UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





_____________





FORM 10-Q


_____________








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





For the quarterly period ended: March 31, 2016





OR





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





For the transition period from _____________ to _____________





Commission File No. 333-178037





PAZOO, INC.


(Exact name of registrant as specified in its charter)





Nevada

27-3984713(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)23 Vreeland Rd, Suite 110

Florham Park NJ

07932(Address of Principal Executive Offices)

(Zip Code)





(973) 884-0136


(Registrant’s Telephone Number, Including Area Code)








Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 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 o





Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§230.405 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 o





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





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





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


Yes o   No x





71,853,928 shares of common stock, par value $0.001 per share, outstanding as of May 20, 2016.






1
 Table of Contents








Pazoo, Inc.


Form 10-Q





Table ofContents





PagePart I
Financial Information
3Item 1
Financial Statements
3Balance Sheets (Unaudited)
3Statements of Operations (Unaudited)
4Statements of Cash Flow (Unaudited)
5Notes to Financial Statements (Unaudited)
6Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
14Item 3
Quantitative and Qualitative Disclosures About Market Risk
16Item 4
Controls and Procedures
16Part II
Other Information
17Item 1
Legal Proceedings
17Item 1A
Risk Factors
17Item 2
Unregistered Sales of Equity Securities and Use of Proceeds
17Item 3
Defaults Upon Senior Securities
17Item 4
Mine Safety Disclosures
17Item 5
Other Information
17Item 6
Exhibits
17









































2
 Table of Contents








Part I – FINANCIAL INFORMATION





Item 1     Consolidated Financial Statements (Unaudited)





The results reflected in the unaudited Condensed Consolidated Statement of Operations for the three month period ended March 31, 2016 may not be indicative of results expected for the full year.  The following unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Notes to the Financial Statements, Management’s Discussion and Analysis of Financial Condition and Results of Operations shown in Item 2 of Part I of this report, as well as the audited financial statements and related notes to the financial statements in the Company’s Annual Report on Form 10-K filed on April 15, 2016 with the Securities and Exchange Commission (SEC) for the year ended December 31, 2015.  Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the instructions to Article 8 Regulation S-X.





PAZOO, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)March 31,


December 31,2016


2015ASSETSCurrent assets:Cash and cash equivalents

$
30,625


$
16,819Accounts receivable


3,842



-Prepaid expenses


5,449



5,448Total current assets


39,916



22,267Fixed assets, net


703,337



749,841Intangible assets, net


1,565,570



1,590,935Total other assets


2,268,907



2,340,776Total assets

$
2,308,823


$
2,363,043LIABILITIES AND STOCKHOLDERS' DEFICITCurrent liabilities:Line of credit

$
25,304


$
19,500Accounts payable and accrued liabilities


694,813



406,176Loans payable


232,584



203,000Interest payable


237,324



172,709Convertible debt, net of unamortized discounts of $141,874 and $533,391


1,392,973



809,644Contingent consideration liabilites


713,581



718,581Derivative liabilities


3,618,509



1,756,435Capital lease liability


223,135



304,516Total current liabilities


7,138,223



4,390,561Long-term liabilities:Long-term portion of convertible debt, net of unamortized discounts of $0, and $794,036


1,292,500



198,464Capital lease


293,083



242,771Total long-term liabilities


1,585,583



441,235Total liabilities


8,723,806



4,831,796CommitmentsStockholders' deficit:Convertible Preferred Stock, 50,000,000 shares authorized, $0.001 par valueSeries A; 10,000,000 shares authorized, 553,449 and 860,669 shares issued and outstanding, respectively.


553



861Series B; 5,000,000 shares authorized, 1,762,500 and 1,762,500  shares issued and outstanding, respectively.


1,762



1,762Series C; 10,000,000 shares authorized, 2,169,930 and 2,051,000 shares issued and outstanding, respectively.


2,170



2,051Series D; 12,500,000 shares authorized, 0 and 0 shares issued and outstanding, respectively.


-



-Series E; 12,500,000 shares authorized, 0 and 0 shares issued and outstanding, respectively.


-



-Common stock, $0.001 par value; 2,950,000,000 shares authorized, 24,730,296 and 14,865,053 shares issued and outstanding, respectively.


