0001014897-19-000050.txt : 20190416 0001014897-19-000050.hdr.sgml : 20190416 20190416163159 ACCESSION NUMBER: 0001014897-19-000050 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 65 CONFORMED PERIOD OF REPORT: 20181231 FILED AS OF DATE: 20190416 DATE AS OF CHANGE: 20190416 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRIGHTLANE CORP. CENTRAL INDEX KEY: 0001425289 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 300782905 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-54027 FILM NUMBER: 19751328 BUSINESS ADDRESS: STREET 1: 1600 WEST LOOP SOUTH STREET 2: SUITE 600 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 888-468-2856 MAIL ADDRESS: STREET 1: 1600 WEST LOOP SOUTH STREET 2: SUITE 600 CITY: HOUSTON STATE: TX ZIP: 77056 FORMER COMPANY: FORMER CONFORMED NAME: BONANZA GOLD CORP. DATE OF NAME CHANGE: 20110131 FORMER COMPANY: FORMER CONFORMED NAME: COLD GIN CORP DATE OF NAME CHANGE: 20080128 10-K 1 btln-20181231.htm FORM 10-K BRIGHTLANE CORP. - Form 10-K SEC filing
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-K

 

 

[X]Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2018 

OR

 

[ ]Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period fromto. 

 

Commission File Number: 000-54027

 

BRIGHTLANE CORP.

(Name of registrant as specified in in its charter)

 

Nevada

 

300782905

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

1600 West Loop South, Suite 600

Houston, Texas 77056

(Address of principal executive offices) (Zip Code)

 

(888) 468-2856

 

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

None

 

Securities registered pursuant to Section 12(g) of the Act:

Common Stock $.001 par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES [   ]     NO [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

YES [   ]     NO [ X ]

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 Website, 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 [X]     NO [ ]

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [ ]

 

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

 

Large accelerated filer

[   ]

 Accelerated filer

[   ]

Non-accelerated filer

[   ]

 Smaller reporting company

[X]

(Do not check if a smaller reporting company)

 Emerging growth company

[X]


1


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [   ]  NO [X]

 

The aggregate market value of the issuer’s $0.001 common stock held by non-affiliates of the registrant as of the last day of the registrant’s most recently completed second quarter was $1,957,120.

 

As of April 16, 2019, the issuer had 39,692,654 shares of common stock outstanding.

 

Documents incorporated by reference: None


2


BRIGHTLANE CORP.

 

TABLE OF CONTENTS

 

 

Page

PART I

 

4

Item 1.  Business

 

4

 Item 1A.  Risk Factors

 

8

Item 2.  Properties

 

8

Item 3.  Legal Proceedings

 

8

Item 4.  Mine Safety Disclosures

 

8

 

 

 

PART II

 

9

Item 5.  Market for Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

 

9

Item 6.  Selected Financial Data

 

10

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

 

10

 Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

 

12

Item 8.  Financial Statements and Supplementary Data

 

13

Item 9.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosures

 

30

 Item 9A.  Controls and Procedures

 

30

 Item 9B.  Other Information

 

31

 

 

 

PART III

 

32

Item 10.  Directors and Executive Officers, Promoters, Control Persons, and Corporate Governance

 

32

Item 11.  Executive Compensation

 

34

Item 12.  Security Ownership of Certain Beneficial Owners and Management

 

34

Item 13.  Certain Relationships and Related Transactions, and Director Independence

 

35

Item 14.  Principal Accountant Fees and Services

 

35

 

 

 

PART IV

 

36

Item 15.  Exhibits, Financial Statement Schedules

 

36

Signatures

 

37


3


PART I

 

Note about Forward-Looking Statements

 

Most of the matters discussed within this report include forward-looking statements on our current expectations and projections about future events. In some cases you can identify forward-looking statements by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. Such risks and uncertainties include the risks noted under “Item 1A Risk Factors.” We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

ITEM 1. BUSINESS

 

General

 

Brigthlane Corp. (“we”, the “Company”, “us” or the “Registrant”) was incorporated under the laws of the State of Delaware in December 2006 under the name “Cold Gin Corporation.” On December 27, 2010, we entered into an Agreement and Plan of Reorganization with Bonanza Gold Corp., a wholly-owned subsidiary of the Company, pursuant to which we merged with and into Bonanza Gold Corp, with Bonanza Gold Corp. being the surviving corporation. In connection with the reincorporation merger we changed our domicile from Delaware to Nevada, our name to Bonanza Gold Corp. and each outstanding share of our common stock was exchanged for one hundred fifty shares of the common stock of the Nevada entity. Thereafter, our trading market experienced some unusual activity. In an effort to stabilize the market, we effectuated a 150:1 reverse stock split on March 4, 2011.

 

We were initially established to become a developer of Internet media content for mixed martial arts fans and consumers. Effective December 10, 2010, we transitioned our business focus from that of a developer of Internet media for martial arts to a company engaged in the exploration and mining of minerals.

 

On December 1, 2014, the Board of Directors of the Company decreased the size of the Board of Directors to one through the appointment of Steve Helm as the Chief Executive Officer and the sole director of the company.  Concurrent with Steve Helm’s appointment were the resignations of Craig Russell and Stephen Buxton.  We decided to leverage Steve Helm’s knowledge of the real estate market and seek a take-over candidate in an attempt to enhance shareholder value.  In the third quarter of 2015, Brightlane Acquisition Corp. acquired a controlling interest in the Company from existing shareholders.

 

In connection with the change of control, our business transitioned to a lease-to-own real estate model.  This business model is oriented around the acquisition of single-family homes and portfolios of single family homes and then lease-to-own the properties whereby the lessees will eventually own the home.  Once the tenants fulfill their obligations under the contract, we will deliver the deed to the lessees.  We actively pursue the acquisition of these types of homes through the purchase of bank REOs, portfolios and other methods of acquisition.  

 

In conjunction with this transition, effective September 22, 2015, we changed our name to Brightlane Corp.

 

On December 21, 2015, we completed the agreement to acquire all of the outstanding shares of Brightlane Homes, Inc., which through its wholly owned subsidiary, acquired a 99.9% limited partner interest in Brightlane RECA, LP which was the beneficiary of the Brightlane RECA Trust which owned a portfolio of assets referred to as the Brightlane RECA Portfolio.  In April 2017, the partners of Brightlane RECA, LP amended the Revised Limited Partnership Agreement to admit Brightlane GP, Corp., an affiliate of the Registrant, as a General Partner of BL RECA LP.  This resulted in the transfer of all General Partner interests and powers to Brightlane GP Corp.  

 

On November 21, 2017, the Registrant entered into an Agreement resulting in the following actions:  (1) Brightlane #1, LLC, a subsidiary of Brightlane Homes, Inc., a wholly owned subsidiary of Brightlane Corp., transferred its limited partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC; and (2) Brightlane GP Corp, a wholly owned subsidiary of Brightlane Corp., transferred its general partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC.


4


The Agreement and the associated actions resulted in the termination of all agreements entered into on December 21, 2015 and all subsequent addenda to those agreements.  These actions terminate any rights of the Registrant to the Brightlane RECA Trust, thereby terminating all obligations to the underlying acquisition related debt associated with the assets contributed to the Brightlane RECA Trust.  In addition, per the November 21, 2017 Agreement the parties agreed that:  (1) the RECA Principals as defined in the Brightlane RECA Contribution Agreement agreed to return all of their common stock in the registrant totaling 2,100,013 common shares to the Registrant; and, (2) the RECA Principals agreed to facilitate the transfer of certain assets to Brightlane Homes, Inc., a wholly owned subsidiary of the Registrant.  

 

Brightlane Corp. now concentrates on being a real estate operator providing opportunities in the affordable housing market including reasonable rents and leases plus an opportunity to participate in a right-to-purchase program upon meeting certain criteria. Brightlane acquires single-family homes and portfolios of single-family homes and actively pursues the acquisition of these types of homes through one-off purchases, the purchase of portfolios, and other methods of acquisition.  We service a market that is historically underserved – those seeking living arrangements in the sub $150,000 home market. We continually seek out and make the appropriate investments in ancillary services.

 

We introduce these new services to our tenants/customers through our Brightlife Management subsidiary thereby offering a broader range of services not normally available in this (and other) market segments. Such services may include private label utilities, credit monitoring services, solar power, discount purchasing programs, and private label credit facilities, among other value-added services in the process of being developed.

 

While the acquisition of single family residential homes is at the core of Brightlane's strategic intent, we are developing and launching various additional strategic initiatives. Many of these initiatives involve the offering of various ancillary services to current Brightlane Corp. tenants/customers. Such services may include private label utilities, credit monitoring services, solar power, discount purchasing programs, private label credit facilities, among other programs and benefits.

 

Brightlane is also seeking to expand its business model into multifamily, active adult living, student housing and build-to-rent within the affordable housing space.  We will soon be executing a ground up construction platform of rental single and multifamily products.

 

Operations

 

We are focused on the acquisition, renovation, leasing, and managing of low priced single-family homes throughout the United States utilizing a lease-to-own structure.  The scope of the lease-to-own business opportunity is very large, as growing numbers of families now lease-to-own because they cannot obtain a mortgage.  Rental vacancy rates are declining thus increasing rental rates across the nation.  Rental vacancy rates are at their lowest level since 2000, and on average, inflation-adjusted rents in the U.S. have returned to the peak levels reached in 2000.

 

Single-family home values in the U.S. are expected to rise as the housing market continues to recover.  Over the next 18 months, we intend to acquire, renovate if necessary, and then lease-to-own up to 2,000 low priced single-family homes.

 

The Brightlane Homes, Inc. acquisition furthers the Company’s objective to proffer a unique and innovative business model that generates attractive risk-adjusted returns for our shareholders through the reinvestment of earnings and capital appreciation.  We intend to become the “new pathway to homeownership” for the millions of Americans who were displaced from their homes by the economic crisis or whose buying power has been negatively affected by new banking rules and regulations that essentially put homeownership out of the reach of ordinary Americans.

 

Our business model will focus on its lessees and will assist the “Future Owner” in establishing and managing credit needed to ultimately own the home they will be leasing.  We intend to provide technological and green energy features in our homes that are not usually associated with low priced single-family homes.  In addition, our ultimate goal is to make available other financial and lifestyle services and products to improve the quality of life for our “Future Owners”.

 

We intend to eventually take advantage of the continuing dislocation in the U.S. single-family housing market and the macroeconomic trends in favor of leasing homes.  One of the key elements of our business model is the ability to acquire low priced single-family homes at significant discounts to their most recent broker price opinion (“BPO”).  BPO is defined as “the estimated value of a property as determined by a real estate broker or other qualified individual or firm.  

 

We have access to discounted low priced single-family homes through our relationship with Mr. James Odell Barnes, Jr., and Carolina Acquisition Corp. (“CAC”).  In addition to Mr. Barnes’ well-established channels, we are pursuing bulk acquisitions of single-family homes from banks, mortgage servicers, competitors, government sponsored enterprises, private investors, and other financial institutions.


5


Mr. James Odell Barnes, Jr. is nationally known as the “Foreclosure King” and is one of the largest buyers of REO foreclosed homes in the United States.  Mr. Barnes has over 35 years of experience in buying and selling bank-owned and REO properties.  Mr. Barnes has a reputation as one of the most successful and knowledgeable real estate professionals in the U.S. bank-owned and REO property market.  Despite published concerns regarding shrinking home inventory, Mr. Barnes has assured us that he expects the availability of and his access to bulk low priced single-family homes to remain constant.

 

Brightlane Homes, Inc. maintains an exclusive contract with Carolina Acquisition Corp. for Mr. Barnes’ services in the identification, evaluation, acquisition, and oversight of the renovation of the properties that Brightlane will ultimately purchase.  We will pay CAC an acquisition and renovation fee of about 5% of all costs and expenses that incurred in connection with the initial acquisition, repair, and renovation of single-family properties acquired.  The acquisition and renovation fee is based upon an industry standard fee paid by a publicly traded REIT that owns and rents single-family residential homes.

 

We may renovate acquired homes to the extent necessary and lease them to qualified residents.  We will utilize third party companies to perform our renovation functions.  We have been in discussions with a full service nationwide property preservation company that has many years of experience in REO & Pre-REO property preservation, restoration, maintenance and repair services.  The standard renovation process normally includes paint, flooring, appliances, landscaping, cleaning, and general repairs.  We will establish guidelines that will be applied across all of our markets to ensure uniformity in renovation and maintenance standards.  Upon completion of the renovation process, houses will be (if required) inspected to ensure compliance with specifications for paint, carpet and service-ready appliances.  Once renovation specifications are confirmed, then a final safety and occupancy inspection occurs and the home is ready to be leased.  Most single-family residential operators will agree that every $1.00 USD spent on single-family home renovations usually results in increased value of the property.

 

Industry Overview

 

Companies in this industry acquire, develop, operate, lease, dispose, sell, and market real estate.  Real estate agencies and brokerages, Real Estate Operating Companies (REOCs), commercial and single-family or multifamily residential real estate developers, commercial and residential property management companies, and REITs (real estate investment trusts) are included in this industry.  Real estate investing is a part of the industry and it involves the purchase, ownership, management, rehabilitation, rental and/or sale of real estate for profit.

 

Market Analysis

 

Residential housing is the largest real estate asset class in the United States with a total value of $20+ trillion USD, according to the Federal Reserve Flow of Funds release.  According to the U.S. Census Bureau, since 1965, approximately one-third of this asset class has been rentals and single-family homes comprising roughly one-third of all residential rental housing.  Estimated market value for low priced homes (homes each with a value of less than $150,000) is in excess of $90 billion (according to Corelogic and Realty Trac estimates).  In total, there are over $1 billion in single-family investment properties that are owned by a fragmented investor base.

