gardening products; grow boxes, grow lights, hydroponic systems, ballasts, bulbs, nutrients and additives, and other high-end hydroponic and gardening items.

On January 14, 2015, the Company completed the acquisition of Jeremy N. Stout, Inc. d/b/a The Big Tomato, a Colorado Corporation (“The Big Tomato”) pursuant to which The Big Tomato, Inc., a Colorado corporation and a wholly-owned subsidiary of the Company was merged with and into The Big Tomato. In addition to $400,000 in cash paid by the Company to Jeremy Stout and Josh Field, the shareholders of The Big Tomato, the Company issued an aggregate of 8,100,000 shares of common stock of the Company to the Shareholders. The Company also issued a secured promissory note in the principal amount of $1,000,000 (collectively, the “Notes”) to each of Messrs. Stout and Field. The Notes are payable in eight equal installments of $125,000 commencing April 1, 2015, accrue interest at the rate of 8% per annum and are secured by a first priority lien on all the assets of The Big Tomato. As additional security for the Notes, the Company pledged all of the shares of The Big Tomato to each of Messrs. Stout and Field. The security interest in such assets and the pledged stock is the exclusive remedy in the event of a default under the Notes. The Notes also provide that the Company shall be entitled to offset any damages incurred by it or its affiliates against the principal amount of the Notes arising from an inaccuracy or breach of any representation or warranty of Messrs. Stout and Field or failure to perform or comply with the Notes or other agreements or documents delivered in connection with the Merger.

Accounting Survivor

The financial results presented below are presented under predecessor entity reporting; and because the acquiring entity had minimal operations in the previous time period, historical information of the acquirer is not presented. The results of operations referred to below for the three months ended March 31, 2015 represent the results of operations for the successor entity (Monarch) for the quarter and the standalone comparative financial results of the predecessor (The Big Tomato) for the three months ended March 31, 2014 and March 31, 2015.

Our Operating Segments

We have two distinct operating segments:

Monarch –

The management and consulting segment is positioned to provide services for building out indoor grow and cultivation facilities. This segment also has branded indoor gardening products, along with exclusive distribution arrangements with outside parties for specialized gardening supplies like soil additives and growing mediums.

The Big Tomato –

The retail operations segment consists of supplying hydroponics and indoor gardening supplies through a retail storefront and supply warehouse.

Results of Operations – Monarch (Successor)

For the three months ended March 31, 2015

There is no comparable period for 2014, due to the adoption of predecessor accounting.

Revenues

~~The~~Monarch ~~Company~~generated is$51,854 in ~~its~~net ~~development~~revenues ~~stage~~for ~~and~~the ~~did~~quarter ~~not~~ended ~~generate~~March ~~any~~31, ~~revenues~~2015 ~~during~~as ~~the~~a ~~three~~result ~~months~~of ~~ended~~retail ~~August~~sales ~~31,~~of ~~2014~~its branded hydroponic and ~~August~~cultivation 31supplies, ~~2013~~such as lights and ballasts.

Total operating expenses

~~For~~Monarch’s ~~the three months ended August 31, 2014,~~ total operating expenses were $~~222~~704,~~034,~~051 ~~consisting~~for ofthe ~~interest~~quarter ~~income~~ended ofMarch ~~$131 and general and administrative expenses of $222~~31,~~165~~ 2015. ~~For~~These ~~the~~costs ~~three~~are ~~months~~related ~~ended~~to ~~August~~salaries ~~31,~~and ~~2013,~~wages ~~total~~of ~~operating expenses were~~ $13108,~~604~~589, ~~consisting~~consulting ~~of general~~ and ~~administrative~~professional ~~expenses.~~fees ~~Operating~~of ~~expenses increased by~~ $~~208~~496,~~430~~158, ~~primarily~~occupancy ~~due~~costs ~~to the increase~~ of ~~management fees~~$60,000, ~~professional~~and ~~fees~~travel and other ~~expenses~~of $39,304.