24,730



14,865Additional paid-in capital


9,796,518



9,410,382Accumulated deficit


(16,240,716
)


(11,898,674
)Total stockholders' deficit


(6,414,983
)


(2,468,753
)Total liabilities and stockholders' deficit

$
2,308,823


$
2,363,043








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




3
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PAZOO, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)Three Months EndedMarch 31,2016


2015Revenues:Advertising sales

$
7,326


$
20,233Merchandise sales


-



-Total revenues


7,326



20,233Cost of salesMerchandise sales


-



-Total cost of sales


-



-Gross profit


7,326



20,233Operating expenses:Selling, general and administrative expenses


701,686



1,080,862Professional fees


144,443



228,521Website setup


4,967



57,120Total operating expenses


851,096



1,366,503Loss from operations


(843,770
)


(1,346,270
)Other income/(expenses):Gain/(loss) on derivative liabilities


(2,406,761
)


439,113Loss on debt extinguishment


(66,994
)


-Gain on change in FV of contingent consideration


5,000



-Loss on impairment of equity method investment


-



(499,000
)Interest expense


(1,029,517
)


(518,371
)Net loss

$
(4,342,042
)

$
(1,924,528
)Series A preferred stock dividends


(195
)


(8,962
)Net loss attributable to common stockholders

$
(4,342,237
)

$
(1,933,490
)Net loss per common share – basic and diluted

$
(0.21
)

$
(0.66
)Weighted average common shares outstanding - basic and diluted


20,862,328



2,944,717








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




4
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PAZOO, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)Three Months EndedMarch 31,2016


2015Cash flows from operating activities:Net loss

$
(4,342,042
)

$
(1,924,528
)Adjustments to reconcile net loss to net cash used in operating activities:Amortization of debt discounts


762,237



451,693Depreciation


46,504



-Amortization


25,365



-Capitalized interest expense


192,936Change in fair value of contingent consideration


(5,000
)


-Stock-based compensation


49,900



862,800(Gain)/loss on derivative liabilities


2,406,761



(439,113
)(Gain)/loss on debt extinguishment


66,994



-Loss on true-up of convertible notes


-



34,383Additional common shares issued for true-up of convertible notes


-



51,470Impairment loss on equity method investment


-



499,000Changes in operating assets and liabilities:Accounts receivable


(3,842
)


(821
)Prepaid expenses and other current assets


(1
)


4,716Accounts payable, accrued liabilities and interest payable


322,309



5,159Interest payable


64,615



66,679Net cash used in operating activities


(413,264
)


(388,562
)Cash flows from investing activities:Cash paid for purchase of licenses


-



(200,000
)Equity investment in equity method investee


-



(499,000
)Net cash used in investing activities


-



(699,000
)Cash flows from financing activities:Line of credit


5,804



-Proceeds from convertible note, net of original issue discounts


372,750



82,500Stock subscription receivable


-



5,254Repayments on capital leases


(31,069
)


-Repayments on convertible notes


(9,516
)


-Proceeds from loans payable


39,100



-Proceeds from issuing common stock


-



48,380Proceeds from sale of Series A preferred stock and warrants


-



235,000Proceeds from sale of Series C preferred stock


50,001



-Net cash provided by financing activities


427,070



371,134Net increase (decrease) in cash and cash equivalents


13,806



(716,428
)Cash and cash equivalents beginning of period


16,819



733,637Cash and cash equivalents end of period

$
30,625


$
17,209Supplemental Disclosure of Cash Flows InformationCash paid for interest

$
-


$
-Cash paid for income taxes


-



-Noncash Investing and Financing ActivitiesCommon stock issued for the conversion of Series A preferred stock

$
369


$
60,000Common stock issued for the conversion of Series C preferred stock


-



-Debt discount due to derivative liabilities


406,336



181,803Resolution of derivative liabilities


-



1,126,245Preferred shares issued for conversion of debt and interest


30,652



-Common shares issued for conversion of debt and interest


265,258



679,251Common shares issued with debt


-



-








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




5
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Pazoo, Inc.


Notes to Unaudited Condensed Consolidated Financial Statements








Note 1—DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Description of Business





The Company is a growth stage health and wellness company. Presently, their business consists of pazoo.com, an online, content driven, ad supported health and wellness web site for people and their pets. Additionally, this site has e-commerce functionality which allows pazoo.com to be an online retailer of nutritional foods/supplements, wellness goods, and fitness apparel. Pazoo, Inc. does not have any brick and mortar establishments.