 

Within the overall rental market, the single-family rental segment has continued to grow its relative market share compared to other types of housing rentals.  The primary factors driving the increase in demand for single-family rental properties are:  (1) constraints on home mortgage financing; and, (2) the displacement of homeowners.  While the affordability of homes has risen, the restrictions on home mortgage financing have made purchasing for would-be home purchasers very difficult.

 

In many markets, rental vacancies have fallen and rents have risen, even in areas hardest hit during the housing and economic downturn.  With an increasing trend towards a mobile workforce, America is undergoing a shift in demographics.  Baby boomer households are becoming empty nesters, and the number of 25 to 34 year-olds is growing at an accelerated rate, as members of ‘Generation Y’ reach the stage of their life when they would typically consider buying a home.  Also, the rising cost of college education and the corresponding burden of student loans leave the younger generations with burdensome debt and less willing or able to take on mortgage debt.

 

The single-family rental space is in the early stages of a consolidation phase.  The paradigm of the single-family home market is shifting to larger institutional buyers.  These buyers, regional and national, have started to consolidate the more expensive segements in the single-family home marketplace.


6


The strategies utilized by institutional buyers have been to acquire homes through porfolio purchases, at auction, and at the court house steps.  These purchases are at distressed prices, and the companies add value to their homes through efficient rennovations.  Efficently purchased homes and rennovations bring high rental yields and the potential for rental price, as well as purchase price appriciation.  We intend to utilize these profitable strategies, as well as others, in the low-income segment of the market, which large institutional buyers have not yet entered.  We are one of the first to attack this segement of the single-family home market due to the expertise and high-touch servicing needed to manage the properties.  While the low-income segment brings challenges, it also has the ability to bring higher returns.

 

The aforementioned conditions have primed the market for our innovative business plan.  The ability to acquire single-family homes at discounted prices and rehabilitate the homes, as well as the recent increase in the number of renters makes this plan very dynamic and, potentially, very profitable.

 

Target Market

 

Our Target Market is the affordable low cost single-family residential lease-to-own market segment.  This segment is comprised of many people that have been displaced or are unable to own due to bad credit.

 

Brightlane is also seeking to expand its business model into multifamily, active adult living, student housing and build-to-rent within the affordable housing space.  We are in the process of developing and executing upon executing a ground up construction platform of rental single and multifamily products.

 

SWOT Analysis

 

Our Competitive Strengths

Access to Inventory - James Odell Barnes, Jr. has purchased foreclosed homes for nearly 40 years.  Through the experience and connections of James Odell Barnes one of our greatest strengths is access to inventory.  In addition, Steve Helm’s (our President) access to projects in multi-family and student housing sectors offers even more opportunity and diversity.  

The Ability to Purchase Superior Value - The knowledge and experience of James Odell Barnes, Jr. and Steve Helm allows us to purchase properties in the strongest markets, at the best prices.  

High-Touch Management – Our Brightlife Management subsidiary provides the experienced management necessary to make the single-family homes purchased profitable.   

Strong Direction and Management – Steve Helm has approximately 30 years experience in the real estate industry, and James Odell Barnes, Jr. is one of the most experienced buyers of foreclosed homes in the United States. 

 

Experienced Management Team

 

Steve Helm is our Chief Executive Officer and Director.  In addition, on December 10, 2015 the Board of Directors approved the addition of James Odell Barnes, Jr. to the Board; and, in November 2017, David Hill II was appointed to the Board of Directors, and also serves as our Vice President of Business & Legal Affairs.  A brief synopsis of our Board members’ credentials follows:

 

Steve Helm, Chairman, President, Chief Executive Officer and Director

 

Mr. Helm is a seasoned real estate executive specializing in the areas of finance, development/acquisition and property management for over 25 years. Mr. Helm is also currently the CFO of New Regional Planning, a real estate strategy and consulting firm. From 2004 to 2009 he served as Regional Director for Imperial Capital Bank/Bancorp (NYSE), launching the Texas/Rocky Mountain real estate lending platform as part of the firm’s national expansion. In that capacity, he opened and managed four real estate loan production offices (Dallas, Austin, Denver & Kansas City) covering the Texas, New Mexico, Oklahoma, Arkansas, Colorado and Kansas markets and funded in excess of $500 million of structured debt and portfolio permanent credit facilities from $500,000 to $20 million for a broad range of real estate development activities.

 

Prior to Imperial, he was President of the family business, The Helm Companies, directing the ground up development, re-development, financing and management of small retail and Class A, B & C multifamily properties. During his tenure with the family enterprise, Mr. Helm secured over $60 million of FHA (221 D-4 & 223F) and conventional bank debt as well as LIHTC, private and mezzanine equity financing and supervised the management of a multifamily portfolio of 6 properties comprising over 900 units. Mr. Helm earned the National Apartment Association CAPS Designation and is a CPM Candidate. Mr. Helm holds an MBA from the Cox School of Business, Southern Methodist University, and a BBA in Finance from the University of Texas at Austin.


7


David Hill II, Vice President of Business & Legal Affairs

 

Mr. Hill has served as our Vice President of Business and Legal Affairs, since August 1, 2016. Mr. Hill is an entrepreneurial attorney. Mr. Hill has counseled and consulted start-ups in regards to equity functions, regulatory issues, business development, and venture capital funding.

 

Mr. Hill earned a Bachelor of Arts degree in Political Science from Auburn University, a Juris Doctorate from the Cumberland School of Law at Samford University, and a Masters of Law in Law and Entrepreneurship from the Duke University School of Law.  Mr. Hill is a member of the State Bar of Georgia.

 

James Odell Barnes, Jr., Director

 

Mr. Barnes, the “Foreclosure King,” is one of the largest buyers of real estate owned foreclosed homes in the United States. He has been in the owner-financing business since 1979, and during his career he has bought and sold more than 50,000 properties. Mr. Barnes’ success, knowledge, and experience have brought him great publicity. He has been featured in the Wall Street Journal, NPR, and twice on ABC’s award winning series Nightline.

 

Mr. Barnes has amassed many connections, due to his success, in governmental institutions, the banking industry, and the investor community. His many connections allow him the ability to purchase more than 1,000 single-family homes a month. Mr. Barnes’ many years of experience brings with it the knowledge of which areas around the country will provide the most profit per acquisition.

 

Employees

 

As of April 16, 2019, in addition to Steve Helm and the guidance of James Odell Barnes, Jr. we had three full-time employees.

 

ITEM 1A.  RISK FACTORS

 

Not applicable to smaller reporting companies.

 

ITEM 1B.  UNRESOLVED STAFF COMMENTS

 

Not applicable.

 

ITEM 2. PROPERTIES

 

The Company co-locates its corporate headquarters with one of Mr. Helm’s business endeavors at 1600 West Loop South, Suite 600, Houston, Texas 77056.  We benefit from this co-location by having no rent at this facility throughout 2018.

 

In January of 2016, we established an office consisting of 1,250 square feet for operations in Atlanta, Georgia at 4140 Roswell Road NE.  The lease term was for 12 months automatically renewing annually for an additional 12 months.  Our monthly rent is $1,900.  We plan on increasing the size of this office as required, and are considering eventually making Atlanta, Georgia the location of our executive offices.

 

ITEM 3.  LEGAL PROCEEDINGS

 

We are not currently a party to any legal proceedings, and we are not aware of any proceeding pending or threatened against us by any governmental authority or other party.

 

ITEM 4.  MINE SAFETY DISCLOSURES

 

Not applicable.


8


PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

 

Market Information

 

Our common stock has been listed on the OTCMarkets under the symbol “BTLN” since September 22, 2015.  Prior to this, our common stock was listed on the OTCMarkets under the symbol “BNZA” since January 5, 2011, and prior to that on the Bulletin Board under the symbol “CLGC”.  

 

Holders

 

Common Stock

 

As of the date of this report, there were approximately 121 shareholders of record of our common stock and 18,692,654 shares of common stock deemed outstanding.

 

The beneficial owners of our common stock holding in excess of 5% are as follows:

 

Beneficial Owner of Securities

Number of Common Shares Owned

Percentage of Common Stock Outstanding

Brightlane Acquisition Corp.

6,060,000

32.4%

David Hill II

4,800,640

25.7%

Lloyd G. Dominick

2,965,729

15.9%

James Odell Barnes, Jr. Irrevocable Trust

2,133,618

11.4%

Stephen C. Helm

1,250,000

6.7%

 

Preferred Stock

 

As of the date of this report, there are no shares of our preferred stock outstanding.  

 

At December 31, 2018, there were two types of Preferred Stock outstanding:  (1) Series A Preferred Voting Stock, and (2) Series B Preferred Voting Stock.  There was one (1) share of Series A Preferred Voting Stock, and one (1) share of Series B Preferred Voting Stock issued and outstanding at December 31, 2018.  As of the date of this report there are no preferred shares issued and outstanding.  The Series A Preferred Voting Stock and Series B Preferred Voting Stock were returned to the Company for cancellation (see subsequent events).

 

Dividends and Share Repurchases

 

We have not paid any dividends to our shareholders.  There are no restrictions which would limit our ability to pay dividends on common equity or that are likely to do so in the future.

 

Unregistered Sales of Equity Securities

 

On December 21, 2015 we issued 12,000,000 million shares of our common stock as consideration for the acquisition of Brightlane Home Inc. via a share exchange agreement.  

 

Per the November 21, 2017 Agreement Principals in RECA as defined in the Brightlane RECA Contribution Agreement agreed to return all of their common stock in the registrant totaling 2,100,013 common shares to the Registrant.

 

The Company issued 519,662 shares of its common stock on July 17, 2017.  The holder of certain warrants elected to exercise his right to convert the exercisable warrants on a cashless basis into common stock prior to their expiration dates.

 

The Company issued 100,000 shares of its common stock on May 9, 2018, for the conversion of a $50,000 principal balance of a convertible note payable.

 

On July 3, 2018, the Company issued 1,250,000 shares of its common stock to its Chief Executive Officer in return for a total investment into the Company of $248,938.  The total investment into the Company consisted of a contribution of funds as well as the assumption of certain liabilities and accrued expenses.


9


Warrants

 

On July 14, 2015, the Company’s Board of Directors, not subject to stockholder approval, approved the Amendment and Restatement of Outstanding Warrants.  The amendments extended the expiry date for a period of one year and added a provision for cashless exercise.

 

On January 8, 2018 the remaining 175,000 warrants outstanding expired and were not converted by the Holder of the warrants.

 

At December 31, 2018 there are no warranted outstanding.

 

The Company has no other potentially dilutive securities as of the date of this report.

 

 

ITEM 6.  SELECTED FINANCIAL DATA

Not applicable because the Company is a smaller reporting company.

 

 

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

 

Investments in non-consolidated subsidiaries

 

Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.

 

Off Balance Sheet Arrangements

 

There are no off balance sheet arrangements.

 

Results of Operations for the years ended December 31, 2018 and 2017

 

For the year ended December 31, 2018, as compared to the year ended December 31, 2017, total revenues were $206,881 and $133,328, respectively; and net losses from continuing operations were $405,854 and $436,286 respectively.

 

Total revenue for the year ended December 31, 2018 was primarily attributable to rental and management fee income recognized from the operations of our Brightlife Management subsidiary, interest income on our note receivables and sale of real estate.  For the year ended December 31, 2018 we had income from fees collected of $8,595, generated an additional $40,547 in tenant income, and interest on our note receivables of $21,909, and we sold three real estate properties for net proceeds of $135,830 (after closing costs).  The real estate property sold had an cost basis of $47,500, resulting in gross profit to the Company of $88,330 from sales of real estate.  During the year ended December 31, 2018 and 2017 we had selling, general and administrative expenses from continuing operations of $469.277 and $453,745 respectively.  During the year ended December 31, 2018 and 2017 we incurred interest expenses of $95,958 and $51,469 respectively.

 

The net losses were attributable to operating expenses and other expenses that primarily consisted of expenses related to the implementation of the Company’s business model of a lease-to-own real estate business in addition to payroll, accrual in management fees, employee benefits, the acquisition and management of real estate, rent expenses for our facilities, interest expense on our line of credit, and accrued interest on our notes payable.  


10


Liquidity

 

At December 31, 2018, we had cash and cash equivalents of $20,578. We have incurred negative cash flows from operations since we started our business.  We have spent and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our planned real estate acquisitions.

 

For the year ended December 31, 2018, we recorded a net loss of $405,854.  We had an adjustment of $16,213 due to depreciation and an adjustment of $56,471 as a result of accrued interest added to notes.  We had a negative change of $461,750 due to the investment in real estate, and $29,295 due to accounts payable.  We recorded a positive change of $6,104 in accrued expenses and $11,378 from accrued interest.  As a result, we had net cash used in operating activities of $806,733 for the year ended December 31, 2018.

 

For the year ended December 31, 2017, we recorded a net loss of $1,235,556.  The losses from continuing operations were $436,286 and losses from discontinued operations were $799,270.  We had an adjustment of $1,900 due to depreciation and an adjustment of $50,744 as a result of accrued interest added to notes.  We had a positive change of $36,309 due to accounts receivable and positive change of $17,891 due to the investment in real estate.  We recorded a positive change of $29,905 from accounts payable, $23,729 from accrued expenses and $471 from accrued interest.  As a result, we had net cash used in operating activities of $279,965 for the year ended December 31, 2017.

 

For the year ended December 31, 2018, we recorded a positive change in payments on notes receivable of $7,123.  As a result, for the year ended December 31, 2018, we had net cash provided by investing actives of $7,123.

 

For the year ended December 31, 2018, we drew on our line of credit in the amount of $373,850 for the acquisition of multiple real estate assets, and we issued a note in the amount of $63,750 to one of the parties from whom we acquired certain real estate assets for the balance remaining on the homes acquired.  On July 3, 2018, the received an investment from its Chief Executive Officer of $248,938 in return for 1,250,000 common shares.  This investment consisted of a contribution of funds as well as the assumption of certain liabilities and accrued expenses.  As a result, we had net cash provided by financing activities of $686,538 for the year ended December 31, 2018.