Net ~~loss~~Income/Loss

~~For~~During the ~~three~~quarter ~~months~~ ended ~~August~~March 31, ~~2014~~2015, ~~the~~Monarch ~~Company~~ had a net loss of $~~222~~691,~~034~~197. As part of its agreement with Green Sky, asMonarch ~~compared~~is toincurred athe ~~net~~costs ~~loss~~required ~~for~~to build out the ~~three~~warehouse ~~months~~at ~~ended~~1150 ~~August~~W 31Custer, ~~2013~~in Denver, CO. Due to the terms of ~~$13~~this management contract,~~604~~ Monarch is not yet collecting fees for providing services to offset its operating costs.

~~For~~Results ~~the~~of ~~nine~~Operations ~~months~~– ~~ended~~The ~~August~~Big ~~31, 2014 and August 31, 2013~~Tomato

For the three months ended March 31, 2015 (Successor) and March 31, 2014 (Predecessor)

Revenues

The ~~Company~~Tomato isgenerated $1,105,534 and $686,895 in net revenues from its ~~development~~retail ~~stage~~operations during the quarters ended March 31, 2015 and ~~did~~March ~~not~~31, ~~generate~~2014, ~~any~~respectively, ~~revenues~~an ~~during~~increase of 61%. This increase was due in part to the ~~nine~~Tomato ~~months~~refocusing its sales strategy to target and fulfill larger orders as well as fulfilling new large orders across the country. These types of arrangements have a larger profit margin, as when the Tomato places larger orders from its vendors, it obtains more favorable pricing per unit. This is demonstrated by the trend in cost in sales of $705,019 and $453,224 during the quarters ended ~~August~~March 31, 2015 and March 31, 2014, respectively, an increase of 56% (compared to the 61% growth in revenue). These trends have equated to a larger gross margin, as the Tomato earned a gross margin of $400,515 and ~~August~~$233,671 during the quarters ended March 31, ~~2013~~2015 and March 31, 2014, respectively, an increase of 71%.

Total operating expenses

~~For~~Total ~~the~~operating ~~nine~~expenses ~~months~~for the quarter ended ~~August~~March 31, ~~2014,~~2015 ~~total operating expenses~~ were $~~398~~154,~~257,~~840 consisting of ~~interest~~$3,351 ~~income~~ of advertising, $~~131~~1,480 ~~and~~of ~~general~~depreciation, ~~and~~$15,978 ~~administrative expenses~~ of insurance, $~~398~~4,~~388.~~670 ~~For~~of ~~the~~professional ~~nine~~fees, ~~months~~$32,440 ~~ended~~of ~~August~~rent, 31$65,292 ~~2013~~of wages, ~~total~~$10,233 ~~operating~~of ~~expenses~~utilities, ~~were~~and $3721,~~361~~396 of other general ~~and administrative~~ expenses. ~~General~~Total ~~and~~operating ~~administrative~~ expenses ~~were~~for ~~higher during~~ the ~~nine~~quarter ~~months~~ ended ~~August~~March 31, 2014 ~~compared~~were to$135,415 ~~August~~consisting 31of $3,661 ~~2013~~of ~~primarily~~advertising, ~~due~~$5,516 toof ~~the~~depreciation, ~~increase~~$11,226 of ~~management~~insurance, ~~fees~~$7,333 of professional fees, $29,441 of rent, $53,703 of wages, $13,233 of utilities, and $11,302 of other general expenses.

4Net Income/Loss

~~Net~~During ~~loss~~the quarter ended March 31, 2015, the Tomato had a net income of $245,675, as compared with a net income of $98,256 for the quarter ended March 31, 2014, an increase in bottom line results of 150%. With the legalization of marijuana in Colorado, the Tomato has been able to meet growing demands for indoor hydroponic and cultivation supplies. Larger grow facilities and operations are coming online, and the Tomato has an established reputation for being able to fill large orders at competitive costs, while giving expert advice.

For the nine months ended August 31, 2014, the Company had a net loss of $398,257, as compared to a net loss for the nine months ended August 31, 2013 of $37,361.

