UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~June 30,~~December 31, 2013

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

Commission File Number 000-54816

LOT78, INC.

(Exact name of registrant as specified in its charter)

Nevada		26-2940624
(State of incorporation)		(I.R.S. Employer Identification No.)

65 Alfred Road

Studio 209

London W2 5EU

(Address of principal executive offices)

00447801480109

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☑ Yes ☐ No

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

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

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☑

Non-Accelerated Filer ☐ 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 ☑ No

As of ~~August~~February 1927, ~~2013~~2014, there were 237,~~113~~570,~~616 shares~~283 shares of the registrant’s $0.001 par value common stock issued and outstanding.

LOT78, INC.*

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	98
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	1210
ITEM 4.	CONTROLS AND PROCEDURES	1211
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	11
ITEM 1A.	RISK FACTORS	1211
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	1211
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	1311
ITEM 4.	MINE SAFETY DISCLOSURES	1312
ITEM 5.	OTHER INFORMATION	1312
ITEM 6.	EXHIBITS	1312

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Lot78, Inc., formerly known as Bold Energy Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "LOTE" refers to Lot78, Inc. and its wholly owned subsidiary Lot78 UK Limited.

PART I - FINANCIAL INFORMATION

~~The~~ITEM ~~financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission~~1. ~~Certain~~ ~~information~~FINANCIAL and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the transition period presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our audited financial statements filed therewith along with the Form 8–K/A Annual Report with the U.S. Securities and Exchange Commission (SEC) on July 19, 2013, and can be found on the SEC website at www.sec.gov. STATEMENTS

ITEM 1. CONDENSED FINANCIAL STATEMENTS

INDEX
Unaudited Consolidated Balance Sheets	2

Unaudited Consolidated Statements of Operations	3

Unaudited Consolidated Statements of Cash Flows	4

Notes to Unaudited Consolidated Financial Statements	5

INDEX	F-1
Unaudited Consolidated Balance Sheets as of June 30, 2013, and Balance Sheet as of September 30, 2012.	F-2
Unaudited Consolidated Statement of Operations for the Three and Nine Months Ended June 30, 2013 and 2012.	F-3
Unaudited Consolidated Statement of Cash Flows for the Nine Months Ended June 30, 2013 and 2012.	F-4
Notes to Unaudited Consolidated Financial Statements	F-5

~~F-1~~LOT78, INC.

~~LOT78,~~CONSOLIDATED ~~INC.~~BALANCE SHEET

~~CONSOLIDATED BALANCE SHEET~~(unaudited)

(unaudited)

		December 31,		September 30,
		2013		2013
ASSETS
Current assets:
Cash and cash equivalents	$	49,947	$	274,312
Accounts receivable		85,528		132,422
Prepaid expenses and other current assets		106,490		63,735
Inventory, net		16,107		61,460
Total current assets		258,072		531,929
Property and equipment, net		3,116		3,614
Patents, net		21,964		22,457
Total assets	$	283,152	$	558,000
LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities:
Accounts payable and accrued liabilities	$	274,318	$	280,535
Accounts payable – related party		41,797		26,850
Debt due to third parties		186,314		137,156
Debt due to related parties		32,976		32,272
Derivative liabilities		192,214		434,464
Convertible debt due to shareholders		89,838		124,610
Due to shareholders		329,760		322,594
Total current liabilities		1,147,217		1,358,481
Long term debt due to shareholders		320,659		313,813
Convertible debt, net of discount of $437,458 and $437,500		12,542		12,500
Total long term liabilities		333,201		326,313
Total liabilities	$	1,480,418		1,684,794

Stockholders’ deficit
Preferred stock, $0.001 par value per share, 10,000,000 shares authorized, none issued and outstanding		-		-
Common stock, $0.001 par value per share, 350,000,000 shares authorized, 237,570,283 and 237,403,616 shares issued and outstanding		237,570		237,404
Additional paid-in capital		877,673		865,340
Accumulated other comprehensive income (loss)		17,017		42,134
Accumulated deficit		(2,329,526)		(2,271,672)
Total stockholders’ deficit		(1,197,266)		(1,126,794)
Total liabilities and stockholders’ deficit	$	283,152		558,000

	June 30,			September 30,
	2013			2012
ASSETS
Current assets:
Cash and cash equivalents	$	949		$	—
Accounts receivable, net		26,481			117,931
Prepaid expenses and other current assets		6,029			47,601
Inventory, net		95,081			56,632
Total current assets		128,540			222,164
Property and equipment, net		2,998			928
Patents, net		22,072			26,427
Total assets	$	153,610		$	249,519
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	316,746		$	384,650
Revolving credit facility		110,637			230,907
Short term debt		431,427			161,644
Due to shareholders		323,662			537,846
Total current liabilities		1,182,472			1,314,957
Long term notes due to shareholders		295,773			189,899
Total liabilities		1,478,245			1,504,856
Stockholders’ deficit
Common stock, $0.001 par value per share, 350,000,000 shares authorized, 235,013,616 and 127,638,616 shares issued and outstanding		235,014			127,638
Additional paid-in capital		209,180			12,448
Accumulated other comprehensive income (loss)		83,902			(23,686	)
Deficit accumulated during the development stage		(1,852,731	)		(1,371,737	)
Total stockholders’ deficit		(1,324,635	)		(1,255,337	)
Total liabilities and stockholders’ deficit	$	153,610		$	249,519

The accompanying notes are an integral part of the consolidated unaudited financial statements

~~The accompanying notes are an integral part of the consolidated unaudited financial statements~~2

~~F-2~~LOT78, INC.

~~LOT78,~~CONSOLIDATED ~~INC.~~STATEMENTS OF OPERATIONS

~~CONSOLIDATED~~AND ~~STATEMENTS~~OTHER OFCOMPREHENSIVE ~~OPERATIONS~~ LOSS

~~AND OTHER COMPREHENSIVE LOSS~~(unaudited)

(unaudited)

		Three Months Ended December 31, 2013		Three Months Ended December 31, 2012
Revenue, net	$	55,730	$	58,695
Cost of sales		69,409		75,384
Gross Loss		(13,679)		(16,689)
Expenses
Selling, general and administrative expenses	$	273,576	$	124,350
Depreciation and amortization		1,531		1,034
Total expenses		275,107		125,384
Other income (expense)
Interest expense		(11,318)		(10,401)
Gain on derivative liabilities		242,250		-
Total other income (expense)		230,932		(10,401)
Net loss	$	(57,854)	$	(152,474)
Foreign currency translation adjustments		(25,118)		(57)
Comprehensive income (loss)		(82,972)		(152,531)
Basic and diluted loss per share	$	(0.00)	$	(13.24)
Weighted average shares of common stock outstanding – basic		237,477,892		11,510

	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012			Nine Months Ended June 30, 2013			Nine Months Ended June 30, 2012
Revenue, net	$	92,591		$	60,289		$	302,045		$	347,270
Cost of sales		69,082			44,751			246,239			231,109
Gross Profit		23,509			15,538			55,806			116,161
Expenses
Selling, general and administrative expenses	$	164,632		$	68,235		$	557,275		$	217,353
Foreign currency transaction adjustment		4,760			—			4,760			—
Depreciation and amortization		1,063			1,018			3,172			3,042
Total expenses		170,455			69,253			565,207			220,395
Other income (expense)
Interest expense		(7,641	)		(2,243	)		(28,014	)		(1,516	)
Gain on debt forgiveness					—			56,421			—
Total other income (expense)		(7,641	)		(2,243	)		28,407			(1,516	)
Net loss	$	(154,587	)	$	(55,958	)	$	(480,994	)	$	(105,750	)
Foreign currency translation adjustments		20,133			7,456			107,588			(18,726	)
Comprehensive income (loss)		(134,454	)		(48,502	)		(373,406	)		(124,476	)
Basic and diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average shares of common stock outstanding – basic		232,650,173			34,775,452			184,085,466			127,638,616

The accompanying notes are an integral part of the consolidated unaudited financial statements

~~The accompanying notes are an integral part of the consolidated unaudited financial statements~~3

~~F-3~~LOT78, INC.