 

For the year ended December 31, 2017, we received $400,000 as proceeds from a related party convertible note payable.  As a result, we had net cash provided by financing activities of $400,000 for the year ended December 31, 2017.

 

For the year ended December 31, 2017, we recorded a positive change in net cash used in operating activities of $4,627 as a result of discontinued operations.

 

On May 19, 2017, Brightlane – CLOC Acquisitions, L.L.C., a Delaware limited liability company and a wholly owned subsidiary of the registrant entered into a $5,000,000 revolving credit facility with CoreVest Finance (f/k/a Colony American Finance Lender, LLC).  This credit facility is for the acquisition of residential homes providing the Company an acquisition vehicle.  General provisions of this credit facility are an 18 month term at 9%, with a loan to value of 80%.  At December 31, 2018 the Company had utilized this credit facility to complete two transactions resulting in the acquisition of real estate assets totaling $488,750 of which $373,850 was financed utilizing the credit facility.

 

The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control. We have based our estimate on assumptions that may prove to be wrong. We may need to obtain additional funds sooner or in greater amounts than we currently anticipate. Potential sources of financing include strategic relationships, public or private sales of our shares or debt and other sources. We may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements.  While we have a best efforts commitment from the aforementioned accredited investor it is uncertain when such additional funding will be available and whether the terms will be acceptable to us. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of our existing stockholders will be diluted. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations and our business, financial condition and results of operations would be materially harmed.

 

We have no known demands or commitments and are not aware of any events or uncertainties as of December 31, 2018, other than the work commitment previously mentioned, that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

 

Capital Resources

 

We had no material commitments for capital expenditures as of December 31, 2018 and 2017.


11


Critical Accounting Policies

 

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. On a regular basis, we review our accounting policies and how they are applied and disclosed in our financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Estimates are based on historical experience, management expectations for future performance, and other assumptions as appropriate. Key areas affected by estimates include the assessment of the recoverability of long-lived assets, which is based on such factors as estimated future cash flows. We re-evaluate estimates on an ongoing basis; therefore, actual results may vary from those estimates.

 

Fair Values of Financial Instruments

 

The carrying values of cash, accounts receivable, accounts payable and accrued expenses approximate the fair values of these instruments due to their short-term nature. The carrying amount for borrowings under the financing agreement approximates fair value because of the variable market interest rates charged for these borrowings.

 

Trends and Uncertainties

 

We may be subject to liability for failure to comply with the requirements of Regulation 14C under the Securities Exchange Act of 1934 (the “Exchange Act”).  On September 25, 2015 we filed a Form 8-K announcing an amendment to the articles of incorporation which included changing our name to Brightlane Corp., the increase in our authorized capitalization to 350,000,000 shares, and the creation of a preferred class of stock effective on September 22, 2015. We inadvertently did not timely comply with the requirements of Regulation 14C under the Exchange Act.  This would have required us to circulate an information statement describing the corporate action taken by the written consent of a majority of our shareholders at least 20 days prior to the effective date of the corporate action. We did however have super majority shareholder consent as required for amending the articles of incorporation and complied with Rule 10b-17 of the Exchange Act as we timely filed the amendment to the articles of incorporation with the Financial Industry Regulatory Authority (“FINRA”) on September 11, 2015, for this action to be recognized in the market for trading purposes. Previously we viewed filing a Preliminary 14C Information Statement as duplicative of prior filings and the Corporate Action Notification filed with FINRA on September 11, 2015 which did not give rise to appraisal rights to our shareholders.  We have since acknowledged our inadvertent mistake, and in order to cure the error and to comply with Regulation 14C, we filed a Preliminary Information Statement with the SEC on November 23, 2015. The SEC has as part of its comments to the Preliminary Information Statement asked that we include this stated risk factor for the near foreseeable future. The failure to initially comply with Regulation 14C in a timely manner was inadvertent, and while not probable, could cause the SEC to bring an enforcement action or commence litigation against us for failure to comply with Regulation 14C. Such enforcement could subject us to penalties including the payment of fines or damages. Any such claims or actions could cause us to expend financial resources to defend ourselves and could divert the attention of our management from our core business.

 

 

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable because the Company is a smaller reporting company.


12


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

BRIGHTLANE CORP.

INDEX TO AUDITED FINANCIAL STATEMENTS

DECEMBER 31, 2018 AND 2017

 

 

 

Page

Report of Independent Registered Public Accounting Firm

 

14

 

 

 

Consolidated Balance Sheets of December 31, 2018 and 2017

 

16

 

 

 

Consolidated Statements of Operations for the Years ended December 31, 2018 and 2017

 

17

 

 

 

Consolidated Statement of Changes in Shareholders' Deficit

 

18

 

 

 

Consolidated Statements of Cash Flows for the Years ended December 31, 2018 and 2017

 

19

 

 

 

Notes to Audited Financial Statements

 

20


13


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNING FIRM

 

To the Board of Directors and Stockholders of

Brightlane Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Brightlane Corp.(the Company) as of December 31, 2018, and the related consolidated statement of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2018, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the consolidated financial statements, the Company has only generated minimal revenues since inception, has sustained operating losses since inception, and has an accumulated deficit of $3,337,691 and a working capital deficit of $760,123 at December 31, 2018. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2 to the accompanying financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Prager Metis CPA’s LLC

 

 

We have served as the Company’s auditor since 2018

 

 

Hackensack, New Jersey

April 16, 2019

 


14


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNING FIRM

 

To the Board of Directors and Stockholders of

Brightlane Corp.

 

Opinion on the Consolidated Financial Statements

 

We have audited the accompanying consolidated balance sheets of Brightlane Corp. (the Company) as of December 31, 2017, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2017, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and the results of its operations and its cash flows for the year ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3 to the consolidated financial statements, The Company has only generated minimal revenues since inception, has sustained operating losses since inception, and has an accumulated deficit at December 31, 2017.These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3 to the accompanying financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Paritz & Company P.A.

We have served as the Company’s auditors since 2015

Hackensack, New Jersey

April 2, 2018


15


BRIGHTLANE CORP.

CONSOLIDATED BALANCE SHEETS

 

 

 

December 31, 2018

December 31, 2017

ASSETS

 

 

Current Assets

 

Cash and cash equivalents

$20,578 

$134,650 

Notes receivable - current portion

31,644 

41,568 

Total Current Assets

52,222 

176,218 

 

 

 

Notes receivable - long term portion

204,498 

201,696 

Investment in real estate, net

488,429 

42,892 

Total Assets

$745,149 

$420,806 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

 

Current Liabilities

 

Accounts payable

$24,128 

$53,423 

Accrued expenses

79,086 

72,982 

Accrued interest – related parties

37,527 

26,149 

Demand note payable

- 

51,000 

Line of credit

373,850 

- 

Current portion of convertible notes payable – related party

297,754 

280,900 

Total Current Liabilities

812,345 

484,454 

 

 

 

Convertible note payable

487,175 

- 

Convertible note payable - related party

285,237 

669,044 

Total Liabilities

1,584,757 

1,153,498 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

Series A Preferred Voting Stock, $0.001 par value, 1 share authorized,

1 share issued and outstanding

-  

-  

Series B Preferred Voting Stock, $0.001 par value, 1 share authorized,

1 share issued and outstanding

-  

-  

Common stock, $0.001 par value, 250,000,000 shares authorized,

118,692,654 and 19,442,667 shares issued and 18,692,654

and 17,342,654 shares outstanding at December 31, 2018 and 2017, respectively

18,693  

19,443  

Additional paid in capital

2,479,390  

4,223,571  

Treasury stock

- 

(2,043,869) 

Accumulated deficit

(3,337,691) 

(2,931,837) 

Total Stockholders’ Equity

(839,608) 

(732,692) 

Total Liabilities and Stockholders’ Equity

$745,149  

$420,806  

 

 

 

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


16


BRIGHTLANE CORP.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Year Ended December 31,

 

2018

2017

REVENUE

 

 

Fees

$8,595  

$11,450  

Interest

21,909 

- 

Rental income

40,547 

8,100 

Sale of real estate

135,830 

113,778  

Total Revenue

206,881  

133,328  

 

 

 

Cost of property sold

(47,500) 

(64,400) 

 

 

 

Gross Profit

159,381  

68,928  

 

 

 

OPERATING EXPENSES

Selling, general and administrative

469,277  

453,745  

 

 

 

NET OPERATING LOSS

(309,896) 

(384,817) 

 

 

 

OTHER EXPENSES

 

Interest expense - related party

33,669  

47,469  

Interest expense - other

62,289  

4,000  

 

 

 

Loss from continuing operations

(405,854) 

(436,286) 

Loss from discontinued operations

- 

(799,270) 

 

 

 

LOSS BEFORE INCOME TAXES

(405,854) 

(1,235,556) 

Provision for income taxes

-  

-  

Net loss

$(405,854) 

$(1,235,556) 

 

 

 

Basic and fully diluted loss per share

Continuing operations

(0.02) 

(0.02) 

Discontinued operations

- 

(0.04) 

Net Loss per Share: Basic and Diluted

$(0.02) 

$(0.06) 

 

 

 

Weighted Average Number of Shares Outstanding: Basic and Diluted

18,029,055  

19,162,849  

 

 

 

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


17


BRIGHTLANE CORP.

 

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

 

For the years ended December 31, 2018 and 2017

 

 

Common Stock

Series A

Preferred

Voting Stock

Series B

Preferred

Voting Stock

Additional

Paid-in

Accumulated

Treasury

Stockholders'

Equity

 

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Stock

(Deficit)

Balances at December 31, 2015

18,923,005

 $ 18,923

1

 $ -

-

$- 

$4,224,091  

$(1,278,788) 

$-  

2,964,226  

 

 

 

 

 

 

 

 

 

 

 

Net loss

 -

  -

 -

  -

-

- 

-  

(417,493) 

-  

(417,493) 

Balances at December 31, 2016

18,923,005

 $ 18,923

1

 $ -

1

$- 

$4,224,091  

$(1,696,281) 

$-  

$2,546,733  

 

 

 

 

 

 

 

 

 

 

 

Warrants exercised

519,662

 $ 520

 -

 $ -

-

$- 

$(520) 

$-  

$-  

$-  

Return of shares from Brightlane

Homes, Inc. shareholders

 -

 $ -

 -

 $ -

-

$- 

$-  

$-  

$(2,043,869) 

$(2,043,869) 

Net loss

 -

 $ -

 -

 $ -

-

$- 

$-  

$(1,235,556) 

$-  

$(1,235,556) 

Balances at December 31, 2017

19,442,667

 $ 19,443

1

 $ -

1

$- 

$4,223,571  

$(2,931,837) 

$(2,043,869) 

$(732,692) 

 

 

 

 

 

 

 

 

 

 

 

Cancelation of treasury stock

(2,100,013)

 $ (2,100)

 -

 $ -

-

$- 

(2,041,769) 

-  

2,043,869  

-  

Note conversion

100,000

  100

 -

  -

-

- 

49,900  

-  

-  

50,000  

Subscription agreement

1,250,000

  1,250

 -

  -

-

- 

247,688  

-  

-  

248,938  

Net loss

 -

  -

 -

  -

-

- 

-  

(405,854) 

-  

(405,854) 

Balances at December 31, 2018

18,692,654

 $ 18,693

1

 $ -

1

$- 

$2,479,390  

$(3,337,691) 

$-  

$(839,608) 

 

 

 

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


18


BRIGHTLANE CORP.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

Year Ended December 31,

 

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Loss from continuing operations

$(405,854) 

$(436,286)  

Loss from discontinued operations

- 

(799,270)  

Net loss

$(405,854) 

$(1,235,556) 

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation

16,213 

1,900 

Accrued interest added to notes

56,471 

50,744 

Changes in Assets and Liabilities

Accounts receivable

-  

36,309 

Investment in real estate

(461,750)  

17,891 

Accounts payable

(29,295) 

29,905 

Accrued expenses

6,104  

23,729 

Accrued interest

11,378  

471   

Net cash used in continuing operations

(806,733) 

(1,074,607) 

Net cash provided by discontinued operating activities

-  

794,642  

NET CASH USED IN OPERATING ACTIVITIES

(806,733) 

(279,965) 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Principal payments of notes receivable

7,123 

- 

NET CASH PROVIDED BY INVESTING ACTIVITIES

7,123 

- 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from advance of line of credit

373,850 

- 

Proceeds from convertible note payable - related party

- 

400,000  

Proceeds from convertible note payable

63,750 

- 

Proceeds from subscription investment

248,938 

- 

Payment on demand note payable

(1,000) 

- 

NET CASH PROVIDED BY FINANCING ACTIVITIES

685,538 

400,000  

 

 

 

Increase (decrease) in cash and cash equivalents

(114,072) 

120,035  

Cash and cash equivalents at beginning of year

134,650 

14,615  

Cash and cash equivalents at end of year

$20,578 

$134,650  

 

 

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


19


BRIGHTLANE CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2018 AND 2017

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

Brightlane Corp. (“we”, “our”, “us”, the “Company” or the “Registrant”) was initially incorporated under the laws of the State of Delaware in December 2006 under the name “Cold Gin Corporation.” On December 27, 2010, in connection with an Agreement and Plan of Reorganization we changed our domicile from Delaware to Nevada, our name to Bonanza Gold Corp.  In the third quarter of 2015, Brightlane Acquisition Corp. acquired a controlling interest in the Company from existing shareholders.  This change of control began the transitioning to a lease-to-own real estate company.  In connection with this transition, effective September 22, 2015 we changed our name to Brightlane Corp.