Further, the Company entered the pharmaceutical testing laboratory market with their acquisitions of MA & Associates, LLC which will operate pharmaceutical testing laboratories in Nevada, and Harris Lee Holdings, LLC which will operate pharmaceutical testing laboratories within other states, or license testing protocols as independently owned laboratories.  These pharmaceutical testing laboratories focus on providing quality control services to the medical cannabis industry.  The mission is to protect the public health by providing infrastructure and analytical services to legally-authorized cannabis producers and distributors as well as to regulators.  States that have legalized cannabis are developing cannabis health and safety criteria that we will fulfill through their testing laboratories.  Lastly, the Company’s wholly owned subsidiary, CK Distribution LLC, provides the marketing and sales agent for the distribution of non-controlled hemp products throughout the USA. Non-controlled hemp products are the items utilized by the industry that support grow facilities, infusion companies and dispensaries.





Basis of Presentation





The accompanying unaudited condensed consolidated financial statements include the accounts of the Pazoo, Inc. (“Pazoo” or the “Company”) and its wholly-owned subsidiaries MA & Associates, LLC and Harris Lee Holdings, LLC.  These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant inter-company transactions and accounts have been eliminated in consolidation.





In March 2016, the Company effected a 1-for-100 reverse stock split of the outstanding common stock (the “Reverse Stock Split”) whereby every one hundred (100) shares of outstanding common stock decreased to one (1) share of common stock. Similarly, the number of shares of common stock, par value $0.001 (“Common Stock”) into which each outstanding Preferred stock and warrant to purchase common stock is to be exercisable decreased on a 1-for-100 basis and the exercise price of each outstanding preferred stock and warrant to purchase common stock increased proportionately. The impact of this reverse stock split has been retroactively applied to the financial statements and the related notes.





The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 as filed on April 15, 2016.





Equity Method Investments





Equity method investees are all entities over which the Company has significant influence, but not control. Significant influence is presumed with a shareholding of between 20% and 50% of the voting rights. Investments in equity method investees are accounted for using the equity method of accounting and are initially recognized at cost. In 2015, both entities became wholly owned subsidiaries.





Use of Estimates





In accordance with GAAP the preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period.






6
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On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources. These accounting policies are described at relevant sections in the notes to the financial statements.





Principles of Consolidation





The condensed consolidated financial statements include the accounts of Pazoo and its subsidiaries, which are wholly owned. All significant intercompany transactions and balances have been eliminated in consolidation.





Fixed Asset





Fixed assets are presented at cost at the date of acquisition. Depreciation and amortization is calculated based on the straight-line method over the estimated useful lives of the depreciable assets, or in the case of leasehold improvements, the shorter of the lease term or the estimated useful life of the asset, a portion of which is allocated to cost of sales. Improvements are capitalized while repairs and maintenance are charged to operations as incurred.





Impairment of Long-Lived Assets





The Company’s intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate.  The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value.  If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized.  An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset.  The Steep Hill and MA licenses were evaluated for impairment and no impairment loss was incurred as of March 31, 2016.





Basic and Diluted Net Loss Per Common Share





Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share reflects, in addition to the weighted average number of common shares, the potential dilution if shares of convertible preferred stock were converted into shares of common stock and a corresponding accrued 5% dividend, unless the effects of such exercises and conversions would have been anti-dilutive.





Dilutive SecuritiesMarch 31, 2016


March 31, 2015Convertible notes


848,119,672



441,917,854Preferred series A shares & warrants


351,153,200



425,965,600Preferred series C


216,963,000



58,000,0001,416,235,872



925,883,454





Recent Accounting Pronouncements





February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance related to how an entity should recognize lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance is effective for us beginning in the first quarter of 2019. Early adoption is permitted.  In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is evaluating the impact of adopting this guidance on our consolidated financial condition, results of operations and cash flows.





In March 2016, the FASB issued new guidance which involves several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the guidance to determine the Company's adoption method and the effect it will have on the Company's Consolidated Financial Statements.






7
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In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in ASU 2016-01, among other things, requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); Eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities. The amendments in this ASU are effective for non-public companies for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning December 15, 2019.  Early adoption of the amendments in the ASU is permitted as early as the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  The adoption of this standard is not expected to have a material effect on the consolidated financial position and results of operations and statements of cash flows.