~~LOT78,~~CONSOLIDATED ~~INC.~~STATEMENTS OF CASH FLOWS

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~(unaudited)

(unaudited)

		Three months Ended		Three months Ended
		December 31,		December 31,
		2013		2012
Cash flows from operating activities
Net loss	$	(57,854)	$	(152,474)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		964		77
Amortization		567		957
Gain on derivative liabilities		(242,250)		-
Debt discount amortization		42		-
Stock based compensation		12,500		-
Change in operating assets/liabilities:
Accounts receivable		48,862		96,151
Prepaid expenses and other current assets		(40,608)		13,423
Inventory		45,840		671
Accounts payable and accrued expenses		11,293		(34,033)
Net cash provided by (used in) operating activities		(220,644)		(75,228)

Cash flows from financing activities
Proceeds from issuance of debt		45,322		77,656
Repayment of convertible debt to shareholders		(40,573)
Net cash flows provided by financing activities:		4,749		77,656

Effect of foreign currency on cash and cash equivalents		(8,470)		14
Net increase (decrease) in cash	$	(224,365)	$	2,442
Cash- beginning of period		274,312		-
Cash- end of period	$	49,947	$	2,442

Cash paid for interest	$	1,347	$	-
Cash paid for income taxes	$	-	$	-

Supplementary Non-Cash Information
Debt discount due to derivative liabilities		-		-

	Nine Months Ended			Nine Months Ended
	June 30,			June 30,
	2013			2012
Cash flows from operating activities
Net loss	$	(480,994	)	$	(105,750	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		297			210
Amortization		2,875			2,609
Gain on debt forgiveness		(56,421	)		—
Change in operating assets/liabilities:
Accounts receivable		86,928			93,591
Prepaid expenses and other current assets		32,724			130
Inventory		(35,582	)		23,485
Accounts payable and accrued expenses		(38,719	)		238,021
Net cash provided by (used in) operating activities		(488,892	)		252,296
Cash flows from investing activities
Cash acquired in reverse merger		28,964			—
Purchase of property and equipment		—			(1,118	)
Net cash provided by (used) in investing activities		28,964			(1,118	)
Cash flows from financing activities
Cash proceeds from share sales		325,000			—
Proceeds from short term debt		344,313			—
Repayment of short term debt		(88,232	)		(163,638	)
Change in bank overdraft		(109,714	)		—
Repayment of shareholder loans		(67,165	)		(83,459	)
Net cash flows provided by financing activities:		404,202			(247,097	)
Effect of foreign currency on cash and cash equivalents		56,675			286
Net increase (decrease) in cash	$	949			4,081
Cash- beginning of period		—			322
Cash- end of period	$	949		$	4,689
Cash paid for interest	$	17,285		$	6,114
Cash paid for income taxes	$	—		$	—
Supplementary Non-Cash Information
Acquisition of Bold Energy, Inc		47,945			—
Purchase of fixed assets on account		2,487

The accompanying notes are an integral part of the consolidated unaudited financial statements

~~The accompanying notes are an integral part of the consolidated unaudited financial statements~~4

~~F-4~~Lot78, Inc.

~~Lot78,~~Notes ~~Inc.~~to CONSOLIDATED Financial Statements

~~Notes to Financial Statements~~Unaudited

~~Unaudited~~1. BASIS OF PRESENTATION & ORGANIZATION

1.Basis ~~BASIS~~of ~~OF PRESENTATION & ORGANIZATION~~presentation

~~Basis~~The accompanying unaudited interim financial statements of ~~presentation~~Lot78, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto of the Company contained in Form 10-K filed with the SEC on January 21, 2014.

~~The~~In ~~accompanying~~the ~~unaudited~~opinion ~~interim financial~~of ~~statements~~management, ofall ~~Lot78~~adjustments, ~~Inc.~~consisting ~~(the~~of ~~“Company”)~~normal ~~have~~recurring ~~been~~adjustments, ~~prepared~~necessary infor ~~accordance~~a ~~with~~fair ~~accounting~~presentation ~~principles~~of ~~generally~~financial ~~accepted~~position inand the ~~United~~results ~~States~~ of ~~America~~operations ~~and~~for the ~~rules~~interim periods presented have been reflected herein. The results of operations for the ~~Securities~~interim ~~and~~periods ~~Exchange~~are ~~Commission~~not ~~(“SEC”),~~necessarily ~~and~~indicative ~~should~~of ~~be read~~the inresults ~~conjunction~~to ~~with~~be expected for the ~~audited~~full year. Notes to the financial statements that ~~and~~would ~~notes~~substantially ~~thereto~~duplicate of the ~~Company~~disclosures contained in ~~Form~~the ~~8-K/A~~audited ~~filed~~financial ~~with~~statements for the ~~SEC~~ onfiscal ~~July~~year 19ended September 30, 2013 as reported in the Company’s Form 10-K have been omitted.

InOur ~~the~~business ~~opinion~~is ofsubject ~~management,~~to ~~all~~seasonal ~~adjustments,~~fluctuations. ~~consisting~~Historically, sales of ~~normal~~our ~~recurring~~products ~~adjustments,~~have ~~necessary~~been ~~for~~higher aduring ~~fair~~the ~~presentation~~second ofand ~~financial~~fourth ~~position~~quarters. As a result, our quarterly and ~~the~~annual operating results ofand ~~operations for~~comparable ~~the~~sales ~~interim~~may ~~periods~~fluctuate ~~presented~~significantly ~~have~~as ~~been~~a ~~reflected~~result ~~herein~~of seasonality. ~~The~~ Accordingly, results offor ~~operations~~any ~~for~~one ~~the~~quarter ~~interim~~or ~~periods~~year are not necessarily indicative of ~~the~~ results to be expected for ~~the~~any ~~full~~other ~~year.~~quarter ~~Notes~~or ~~to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements~~ for ~~the~~any ~~fiscal~~ year ~~ended September 30~~, and ~~2012~~comparable assales ~~reported~~for inany ~~the~~particular ~~Company’s Form 8-K/A~~future ~~have~~period ~~been~~may ~~omitted~~decrease.

~~Description~~2. ofGOING ~~Business & Reverse Merger~~CONCERN

WeThe ~~were~~Company’s ~~incorporated~~financial asstatements ~~Bold~~are prepared ~~Energy~~in ~~Inc.~~conformity with accounting principles generally accepted in the ~~State~~United States of ~~Nevada~~America as(“U.S. aGAAP”) applicable ~~for-profit~~to ~~Company~~a ongoing ~~June~~concern ~~27,~~which ~~2008,~~contemplates tothe ~~develop~~realization aof ~~wide~~assets ~~range~~and ~~loyalty~~liquidation ~~program~~of ~~based~~liabilities onin ~~“Global~~the ~~Club~~normal course ~~points”~~of ~~awarded~~business. ~~for~~The ~~all~~Company ~~purchases~~has ~~made~~not inyet ~~associated~~established ~~establishments.~~an Onongoing ~~November~~source ~~10,~~of ~~2009,~~revenues asufficient ~~change~~to incover ~~control~~its ~~occurred~~operating ~~when~~costs and allow ~~Bold~~it ~~Energy,~~to ~~Inc.~~continue ~~received~~as a ~~resignation~~going ~~notice~~concern. ~~from~~The ~~Orlando~~Company J.has ~~Narita~~an ~~from~~accumulated ~~all~~deficit ofsince ~~his~~inception ~~positions~~to ~~with~~December ~~the~~31, ~~Company~~2013, ~~including~~of ~~President~~$2, ~~CEO~~329,526 ~~Principal~~which raises ~~Executive~~substantial ~~Officer,~~doubt ~~Treasurer,~~about ~~CFO,~~the ~~Principal~~Company’s ~~Accounting~~ability ~~Officer,~~to ~~Secretary,~~continue ~~and~~as ~~Director~~a going concern. OnThe ~~November~~ability ~~30,~~of ~~2009,~~the Company to continue ~~Bold~~as ~~Energy,~~a ~~Inc.~~going ~~appointed~~concern ~~Eden~~is ~~Clark~~dependent ason ~~its~~the ~~new~~Company ~~President,~~obtaining ~~CEO,~~adequate ~~Principal~~capital ~~Executive~~to ~~Officer,~~fund ~~Treasurer,~~operating ~~CFO,~~losses ~~Principal~~until ~~Accounting~~it becomes profitable. ~~Officer,~~If ~~Secretary~~the Company is unable to obtain adequate capital, ~~Treasurer~~it ~~and~~could asbe ~~Director~~forced to cease operations.