Liquidity and Capital Resources

As of ~~August~~March 31, ~~2014~~2015, the Company had ~~a cash balance of~~ $75226,~~396.~~060 We estimate that within the next 12 months we will need approximately $750,000 to acquire The Big Tomato and further develop our business. We cannot be certain that the required additional financing will be available or available on terms favorable to us. If additional funds are raised by the issuance of ~~our~~cash ~~equity securities, such as through the issuance of additional shares~~ and ~~the~~total ~~issuance~~liabilities ~~and exercise~~ of ~~warrants~~$3, ~~then existing stockholders will experience dilution of their ownership interest. If adequate funds are not available or not available on acceptable terms~~697, ~~we may be unable to fund our operations~~608. ~~The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.~~

~~Pursuant~~The toTomato ~~the~~has ~~purchase~~continued ~~agreement~~this ~~for~~profitable ~~the~~trend ~~assets~~of ~~acquired~~2014 ~~from~~by ~~REM~~showing ~~International,~~a ~~LLC,~~continued surplus in the ~~Company~~beginning isof ~~obligated~~2015. However, in order to ~~pay~~maintain ~~REM~~its ~~$7,000~~operations ~~for~~and ~~the~~its ~~next~~ability ~~five~~to ~~months~~manage ~~and~~its ~~commencing~~supply ~~March~~chain ~~2015~~and ~~$12~~distribution channels,~~750~~ ~~for~~the Tomato must have adequate working capital so as to have the ~~subsequent~~financial ~~six~~flexibility ~~months~~to fulfill inventory orders by its customers. ~~Currently,~~The profits of the ~~Company~~Tomato does not ~~have~~mean ~~adequate~~that ~~cash~~it will be able to ~~make~~support ~~such~~the ~~payments~~capital burn or operations of Monarch in the future.

Management estimates that Monarch will need approximately $2,540,000 for the next 12 months of operations, which includes $1,000,000 to pay the sellers for the sale of The Big Tomato. Quarterly interest payments are due to Glamis Capital commencing August 15, 2015 with the outstanding principal of $1,150,000 and all accrued interest due no later than January 30, 2016. The Company also owes the former owners of the Tomato $1,750,000 in cash consideration, due quarterly, as of the date of this filing. The Company does not have sufficient cash to fund its expenses over the next twelve months. There can be no assurance that additional capital will be available to the Company. If the Company fails to raise adequate capital, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company. Although Monarch does anticipate receiving monthly payments of $50,000 from Green Sky, Inc. pursuant to its management services agreement, Monarch does not have sufficient cash to fund its expenses over the next twelve months.

Given all the conditions precedent to Redwood Management LLC funding the Debenture (described above in Corporate History- Monarch America, Inc., there is no assurance that the Company will receive any further funding from Redwood.

Going Concern

As of ~~August~~March 31, ~~2014~~2015, the Company has ~~not recognized any revenue, has~~ a working capital deficit of $791,~~452~~963,885, and has an accumulated deficit of $~~488~~1,~~992~~693,541. ~~Our~~The ~~auditors~~continuation ~~have~~of ~~issued~~the Company as a going concern ~~opinion on our audited financial statements for the year ended November 30, 2013. This means that there~~ is ~~substantial~~dependent ~~doubt~~upon ~~that we can continue as an on-going business for~~ the ~~next~~continued ~~twelve~~financial ~~months~~support ~~unless~~from weits ~~obtain~~management, ~~additional~~and ~~capital~~its ability to ~~pay~~identify ~~for~~future ~~our~~investment ~~expenses.~~opportunities ~~This is because we have not generated any revenues~~ and noobtain ~~sales~~the ~~are~~necessary ~~yet~~debt ~~possible.~~or ~~There~~equity ~~is no assurance we will ever reach this point. Accordingly~~financing, weand ~~must~~generating ~~raise~~profitable ~~sufficient~~operations ~~capital~~ from ~~sources.~~the ~~Our~~Company’s ~~only~~future ~~other source for cash at this time is investments by others~~operations. WeThese ~~must~~factors raise ~~cash~~substantial todoubt ~~stay~~regarding inthe ~~business.~~Company’s Inability ~~response~~ to ~~these~~continue ~~problems,~~as ~~management~~a ~~intends~~going ~~to raise additional funds through public or private placement offerings~~concern.

The repositioning of Lingas Resources into what is now Monarch America has required substantial capital throughout fiscal year 2014 and into 2015 in order to ramp up operations and change the Company’s industry from rare earth mining and discovery to marijuana cultivation. There is doubt and uncertainty as to whether Monarch will be able to sustain operations, even if management obtains the necessary capital for operations when we begin to collect on the terms of the management agreement with Green Sky. Moreover, we have issued and outstanding promissory notes in the aggregate principal amount of $1,150,000 due and payable in full on January 30, 2016. Monarch’s ability to continue as a going concern is dependent on management’s ability to raise additional capital, despite the profits shown by The Big Tomato.