In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40)—Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, or ASU 2014-15. ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is a substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 defines the term substantial doubt, requires an evaluation of every reporting period including interim periods, provides principles for considering the mitigating effect of management’s plan, requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, requires an express statement and other disclosures when substantial doubt is not alleviated, and requires an assessment for a period of one year after the date that the financial statements are issued or available to be issued. The amendments in ASU 2014-15 are effective for annual periods beginning after December 15, 2016 and interim periods within those reporting periods. Earlier adoption is permitted. The Company is currently evaluating the impact this guidance may have on our consolidated financial statements.





In September 2015, the FASB issued Accounting Standards Update (ASU) 2015-16—Business Combinations, as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The amendment eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this guidance for the year ended December 31, 2016. The Company does not expect this guidance to have a material effect on its consolidated financial statements.





On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of the new standard from January 1, 2017 to January 1, 2018. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. This ASU permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.





Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed to have a material impact on our present or future consolidated financial statements.





Fair Value of Financial Instruments





The Company’s financial instruments consist principally of cash and cash equivalents, derivatives, convertible debt, and accounts payable. The Company believes that the recorded values of all of its other financial instruments approximate their fair values because of their nature and respective maturity dates or durations. The fair value of our long-term debt is determined by using estimated market prices. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:





Level 1: Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.


Level 2: Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.


Level 3: Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.






8
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Revenue Recognition





Revenues are recognized when evidence of an agreement exists, the price is fixed or determinable, collectability is reasonably assured and goods have been delivered or services performed.  The Company is paid revenue from various advertising sources.  Typically advertising revenue is based upon the activity reports received from the advertising brokers and revenue is paid in accordance with the broker agreements at varying intervals from 30 to 75 days following the close of the particular advertising period.  The Company recognizes the revenue, and records the accounts receivable, upon receipt of the activity report from the broker.  In the event payment is not received within 120 days of the due date, the Company with classify such amount as an account where collection is doubtful.  At this time the Company has no reason to believe any accounts are not collectible and therefore no allowance for doubtful accounts has been made at this time for any advertising revenue.





Note 2—GOING CONCERN





During the three months ended March 2015 and 2016, the Company incurred net losses of $1,924,528 and $4,342,042, respectively. In addition, as of March 31, 2016, the Company had a working capital deficit of $7,098,307. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon our ability to generate sufficient cash flow and raise additional capital to meet our obligations on a timely basis and ultimately attain profitability.  If the Company is unable to generate sufficient cash flow or raise additional capital, it could be forced to cease operations.





Note 3—FIXED ASSETS





Fixed assets consists of the following:





Estimated Useful Life

(in years)


March 31, 2016


December 31, 2015Cost:Equipment


3-5


$
643,195


$
643,195Furniture and fixture


7



6,687



6,687Leasehold improvements


3-5



238,620



238,620Website


3



1,385



1,385$
889,887


$
889,887Accumulated depreciation and amortization






(186,550
)


(140,046
)Fixed Assets, Net





$
703,337


$
749,841





Costs of assets acquired under capital leases were approximately $615,000 as of March 31, 2016 and $615,000 at December 31, 2015.  The capital lease represents a total of three leases for testing equipment. The leases hold an interest rate of 0% and monthly payments are approximately $17,000 per month. As of March 31, 2016 and at December 31, 2015, accumulated depreciation related to assets under capital lease was $131,547 and $103,796, respectively.





Note 4—INTANGIBLE ASSETS





Intangible assets as of March 31, 2016 and December 31, 2015 consisted of a license agreement acquired for $307,500 from Steep Hill Labs for the right to take the Steep Hill software and methodology to states above and beyond Nevada, and the MA license derived from the acquisition of $1,345,771.  The cost basis of the intangible asset will be amortized over a twenty year useful life.  Amortization expense for the three months ended March 31, 2016 and March 31, 2015 were $25,365 and $0, respectively.  Annual amortization expense is approximately $107,000 per year.





March 31, 2016


December 31, 2015Steep Hill license

$
307,500


$
307,500MA & Associates license


1,345,771



1,345,771$
1,653,271


$
1,653,271Accumulated amortization


(87,701
)


(62,336
)Intangible Assets, Net

$
1,565,570


$
1,590,935






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Note 5—LINE OF CREDIT





The Company entered into a line of credit with Wells Fargo in December 2015 in the amount of $25,000.  The credit line bears an interest rate of 9.75% annually, compounded daily, and there is no term on the account. There are no financial covenants and the guarantor on the account is Steve Basloe. The line of credit has been used for general operating expenses.