OnIn ~~February~~order 4,to ~~2013,~~continue ~~Bold~~as ~~Energy, Inc. closed~~ a ~~voluntary~~going ~~share exchange transaction with Anio~~concern, ~~Ltd., a limited liability company established under~~ the Company ~~laws~~will ofneed, ~~the~~among ~~United~~other ~~Kingdom~~things, ~~which~~ ~~conducts~~additional ~~its~~capital ~~primary~~resources. ~~line~~Management’s ofplan ~~business~~is ~~under the name “Lot78”, pursuant~~ to aobtain ~~Share~~such ~~Exchange~~resources ~~Agreement~~for (the ~~“Exchange~~ ~~Agreement”) by and among the~~ Company ~~and~~through ~~its~~debt ~~controlling stockholders, on the one hand,~~ and/or ~~Anio~~equity ~~Ltd.~~financing ~~And~~from ~~the~~third ~~stockholders of Anio Ltd~~parties. ~~(the “Selling Stockholders”), on the other hand.~~

At the closing of the transactions contemplated by the Exchange Agreement (the “Closing”), the Company issued 127,638,616 new shares of its common stock to the Selling Stockholders in exchange for 100% of the issued and outstanding capital stock of Anio Ltd3. ~~And~~DEBT ~~Eden~~– ~~Clark~~THIRD ~~and~~PARTIES ~~Patrick~~AND ~~DeBlois~~RELATED irrevocably cancelled a total of 123,817,552 restricted shares of common stock of the Company. As a result of the Share Exchange Agreement, Anio Ltd. Became the Company’s wholly-owned subsidiary, and the Company acquired the business and operations of Anio Ltd. There were 100,574,016 shares of common stock outstanding prior to the reverse merger. These shares were treated as issued during the nine months ended June 30, 2013 . PARTIES

~~F-5~~At December 31, 2013 and September 30, 2013 debt consists of the following:

On May 17, 2013, the Company authorized the issuance of 3,821,064 shares of Common Stock with no cost basis, which were to be backdated to January 31, 2013, as said shares should have been included in an initial issuance pursuant to that certain Share Exchange Agreement dated November 12, 2012.

	December 31, 2013		September 30, 2013

Loans - CI LLC	$	186,314	$	137,156
Loans – Related parties		32,976		32,272
Loans - David Hardcastle – Shareholder ($329,760 short term)		650,419		636,407
Total Debt to shareholders and related parties	$	869,709	$	805,835

~~Lot78,~~During ~~Inc. was deemed to be~~ the ~~accounting~~three ~~acquirer~~months inended ~~this~~December ~~transaction and as a result this transaction was accounted for as a reverse merger. The historical financial statements presented in this filing are those of Lot78~~31, ~~Inc. The assets and liabilities of Bold Energy~~2013, ~~Inc. were recorded, as of completion of~~ the ~~merger,~~Company atreceived ~~fair value~~$45,322 from CI ~~which~~LLC isas ~~considered~~a toshort ~~approximate~~term ~~historical cost, and added to those of Lot78, Inc~~loan.

~~Pursuant~~Short toterm ~~the~~loans ~~closing~~from ofCI ~~the~~LLC ~~Share Exchange~~(“CIL”) ~~Agreement,~~are ~~Eden~~unsecured ~~Clark resigned as the President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer~~ and ~~sole member~~interest ~~of the Board of Directors of the Company~~free. Concurrently, Oliver Amhurst was appointed as the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and sole member of the Board of Directors. Subsequent to the Closing, Mr. Asgherali Gulamhussein was appointed as Chief Financial Officer and Director of the Company.

~~Our~~Other ~~business~~differences ~~is subject~~in tothe ~~seasonal~~loan ~~fluctuations.~~values between ~~Historically,~~September ~~sales of our products have been higher during quarter 2 and quarter 4. As a result~~30, ~~our~~ ~~quarterly~~2013 and ~~annual~~December ~~operating results and comparable sales may fluctuate significantly as a result of seasonality. Accordingly~~31, ~~results~~ ~~for~~2013 ~~any one quarter or year~~ are ~~not~~due ~~necessarily indicative of results~~ to beforeign ~~expected~~exchange ~~for any other quarter or for any year, and comparable sales for any particular future period may decrease~~translations.

2Long-term loans from David Hardcastle are unsecured and are currently non-interest bearing. ~~GOING~~However, ~~CONCERN~~once the Company secures significant external financing, the long term loans begin accruing interest at bank rate plus 2% per annum and will be payable in quarterly installments over a 3 year period.

The Company’s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company has an accumulated deficit since inception to June 30, 2013, of $1,852,731 which raises substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.5

In4. ~~order~~CONVERTIBLE ~~to continue as a going concern~~DEBT, ~~the Company~~DERIVATIVE ~~will~~LIABILITIES ~~need,~~& ~~among~~FAIR ~~other~~VALUE ~~things, additional capital resources. Management’s plan is to obtain such resources for the Company through debt and/or equity financing from third parties.~~MEASUREMENTS

~~F-6~~Convertible Debt – IIMG

3Loans from Iceberg Investment Management Group (“IIMG”) are unsecured and accrue interest at a rate of 2.5% ~~SHORT~~per ~~TERM~~annum. ~~DEBT~~During the three months ended December 31, 2013, the Company repaid $40,573 to IIMG .

AtIf ~~June~~the ~~30,~~loans ~~2013~~remain ~~and~~unpaid ~~September~~by 30the maturity date, all ~~2012~~amounts ~~short~~are ~~term~~convertible ~~debt~~into ~~consists~~common stock of the Company at 80% of the Company’s volume weighted average price (“VWAP”) for the 5 previous days prior to execution of the ~~following:~~promissory note.

	June 30, 2013		September 30, 2012
Loans - CI LLC	$	129,271		137,397
Loans – Other	$	30,417	$	—
Loans - Iceberg Investment Management Group		271,739		24,247
Total Short term debt	$	431,427	$	161,644

Convertible Debt – Embedded Derivatives

~~Short~~On ~~term~~August ~~loans~~30, ~~from~~2013, ~~Iceberg~~the ~~Investment~~Company ~~Management~~entered ~~Group~~into an Unsecured Senior Convertible Promissory Note (the “~~IIMG~~Note”) ~~are~~with ~~unsecured~~Banque ~~and~~Benedict ~~accrue~~Hentsch ~~interest~~& atCie aSA ~~rate~~(“Banque Benedict”) offor ~~2.5%~~the ~~per~~principal ~~annum.~~sum ~~During~~of ~~the~~Three ~~nine~~Hundred ~~months~~and ~~ended~~Fifty ~~June~~Thousand ~~30,~~Dollars ~~2013~~($350, ~~the~~000) ~~Company~~plus ~~received~~simple ~~$313,012~~interest ~~from~~thereon ~~IIMG~~at asthe rate ~~short~~of ~~term~~ten ~~loans,~~percent of(10%) ~~which,~~per ~~$56,421~~annum. ~~have~~Banque ~~been~~Benedict ~~forgiven~~has ~~and~~the ~~netted~~option ~~off~~at ~~against~~any time to convert the ~~balance due.~~Note ~~Short~~in ~~term~~whole ~~loans~~into ~~from~~shares CIof ~~LLC~~the common ~~(“CIL”)~~stock ~~are~~of ~~unsecured~~the ~~and~~Company ~~are~~at ~~interest~~the ~~free~~conversion rate of $0.125 ~~During~~per ~~the~~share. ~~nine~~Unless ~~months~~the ~~ended~~Note ~~June~~is 30earlier converted, ~~2013,~~ the ~~Company~~total ~~received~~principal and ~~$31,301~~unpaid ~~from~~interest anis ~~individual~~due ason ~~short~~September ~~term~~1, ~~loans~~2016.