The financial statements included in this Report do not include any adjustments that may be necessary if we are unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

5Revenue Recognition

The Tomato derives the majority of its revenue from the sale of hydroponic and indoor garden supplies at its retail store, in which the products are delivered to the customer immediately. The Tomato also has an online store, but there are minimal e-commerce sales. Monarch is primarily in the business of providing management and consulting services, along with retail sales of its own branded indoor gardening supplies. Monarch has not yet earned revenue in relation to its management and consulting services, and any retail sales are due upon delivery and have been paid in full. The Company recognizes revenue, net of sales tax, when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured which is typically when the customer takes possession of the merchandise at the point of sale, or if from the online store, when title transfers upon shipment from the Company’s warehouse. The Company is not in the practice of taking cash payments in advance from customers for inventory yet to be exchanged, but in such an event, the Company would recognize the amount received as deferred revenue until the sale or service is complete.

Stock-based Compensation

~~Derivative Financial Instruments~~10

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, in accordance with ASC 815-15 “Derivative and Hedging” the Company valued the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.Inventories

Inventories are stated at the lower of cost or market. Cost is determined on average cost basis. Market is determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. Periodic inventory counts are performed in order to reconcile physically present inventory at the warehouse and retail store to the inventory listing.

Depreciation

Equipment is stated at cost and is depreciated on a straight-line basis over its estimated useful life, as follows:

Furniture and equipment	5 years
Leasehold improvements	3 years
Software and website	3 years
Vehicles	7 years

Property and equipment is presented net of accumulated depreciation.

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to the recoverability of intangible assets, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on ~~the~~its financial statements unless otherwise disclosed, and the Company does not believe that there are ~~any other~~ new accounting pronouncements that have been issued that may have a material impact on its financial position or results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

WeUnder ~~maintain~~the ~~disclosure~~supervision ~~controls~~ and ~~procedures~~with ~~that~~the ~~are~~participation ~~designed~~of toour ~~ensure~~management, ~~that~~who ~~information~~is ~~required~~also toour beprincipal ~~disclosed~~executive inofficer and principal financial officer, we conducted an evaluation of our ~~reports~~disclosure ~~filed~~controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, isas ~~recorded,~~of ~~processed~~March 31, ~~summarized~~2015. ~~and~~Based ~~reported~~upon ~~within~~such evaluation, the ~~time~~Company's ~~periods~~Chief ~~specified~~Executive inOfficer ~~the~~and ~~Securities~~Chief ~~and~~Financial ~~Exchange~~Officer ~~Commission's~~concluded ~~rules~~that ~~and~~our ~~forms,~~disclosure controls and ~~that~~procedures ~~such~~were ~~information~~not iseffective, ~~accumulated~~as ~~and~~of ~~communicated~~March 31, 2015, to ~~our~~provide ~~management,~~assurance ~~including~~that ~~our~~information ~~president~~that ~~(our~~is ~~principal~~required ~~executive~~to ~~officer,~~be ~~principal~~disclosed ~~financial~~by ~~officer~~the ~~and~~Company ~~principal~~in ~~accounting~~the ~~officer)~~reports tothat ~~allow~~it ~~for~~files ~~timely~~or ~~decisions~~submits ~~regarding~~under ~~required~~the ~~disclosure.~~Exchange AsAct ofis ~~August~~recorded, 31processed, ~~2014~~summarized, weand ~~carried out an evaluation~~reported, ~~under~~within the ~~supervision~~time ~~and~~periods ~~with~~specified by the ~~participation~~SEC's ofrules ~~our~~and ~~president~~forms. ~~(our~~Disclosure ~~principal~~controls ~~executive~~and ~~officer~~procedures include, ~~principal~~without ~~financial~~limitation, ~~officer~~controls and ~~principle~~procedures ~~accounting~~designed ~~officer),~~to ofensure ~~the~~that ~~effectiveness~~information ofrequired ~~the~~to ~~design~~be ~~and~~disclosed ~~operation~~by ofthe ~~our~~Company ~~disclosure~~in ~~controls~~the ~~and~~reports ~~procedures.~~that ~~Based~~it onfiles or submits under the ~~foregoing,~~Exchange ~~our~~Act ~~president~~is ~~(our~~accumulated ~~principal~~and ~~executive~~communicated ~~officer,~~to ~~principal~~the ~~financial~~Company's ~~officer~~management, ~~and~~including ~~principal~~its ~~accounting~~Chief ~~officer)~~Executive ~~concluded~~Officer ~~that~~and ~~our~~Chief ~~disclosure~~Financial ~~controls~~Officer, ~~and~~or ~~procedures~~persons ~~were~~performing ~~not~~similar ~~effective~~functions, as ofappropriate, ~~August~~to ~~31,~~allow ~~2014~~timely decisions regarding required disclosure.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive, principal operating and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Our internal controls were not effective as of March 31, 2015 for the following reasons: Given the limited number of personnel responsible for accounting for and managing transaction and funds in the company, there is an inherent limitation to the Company’s ability to establish segregation of duties. Moreover, the Company has a limited number of qualified accounting personnel involved in the maintenance of accounting records and the Company has been unable to maintain adequate control activities or monitoring processes.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