Note 6—DERIVATIVE LIABILITIES





The Company evaluates all of it financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.





Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.





Under ASC-815 the conversion options embedded in the notes payable described in Note 8 require liability classification because they do not contain an explicit limit to the number of shares that could be issued upon settlement. In addition, all of the Company’s outstanding common stock warrants are tainted, as they include price protection clauses, in 2014 and 2015 and accounted for as derivative liabilities.





The following table summarizes the changes in the derivative liabilities during three months ended March 31, 2016:





Deritvative Liability TableBalance as of December 31, 2015

$
1,756,435Initial value derivatives


2,165,934Extinguished


(951,023
)Change in fair value


647,163Balance as of March 31, 2016

$
3,618,509





The Company uses the Black Scholes Option Pricing Model to value its convertible debt and warrant derivative liabilities based upon the following assumptions during the three months ended March 31, 2016:




March 31, 2016Dividend yield:


0Expected volatility


80%Risk free interest rate

0.16% to 0.39%Expected life (years)

0.04 to 0.86





During three months ended March 31, 2016 and 2015, the aggregate gain/(loss) on derivative liability was ($2,406,761) and $439,113, respectively, consisting of initial derivative expense and the change in fair value of the derivative liabilities.





Note 7—STOCKHOLDERS’ EQUITY





Preferred Stock





Total stock-based compensation recognized at March 31, 2016 totaled $49,900, consisting of 60,000 common shares and 47,500 Series C preferred shares. For the three months ended March 31, 2015 total stock-based compensation was recognized at March 31, 2015 of $862,800.





During the three months ended March 31, 2016, 368,526 shares of Series A preferred stock were converted into 2,348,526 common shares and in 2015 275,000 Series A preferred stock were converted into 275,000 common shares, respectively.





During the three months ended March 31, 2016, the Company issued an aggregate of 61,306 Series A Preferred Stock in connection with conversion of $30,652 notes payable with no effect to net loss.





During the three months ended March 31, 2016, the Company sold 71,430 Series C Preferred Stock for $50,001.




The conversion rates for the Preferred Series of Stock are not affected by the stock split.




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Common Stock





Issuances





During the three months ended, March 31, 2016, the Company issued 7,456,707 common shares in connection with conversion of debt valued at $265,258 for the conversion of debt of $77,874.





Preferred Stock Warrants





The following table presents the Series A preferred stock warrant activity during 2015 and first quarter 2016:





Warrants


Weighted Average Exercise PriceOutstanding - December 31, 2015


2,958,083


$
1.17Granted


-



-Forfeited/canceled


-



-Exercised


-



-Outstanding – March 31, 2016


2,958,083


$
1.17Exercisable – March 31, 2016


2,958,083


$
1.17





The weighted average remaining life of the outstanding Series A preferred stock warrants as of March 31, 2016 and December 31, 2015 was 3.97 and 4.22 years, respectively.





In April 2016, pursuant to a Settlement Agreement with ICPI, all remaining Series A Warrants have been retired in exchange for the issuance of Series C Preferred Stock.  A total of 1,700,000 Series C Preferred Shares were issued to ICPI in exchange for the retirement of all remaining Series A Warrants and the waiver of unpaid dividends on Series A Preferred stock held by ICPI for the years 2014, 2015 and 2016.




Note 8—CONVERTIBLE NOTES




The following table summarizes the changes in the convertible notes in the three months ending March 31, 2016:




Short Term


Long Term


TotalBalance as of December 31, 2015 - Net

$
809,644


$
198,464


$
1,008,108Add back: unamortized discount


533,391



794,036



1,327,427Balance as of December 31, 2015 - Gross

$
1,343,035


$
992,500


$
2,335,535Cash additions


72,750



300,000



372,750Interest added to notes payable


192,936



192



192,936Cash payments


-



-



-Conversions


(78,874
)


-



(78,874
)Original issue discount


5,000



-



5,000Total

$
1,534,847


$
1,292,500


$
2,827,347Less: unamortized discount


(141,874
)


-



(141,874
)Balance as of March 31, 2016

$
1,392,973


$
1,292,500


$
2,685,473


Year Ended March 31,2017


2018


2019


2020


2021


Therafter

TotalConvertible notes


1,534,847



-



-



-



300,000



992,500



2,827,347Short-term non-convertible notes


232,584



-



-



-



-



-



232,584Total


1,767,431



-



-



-



300,000



992,500



3,059,931






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In February 2016, the company entered into convertible note agreements for an aggregate total of $72,750. The interest rates range from 8% - 12% and the conversion terms are at a 50% discount to the 25 prior trading days. The maturity dates range from November 2016 to February 2017.