 

On December 21, 2015, we completed the agreement to acquire all of the outstanding shares of Brightlane Homes, Inc., which through its wholly owned subsidiary, acquired a 99.9% limited partner interest in Brightlane RECA, LP which was the beneficiary of the Brightlane RECA Trust which owned a portfolio of assets referred to as the Brightlane RECA Portfolio.  In April 2017, the partners of Brightlane RECA, LP amended the Revised Limited Partnership Agreement to admit Brightlane GP, Corp., an affiliate of the Registrant, as a General Partner of BL RECA LP.  This resulted in the transfer of all General Partner interests and powers to Brightlane GP Corp.  

 

On November 21, 2017, the Registrant entered into an Agreement resulting in the following actions:  (1) Brightlane #1, LLC, a subsidiary of Brightlane Homes, Inc., a wholly owned subsidiary of Brightlane Corp., transferred its limited partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC; and (2) Brightlane GP Corp, a wholly owned subsidiary of Brightlane Corp., transferred its general partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC.

 

The Agreement and the associated actions resulted in the termination of all agreements entered into on December 21, 2015 and all subsequent addenda to those agreements.  These actions terminate any rights of the Registrant to the Brightlane RECA Trust, thereby terminating all obligations to the underlying acquisition related debt associated with the assets contributed to the Brightlane RECA Trust.  In addition, per the November 21, 2017 Agreement the parties agreed that:  (1) the RECA Principals as defined in the Brightlane RECA Contribution Agreement agreed to return all of their common stock in the registrant totaling 2,100,013 common shares to the Registrant; and, (2) the RECA Principals agreed to facilitate the transfer of certain assets to Brightlane Homes, Inc., a wholly owned subsidiary of the Registrant.  

 

Brightlane Corp. now concentrates on being a real estate operator providing opportunities in the affordable housing market including reasonable rents and leases plus an opportunity to participate in a right-to-purchase program upon meeting certain criteria. Brightlane acquires single-family homes and portfolios of single-family homes and actively pursues the acquisition of these types of homes through one-off purchases, the purchase of portfolios, and other methods of acquisition.  We service a market that is historically underserved – those seeking living arrangements in the sub $150,000 home market. We continually seek out and make the appropriate investments in ancillary services.  

 

NOTE 2 – GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has only generated minimal revenues since inception, has sustained operating losses since inception, and has an accumulated deficit of $(3,337,691) and a working capital deficit of $760,123 at December 31, 2018. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.  The Company’s continuation as a going concern is dependent upon, among other things, its ability to generate revenues and its ability to obtain capital from third parties.  No assurance can be given that the Company will be successful in these efforts.  

 

Management plans to identify adequate sources of funding to provide operating capital for continued growth.  In addition, Management intends to continue accessing the $5 million credit facility obtained by its Brightlane – CLOC Acquisitions, LLC subsidiary in order to acquire additional homes that will provide a profitable revenue stream for the Company.

 

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 


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NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.  The Financial Statements have been prepared under accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a December 31 fiscal year end.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Principals of Consolidation

 

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated

 

 

Cash and Cash Equivalents

 

The Company accounts for cash and cash equivalents under FASB ASC 305, “Cash and Cash Equivalents”, and considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  

 

 

Cash Flows Reporting

 

The Company follows ASC 230, “Statement of Cash Flows,” for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230 to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

 

Commitments and Contingencies

 

The Company follows ASC 450-20, “Loss Contingencies,” to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.  There were no commitments or contingencies at December 31, 2018 and 2017.

 

Convertible Instruments

 

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

 

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.


21


 

The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted guidance issued by the FASB regarding recognizing revenue from contracts with customers.  The revenue recognition policies as enumerated below reflect the Company's accounting policies effective January 1, 2018, which did not have a materially different financial statement result than what the results would have been under the previous accounting policies for revenue recognition.

 

Brightlane Corp.’s revenue results from four sources related to the acquisition/disposal and renting/leasing of real estate properties:  

(1)Fees related to the management of properties.  We collect a monthly management fee for each home that we manage on a third party basis for our portfolio clients.  In many instances we also collect late fees. 

(2)Interest income on notes receivable.  We carry principle balances on notes receivable and in return for carrying these notes we receive monthly principal and interest payments on these notes receivable.  We apportion the payments as received to reducing the principle balance and book the balance to fees due us as well as interest income.   

(3)Rental income on properties we own.  We own properties and rent or lease them to our tenants and book this as rental income. 

(4)Sale of real estate.  Periodically, as market conditions allow, we dispose of a property.  Once sold, book the net proceeds after customary closing costs as sale of real estate.   

 

The following table disaggregates revenue by major source for the year ended December 31, 2018:

 

Year Ended December 31, 2018

 

Total

Fees Income

 

$

8,595

Interest Income

 

 

21,909

Rental Income

 

 

40,547

Sale of Real Estate

 

 

135,830

Total Revenue

 

$

206,881

 

Deferred Income Taxes and Valuation Allowance

 

The Company accounts for income taxes under ASC 740 Income Taxes.  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs.  A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.  No deferred tax assets or liabilities were recognized at December 31, 2018 or 2017.

 

 

Earnings (Loss) Per Share

 

The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, “Earnings per Share.” Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.  


22


 

 

Financial Instruments

 

The Company’s balance sheet includes certain financial instruments: primarily accounts payable, accruals and debt obligations. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

ASC 820, “Fair Value Measurements and Disclosures,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

Level 1 -Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

 

Level 2 -Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

 

Level 3 -Inputs that are both significant to the fair value measurement and unobservable. 

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

The Company does not have any assets or liabilities measured at fair value on a recurring basis.

 

Investments in non-consolidated subsidiaries

 

Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.

 

Long-lived Assets

 

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.


23


 

 

Property and Equipment

 

The Company follows ASC 360, Property, Plant, and Equipment, for its fixed assets.  Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets (3 years).

 

Related Parties

 

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.  

 

Restricted Stock

 

The Company issues restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is measurable more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.

 

Stock-Based Compensation

 

FASB ASC 718 “Compensation – Stock Compensation,” prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Recently Issued Accounting Pronouncements

 

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

 

 

NOTE 4 – DISCONTINUED OPERATIONS

 

In April 2017, the partners of Brightlane RECA, LP amended the Revised Limited Partnership Agreement to admit Brightlane GP, Corp., an affiliate of the Registrant, as a General Partner of BL RECA LP.  All General Partner interests and powers were transferred to Brightlane GP Corp.  

 

On November 21, 2017, the Company entered into an Agreement resulting in the following actions:  (1) Brightlane #1, LLC, a subsidiary of Brightlane Homes, Inc., a wholly owned subsidiary of Brightlane Corp., transferred its limited partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC; and (2) Brightlane GP Corp, a wholly owned subsidiary of Brightlane Corp., transferred its general partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC.


24


 

 

The Agreement and the associated actions resulted in the termination of all agreements entered into on December 21, 2015 and all subsequent addenda to those agreements.  These actions terminate any rights of the Registrant to the Brightlane RECA Trust, thereby terminating all obligations to the underlying acquisition related debt associated with the assets contributed to the Brightlane RECA Trust.  In addition, per the November 21, 2017 Agreement the parties agreed that:  (1) the RECA Principals as defined in the Brightlane RECA Contribution Agreement agreed to return all of their common stock in the Company totaling 2,100,013 common shares to the Company; and, (2) the RECA Principals agreed to facilitate the transfer of certain assets to Brightlane Homes, Inc., a wholly owned subsidiary of the Company.  

 

 

2018

2017

    Interest income

-

$       235,464

    Fees collected

-

25,113

    Portfolio expenses

-

(125,744)

    Portfolio servicing fees

-

(217,973)

    Portfolio management fees

-

(75,360)

    Loss on equity interest

-

(114,500)

    Loss on disposition of assets

-

(526,270)

Loss from discontinued operations

-

$     (799,270)

 

 

NOTE 5 – INVESTMENT IN REAL ESTATE

 

Investment in real estate, net of accumulated depreciation, consisted of the following at of December 31, 2018 and 2017:

 

 

December 31,

2018

December 31,

2017

Useful

Life

Investment in Real Estate

502,154  

45,695  

25 years

Less:  Accumulated Depreciation

(13,725) 

(2,803) 

 

Property, Plant, and Equipment, Net

$488,429  

$42,892  

 

 

Investment in real estate are depreciated using the straight-line method.  Depreciation expense was $10,921 and $1,900 for the years ended December 31, 2018 and 2017, respectively.

 

 

NOTE 6 – LINE OF CREDIT FACILITY

 

On May 19, 2017, Brightlane – CLOC Acquisitions, L.L.C., a Delaware limited liability company and a wholly owned subsidiary of the registrant entered into a $5,000,000 revolving credit facility with CoreVest Finance (f/k/a Colony American Finance Lender, LLC).  This credit facility is for the acquisition of residential homes providing the Company an acquisition vehicle.  General provisions of this credit facility are an 18 month term at 9%, with a loan to value of 80%.  At December 31, 2018 the Company had utilized this credit facility to complete two transactions resulting in the acquisition of real estate assets totaling $488,750 of which $373,850 was financed utilizing the credit facility.  The balance of the line of credit was $373,850 at December 31, 2018.

 

NOTE 7 – NOTES RECEIVABLE

 

As part of the agreement entered into on November 21, 2017, the Company assumed nine notes receivable totaling $243,264.  These notes are secured by residential properties.  The terms associated with these notes range from 11 years to 30 years, with interest rates ranging from 9.3% to 10%.  During the year ended December 31, 2018, principal payments towards notes receivables totaled $7,122, reducing notes receivable to $236,142.  The current portion of these notes is $31,644 (which includes principal and interest payments).


25


NOTE 8 – NOTES PAYABLE

 

On September 30, 2015 the Company borrowed $60,723 from a third party.  The note bears interest at 8% per annum and is payable on demand. Interest is paid quarterly. The note was convertible into common stock of the Company at $0.50 per share.  On January 28, 2016, the Company made a principal payment of $10,723, bringing the outstanding principal to $50,000 on this note.  The lender elected to have interest accrue for the 3 months ended December 31, 2017 thereby increasing the principal due to $51,000 at December 31,2017.  The Company made a principal and interest payment during the year ended December 31, 2018 totaling $2,020 reducing the principal balance to $50,000 and subsequently on May 9, 2018 the lender elected to exercise his option to convert the remaining $50,000 principal balance into 100,000 shares of common stock reducing the principal balance to $0.  Interest expense incurred during the years ended December 31, 2018 and 2017 was $1,447 and $4,000 respectively.

 

On February 28, 2017 the Company borrowed $400,000 from a third party.  The promissory note carries an interest rate of 6% per annum with a maturity date of February 28, 2020.  The lender may convert into shares of our common stock after one year, at $0.20 per share.  The lender has the option of accruing interest or receiving interest only payment annually.  On the anniversary of this note, the lender elected to have interest accrued thereby increasing the principal due to $423,424 at December 31, 2018.  On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense incurred during the years ended December 31, 2018 and 2017 was $25,248 and $19,545 respectively.

 

On February 5, 2018 the Company issued a note to a third party for the remaining balance owed on properties acquired in a real estate transaction for $63,750.  The promissory note carries an interest rate of 9% per annum with a maturity date of February 5, 2021.  The lender may convert into shares of our common stock after one year, at $0.20 per share.  The lender has the option of accruing interest or receiving interest only payment annually.  On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense incurred during the years ended December 31, 2018 and 2017 was $5,187 and $0 respectively.

 

 

NOTE 9 – RELATED PARTY TRANSACTIONS AND BALANCES

 

On December 9, 2015, we entered into a subscription agreement to sell one unit consisting of a $250,000 promissory note, one share of Series A Preferred Voting Stock and one share of Series B Preferred Voting Stock to a related-party in exchange for $250,000 and the investor’s agreement to utilize its best efforts to cause a capital injection of up to $3,000,000.00 into the Company on or before January 1, 2017 (extended to January 1, 2019).  The promissory note carries an interest rate of 6% per annum with a maturity date of December 9, 2019.  The lender may convert into shares of our common stock after one year, at $0.20 per share.  The lender has the option of accruing interest or receiving interest only payment annually. On the anniversary of this note, the lender elected to have interest accrued thereby increasing the principal due to $297,754 at December 31, 2018. On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense incurred during the years ended December 31, 2018 and 2017 was $16,915 and $15,958 respectively.

 

On March 24, 2016, we received an additional $110,000 in capital from the aforementioned related party as an advance on the commitments this related party has to us.  The promissory note carries an interest rate of 6% per annum with a maturity date of March 24, 2020.  The lender may convert into shares of our common stock after one year, at $0.20 per share.  The lender has the option of accruing interest or receiving interest only payment annually.  On the anniversary of this note, the lender elected to have interest accrued thereby increasing the principal due to $123,615 at December 31, 2018.  On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense for this note for years ended December 31, 2018 and 2017 was $7,323 and $6,926 respectively.

 

On July 27, 2016, we received an additional $499,200 in capital from the aforementioned related party as an advance on the commitments this related party has to us.  The promissory note carries an interest rate of 6% per annum with a maturity date of July 27, 2020  The lender may convert into shares of our common stock after one year, at $0.50 per share.  The lender has the option of accruing interest or receiving interest only payment annually.  During the year ended December 31, 2016, we repaid a total of $360,000 to the related party toward this promissory note.  On the anniversary of this note, the lender elected to have interest accrued thereby increasing the principal due to $161,621 at December 31, 2018.  On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market


26


conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense for this note for years ended December 31, 2018 and 2017 was $9,431 and $8,691 respectively.

 

Mr. Steve Helm sits on the board of directors and also serves as the Company’s Chief Executive Officer.  As compensation for his services we are accruing annual compensation of $25,000 as of January 1, 2016.  We will continue to accrue his compensation at a quarterly rate of $6,250 going forward.  On July 3, 2018, the Company issued 1,250,000 shares of its common stock Mr. Helm in return for a total investment into the Company of $248,938.  The total investment into the Company consisted of a contribution of funds as well as the assumption of certain liabilities and accrued expenses.  The accrued expenses were a result of the accrual resulting from the accrual of the annual compensation at a rate of $6,250 per quarter from January 1, 2016 through May 15, 2018.  From May 15, 2018 through December 31, 2018 we continued to accrue an annual compensation for Mr. Helm at a rate of $6,250 per quarter.  Accrued compensation for years ended December 31, 2018 and 2017 was $15,625 and $25,000 respectively.