4On September 9, 2013, the Company entered into an Unsecured Senior Convertible Promissory Note (the “Note”) with Monument Assets & Resources Company Ltd (“Monument Assets”) for the principal sum of One Hundred Thousand Dollars ($100,000) plus simple interest thereon at the rate of ten percent (10%) per annum. ~~RELATED~~Monument ~~PARTY~~Assets ~~TRANSACTIONS~~has the option at any time to convert the Note in whole into shares of the common stock of the Company at the conversion rate of $0.125 per share. Unless the Note is earlier converted, the total principal and unpaid interest is due on September 1, 2016.

AsThe above conversion notes contain a reset provision whereby the conversion price on the notes can be reduced based on future equity transactions of ~~June~~the ~~30,~~Company. ~~2013~~As a result, the conversion options were classified as derivative liabilities at their fair value on the ~~Company~~date ~~repaid~~of ~~loans~~issuance. The fair value of tothe ~~shareholders~~derivative liabilities exceeded the principal amount of the notes, resulting in a full debt discount of $67450,~~165~~000, $12,542 of which has been amortized to interest expense from the date of the issuance to December 31 2013.

~~Short~~As ~~term~~defined ~~loans~~in ~~from~~FASB ~~shareholders~~ASC ~~are unsecured~~820, fair value is the ~~non-interest~~price ~~bearing~~that ~~and~~would ~~due~~be onreceived ~~demand.~~to ~~Long-term~~sell ~~loans~~an ~~from~~asset ~~shareholders~~or ~~are~~paid ~~unsecured~~to ~~and~~transfer ~~are~~a ~~currently~~liability ~~non-interest~~in ~~bearing~~an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that ~~However~~market participants would use in pricing the asset or liability, ~~once~~including assumptions about risk and the ~~Company~~risks ~~secures~~inherent ~~significant~~in ~~external~~the inputs ~~financing~~to the valuation technique. These inputs can be readily observable, ~~long~~market ~~term~~corroborated, ~~loans~~or ~~from~~generally ~~shareholders~~unobservable. ~~begin~~The Company ~~accruing~~classifies ~~interest~~fair atvalue balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy ~~bank~~that ~~rate~~prioritizes ~~plus~~the 2%inputs ~~per~~used ~~annum~~to ~~and~~measure ~~will~~fair bevalue. ~~payable~~The hierarchy gives the highest priority to unadjusted quoted prices in active ~~quarterly~~markets ~~installments~~for ~~over~~identical aassets 3or ~~year~~liabilities ~~period~~(level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

5.The ~~EQUITY~~three levels of the fair value hierarchy are as follows:

~~During~~Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the ~~nine~~reporting ~~months~~date. ~~ended~~Active ~~June~~markets ~~30,~~are ~~2013~~ those in which transactions for the ~~Company~~asset ~~sold~~or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1~~,300,000~~ ~~shares~~primarily consists of ~~common~~financial ~~stock~~instruments ~~for~~such ~~$325~~as exchange-traded derivatives,~~000~~ marketable securities and listed equities.

OnLevel ~~June~~2 5,– ~~2013,~~Pricing ~~the~~inputs ~~Company~~are ~~effectuated~~other ~~a forward~~than ~~stock~~quoted ~~split~~prices ~~(the~~in ~~“Forward~~active ~~Split”)~~markets ofincluded ~~its~~in ~~issued~~level ~~and outstanding common shares whereby every one (~~1~~) old share of the Company’s common stock was exchanged for four (4) new shares of the Company's common stock. As a result~~, ~~the~~which ~~issued and~~are ~~outstanding~~either ~~shares~~directly ofor ~~the~~indirectly ~~Company’s~~observable ~~common stock~~ as of the ~~Record~~reported ~~Date, May 17, 2013, increased from 58,568,404 shares prior to the Forward Split to 234,273,616 shares following the Forward Split~~date. FINRA confirmed approval of the Forward Split on June 4, 2013, payable as a dividend to shareholders, and the Forward Split became effective on June 5, 2013. All share and per share amounts have been adjusted retroactively to the first day of the first period presented in the accompanying consolidated financial statements.

~~F-7~~Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

6~~. SUBSEQUENT EVENTS~~

OnThe ~~July~~following ~~10,~~table ~~2013~~sets ~~the~~forth ~~Company~~by ~~entered~~level ~~into~~within ~~a Private Placement Subscription Agreement (~~the ~~“Subscription~~fair ~~Agreement”)~~value ~~with an individual investor (the “Subscriber”). Pursuant to the~~hierarchy ~~Subscription Agreement~~ the ~~Subscriber has agreed to purchase 2,000,000 shares of the~~ Company’s ~~common~~financial ~~stock~~assets atand aliabilities ~~set~~that ~~price of~~were ~~$0.25~~accounted ~~per~~for ~~share.~~at ~~The~~fair ~~shares~~value ~~were~~as ~~duly~~at ~~issued~~December on31, ~~said date~~2013.

Funds for the above issue were received by the Company on July 12, 2013, and a proportion of these funds were used to repay the bank overdraft subsequent to which the fixed and floating charge on all property and assets was cancelled together with the Director’s personal guarantee.

Recurring Fair Value Measures	Level 1			Level 2			Level 3			Total
LIABILITIES:

Derivative liabilities net September 30, 2013		$	-		$	-		$	434,464		$	434,464
Derivative liabilities net December 31, 2013		$	-		$	-		$	192,214		$	192,214

The ~~Company~~following ~~has~~table ~~also~~summarizes ~~repaid~~the ~~$156,506~~changes ofin ~~debt~~the toderivative ~~IIMG~~liabilities during ~~from~~ the ~~above proceeds.~~period ended December 31, 2013:

eND OF NOTES TO FINANCIALS

Fair value as of October 1, 2013	$	434,464
Change in fair value		242,250
Ending balance as of December 31, 2013	$	192,214

~~F-8~~The gain on derivative liabilities of $242,250 in the accompanying consolidated statement of operations consists of the change in fair value of $242,250 noted above.

~~ITEM~~The Company uses the Black-Scholes option pricing model to value the derivative liability and subsequent re-measurements. Included in the model are the following assumptions: stock price at valuation date of $0.0547, exercise price of $0.125, dividend yield of zero, years to maturity of 2.67, ~~MANAGEMENT'S~~risk ~~DISCUSSION~~free ~~AND~~rate ~~ANALYSIS~~of OF0.09 – 0.8 percent, and ~~FINANCIAL~~annualized ~~CONDITION~~volatility ORof ~~PLAN~~292.63 OF– ~~OPERATION~~478.27 percent.