In March 2016, the Company entered into a convertible agreement note with private investors for the amount of $300,000 with an interest rate of 12% and a maturity date of March 2021.





In addition to the funds received, noteholders converted $78,874 during the three months ended March 31, 2016 into common stock exclusive of accrued interest.  Non-cash additions, which are due to the increase in principle for compounding interest, including accrued interest, to new assignee, totaled $192,936 in the first three months of 2016.  At March 31, 2016, a total of 6 notes with a principle balance of $852,861 were past due.




Note 9—RELATED PARTY TRANSACTIONS





In July 2013, the Company entered into a consulting agreement with an affiliate of Mr. Basloe, a board member of the Company. The agreement provides for consulting on marketing-related services for the Company. Amounts incurred under this agreement for the three months ended March 31 2016 and 2015, totaled $6,500 and $15,000, respectively.





In January 2015, the Company entered into a services agreement with a family member of board member Mr. Basloe. The agreement provided for consultation services related to the Colorado recreational and medical marijuana marketplace and onsite retail operations studies in Boulder, CO and Denver, CO. The consultant was granted 250,000 common shares under the agreement which vest after six months. The fair value of the award was determined to be $1,750, of which $1,750 was recognized during the year ended December 31, 2015 as stock-based compensation.





In connection with the investments in Harris Lee Holdings, LLC and MA & Associates, LLC the Company issued Series B and Series C Preferred shares to two current board members, Mr. Del Hierro and Mr. Lieberthal in 2015. Mr. Del Hierro was issued 150,000 shares of Series B Preferred and 380,000 shares of Series C Preferred. Mr. Lieberthal was issued 150,000 shares of Series B Preferred shares and 332,000 shares of Series C Preferred shares for total compensation of $891,000, which was recorded as stock compensation.





In July 2015, Harris Lee Holdings, LLC entered into a series of agreements related to the operations of the Colorado testing facility being managed by Harris Lee Colorado, LLC.  The Managing Member of Harris Lee Colorado, LLC is an immediate family member of Steve Basloe, President and Director of the Company.  Among the agreements signed is a sub-license Agreement whereby Harris Lee Holdings, LLC sub-licenses the Steep Hill Labs testing protocol to Harris Lee Colorado, LLC in exchange for licensing fees based on the number of tests conducted by Harris Lee Colorado, LLC.





Note 10—LOANS PAYABLE





In September 2015, Pazoo, Inc. entered into a loan note totaling $200,000 with Mark Sarna and Sarna Family Limited Partnership. The note has an interest rate of 15.0% and matures September 22, 2016.  As of March 31, 2016, $200,000 still remains outstanding.





In January 2016, Pazoo, Inc. entered into a loan note totaling $5,000 with RBF Unlimited, LLC.  The note has an interest rate of 0.70% and matures January 27, 2017. As of March 31, 2016, loan was paid back in full.





In January 2016, Pazoo, Inc. entered into a loan agreement with Kabbage Loans totaling $9,100. The loan has a monthly payment consisting of $500 to the principal and $210 to fees, totaling a monthly cost of $710. The loan will be paid off in a maximum of 12 months. As of March 31, 2016, $7,583 still remains outstanding.





In February 2016, Pazoo, Inc. entered into a loan note totaling $25,000 with LG Capital, LLC. The note has an interest of 8% and it matures on October 4, 2017. As of March 31, 2016, $25,000 still remains outstanding.





Note 11—COMMITMENTS





On March 10, 2015, Harris Lee signed a 9-year licensing agreement with Steep Hill Labs, LLC, with options to renew for an additional 9 years. The purpose of the agreement is to take the Steep Hill licensing to additional states to test medical marijuana above and beyond the State of Nevada, namely Oregon and Colorado. Under the license agreement for the first two states (Oregon and Colorado), if certain gross revenue thresholds are met, the Company is obligated to pay an additional $250,000. In addition, the Company is obligated to pay certain royalties over the life of the license agreement to Steep Hill Labs, LLC, based on the greater of the number of tests ($5 dollars a test) or an escalating royalty rate (7% to 15%) of the initial purchase price. The Company has the option to enter into additional states with similar commitments and royalties.