 

 

NOTE 10– SHAREHOLDERS’ EQUITY

 

Common Stock

 

On December 21, 2015, the Company issued 12,000,000 shares of common stock for the acquisition of Brightlane Homes, Inc.

 

Per the November 21, 2017 Agreement Principals in RECA as defined in the Brightlane RECA Contribution Agreement agreed to return all of their common stock in the Company totaling 2,100,013 common shares to the Company (see note 4).  These shares were returned to treasury and subsequently retired on April 1, 2018.

 

The Company issued 519,662 shares of its common stock on July 17, 2017.  The holder of certain warrants elected to exercise his right to convert the exercisable warrants on a cashless basis into common stock prior to their expiration dates.

 

The Company issued 100,000 shares of its common stock on May 9, 2018, for the conversion of a $50,000 principal balance of a convertible note payable.

 

On July 3, 2018, the Company issued 1,250,000 shares of its common stock to its Chief Executive Officer in return for a total investment into the Company of $248,938.  The total investment into the Company consisted of a contribution of funds as well as the assumption of certain liabilities and accrued expenses.

 

Preferred Stock

 

As of the date of this report, there are no shares of our preferred stock outstanding.  

 

At December 31, 2018, there were two types of Preferred Stock outstanding:  (1) Series A Preferred Voting Stock, and (2) Series B Preferred Voting Stock.  There was one (1) share of Series A Preferred Voting Stock, and one (1) share of Series B Preferred Voting Stock issued and outstanding at December 31, 2018.  As of the date of this report there are no preferred shares issued and outstanding.  The Series A Preferred Voting Stock and Series B Preferred Voting Stock were returned to the Company for cancellation (see subsequent events).

 

Warrants issued in connection with sale of common shares

 

On July 14, 2015, the Company’s Board of Directors, not subject to stockholder approval, approved the Amendment and Restatement of Outstanding Warrants.  The amendments extended the expiry date for a period of one year and added a provision for cashless exercise.

 

On January 8, 2018 the remaining 175,000 warrants outstanding expired and were not converted by the Holder of the warrants.

 

At December 31, 2018 there are no warranted outstanding.

 

The Company has no other potentially dilutive securities as of the date of this report.


27


NOTE 11 – INCOME TAXES

 

The components of deferred tax assets consist of:

 

 

 

December 31,

 

 

2018

 

20177

Net operating loss

 

$

257,000

 

$

152,000

Valuation allowance

 

 

(257,000)

 

 

(152,000)

Deferred tax assets, net of allowance

 

$

-

 

$

-

 

The reconciliation of the effective income tax rate to the federal statutory rate is as follows:

 

 

December 31, 2018

December 31, 2017

US Federal statutory rate

(21%)

(35%)

State income tax, net of federal benefit

(5%)

(5%)

Change in valuation allowance

26%

40%

Income tax benefit

-%

-%

 

The Company has approximately $990,000 net operating loss carryforwards that are available to reduce future taxable income. These NOLs begin to expire in 2036.  In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not be realized.

 

The Company files U.S. federal and several state tax returns that are subject to audit by tax authorities beginning with the year ended December 31, 2012. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.

 

The Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 35% to 21%, resulting in a deferred tax expense of $219,000 as of December 31, 2017 that is still fully valued against as of December 31, 2018. This expense is attributable to the Company being in a net deferred tax asset position at the time of remeasurement. As the company maintains fully valuation allowance, this amount can be seen on the rate reconciliation as an adjustment to deferred tax asset and corresponding valuation allowance.

 

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2018, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing but have kept the full valuation allowance. As a result have recorded no income tax expense in the fourth quarter of 2017, the period in which the legislation was enacted.

 

On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The deferred tax expense recorded in connection with the remeasurement of deferred tax assets is a provisional amount and a reasonable estimate at December 31, 2018 based upon the best information currently available. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Act. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2019 when the analysis is complete. The accounting is expected to be complete when the 2018 U.S. corporate income tax return is filed in 2019.


28


NOTE 12 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation the following material events have occurred that require disclosure.

 

On March 12, 2019, the Company terminated the subscription agreement entered into with Brightlane Acquisition Corp. (the “Investor”). on December 9, 2015.  The Investor is an affiliate shareholder of the Company.  Pursuant to this agreement, the Company sold a $250,000 promissory note, one share of Series A Preferred Voting Stock, and one share of Series B Preferred Voting Stock to the Investor in exchange for $250,000 and for the Investor’s agreement to utilize its best efforts to cause a capital injection of up to $3,000,000 into the Company on or before January 1, 2017.  This agreement has been renewed up through March 12, 2019.  The agreement was terminated due to the Board determining that it was no longer desirable to continue extending the agreement.  As a result of this termination, the Series A and Series B Preferred Voting Stock has been returned to the Company for cancellation.  There are no penalties incurred by terminating this agreement.

 

On April 3, 2019, the board of directors of Brightlane Corp., approved a share exchange agreement with VAT Bridge Ltd., a United Kingdom based entity.  Pursuant to this agreement, Brightlane will issue 21,000,000 common shares to the owners of VAT Bridge in return for all outstanding shares of VAT Bridge.  These shares shall be issued to VAT Bridge shareholders proportionately to their current ownership interest in VAT Bridge.  As a result of this agreement, VAT Bridge will become a wholly owned subsidiary of Brightlane.


29


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

There were no disagreements with accountants on accounting and financial disclosure for the year ended December 31, 2018 and 2017.

 

ITEM 9A.  CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

The Company has adopted and maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this annual report, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the SEC. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. As required under Exchange Act Rule 13a-15, the Company’s management, including the Chief Executive Officer who also serves as our Principal Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Office who also serves as our Principal Financial Officer concluded that the disclosure controls and procedures are ineffective.

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: domination of management by a single individual without adequate compensating controls, lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; inadequate segregation of duties consistent with control objectives, and lack of an audit committee. These material weaknesses were identified by our Chief Executive Officer who also serves as our Principal Financial Officer in connection with the above annual evaluation.

 

Management believes that the material weaknesses did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and inadequate segregation of duties results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

Management recognizes that its controls and procedures would be substantially improved if we had an audit committee and two individuals serving as officers and as such is actively seeking to remediate this issue.

 

Management’s Report on Internal Control over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements. Management conducted an assessment of the Company’s internal control over financial reporting based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework. Based on the assessment, management concluded that, as of December 31, 2018, the Company’s internal control over financial reporting is ineffective based on those criteria.

 

The Company’s management, including its Chief Executive Officer who also serves as our Principal Financial Officer, does not expect that the Company’s disclosure controls and procedures and its internal control processes will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that the breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time,


30


controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

 

Management’s Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

 

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

 

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

 

We will work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.

 

Changes in Internal Control

 

There have been no changes in internal controls over the financial reporting that occurred during the period covered by this report, fourth quarter of the fiscal year ended December 31, 2018, that has materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

 

ITEM 9B.  OTHER INFORMATION

 

None.


31


PART III

 

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Steve Helm is our Chief Executive Officer and Director.  In addition, on December 10, 2015 the Board of Directors approved the addition of James Odell Barnes, Jr. to the Board; and, in November 2017, David Hill II was appointed to the Board of Directors, and also serves as our Vice President of Business & Legal Affairs.  A brief synopsis of our Board members’ credentials follows:

 

Steve Helm, Age 57, Chairman, President, Chief Executive Officer and Director

 

Mr. Helm is a seasoned real estate executive specializing in the areas of finance, development/acquisition and property management for over 25 years. Mr. Helm is also currently the CFO of New Regional Planning, a real estate strategy and consulting firm. From 2004 to 2009 he served as Regional Director for Imperial Capital Bank/Bancorp (NYSE), launching the Texas/Rocky Mountain real estate lending platform as part of the firm’s national expansion. In that capacity, he opened and managed four real estate loan production offices (Dallas, Austin, Denver & Kansas City) covering the Texas, New Mexico, Oklahoma, Arkansas, Colorado and Kansas markets and funded in excess of $500 million of structured debt and portfolio permanent credit facilities from $500,000 to $20 million for a broad range of real estate development activities.

 

Prior to Imperial, he was President of the family business, The Helm Companies, directing the ground up development, re-development, financing and management of small retail and Class A, B & C multifamily properties. During his tenure with the family enterprise, Mr. Helm secured over $60 million of FHA (221 D-4 & 223F) and conventional bank debt as well as LIHTC, private and mezzanine equity financing and supervised the management of a multifamily portfolio of 6 properties comprising over 900 units. Mr. Helm earned the National Apartment Association CAPS Designation and is a CPM Candidate. Mr. Helm holds an MBA from the Cox School of Business, Southern Methodist University, and a BBA in Finance from the University of Texas at Austin.

 

David Hill II, Age 32, Vice President of Business & Legal Affairs

 

Mr. Hill has served as our Vice President of Business and Legal Affairs, since August 1, 2016. Mr. Hill is an entrepreneurial attorney. Mr. Hill has counseled and consulted start-ups in regards to equity functions, regulatory issues, business development, and venture capital funding.

 

Mr. Hill earned a Bachelor of Arts degree in Political Science from Auburn University, a Juris Doctorate from the Cumberland School of Law at Samford University, and a Masters of Law in Law and Entrepreneurship from the Duke University School of Law. Mr. Hill is a member of the State Bar of Georgia.

 

James Odell Barnes, Jr., Age 67, Director

 

Mr. Barnes, the “Foreclosure King,” is one of the largest buyers of real estate owned foreclosed homes in the United States. He has been in the owner-financing business since 1979, and during his career he has bought and sold more than 50,000 properties. Mr. Barnes’ success, knowledge, and experience have brought him great publicity. He has been featured in the Wall Street Journal, NPR, and twice on ABC’s award winning series Nightline.

 

Mr. Barnes has amassed many connections, due to his success, in governmental institutions, the banking industry, and the investor community. His many connections allow him the ability to purchase more than 1,000 single-family homes a month. Mr. Barnes’ many years of experience brings with it the knowledge of which areas around the country will provide the most profit per acquisition.

 

Directors’ Term of Office

 

Directors will hold office until the next annual meeting of stockholders and the election and qualification of their successors. Officers are elected annually by our board of directors and serve at the discretion of the board of directors.


32


Director Independence

 

Although our securities do not trade on any national securities exchange, for purposes of independence we use the NASDAQ definition of independence. Our directors, Steven Helm and David Hill II, are not independent because of their positions as executive officers of the Company.  James Odell Barnes, Jr. is independent in accordance with the NASDAQ definition for independence.

 

Audit Committee and Audit Committee Financial Expert

 

Our board of directors acts as our audit committee and compensation committee. We do not have an “audit committee financial expert,” as that term is defined in Item 407(d) of Regulation S-K promulgated under the Securities Act. The board of directors believes that its members are financially literate and experienced in business matters and are capable of (1) understanding generally accepted accounting principles (“GAAP”) and financial statements, (2) assessing the general application of GAAP principles in connection with our accounting for estimates, accruals and reserves, (3) analyzing and evaluating our financial statements, (4) understanding our internal controls and procedures for financial reporting, and (5) understanding audit committee functions, all of which are attributes of an audit committee financial expert. However, the board of directors believes that no audit committee member has obtained these attributes through the experience specified in the SEC's definition of “audit committee financial expert.” Further, as is the case with many small companies, it would be difficult for us to attract and retain board members who qualify as “audit committee financial experts,” and competition for such individuals is significant. The board of directors believes that its current audit committee is able to fulfill its role under SEC regulations despite not having a designated “audit committee financial expert.”

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires the Company’s executive officers, directors and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of the Company’s common stock. Such officers, directors and persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file with the SEC.

 

Based solely on a review of the copies of such forms that were received by the Company, or written representations from certain reporting persons, the Company is not aware of any failures to file reports or report transactions in a timely manner during the Company’s fiscal year ended December 31, 2018.  

 

Code of Ethics

 

We have adopted a Code of Ethics applicable to our officers and directors, which is filed as an exhibit to this Annual Report on Form 10-K.  We will provide any person without charge, upon written or oral request to our corporate headquarters, a copy of our Code of Ethics.

 

Procedure for Nominating Directors

 

We have not made any material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

 

Family Relationships

 

There are no family relationships among our directors, executive officers or persons nominated to become executive officers or directors.

 

Involvement in Certain Legal Proceedings

 

During the past ten (10) years, none of our directors, persons nominated to become directors, executive officers, promoters or control persons was involved in any of the legal proceedings listed in Item 401 (f) of Regulation S-K.

 

Arrangements

 

There are no arrangements or understandings between an executive officer, director or nominee and any other person pursuant to which he was or is to be selected as an executive officer or director.


33


ITEM 11.  EXECUTIVE COMPENSATION

 

On July 3, 2018, the Company issued 1,250,000 shares of its common stock to its Chief Executive Officer in return for a total investment into the Company of $248,938.  The total investment into the Company consisted of a contribution of funds as well as the assumption of certain liabilities and accrued expenses.  The accrues expenses were a result of the accrual resulting from the accrual an annual compensation for our Chief Executive Office at a rate of $6,250 per quarter for an annual total of $25,000 from January 1, 2016 through May 15, 2018.  From May 15, 2018 through December 31, 2018 we continued to accrue an annual compensation for our Chief Executive Office at a rate of $6,250 per quarter.   

 

David Hill II received compensation as our VP of Business & Legal Affairs for each of the years ending December 31, 2018 and 2017 of $51,163 and $66,772 respectively.

 

Option/SAR Grants in Last Fiscal Year

 

None.

 

Outstanding Equity Awards at Fiscal Year-End

 

None.