~~FORWARD-LOOKING~~5. ~~STATEMENTS~~RELATED PARTY TRANSACTIONS

~~This~~As ~~Management's Discussion and Analysis~~ of ~~Financial~~December ~~Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks~~31, ~~significant uncertainties and other factors that may cause our actual results~~2013, ~~levels~~ of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the ~~use~~Company ofowed ~~the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential,~~an ~~proposed,~~officer ~~or continue or the negative of those terms. These statements are only predictions. In evaluating these statements~~$41, ~~you~~797 ~~should~~for ~~consider~~accounting various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and ~~adversely~~consultancy ~~from those expressed in any forward-looking statements~~fees. ~~We undertake no obligation to revise or update publicly any forward-looking statements for any reason.~~

~~Overview~~6. EQUITY

~~Lot78,~~During ~~Inc. (~~the ~~“Company”) designs,~~three ~~markets,~~months ~~distributes,~~ended ~~and~~December ~~sells apparel under the brand name "Lot78" to fashion-conscious consumers on four continents~~31, 2013 ~~including North America, Europe, Asia, and South America. We seek to be a trend setting leader in~~ the ~~design,~~Company ~~marketing, distribution~~issued ~~and sale of luxury street apparel. Our current collection is a full men’s and women’s contemporary ready to wear line which includes leather jackets~~166,667 ~~t-shirts,~~shares sweats, knitwear, chinos, and wool coats. We operate in three distinct but integrated segments: Wholesale, Consumer Direct and Core Services. Our Wholesale segment sells our products to industry-leading high-end global department stores, specialty retailers and boutiques; our Consumer Direct segment consists of ~~e-commerce~~common ~~sales through~~stock ~~our~~valued ~~branded website located~~ at ~~www.lot78.com; and our Core Services segment provides product design~~$12,500 ~~distribution,~~for ~~marketing and~~services ~~other overhead resources to the other segments~~rendered.

~~Plan~~7. ofCOMMITMENTS ~~Operation~~AND CONTINGENCIES

AsIn ofNovember 2012, ~~June~~Anio ~~30,~~Limited ~~2013~~(now named Lot 78 UK Limited) entered into a Consulting and Services Agreement with Iceberg Investments Management Group Limited , wea ~~had~~British ~~$949~~Virgin Islands corporation. This document includes a provision that Lot78 UK Ltd would pay a success fee of ~~cash~~USD$770,000 on ~~hand.~~ Wethe ~~incurred~~closing ~~operating~~of ~~expenses~~any financing in the amount exceeding $3,000,000. The amount of the success fee purportedly payable reduces if the financing is less than $~~565~~3,~~207~~000,000. ~~during~~For these purposes, Iceberg have confirmed that no success fee would be payable if the ~~nine~~financing ~~months~~is ~~ended~~less ~~June~~than 30$1,450,000 ~~2013~~and $500,000 whether by equity or loan raised from or introduced by Banque Benedict Hentsch & CIE SA is excluded. If ~~These~~Iceberg is ~~operating~~not ~~expenses~~successful in obtaining financing ~~were~~for ~~comprised~~the Company within 18 months of ~~general~~a ~~and~~potential ~~administrative~~merger ~~expenses,~~or ~~professional~~transaction ~~fees,~~there ~~and~~are ~~directors’~~provisions ~~and~~that ~~consulting~~Lot78 ~~fees,~~UK ~~and~~Ltd ~~other~~provide ~~miscellaneous~~a convertible ~~expenses~~promissory note.

~~Our~~The ~~current~~Company ~~cash~~is ~~holdings~~taking ~~will~~legal ~~not satisfy~~advice ~~our~~on ~~liquidity~~this ~~requirements~~document, the ~~and~~enforceability weof ~~will~~its ~~require~~provisions ~~additional~~and ~~financing~~reserves toits ~~pursue~~position ~~our~~as ~~planned~~to whether ~~business~~such ~~activities.~~fees Wewill ~~are~~be ~~in the process~~payable ofunder ~~seeking equity and~~ or ~~debt~~pursuant ~~financing~~ to ~~fund~~this ~~our operations over the next 12 months~~document.

If8. weSUBSEQUENT ~~cannot generate sufficient revenues to continue operations, we will suspend or cease our operations.~~EVENTS

WeOn do2nd ~~not~~January 2014, ~~expect~~ the ~~purchase~~Company oropened ~~sale~~a Letter of ~~any~~Credit with Bibby Financial Services amounting to $305,085 for it’s Spring/Summer ~~significant~~14 ~~equipment~~production. This Letter of Credit was covered by the forward orders received from our customers and ~~have~~the nototal ~~current~~amount outstanding ~~material~~as ~~commitments~~of date of issuance of the financial statements is $5,509.

~~Management believes that if subsequent private~~eND ~~placements~~OF ~~are~~NOTES ~~successful,~~TO we will generate sales revenue within the following twelve months thereof. However, additional equity and or debt financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.FINANCIALS

~~Results~~ITEM of2. ~~Operations~~MANAGEMENT'S ~~for~~DISCUSSION ~~the~~AND ~~Three~~ANALYSIS ~~and Nine~~OF ~~Months~~FINANCIAL ~~Ended~~CONDITION ~~June~~OR ~~30,~~PLAN ~~2013~~OF ~~and 2012~~OPERATION

~~Revenues~~FORWARD-LOOKING STATEMENTS

~~We earned revenues of $92,591 for the three~~ ~~months~~This ~~ended~~Management's ~~June~~Discussion ~~30,~~and ~~2013~~Analysis ~~compared to revenues~~ of ~~$60,289~~Financial ~~for~~Condition ~~the~~and ~~three~~Results ~~months~~of ~~ended~~Operations ~~June~~(MD&A) ~~30,~~contains ~~2012. For the nine month period~~forward-looking ~~ended~~statements ~~June~~that ~~30,~~involve ~~2013~~known weand ~~earned~~unknown ~~revenues of $302~~risks,~~045~~ ~~compared~~significant touncertainties ~~$347,270~~and ~~for~~other ~~the~~factors ~~corresponding~~that ~~period~~may incause ~~2012.~~our ~~The~~actual ~~increase in revenues~~results, ~~for~~levels ~~the~~of ~~period~~activity, ~~ended~~performance ~~June~~or 30achievements ~~2013~~to ~~can~~ be ~~attributed~~materially todifferent ~~an early order~~ from ~~Net~~any afuture ~~Porter~~results, ~~for~~levels ~~our~~of ~~2013~~activity, ~~autumn/winter collection.~~performance ~~Decreased~~or ~~revenues~~achievements inexpressed, ~~the~~or ~~nine~~implied, ~~month~~by ~~period~~those ~~ended~~forward-looking ~~June~~statements. You ~~30, 2013~~ can beidentify ~~attributed~~forward-looking tostatements by the ~~difference~~use ~~in the timing~~ of ~~deliveries for~~ the ~~autumn/winter~~words ~~2012~~may, ~~and~~will, ~~2011~~should, ~~seasons.~~could, ~~The~~expects, ~~Company~~plans, isanticipates, ~~reliant~~believes, onestimates, ~~our~~predicts, ~~suppliers~~intends, topotential, proposed, ~~manufacture~~or ~~goods~~continue soor ~~that~~the wenegative ~~can~~of ~~deliver products~~those toterms. These ~~our~~statements ~~wholesale~~are ~~customers~~only ~~each season~~predictions. AsIn ~~there~~evaluating ~~were~~these ~~delays~~statements, you inshould ~~the~~consider ~~production~~various offactors ~~the~~which ~~autumn/winter~~may ~~2011~~cause ~~season,~~our ~~the~~actual ~~revenue related~~results to ~~that~~differ ~~season’s~~materially ~~deliveries~~from ~~were~~any ~~recorded~~forward-looking ~~during the quarter ended December 31, 2011~~statements. Although ~~The~~we ~~autumn/winter~~believe ~~2012~~that ~~season, however,~~the ~~was~~exceptions ~~produced~~reflected ~~and~~in ~~delivered during~~ the ~~quarter~~forward-looking ~~ended~~statements ~~September~~are 30reasonable, ~~2012.~~we Ascannot ~~such~~guarantee future results, ~~the~~levels ~~timing~~of ~~difference~~activity, ~~caused~~performance byor ~~the~~achievements. Therefore, ~~production and~~actual ~~delivery~~results ofmay ~~the~~differ ~~autumn/winter~~materially ~~2012~~ and ~~2011~~adversely ~~seasons~~from those ~~caused~~expressed ~~the decrease~~ in ~~revenue~~any inforward-looking ~~the~~statements. We ~~nine~~undertake ~~month~~no ~~period~~obligation ~~ended~~to ~~June~~revise ~~30, 2013~~or ~~compared~~update topublicly ~~the~~any ~~same~~forward-looking statements ~~period~~for ~~from~~any ~~the prior year~~reason.