612

PART II OTHER INFORMATION

Item 1. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors.

As a “smaller reporting company”, we are not required to provide the information required by this item.

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

Recent sales of unregistered securities

AsThe ofCompany ~~September~~needs ~~11,~~to ~~2014,~~formally ~~the~~issue ~~Company issued 1~~89,~~500,000~~754 shares of its common stock to ~~REM~~Robert ~~International,~~Shepard ~~LLC~~ pursuant to the terms of ~~the~~a ~~Asset~~letter ~~Purchase~~agreement ~~Agreement~~ with ~~said~~such ~~person~~individual. ~~The~~This ~~shares~~issuance ~~issued~~will ~~have~~be ~~not~~conducted ~~been registered under the Securities Act of 1933, as amended (the “Act”), and were issued~~ in reliance upon ~~the~~an exemption from registration ~~contained~~provided inunder Section 4(2) of the Securities Act of 1933, as amended.

On September 16, 2014, the Company issued 500,000, 15,000 and 10,000 shares of common stock to each of Kevin Malone, Sherry Serna and Deborah Engles, respectively, for services provided by each of these three individuals to the Company. The shares issued have not been registered under the Act and were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act.

As of October 15, 2014, the Company issued 50,000 shares of common stock to Acorn Management Partners, LLC for services rendered. The shares have not been registered under the Act and were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act.

During the quarter and in the first week of September 2014, the Company raised an aggregate of $319,286 from the sale of 26,607 shares of Series B Convertible Preferred Stock. The Preferred Stock has not been registered under the Act, and was issued in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act.

Purchases of equity securities by the issuer and affiliated purchasers.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

713

Item 6. Exhibits.

Exhibit No.		Description
10.1		Promissory Note executed by Monarch, Inc. to HBH Industries, Inc.
31		Rule 13a-14(a)/15d-14(a) Certifications*
10.2		Professional Relations and Consulting Agreement between Cannabis Kinetics Corp. and Acorn Management Partners, LLC
32		Section 1350 Certifications*
31.1		Certification of Principal Executive Officer pursuant to Section302 of the Sarbanes-Oxley Act
101		XBRL Interactive Data Files*
31.2		Certification of Principal Financial Officer pursuant to Section302 of the Sarbanes-Oxley Act
32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

8__________

~~SIGNATURES~~*Filed herewith

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~14

	CANNABIS KINETICS, INC.
Dated: October 15, 2014	By	/s/ Eric Hagen
		Eric Hagen
		President and Chief Executive Officer (Principal Executive Officer)
Dated: October 15, 2014	By:	/s/ Steve Brandt
		Steve Brandt
		Treasurer and Vice President (Principal Financial and Accounting Officer)

SIGNATURES

9Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MONARCH AMERICA, INC.

Date: May 20, 2015	By:	/s/ Eric Hagen
		Eric Hagen President and Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Jonathan Hunt
		Jonathan Hunt Vice-President, Treasurer and Secretary (Principal Financial and Accounting Officer)

Filing Compare · Monarch America, Inc.