 

Compensation of Directors

 

None of the Company’s directors received any compensation for services as directors during the last fiscal year other than as stated above for our Chief Executive Officer.

 

Equity Compensation Plan Information

 

Not applicable.

 

Employment Agreements

 

None.

 

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 

 

The following table sets forth certain information regarding beneficial ownership of our common stock as of December 31, 2018 by (i) each person (or group of affiliated persons) who is known by us to own more than five percent of the outstanding shares of our common stock, (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group.  As of December 31, 2018, there were 18,692,654 shares of common stock outstanding.

 

Name and Address of Stockholder

Shares

% Owned

David Hill II

 

4,800,640

2,133,618 (indirect) (1)

25.7%

11.4%

 

 

 

James Odell Barnes, Jr.

0

0.00%

 

 

 

Steve Helm

1,250,000

6.7%

 

 

 

Officers and Directors as a Group

8,184,258

43.8%

(3 persons)

 

 

 

 

Brightlane Acquisition Corp. (2)

6,060,000

32.4%

 

 

 

Lloyd G. Dominick

2,965,729

15.9%

 

1)David Hill II is the trustee for the James Odell Barnes, Jr. Irrevocable Trust. 

2)Peter Hellwig, a related party, has voting control of Brightlane Acquisition Corp. 


34


Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. The principal address of each of the stockholders listed below is c/o 1600 West Loop South, Suite 600, Houston, Texas 77056.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

None.

 

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

Aggregate fees including expenses billed to us for the years ended December 31, 2018 and 2017 for professional services performed: 

 

 

2018

2017

Prager Metis CPA’s, LLC

$30,000

$28,500

 

 

 

Tax Fees

$1,750

-

All Other Fees

-

-

Total

$31,750

$28,500

 

Board of Directors Pre-Approval Process, Policies and Procedures

 

Our principal auditors have performed their audit procedures in accordance with pre-approved policies and procedures established by our Board of Directors. Our principal auditors have informed our Board of Directors of the scope and nature of each service provided. With respect to the provisions of services other than audit, review, or attest services, our principal accountants brought such services to the attention of our Board of Directors prior to commencing such services.


35


PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1) The following financial statements are included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2018:

 

1.Reports of Independent Registered Public Accounting Firms 

2.Balance Sheets as of December 31, 2018 and 2017 

3.Statements of Operations for the years ended December 31, 2018 and 2017  

4.Statement of Changes in Stockholders’ Equity (Deficit) as of December 31, 2018 

5.Statements of Cash Flows for the years ended December 31, 2018 and 2017 

6.Notes to the Financial Statements 

 

(a)(2) All financial statement schedules have been omitted as the required information is either inapplicable or included in the Consolidated Financial Statements or related notes.

 

(a)(3) The following exhibits are either filed as part of this report or are incorporated herein by reference:

 

3.1      Certificate of Incorporation of Cold Gin Corporation, as amended (incorporated herein by reference from the Company’s Exhibit to its Information Statement on Schedule 14C filed on December 3, 2010)

 

3.2     Articles of Incorporation of Bonanza Gold Corp., as amended (incorporated herein by reference from the Company’s Exhibit to its Information Statement on Schedule 14C filed on December 3, 2010)

 

3.3     Articles of Merger (incorporated herein by reference from the Company’s Exhibit to its Information Statement on Schedule 14C filed on December 3, 2010)

 

3.4     Certificate of Merger (incorporated herein by reference from the Company’s Exhibit to its Information Statement on Schedule 14C filed on December 3, 2010)

 

3.5     By-Laws of Bonanza Gold Corp. (incorporated herein by reference from the Company’s Exhibit to its Information Statement on Schedule 14C filed on December 3, 2010)

 

3.6 Certificate of Amendment to the Articles of Incorporation of Bonanza Gold Corp. (incorporated herein by reference from the Company’s Exhibit to its Information Statement on Schedule 14C filed on February 9, 2011)

 

31.1 Certification pursuant to Rule 13a-14(a)/15d-14(a) (1)

 

32.1 Certification pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 (1)

 

 

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* Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report

** As provided in Rule 406T of Regulation S-T, this information is deemed furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended.

 

(1)Filed herewith. 


36


SIGNATURES

 

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

 

BRIGHTLANE CORP.

 

Date:  April 16, 2019By:/s/ Steve Helm 

Steve Helm

President and Chief Executive Officer

(Principal Executive Officer, Principal Accounting Officer

and Principal Financial Officer)

 

/s/Steve Helm

Director

 

/s/David Hill II

Director

 

/s/James Odell Barnes, Jr.

Director


37

 

EX-31 2 exhibit31.htm EXHIBIT 31 302 Certification

302 CERTIFICATION

 

I, Steve Helm, certify that:

 

         1. I have reviewed this annual report on Form 10-K of Brightlane Corp.;

 

         2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

         3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

         4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

      a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

      b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

      c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report, our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

      d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

         5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):


         a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

         b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

 

Date: April 16, 2019

 

/s/Steve Helm

Steve Helm

Chief Executive Officer

Principal Financial Officer

 

EX-32 3 exhibit32.htm EXHIBIT 32 906 Certification

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Brightlane Corp. (the "Company") on Form 10-K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steve Helm, Chief Executive Officer and Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

            (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

            (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

/s/Steve Helm

Steve Helm

Chief Executive Officer

Principal Financial Officer

 

 

April 16, 2019

 

 