~~Cost of Goods Sold~~ Overview

~~Cost~~Lot78, ofInc. ~~goods sold for~~ (the ~~three~~“Company”) ~~months ended~~designs, ~~June 30~~markets, ~~2013 were $69~~distributes,~~082~~ ~~compared~~and tosells ~~$44,751~~apparel ~~for~~under the ~~three~~brand ~~months~~name ~~ended~~"Lot78" ~~June 30, 2012. Cost of goods sold represented 75% of sales for the three months ended June 30, 2013 as compared~~ to ~~75%~~fashion-conscious ~~for~~consumers ~~the~~on ~~three~~four ~~months ended June 30~~continents, ~~2012. For the nine months~~ ~~ended~~including ~~June~~North 30America, ~~2013~~Europe, ~~cost~~Asia, ofand ~~goods~~South ~~sold~~America. ~~were~~We ~~$246,239~~seek ~~compared~~ to ~~$231,109~~be ~~for~~a ~~the~~trend ~~corresponding~~setting ~~period~~leader in ~~2012.~~the ~~Cost~~design, ofmarketing, ~~goods~~distribution ~~sold~~and ~~represented~~sale ~~82%~~ of ~~sales~~luxury ~~for~~street ~~the~~apparel. ~~nine~~Our ~~months~~current ~~ended~~collection ~~June~~is ~~30,~~a ~~2013~~full asmen’s ~~compared~~and towomen’s 67contemporary %ready-to-wear ~~for~~line which ~~the~~includes ~~nine~~leather ~~months~~jackets, ~~ended~~t-shirts, ~~June~~sweats, 30knitwear, ~~2012. This~~accessories, ~~increase~~jeans, inchinos, ~~COGS~~and aswool acoats. ~~percentage~~We ofoperate ~~sales~~in ~~for the~~ three ~~months~~distinct but ~~can~~integrated besegments: ~~attributed~~Wholesale, toConsumer ~~the~~Direct ~~higher~~and ~~revenues~~Core ~~achieved in this quarter~~Services. ~~For~~ ~~the~~Our ~~nine~~Wholesale ~~months~~segment ~~ended~~sells ~~June~~our ~~30,~~products ~~2013 the increase can be attributed~~ to ~~write offs of obsolete inventory and sales of overstock~~industry-leading ~~inventory~~high-end atglobal ~~discounted~~department ~~prices during the quarter ended December 31~~stores, ~~2012.~~specialty ~~During~~retailers ~~the~~and ~~same~~boutiques; ~~quarter,~~our ~~the~~Consumer ~~Company~~Direct ~~sold~~segment ~~many~~consists of ~~the~~e-commerce sales ~~goods~~through ~~from~~our ~~prior~~branded ~~seasons~~website tolocated aat ~~discount~~www.lot78.com; ~~retailer~~and ~~for~~our ~~cost~~Core ~~value~~Services orsegment ~~minimal~~provides ~~margins.~~product Indesign, ~~addition~~distribution, ~~we held a pre-Christmas 2012 discount~~marketing ~~sale,~~and ~~where~~other ~~prior~~overhead ~~season~~resources ~~merchandise~~to ~~was~~the ~~sold~~other ~~at depressed margins as well~~segments.

~~Expenses~~Executive Summary

~~For~~Our ~~the~~results ~~three months ended June 30, 2013, total expenses increased $101,202, to $170,455, as compared to $69,253~~ for the ~~corresponding~~current ~~period~~quarter inwere ~~2012. For the nine months~~in ~~ended~~line ~~June~~with ~~30,~~expectations. ~~2013 total expenses increased $344~~Historically,~~812,~~ orwe ~~157%,~~rely toon ~~$565,207~~re asorders ~~compared~~and toonline ~~$220,395~~sales for ~~the~~revenues ~~corresponding period~~ in ~~2012.~~our ~~This~~first ~~increase~~and ~~can~~third bequarters ~~attributed~~with ~~to increased professional fees related to~~ the bulk ~~share~~of ~~exchange~~our ~~agreement,~~revenue ~~larger~~being ~~sample costs~~generated ~~due~~in tothe ansecond ~~increasing~~and ~~expansive~~fourth ~~collection,~~quarters ~~increased~~co-inciding ~~travel~~with ~~costs~~the ~~for spring~~Spring/~~summer~~Summer ~~2013~~ and ~~autumn~~Fall/~~winter~~Winter ~~2013 sales, and increased personnel due to the expansion of operations~~seasons.

~~Liquidity~~We are in the process of looking to have pre seasonal deliveries to our customers which if successful will generate greater revenues in our first and ~~Financial~~third ~~Condition~~quarters.

Working Capital
		June 30, 2013		September 30, 2012		Difference
Current Assets	$	128,540	$	222,164	$	93,624
Current Liabilities	$	1,182,472	$	1,314,957	$	(132,485)
Working Capital	$	(1,053,932)	$	(1,092,793)	$	(38,861)

Plan of Operation

Cash Flows
		Nine Months Ended June 30, 2013		Nine Months Ended June 30, 2012
Net Cash (Used) Provided by Operating Activities	$	(488,892)	$	252,296
Net Cash (Used) Provided by Investing Activities	$	28,964	$	(1,118)
Net Cash (Used) Provided by Financing Activities	$	404,202	$	(247,097)
Net Effect of Foreign Currency Translation	$	56,675	$	286
Net (Decrease) Increase in Cash During the Period	$	949	$	4,081

As of December 31, 2013, we had $49,947 of cash on hand. We incurred operating expenses in the amount of $273,576 during the period ended December 31, 2013. These operating expenses were comprised of general and administrative expenses, professional fees, directors’ and consulting fees, and other miscellaneous expenses.

~~For~~Our ~~the~~current ~~nine~~cash ~~months~~holdings ~~ended~~will ~~June~~not ~~30, 2013,~~satisfy ~~net~~our ~~cash~~liquidity ~~used~~requirements inand ~~operating~~we ~~activities~~will ~~was~~require ~~$488,892~~additional asfinancing ato ~~result~~pursue ofour ~~changes~~planned business activities. We are in ~~our~~the ~~working~~process of ~~capital~~seeking equity and aor ~~nine~~debt ~~month~~financing ~~net~~to ~~loss~~fund ofour ~~$480,994~~operations over the next 12 months.

~~For~~If ~~the~~we ~~nine~~cannot ~~months~~generate ~~ended~~sufficient ~~June~~revenues ~~30, 2013, net~~to ~~cash~~continue ~~provided by financing activities was $404~~operations,~~202~~ aswe awill ~~result~~suspend ofor ~~proceeds~~cease ~~from short term debt of $344,313 offset by debt repayments of $88,232, along with proceeds from the sale of common stock for $325,000. We repaid $67,165 to~~ our ~~shareholders and our bank overdraft decreased by $109,714~~operations.

We ~~will~~do ~~require~~not ~~additional~~expect ~~funds to fund our budgeted expenses in~~ the ~~future.~~purchase ~~These funds may be raised through equity financing, debt financing,~~ or ~~other~~sale ~~sources, which may result in further dilution in the equity ownership~~ of ~~our shares. There is no assurance that we will be able to maintain operations~~any atsignificant aequipment ~~level~~and ~~sufficient~~have for an investor to obtain a return on their investment in our common stock. Furthermore, we may continue to be unprofitable. We may need to raise additional funds in the future in order to proceed with our budgeted expenses. Additionally, there is no ~~assurance~~current ~~that~~material ~~any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities~~commitments.

10Management believes that if subsequent placements are successful, we will generate sufficient sales revenue to cover our operating costs within the following twelve months thereof. However, additional equity and or debt financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.

~~Liquidity and Capital Resources~~ 8

Growth of our operations will be based on our ability to internally finance from operating cash flows, and the ability to raise funds through equity and/or debt financing to increase sales and production. Our primary sources of liquidity are: (i) cash from sales of our products; and (ii) financing activities. Our cash balance as of June 30, 2013 is $949.Revenues

~~Our~~We ~~Company~~earned ~~has~~revenues ~~funded~~of ~~some~~$55,730 for the period ended December 31, 2013 compared to revenues of ~~its~~$58,695 ~~operations~~for the period ended December 31, 2012. The decrease in ~~through~~revenues ~~debt~~for ~~financing~~the ~~with~~period ~~related~~ended ~~party~~December ~~transactions~~31, 2013 can be attributed to our end of season Fall/Winter 13 stock being sold after the quarter end in February 2014 whereas our old stock for Fall/Winter 12 was sold in December 2012.

AsCost of ~~June~~Goods 30, 2013, our Company is obligated to David Hardcastle, a shareholder, for a non-interest bearing demand loan with a balance of $320,896 and a non-interest bearing long term loan with a balance of $295,773.Sold

AsCost of ~~June~~goods 30sold for the period ended December 31, 2013 were $69,409 ~~our~~compared ~~Company~~to is$75,384 ~~obligated~~for the period ended December 31, 2012. Cost of goods sold represented 125% of sales for the period ended December 31, 2013 as compared to ~~Oliver~~128% ~~Amhurst~~for the period ended December 31, a2012. ~~shareholder~~For the period ended December 31, ~~for~~2013 the decrease can be attributed to a ~~non~~lower ~~interest~~write ~~bearing~~down ~~demand~~off ~~loan~~stock ~~with~~for aFall/Winter ~~balance~~13 ofcompared ~~$2,766~~to Fall/Winter 12.

~~Inflation~~Expenses

~~The~~For ~~amounts~~the ~~presented~~period inended ~~the~~December ~~financial~~31, 2013, total ~~statements~~general doand ~~not~~administrative ~~provide~~expenses ~~for~~increased ~~the~~$149,226, ~~effect~~or of120%, ~~inflation~~to on$273,576. ~~our~~This ~~operations~~increase orcan ~~financial~~be ~~position. The~~attributed ~~net~~to ~~operating~~increased ~~losses~~professional fees ~~shown~~related to regulatory filings, increased travel costs for Fall/Winter 2013 sales, PR costs, employing an Italian Consultant ~~would~~for beliasing ~~greater~~with ~~than~~factories, ~~reported~~increase ifin ~~the~~design ~~effects~~team staff and salaries of ~~inflation~~the ~~were~~CEO ~~reflected~~and ~~either~~CFO bywhose ~~charging~~costs ~~operations~~were ~~with~~not ~~amounts~~incurred ~~that~~in ~~represent~~the ~~replacement~~December 2012 quarter. We have also incurred one off costs orrelating byto ~~using~~professional ~~other~~fees ~~inflation~~of ~~adjustments~~$12,500, pertaining to preparation of filing of an S-1 document.

Going Concern

*Working Capital*
		At December 31, 2013		At September 30, 2013		Difference
Current Assets	$	258,072	$	531,929	$	(273,857)
Current Liabilities	$	1,147,217	$	1,358,481	$	211,264
Working Capital	$	(889,145)	$	(826,552)	$	(62,593)

For the nine months ended June 30, 2013, our Company has a comprehensive loss of $373,406 and an accumulated deficit of $1,852,731. Our Company intends to fund operations through operational cash flow and equity/debt financing arrangements. These sources may be insufficient to fund its capital expenditures, working capital and other cash requirements for the future. In response to these problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about our Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

*Cash Flows*
		Three Months Ended December 31, 2013		Three Months Ended December 31, 2012
Net Cash (Used) Provided by Operating Activities	$	(220,644)	$	(75,228)
Net Cash (Used) Provided by Investing Activities	$	-	$	-
Net Cash (Used) Provided by Financing Activities	$	4,749	$	77,656
Net Effect of Foreign Currency Translation	$	(8,470)	$	14
Net (Decrease) Increase in Cash During the Period	$	(224,365)	$	2,442

~~Off-Balance~~For ~~Sheet~~the ~~Arrangements~~period ended December 31, 2013, net cash used in operating activities was $220,644 as a result of changes in our working capital, a net loss of $57,854 and a non cash derivative gain of $242,250

AsFor ofthe ~~June~~period 30ended December 31, 2013, ~~we had no off balance~~net ~~sheet~~cash ~~transactions~~provided ~~that~~by ~~have~~financing ~~had,~~activities orwas ~~are reasonably likely to have~~$4,749 as a ~~current~~result orof ~~future~~proceeds ~~effect~~from ondebt ~~our~~of ~~financial condition~~$45, ~~changes in our financial condition~~322, ~~revenues~~and orrepayment ~~expenses,~~of ~~results~~convertible debt of ~~operations~~$40, ~~liquidity, capital expenditures or capital resources~~573.

~~Critical~~We ~~Accounting~~will ~~Policies~~require additional funds to fund our budgeted expenses in the future. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. For the period ended December 31, 2013 we have managed to raise $45,322 through debt financing. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Furthermore, we may continue to be unprofitable. We will need to raise additional funds in the future in order to proceed with our budgeted expenses. Additionally, there is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations or to repay our liabilities.

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.9

WeLiquidity ~~regularly evaluate the accounting policies~~ and ~~estimates~~Capital that we use to prepare for 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.Resources

~~Recently~~Growth ~~issued~~of ~~accounting~~our ~~pronouncements~~operations will be based on our ability to internally finance from operating cash flows, and the ability to raise funds through equity and/or debt financing to increase sales and production. Our primary sources of liquidity are: (i) cash from sales of our products; and (ii) financing activities. Our cash balance as of December 31, 2013 is $49,947.

~~The~~Our Company has ~~implemented~~funded ~~all~~some ~~new~~of ~~accounting pronouncements~~its ~~that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise~~operations ~~disclosed,~~through ~~and~~debt ~~the~~financing ~~Company~~with ~~does~~related ~~not~~party ~~believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations~~transactions.

11Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Going Concern

For the three months ended December 31, 2013, our Company has a comprehensive loss of $82,972 and an accumulated deficit of $2,329,526. Our Company intends to fund operations through operational cash flow and equity/debt financing arrangements. These sources may be insufficient to fund its capital expenditures, working capital and other cash requirements for the future. In response to these problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about our Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

As of December 31, 2013, we had no off balance sheet transactions that have had, or are reasonably likely to have, a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

We regularly evaluate the accounting policies and estimates that we use to prepare for 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.