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Class of Stock [Axis] Net Cash Provided by (Used in) Operating Activities Net Cash Provided by (Used in) Operating Activities Increase (Decrease) in Accounts Receivable Net Cash Provided by (Used in) Operating Activities {1} Net Cash Provided by (Used in) Operating Activities Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent Revenues Revenues Rental income Rental income Common Stock, Shares, Outstanding Entity Incorporation, State Country Name Document Fiscal Period Focus Voluntary filer Deferred Tax Assets, Valuation Allowance Deferred Tax Assets, Valuation Allowance Common Stock, Value, Issued Schedule of Deferred Tax Assets and Liabilities Deferred Income Taxes and Valuation Allowance Deferred Income Taxes and Valuation Allowance shares outstanding shares outstanding Series B Preferred Stock Net cash provided by discontinued operating activities Net cash provided by discontinued operating activities Net Income (Loss), Including Portion Attributable to Noncontrolling Interest Net Income (Loss), Including Portion Attributable to Noncontrolling Interest Provision for Income Taxes Provision for Income Taxes Stockholders' Equity Attributable to Parent {1} Stockholders' Equity Attributable to Parent Current portion of convertible notes payable - related party Current portion of convertible notes payable - related party Assets, Current Assets, Current Entity Listing, Par Value Per Share Amendment Flag Trading Symbol Fiscal Year End Period End date Interest Expense, July 27, 2016 Interest Expense, July 27, 2016 Loss on disposition from discontinued operations Loss on disposition from discontinued operations Common Stock Equity Components [Axis] Undistributed Earnings (Loss) from Discontinued Operations Available to Common Shareholders, Basic Series B Preferred Stock Value Outstanding Series B Preferred Stock Value Outstanding Portfolio management fees from discontinued operations Portfolio management fees from discontinued operations Portfolio servicing fees from discontinued operations Portfolio servicing fees from discontinued operations Long-lived Assets Policies NOTES RECEIVABLE Shares, Outstanding, Beginning Balance Shares, Outstanding, Beginning Balance Shares, Outstanding, Ending Balance Common Stock Including Additional Paid in Capital Statement Payment on demand note payable Payment on demand note payable Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities {1} Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities Interest Liabilities, Current Liabilities, Current Registrant Name Interest Expense, February 28, 2017 Interest Expense, February 28, 2017 Property, Plant, and Equipment, Net Property, Plant, and Equipment, Net Disaggregation of Revenue Restricted Stock Policy Represents the textual narrative disclosure of Restricted Stock Policy, during the indicated time period. Earnings (Loss) Per Share Subsequent Events RELATED PARTY TRANSACTIONS AND BALANCES Principal payments of notes receivable Principal payments of notes receivable Increase (Decrease) in Accounts Payable Earnings Per Share, Basic and Diluted Cost of property sold Cost of property sold Preferred Stock, Par or Stated Value Per Share Additional Paid in Capital Real Estate Investments, Net Entity Address, Postal Zip Code Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount Deferred Tax Assets, Operating Loss Carryforwards Interest Expense, December 9, 2015 Interest Expense, December 9, 2015 Interest Expense, September 30, 2015 Interest Expense, September 30, 2015 Accumulated Depreciation Accumulated Depreciation Portfolio expenses from discontinued operations Portfolio expenses from discontinued operations Statement [Line Items] Equity Component Treasury Stock, Common Proceeds from advance of line of credit Proceeds from advance of line of credit Operating Income (Loss) Operating Income (Loss) Selling, General and Administrative Expense Operating Expenses {1} Operating Expenses Common Stock, Shares Authorized Preferred Stock, Shares Authorized Stockholders' Equity Attributable to Parent Stockholders' Equity Attributable to Parent Liabilities {1} Liabilities Public Float Financial Instruments Cash and Cash Equivalents Income Tax Disclosure Interest Expense, Related Party Liabilities and Equity Liabilities and Equity Local Phone Number Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount Tables/Schedules Related Parties Related Parties Cancelation of treasury stock Cancelation of treasury stock Depreciation Sales of Real Estate {1} Sales of Real Estate Convertible Notes Payable Accrued interest - 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Nevada 300782905 1600 West Loop South, Suite 600 Houston Texas 77056 (888) 468-2856 0.001 1957120 39692654 20578 134650 31644 41568 52222 176218 204498 201696 488429 42892 745149 420806 24128 53423 79086 72982 37527 26149 0 51000 373850 0 297754 280900 812345 484454 487175 0 285237 669044 1584757 1153498 0.001 1 1 0 0 0 0 0.001 250000000 18692654 19442667 18693 19443 2479390 4223571 0 -2043869 -3337691 -2931837 -839608 -732692 745149 420806 8595 11450 21909 0 40547 8100 135830 113778 206881 133328 -47500 -64400 159381 68928 469277 453745 -309896 -384817 33669 47469 62289 4000 -405854 -436286 0 -799270 -405854 -1235556 0 0 -405854 -1235556 -0.02 -0.02 0 -0.04 -0.02 -0.06 18029055 19162849 18923005 18923 1 0 0 0 4224091 -1278788 0 2964226 0 0 0 0 0 0 0 -417493 0 -417493 18923005 18923 1 0 1 0 4224091 -1696281 0 2546733 519662 520 0 0 0 0 -520 0 0 0 0 0 0 0 0 0 0 0 -2043869 -2043869 0 0 0 0 0 0 0 -1235556 0 -1235556 19442667 19443 1 0 1 0 4223571 -2931837 -2043869 -732692 -2100013 -2100 0 0 0 0 -2041769 0 2043869 0 100000 100 0 0 0 0 49900 0 0 50000 1250000 1250 0 0 0 0 247688 0 0 248938 0 0 0 0 0 0 0 -405854 0 -405854 18692654 18693 1 0 1 0 2479390 -3337691 0 -839608 -405854 -436286 0 -799270 -405854 -1235556 16213 1900 56471 50744 0 36309 -461750 17891 -29295 29905 6104 23729 11378 471 -806733 -1074607 0 794642 -806733 -279965 7123 0 7123 0 373850 0 0 400000 63750 0 248938 0 -1000 0 685538 400000 -114072 120035 134650 14615 20578 134650 <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">NOTE 1 – ORGANIZATION AND BUSINESS </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Brightlane Corp. (“we”, “our”, “us”, the “Company” or the “Registrant”) was initially incorporated under the laws of the State of Delaware in December 2006 under the name “Cold Gin Corporation.” On December 27, 2010, in connection with an Agreement and Plan of Reorganization we changed our domicile from Delaware to Nevada, our name to Bonanza Gold Corp.  In the third quarter of 2015, Brightlane Acquisition Corp. acquired a controlling interest in the Company from existing shareholders.  This change of control began the transitioning to a lease-to-own real estate company.  In connection with this transition, effective September 22, 2015 we changed our name to Brightlane Corp.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">On December 21, 2015, we completed the agreement to acquire all of the outstanding shares of Brightlane Homes, Inc., which through its wholly owned subsidiary, acquired a 99.9% limited partner interest in Brightlane RECA, LP which was the beneficiary of the Brightlane RECA Trust which owned a portfolio of assets referred to as the Brightlane RECA Portfolio.  In April 2017, the partners of Brightlane RECA, LP amended the Revised Limited Partnership Agreement to admit Brightlane GP, Corp., an affiliate of the Registrant, as a General Partner of BL RECA LP.  This resulted in the transfer of all General Partner interests and powers to Brightlane GP Corp.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">On November 21, 2017, the Registrant entered into an Agreement resulting in the following actions:  (1) Brightlane #1, LLC, a subsidiary of Brightlane Homes, Inc., a wholly owned subsidiary of Brightlane Corp., transferred its limited partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC; and (2) Brightlane GP Corp, a wholly owned subsidiary of Brightlane Corp., transferred its general partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Agreement and the associated actions resulted in the termination of all agreements entered into on December 21, 2015 and all subsequent addenda to those agreements.  These actions terminate any rights of the Registrant to the Brightlane RECA Trust, thereby terminating all obligations to the underlying acquisition related debt associated with the assets contributed to the Brightlane RECA Trust.  In addition, per the November 21, 2017 Agreement the parties agreed that:  (1) the RECA Principals as defined in the Brightlane RECA Contribution Agreement agreed to return all of their common stock in the registrant totaling 2,100,013 common shares to the Registrant; and, (2) the RECA Principals agreed to facilitate the transfer of certain assets to Brightlane Homes, Inc., a wholly owned subsidiary of the Registrant.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Brightlane Corp. now concentrates on being a real estate operator providing opportunities in the affordable housing market including reasonable rents and leases plus an opportunity to participate in a right-to-purchase program upon meeting certain criteria. Brightlane acquires single-family homes and portfolios of single-family homes and actively pursues the acquisition of these types of homes through one-off purchases, the purchase of portfolios, and other methods of acquisition.  We service a market that is historically underserved – those seeking living arrangements in the sub $150,000 home market. We continually seek out and make the appropriate investments in ancillary services.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">NOTE 2 – GOING CONCERN</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has only generated minimal revenues since inception, has sustained operating losses since inception, and has an accumulated deficit of $(3,337,691) and a working capital deficit of $760,123 at December 31, 2018. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.  The Company’s continuation as a going concern is dependent upon, among other things, its ability to generate revenues and its ability to obtain capital from third parties.  No assurance can be given that the Company will be successful in these efforts.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Management plans to identify adequate sources of funding to provide operating capital for continued growth.  In addition, Management intends to continue accessing the $5 million credit facility obtained by its Brightlane – CLOC Acquisitions, LLC subsidiary in order to acquire additional homes that will provide a profitable revenue stream for the Company.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> -3337691 760123 <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</p> <p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;text-indent:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Basis of Presentation</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.  The Financial Statements have been prepared under accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a December 31 fiscal year end.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Use of Estimates</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"><span style="border-bottom:1px solid #000000">Principals of Consolidation</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify"> </p> <p style="font:10pt Calibri;margin:0;margin-left:9pt;margin-right:13.5pt;display:none"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Cash and Cash Equivalents</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company accounts for cash and cash equivalents under FASB ASC 305, “<i>Cash and Cash Equivalents</i>”, and considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  </p> <p style="font:10pt Calibri;margin:0;margin-left:9pt;margin-right:13.5pt;display:none"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Cash Flows Reporting</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company follows ASC 230, <i>“Statement of Cash Flows,”</i> for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230 to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.</p> <p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Commitments and Contingencies</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company follows ASC 450-20<i>, “Loss Contingencies</i>,” to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.  There were no commitments or contingencies at December 31, 2018 and 2017.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"><span style="border-bottom:1px solid #000000">Convertible Instruments</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.</p> <p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify"><span style="border-bottom:1px solid #000000">Revenue Recognition</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify">  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify">Effective January 1, 2018, the Company adopted guidance issued by the FASB regarding recognizing revenue from contracts with customers.  The revenue recognition policies as enumerated below reflect the Company's accounting policies effective January 1, 2018, which did not have a materially different financial statement result than what the results would have been under the previous accounting policies for revenue recognition.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">Brightlane Corp.’s revenue results from four sources related to the acquisition/disposal and renting/leasing of real estate properties:  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(1)</kbd><kbd style="margin-left:0pt"/>Fees related to the management of properties.  We collect a monthly management fee for each home that we manage on a third party basis for our portfolio clients.  In many instances we also collect late fees. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(2)</kbd><kbd style="margin-left:0pt"/>Interest income on notes receivable.  We carry principle balances on notes receivable and in return for carrying these notes we receive monthly principal and interest payments on these notes receivable.  We apportion the payments as received to reducing the principle balance and book the balance to fees due us as well as interest income.   </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(3)</kbd><kbd style="margin-left:0pt"/>Rental income on properties we own.  We own properties and rent or lease them to our tenants and book this as rental income. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(4)</kbd><kbd style="margin-left:0pt"/>Sale of real estate.  Periodically, as market conditions allow, we dispose of a property.  Once sold, book the net proceeds after customary closing costs as sale of real estate.   </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">The following table disaggregates revenue by major source for the year ended December 31, 2018:</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">  </p> <table style="margin:0 auto;border-collapse:collapse;width:54.52%;margin-left:76.5pt"><tr><td style="border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b>Year Ended December 31, 2018</b></p> </td><td style="padding-bottom:1pt;border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b> </b> </p> </td><td colspan="2" style="border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:center"><b>Total</b></p> </td></tr> <tr><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">Fees Income</p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">$</p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">8,595</p> </td></tr> <tr><td style="background-color:#FFFFFF;padding-bottom:1pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">Interest Income</p> </td><td style="background-color:#FFFFFF;padding-bottom:1pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#FFFFFF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#FFFFFF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">21,909</p> </td></tr> <tr><td style="background-color:#D7D7FF;padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0">Rental Income</p> </td><td style="background-color:#D7D7FF;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">40,547</p> </td></tr> <tr><td style="padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0">Sale of Real Estate</p> </td><td style="padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="border-bottom:0.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">135,830</p> </td></tr> <tr><td style="background-color:#D7D7FF;padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b>Total Revenue </b></p> </td><td style="background-color:#D7D7FF;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">$</p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">206,881</p> </td></tr> </table> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Deferred Income Taxes and Valuation Allowance</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company accounts for income taxes under ASC 740 <i>Income Taxes</i>.  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs.  A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.  No deferred tax assets or liabilities were recognized at December 31, 2018 or 2017.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify"> </p> <p style="font:10pt Calibri;margin:0;margin-left:9pt;margin-right:13.5pt;display:none"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Earnings (Loss) Per Share</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, “<i>Earnings per Share</i>.” Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.  </p> <p style="font:10pt Times New Roman;margin:0;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Financial Instruments</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company’s balance sheet includes certain financial instruments: primarily accounts payable, accruals and debt obligations. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. </p> <p style="font:10pt Times New Roman;margin:0;text-indent:36pt;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">ASC 820, “<i>Fair Value Measurements and Disclosures</i>,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:94.5pt;margin-right:13.5pt"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:44.65pt;text-indent:-85.15pt">Level 1 -</kbd><kbd style="margin-left:44.8pt"/>Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. </p> <p style="font:10pt Times New Roman;margin:0"> </p> <p style="font:10pt Calibri;margin:0;margin-left:94.5pt;margin-right:13.5pt"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:44.65pt;text-indent:-85.15pt"><span style="font-family:Times New Roman">Level 2 -</span></kbd><kbd style="margin-left:44.8pt"/><span style="font-family:Times New Roman">Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.</span> </p> <p style="font:10pt Times New Roman;margin:0;text-indent:-85.15pt;margin-left:94.5pt;margin-right:13.5pt">  </p> <p style="font:10pt Calibri;margin:0;margin-left:94.5pt;margin-right:13.5pt"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:44.65pt;text-indent:-85.15pt"><span style="font-family:Times New Roman">Level 3 -</span></kbd><kbd style="margin-left:44.8pt"/><span style="font-family:Times New Roman">Inputs that are both significant to the fair value measurement and unobservable.</span> </p> <p style="font:10pt Times New Roman;margin:0;text-indent:36pt;margin-left:9pt;margin-right:13.5pt;color:#000000">  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company does not have any assets or liabilities measured at fair value on a recurring basis.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"><span style="border-bottom:1px solid #000000">Investments in non-consolidated subsidiaries</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Long-lived Assets</span></p> <p style="font:10pt Arial;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.</p> <p style="font:10pt Times New Roman;margin:0;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Property and Equipment</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company follows ASC 360, <i>Property, Plant, and Equipment,</i> for its fixed assets.  Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets (3 years). </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Related Parties</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company follows ASC 850,<i> “Related Party Disclosures,” </i>for the identification of related parties and disclosure of related party transactions.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="font-size:10pt;border-bottom:1px solid #000000">Restricted Stock</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company issues restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is measurable more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. </p> <p style="font:10pt Times New Roman;margin:0;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Stock-Based Compensation</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">FASB ASC 718 <i>“Compensation – Stock Compensation,”</i> prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.</p> <p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;color:#000000;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “<i>Equity – Based Payments to Non-Employees</i>.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. </p> <p style="font:10pt Calibri;margin:0;display:none"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Recently Issued Accounting Pronouncements</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.</p> <p style="font:10pt Times New Roman;margin:0;text-indent:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Basis of Presentation</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.  The Financial Statements have been prepared under accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a December 31 fiscal year end.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Use of Estimates</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"><span style="border-bottom:1px solid #000000">Principals of Consolidation</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Cash and Cash Equivalents</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company accounts for cash and cash equivalents under FASB ASC 305, “<i>Cash and Cash Equivalents</i>”, and considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Cash Flows Reporting</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company follows ASC 230, <i>“Statement of Cash Flows,”</i> for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230 to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Commitments and Contingencies</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company follows ASC 450-20<i>, “Loss Contingencies</i>,” to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.  There were no commitments or contingencies at December 31, 2018 and 2017.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"><span style="border-bottom:1px solid #000000">Convertible Instruments</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.</p> <p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify"><span style="border-bottom:1px solid #000000">Revenue Recognition</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify">  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify">Effective January 1, 2018, the Company adopted guidance issued by the FASB regarding recognizing revenue from contracts with customers.  The revenue recognition policies as enumerated below reflect the Company's accounting policies effective January 1, 2018, which did not have a materially different financial statement result than what the results would have been under the previous accounting policies for revenue recognition.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;background-color:#FFFFFF;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">Brightlane Corp.’s revenue results from four sources related to the acquisition/disposal and renting/leasing of real estate properties:  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(1)</kbd><kbd style="margin-left:0pt"/>Fees related to the management of properties.  We collect a monthly management fee for each home that we manage on a third party basis for our portfolio clients.  In many instances we also collect late fees. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(2)</kbd><kbd style="margin-left:0pt"/>Interest income on notes receivable.  We carry principle balances on notes receivable and in return for carrying these notes we receive monthly principal and interest payments on these notes receivable.  We apportion the payments as received to reducing the principle balance and book the balance to fees due us as well as interest income.   </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(3)</kbd><kbd style="margin-left:0pt"/>Rental income on properties we own.  We own properties and rent or lease them to our tenants and book this as rental income. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:55.2pt;text-align:justify"><kbd style="position:absolute;text-indent:-19.2pt;font:10pt Times New Roman">(4)</kbd><kbd style="margin-left:0pt"/>Sale of real estate.  Periodically, as market conditions allow, we dispose of a property.  Once sold, book the net proceeds after customary closing costs as sale of real estate.   </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">The following table disaggregates revenue by major source for the year ended December 31, 2018:</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">  </p> <table style="margin:0 auto;border-collapse:collapse;width:54.52%;margin-left:76.5pt"><tr><td style="border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b>Year Ended December 31, 2018</b></p> </td><td style="padding-bottom:1pt;border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b> </b> </p> </td><td colspan="2" style="border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:center"><b>Total</b></p> </td></tr> <tr><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">Fees Income</p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">$</p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">8,595</p> </td></tr> <tr><td style="background-color:#FFFFFF;padding-bottom:1pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">Interest Income</p> </td><td style="background-color:#FFFFFF;padding-bottom:1pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#FFFFFF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#FFFFFF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">21,909</p> </td></tr> <tr><td style="background-color:#D7D7FF;padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0">Rental Income</p> </td><td style="background-color:#D7D7FF;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">40,547</p> </td></tr> <tr><td style="padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0">Sale of Real Estate</p> </td><td style="padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="border-bottom:0.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">135,830</p> </td></tr> <tr><td style="background-color:#D7D7FF;padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b>Total Revenue </b></p> </td><td style="background-color:#D7D7FF;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">$</p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">206,881</p> </td></tr> </table> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">  </p> <table style="margin:0 auto;border-collapse:collapse;width:54.52%;margin-left:76.5pt"><tr><td style="border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b>Year Ended December 31, 2018</b></p> </td><td style="padding-bottom:1pt;border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b> </b> </p> </td><td colspan="2" style="border-bottom:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:center"><b>Total</b></p> </td></tr> <tr><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">Fees Income</p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">$</p> </td><td style="background-color:#D7D7FF;border-top:2.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">8,595</p> </td></tr> <tr><td style="background-color:#FFFFFF;padding-bottom:1pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">Interest Income</p> </td><td style="background-color:#FFFFFF;padding-bottom:1pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#FFFFFF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#FFFFFF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">21,909</p> </td></tr> <tr><td style="background-color:#D7D7FF;padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0">Rental Income</p> </td><td style="background-color:#D7D7FF;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">  </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">40,547</p> </td></tr> <tr><td style="padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0">Sale of Real Estate</p> </td><td style="padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="border-bottom:0.25pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">135,830</p> </td></tr> <tr><td style="background-color:#D7D7FF;padding-left:9pt;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"><b>Total Revenue </b></p> </td><td style="background-color:#D7D7FF;padding-bottom:2.5pt" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt">$</p> </td><td style="background-color:#D7D7FF" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:right">206,881</p> </td></tr> </table> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Deferred Income Taxes and Valuation Allowance</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company accounts for income taxes under ASC 740 <i>Income Taxes</i>.  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs.  A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.  No deferred tax assets or liabilities were recognized at December 31, 2018 or 2017.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Earnings (Loss) Per Share</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, “<i>Earnings per Share</i>.” Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Financial Instruments</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company’s balance sheet includes certain financial instruments: primarily accounts payable, accruals and debt obligations. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. </p> <p style="font:10pt Times New Roman;margin:0;text-indent:36pt;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">ASC 820, “<i>Fair Value Measurements and Disclosures</i>,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:94.5pt;margin-right:13.5pt"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:44.65pt;text-indent:-85.15pt">Level 1 -</kbd><kbd style="margin-left:44.8pt"/>Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. </p> <p style="font:10pt Times New Roman;margin:0"> </p> <p style="font:10pt Calibri;margin:0;margin-left:94.5pt;margin-right:13.5pt"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:44.65pt;text-indent:-85.15pt"><span style="font-family:Times New Roman">Level 2 -</span></kbd><kbd style="margin-left:44.8pt"/><span style="font-family:Times New Roman">Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.</span> </p> <p style="font:10pt Times New Roman;margin:0;text-indent:-85.15pt;margin-left:94.5pt;margin-right:13.5pt">  </p> <p style="font:10pt Calibri;margin:0;margin-left:94.5pt;margin-right:13.5pt"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:44.65pt;text-indent:-85.15pt"><span style="font-family:Times New Roman">Level 3 -</span></kbd><kbd style="margin-left:44.8pt"/><span style="font-family:Times New Roman">Inputs that are both significant to the fair value measurement and unobservable.</span> </p> <p style="font:10pt Times New Roman;margin:0;text-indent:36pt;margin-left:9pt;margin-right:13.5pt;color:#000000">  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company does not have any assets or liabilities measured at fair value on a recurring basis.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"><span style="border-bottom:1px solid #000000">Investments in non-consolidated subsidiaries</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Long-lived Assets</span></p> <p style="font:10pt Arial;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Property and Equipment</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company follows ASC 360, <i>Property, Plant, and Equipment,</i> for its fixed assets.  Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets (3 years). </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Related Parties</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company follows ASC 850,<i> “Related Party Disclosures,” </i>for the identification of related parties and disclosure of related party transactions.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="font-size:10pt;border-bottom:1px solid #000000">Restricted Stock</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Company issues restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is measurable more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Stock-Based Compensation</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">FASB ASC 718 <i>“Compensation – Stock Compensation,”</i> prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.</p> <p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;color:#000000;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “<i>Equity – Based Payments to Non-Employees</i>.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. </p> <p style="font:10pt Calibri;margin:0;display:none"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"><span style="border-bottom:1px solid #000000">Recently Issued Accounting Pronouncements</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">NOTE 4 – DISCONTINUED OPERATIONS</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;color:#000000;text-align:justify">In April 2017, the partners of Brightlane RECA, LP amended the Revised Limited Partnership Agreement to admit Brightlane GP, Corp., an affiliate of the Registrant, as a General Partner of BL RECA LP.  All General Partner interests and powers were transferred to Brightlane GP Corp.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">On November 21, 2017, the Company entered into an Agreement resulting in the following actions:  (1) Brightlane #1, LLC, a subsidiary of Brightlane Homes, Inc., a wholly owned subsidiary of Brightlane Corp., transferred its limited partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC; and (2) Brightlane GP Corp, a wholly owned subsidiary of Brightlane Corp., transferred its general partnership interest in Brightlane RECA LP, the sole beneficiary of the Brightlane RECA Trust, to GP 2002, LLC.</p> <p style="font:10pt Times New Roman;margin:0"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">The Agreement and the associated actions resulted in the termination of all agreements entered into on December 21, 2015 and all subsequent addenda to those agreements.  These actions terminate any rights of the Registrant to the Brightlane RECA Trust, thereby terminating all obligations to the underlying acquisition related debt associated with the assets contributed to the Brightlane RECA Trust.  In addition, per the November 21, 2017 Agreement the parties agreed that:  (1) the RECA Principals as defined in the Brightlane RECA Contribution Agreement agreed to return all of their common stock in the Company totaling 2,100,013 common shares to the Company; and, (2) the RECA Principals agreed to facilitate the transfer of certain assets to Brightlane Homes, Inc., a wholly owned subsidiary of the Company.  </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <table style="margin:0 auto;border-collapse:collapse;width:356.75pt;margin-left:60.25pt"><tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt"> </p> </td><td style="width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:center">2018</p> </td><td style="width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:center">2017</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Interest income</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">$       235,464</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Fees collected</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">25,113</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Portfolio expenses</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(125,744)</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Portfolio servicing fees</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(217,973)</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Portfolio management fees</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(75,360)</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Loss on equity interest</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(114,500)</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Loss on disposition of assets</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(526,270)</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">Loss from discontinued operations</p> </td><td style="width:92pt;white-space:nowrap;border-top:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap;border-top:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">$     (799,270)</p> </td></tr> </table> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <table style="margin:0 auto;border-collapse:collapse;width:356.75pt;margin-left:60.25pt"><tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt"> </p> </td><td style="width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:center">2018</p> </td><td style="width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:center">2017</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Interest income</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">$       235,464</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Fees collected</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">25,113</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Portfolio expenses</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(125,744)</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Portfolio servicing fees</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(217,973)</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Portfolio management fees</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(75,360)</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Loss on equity interest</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(114,500)</p> </td></tr> <tr style="height:12.75pt"><td style="background-color:#D7D7FF;width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">     Loss on disposition of assets</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="background-color:#D7D7FF;width:92pt;white-space:nowrap;border-bottom:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">(526,270)</p> </td></tr> <tr style="height:12.75pt"><td style="width:172.75pt;white-space:nowrap" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt">Loss from discontinued operations</p> </td><td style="width:92pt;white-space:nowrap;border-top:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">-</p> </td><td style="width:92pt;white-space:nowrap;border-top:0.5pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-right:13.5pt;text-align:right">$     (799,270)</p> </td></tr> </table> 0 235464 0 25113 0 -125744 0 -217973 0 -75360 0 -114500 0 -526270 0 -799270 <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">  </p> <table style="margin:0 auto;border-collapse:collapse;margin-left:46.75pt"><tr><td style="width:175.5pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"><span style="font-size:10pt"> </span> </p> </td><td style="width:110.8pt;padding-left:5.4pt;padding-right:5.4pt;border-bottom:0.75pt solid #000000" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center">December 31,</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center"><span style="font-size:10pt">2018</span></p> </td><td style="width:93.3pt;padding-left:5.4pt;padding-right:5.4pt;border-bottom:0.75pt solid #000000" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center">December 31,</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center"><span style="font-size:10pt">2017</span></p> </td><td style="width:79.8pt;border-bottom:0.75pt solid #000000" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center">Useful</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center">Life</p> </td></tr> <tr><td style="background-color:#D7D7FF;width:175.5pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-right:-0.25pt">Investment in Real Estate</p> </td><td style="background-color:#D7D7FF;width:110.8pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:93pt">502,154 </kbd> </p> </td><td style="background-color:#D7D7FF;width:93.3pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:76pt">45,695 </kbd> </p> </td><td style="background-color:#D7D7FF;width:79.8pt" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-right:-0.25pt;text-align:center">25 years</p> </td></tr> <tr><td style="width:175.5pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-right:-0.25pt">Less:  Accumulated Depreciation</p> </td><td style="width:110.8pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:93pt">(13,725)</kbd> </p> </td><td style="width:93.3pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:76pt">(2,803)</kbd> </p> </td><td style="width:79.8pt" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-right:-0.25pt;text-align:right"> </p> </td></tr> <tr><td style="background-color:#D7D7FF;width:175.5pt;padding-left:5.4pt;padding-right:5.4pt" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-right:-0.25pt"><span style="font-size:10pt">Property, Plant, and Equipment, Net</span></p> </td><td style="background-color:#D7D7FF;width:110.8pt;padding-left:5.4pt;padding-right:5.4pt;border-top:0.5pt solid #000000;border-bottom:3px double #000000" valign="top"><p style="font:10pt Times New Roman;margin:0"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt;text-indent:0pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:93pt">488,429 </kbd> </p> </td><td style="background-color:#D7D7FF;width:93.3pt;padding-left:5.4pt;padding-right:5.4pt;border-top:0.5pt solid #000000;border-bottom:3px double #000000" valign="top"><p style="font:10pt Times New Roman;margin:0"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt;text-indent:0pt"><span style="font-size:10pt">$</span></kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:76pt"><span style="font-size:10pt">42,892 </span></kbd> </p> </td><td style="background-color:#D7D7FF;width:79.8pt;border-top:0.5pt solid #000000;border-bottom:3px double #000000" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-right:-0.25pt;text-align:right"> </p> </td></tr> </table> 502154 45695 -13725 -2803 488429 42892 Investment in real estate are depreciated using the straight-line method.  Depreciation expense was $10,921 and $1,900 for the years ended December 31, 2018 and 2017, respectively. <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">NOTE 6 – LINE OF CREDIT FACILITY</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:9pt;text-align:justify">On May 19, 2017, Brightlane – CLOC Acquisitions, L.L.C., a Delaware limited liability company and a wholly owned subsidiary of the registrant entered into a $5,000,000 revolving credit facility with CoreVest Finance (f/k/a Colony American Finance Lender, LLC).  This credit facility is for the acquisition of residential homes providing the Company an acquisition vehicle.  General provisions of this credit facility are an 18 month term at 9%, with a loan to value of 80%.  At December 31, 2018 the Company had utilized this credit facility to complete two transactions resulting in the acquisition of real estate assets totaling $488,750 of which $373,850 was financed utilizing the credit facility.  The balance of the line of credit was $373,850 at December 31, 2018.</p> 373850 <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify">NOTE 7 – NOTES RECEIVABLE</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:9pt;text-align:justify">As part of the agreement entered into on November 21, 2017, the Company assumed nine notes receivable totaling $243,264.  These notes are secured by residential properties.  The terms associated with these notes range from 11 years to 30 years, with interest rates ranging from 9.3% to 10%.  During the year ended December 31, 2018, principal payments towards notes receivables totaled $7,122, reducing notes receivable to $236,142.  The current portion of these notes is $31,644 (which includes principal and interest payments).</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">NOTE 8 – NOTES PAYABLE</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">On September 30, 2015 the Company borrowed $60,723 from a third party.  The note bears interest at 8% per annum and is payable on demand. Interest is paid quarterly. The note was convertible into common stock of the Company at $0.50 per share.  On January 28, 2016, the Company made a principal payment of $10,723, bringing the outstanding principal to $50,000 on this note.  The lender elected to have interest accrue for the 3 months ended December 31, 2017 thereby increasing the principal due to $51,000 at December 31,2017.  The Company made a principal and interest payment during the year ended December 31, 2018 totaling $2,020 reducing the principal balance to $50,000 and subsequently on May 9,<span style="vertical-align:super"> </span>2018 the lender elected to exercise his option to convert the remaining $50,000 principal balance into 100,000 shares of common stock reducing the principal balance to $0.  Interest expense incurred during the years ended December 31, 2018 and 2017 was $1,447 and $4,000 respectively.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify">On February 28, 2017 the Company borrowed $400,000 from a third party.  The promissory note carries an interest rate of 6% per annum with a maturity date of February 28, 2020.  The lender may convert into shares of our common stock after one year, at $0.20 per share.  The lender has the option of accruing interest or receiving interest only payment annually.  On the anniversary of this note, the lender elected to have interest accrued thereby increasing the principal due to $423,424 at December 31, 2018.  On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense incurred during the years ended December 31, 2018 and 2017 was $25,248 and $19,545 respectively.</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt">On February 5, 2018 the Company issued a note to a third party for the remaining balance owed on properties acquired in a real estate transaction for $63,750.  The promissory note carries an interest rate of 9% per annum with a maturity date of February 5, 2021.  The lender may convert into shares of our common stock after one year, at $0.20 per share.  The lender has the option of accruing interest or receiving interest only payment annually.  On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense incurred during the years ended December 31, 2018 and 2017 was $5,187 and $0 respectively.</p> 60723 0.50 1447 4000 400000 0.20 25248 19545 63750 0.20 5187 0 250000 0.20 16915 15958 110000 0.20 7323 6926 On July 27, 2016, we received an additional $499,200 in capital from the aforementioned related party as an advance on the commitments this related party has to us.  The promissory note carries an interest rate of 6% per annum with a maturity date of July 27, 2020  The lender may convert into shares of our common stock after one year, at $0.50 per share.  The lender has the option of accruing interest or receiving interest only payment annually.  During the year ended December 31, 2016, we repaid a total of $360,000 to the related party toward this promissory note.  On the anniversary of this note, the lender elected to have interest accrued thereby increasing the principal due to $161,621 at December 31, 2018.  On September 20, 2018 the Company and the lender agreed to amend certain terms of the note due to market <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:9pt;text-align:justify"><span style="font:10pt Times New Roman">conditions extending the maturity date by one year and setting the conversion rate to the current $0.20 per share.  Interest expense for this note for years ended December 31, 2018 and 2017 was $9,431 and $8,691 respectively.</span></p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:justify">Mr. Steve Helm sits on the board of directors and also serves as the Company’s Chief Executive Officer.  As compensation for his services we are accruing annual compensation of $25,000 as of January 1, 2016.  We will continue to accrue his compensation at a quarterly rate of $6,250 going forward.  On July 3, 2018, the Company issued 1,250,000 shares of its common stock Mr. Helm in return for a total investment into the Company of $248,938.  The total investment into the Company consisted of a contribution of funds as well as the assumption of certain liabilities and accrued expenses.  The accrued expenses were a result of the accrual resulting from the accrual of the annual compensation at a rate of $6,250 per quarter from January 1, 2016 through May 15, 2018.  From May 15, 2018 through December 31, 2018 we continued to accrue an annual compensation for Mr. Helm at a rate of $6,250 per quarter.  Accrued compensation for years ended December 31, 2018 and 2017 was $15,625 and $25,000 respectively.</p> 499200 0.50 9431 8691 1250000 248938 15625 25000 12000000 519662 100000 50000 1250000 248938 The Company has no other potentially dilutive securities as of the date of this report. <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">NOTE 11 – INCOME TAXES</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000">The components of deferred tax assets consist of:</p> <p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;color:#000000"> </p> <table style="margin:0 auto;border-collapse:collapse;width:84.16%;margin-left:9pt"><tr style="height:13.5pt"><td valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> </td><td valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> </td><td colspan="5" style="border-bottom:1pt solid #000000" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center">December 31,</p> </td></tr> <tr style="height:13.5pt"><td valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> </td><td valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> </td><td colspan="2" style="border-top:1pt solid #000000" valign="top"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center">2018</p> </td><td valign="top"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center"> </p> </td><td colspan="2" style="border-top:1pt solid #000000" valign="bottom"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt;text-align:center">20177</p> </td></tr> <tr style="height:10.3pt"><td style="background-color:#D7D7FF" valign="middle"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt">Net operating loss</p> </td><td style="background-color:#D7D7FF" valign="middle"><p style="font:10pt Times New Roman;margin:0;margin-left:9pt;margin-right:13.5pt"> </p> </td><td style="ba