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 financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

WeDisclosure ~~maintain disclosure~~ controls and procedures, asare ~~defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange~~controls ~~Act"),~~and procedures that are designed to ensure that information required to be disclosed ~~by us~~ in ~~the~~our reports ~~that~~filed ~~we file or submit~~ under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the ~~Securities and Exchange Commission~~SEC's rules and forms. Disclosure controls and ~~that~~procedures ~~such~~include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our ~~sole~~management, including ~~officer~~its principal executive and principal financial officers, or persons performing similar functions, as appropriate to ~~allow~~ allow timely decisions regarding required disclosure. WeOur management carried out an evaluation, under the supervision and with the ~~participation~~ participation of our ~~sole~~Principal ~~officer~~Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures aspursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of ~~June~~1934 ~~30,~~("Exchange ~~2013~~Act"). Based onupon ~~the~~that evaluation, ofour ~~these~~Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of December 31, 2013, due to the ~~Company’s~~material ~~management~~weaknesses ~~concluded~~resulting ~~that~~from ~~our~~the Board ~~disclosure~~of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and ~~procedures~~in ~~are~~place ~~ineffective~~to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on January 21, 2014, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in ~~internal~~Internal ~~controls~~Controls Over Financial Reporting

~~There were~~Our nomanagement ~~changes~~has inalso evaluated our internal control over financial reporting, asand ~~defined~~there inhave ~~Rule~~been ~~13a-15(f)~~no ~~promulgated~~significant ~~under~~changes ~~the~~in ~~Exchange Act,~~our ~~during~~internal ~~the~~controls ~~quarter~~or ~~ended~~in ~~June~~other ~~30,~~factors ~~2013,~~ that could ~~have~~significantly ~~materially~~affect ~~affected,~~those orcontrols ~~are~~subsequent ~~reasonably likely~~ to ~~materially~~the ~~affect,~~date of our ~~internal~~ ~~control~~last ~~over financial reporting~~evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

~~Management~~We isknow ~~not aware~~ of ~~any~~no ~~legal~~material, ~~proceedings~~existing ~~contemplated by any governmental authority~~ or ~~any~~pending legal ~~other~~proceedings ~~party~~ against ~~us. None of~~ our ~~directors~~Company, ~~officers or~~nor ~~affiliates~~ are: ~~(i)~~we ainvolved ~~party~~as ~~adverse~~a toplaintiff us in any ~~legal~~material ~~proceedings,~~proceeding or ~~(ii)~~pending ~~have~~litigation. anThere are ~~adverse~~no ~~interest~~proceedings toin uswhich inour director, officer or any ~~legal~~affiliates, ~~proceedings. Management~~or isany ~~not~~registered ~~aware~~or ofbeneficial ~~any~~shareholder, ~~other~~is ~~legal~~an ~~proceedings~~adverse party ~~that~~or ~~have~~has ~~been~~a ~~threatened~~material ~~against~~interest usadverse to our interest.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

Quarterly Issuances:

OnDuring ~~May~~the 16quarter, ~~2013,~~ the ~~Company~~ ~~authorized~~Company ~~the~~issued ~~issuance of 2~~166,~~240,000~~667 shares of ~~Common~~common ~~Stock~~stock atfor aservices ~~price of $0~~rendered.~~25 per share, pursuant to a private placement subscription offering, with an aggregate offering price of $140,000.~~

On June 5, 2013, the Company authorized the issuance of 200,000 shares of Common Stock at a price of $0.25 per share, pursuant to a private placement subscription offering, with an aggregate offering price of $50,000.

On June 7, 2013, the Company authorized the issuance of 200,000 shares of Common Stock at a price of $0.25 per share, pursuant to a private placement subscription offering, with an aggregate offering price of $50,000.

On June 4, 2013, the Company authorized the issuance of 340,000 shares of Common Stock at a price of $0.25 per share, pursuant to a private placement subscription offering, with an aggregate offering price of $85,000.

Subsequent Issuances:

OnSubsequent ~~July~~to ~~10,~~the ~~2013~~quarter, the Company ~~authorized~~did not ~~the~~issue ~~issuance of 2,000,000~~ shares of ~~Common~~common ~~Stock at a price of $0~~stock.~~25 per share, pursuant to a private placement subscription offering, with an aggregate offering price of $500,000~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

~~Quarterly Events~~None.

None, other than as previously disclosed.

Subsequent Events

On July 27, 2013, Mr. Asgherali Gulamhussein (“Mr. Gulamhussein”) was appointed as a Director of the Company to serve until the next annual meeting of the shareholders and/or until his successor is duly appointed, as reported on Form 8-K filed with the Commission on August 12, 2013.

On August 9, 2013, the Company accepted the resignation of Mr. Oliver Amhurst (“Mr. Amhurst”) as the Chief Financial Officer of the Company, as reported on Form 8-K filed with the Commission on August 12, 2013. Mr. Amhurst shall remain in his positions as President, Chief Executive Officer, Secretary, Treasurer and a member of the Board of Directors of the Company. Mr. Amhurst’s resignation as Chief Financial Officer did not involve any disagreement with the Company.

On August 9, 2013, Mr. Gulamhussein was appointed as the Chief Financial Officer of the Company to serve until his successor is duly appointed, as reported on Form 8-K filed with the Commission on August 12, 2013.

ITEM 6. EXHIBITS

Exhibit Number	Description	Filed
2.01	Share Exchange Agreement by and among the Company, the controlling stockholders of the Company, Anio Limited (Lot78), and the shareholders of Anio Limited (Lot78) dated November 12, 2012	Filed with the SEC on February 4, 2013 as part of our Current Report on Form 8-K.
3.01(a)	Articles of Incorporation filed with the Nevada Secretary of State on June 27, 2008	Filed with the SEC on September 9, 2008 as part of our Registration Statement on Form S-1.
3.01(b)	Certificate of Amendment to Articles of Incorporation filed with the Nevada Secretary of State on March 14, 2011	Filed with the SEC on December 20, 2012 as part of our Quarterly Report on Form 10-Q.
3.01(c)	Certificate of Amendment to Articles of Incorporation filed with the Nevada Secretary of State on January 31, 2013	Filed with the SEC on February 4, 2013 as part of our Current Report on Form 8-K.
3.01(d)	Certificate of Amendment to Articles of Incorporation filed with the Nevada Secretary of State on May 22, 2013	Filed with the SEC on November 29, 2013 as part of our Registration Statement on Form S-1.
3.02	Bylaws	Filed with the SEC on September 9, 2008 as part of our Registration Statement on Form S-1.
10.01	Supply Terms and Conditions	Filed with the SEC on July 19, 2013 as part of our Current Report on Form 8-K.
10.02	Unsecured Senior Convertible Promissory Note, effective August 30, 2013, by and between Lot78, Inc. and Banque Benedict Hentsch & Cie SA.	Filed with the SEC on September 4, 2013 as part of our Current Report on Form 8-K.
10.03	Unsecured Senior Convertible Promissory Note, effective September 9, 2013, by and between Lot78, Inc. and Monument Assets & Resources Company Ltd	Filed with the SEC on September 11, 2013 as part of our Current Report on Form 8-K.
10.04	Purchase and Resale Agreement dated December 30, 2013 by and between Lot78 UK and Bibby.	Filed with the SEC on January 6, 2014 as part of our Current Report on Form 8-K.
10.05	Recourse Factoring Agreement dated December 30, 2013 by and between Lot78 UK and Bibby.	Filed with the SEC on January 6, 2014 as part of our Current Report on Form 8-K.
16.01	Letter to the SEC from De Joya, Griffith & Company LLC dated November 19, 2012	Filed with the SEC on November 19, 2012 as part of our Current Report on Form 8-K.
21.01	List of Subsidiaries	Filed with the SEC on November 29, 2013 as part of our Registration Statement on Form S-1.
31.01	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
31.02	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32.01	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32.02	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
101.INS*	XBRL Instance Document.	Filed herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document.	Filed herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.

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

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LOT78, INC.
Date: August 19, 2013	/s/ Oliver Amhurst
Date: February 27, 2014	/s/ Oliver Amhurst
	By: Oliver Amhurst
	Its: President and Chief Executive Officer
Date: August 19, 2013	/s/ Asgherali Gulamhussein
Date: February 27, 2014	/s/ Asgherali Gulamhussein
	By: Asgherali Gulamhussein
	Its: Chief Financial Officer

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Date: August 19, 2013	/s/ Oliver Amhurst
Date: February 27, 2014	/s/ Oliver Amhurst
	By: Oliver Amhurst
	Its: Director

Date: August 19, 2013	/s/ Asgherali Gulamhussein
Date: February 27, 2014	/s/ Asgherali Gulamhussein
	By: Asgherali Gulamhussein
	Its: Director

1413

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