In 2015, MA and Associates, LLC entered into various capital lease agreements to finance fixed asset purchases for approximately $615,000. Total monthly payments over the 36 month terms are approximately $17,000.






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The Company rents office space in New Jersey with a term ending on February of 2016 and monthly payments of approximately $1,500. The Company’s MA and Associates, LLC subsidiary rents space in Nevada with a 60 month term ending in May of 2019, with monthly rent expense of $1,632. The Company’s Harris Lee, LLC subsidiary rents space in Portland, Oregon under a 96 month lease, ending October of 2023 with escalating monthly rental payments from $1,650 to $2,322.





As of March 31, 2016 the Company was still obligated to pay the remaining portion under the original 2014 40% investment agreement with MA and Associates, LLC, consisting of $678,000 of cash and 50,000 shares of Series C Preferred Stock (valued at $35,000 as of March 31, 2016), totaling $713,581 and included in contingent consideration liability on the accompanying consolidated balance sheet and will be issued in the future after the testing laboratory is operational.





As of March 31, 2016 the Company was obligated to pay Blue Moon Advisors, Inc., per the November 2015 Incubation Agreement.  The Company is obligated to pay $17,000 per month starting on January 1, 2016, throughout the year of 2016, totaling $204,000.




Note 12—SUBSEQUENT EVENTS





The company issued an aggregate of 38,813,053 common shares to debt holders valued at a total of $151,863 for conversions pursuant to convertible notes. The conversion prices on these stock issuances averaged at a price of $0.005876.





Investors converted 83,103 Series A Preferred stock into 8,310,300 common stock.





The Company issued 28,579 Series C Preferred stock for an amount of $20,000.





The Company issued 2,200,000 Series C Preferred stock in accordance with a Settlement Agreement dated April 22, 2016.  This Agreement specifies an issuance of 2.2 million Series C Preferred stock for the retirement of any and all outstanding warrants, preferred shares, or contingent considerations in the past or moving forward.  As noted in Note 7, 1.7 million of these Series C Preferred shares are for the cancellation of approximately 2.95 million warrants and release from any prior Series A dividends.  The remaining shares were issued for payment on certain contingent consideration accrued for as of March 31, 2016 and for compensation, recognized as of March 31, 2016.





In Company entered into a line of credit with Wells Fargo Bank for a total of $5,000.





The Company entered into a convertible note agreements for $58,000. The interest rate is 10% and the conversion terms are at the lesser of $0.02 or a 50% discount to the 20 prior trading days. The maturity date of the note is April 12, 2017.





The Company issued an aggregate of 55 Series A Preferred stock for dividends from 2015 for certain Preferred A shareholders.





The consolidated financial statements included in this report have been prepared in conformity with generally accepted accounting principles that contemplate our continuance as a going concern. The Company has had minimal revenues and has generated losses from operation. As set forth in Note 2 to the audited Financial Statements, the continuation of the Company as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses until it becomes profitable, if ever. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.














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





This Quarterly Report on Form 10-Q contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Any statements in this Quarterly Report that are not statements of historical facts are forward-looking statements, which involve risks and uncertainties. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. Our actual results may differ materially from those indicated in the forward-looking statements as a result of the factors set forth elsewhere in this Quarterly Report on Form 10-Q, including under “Risk Factors.” You should read the following discussion and analysis together with our unaudited financial statements for the periods specified and the related notes included herein. Further reference should be made to our Registration Statement on Form S-1 filed with the Securities and Exchange Commission.





This Quarterly Report on Form 10-Q contains terminology referring to Pazoo, Inc., such as “us,” “our,” and “the Company.”





Management intends the following discussion to assist in the understanding of our financial position and our results of operations for the three months ended March 31, 2016 and March 31, 2015.





Overview


We were incorporated as a C-Corporation in the State of Nevada as IUCSS, Inc. on November 16, 2010 and we established a fiscal year end of December 31.  On May 9, 2011, we changed our name to Pazoo, Inc. to take advantage of unique branding and website opportunities. We are a start-up health and wellness social community that has developed its website (www.pazoo.com) to provide information, services, and online products for improvement of everyday living.  Our mission is to be 1) a leading social community offering best-in-class health and wellness products for both people and pets; 2) an important resource for consumers and professionals with diverse information about health and wellness and 3) specifically as it relates to medical marijuana and the testing of medical marijuana to ensure quality and safety for the consumer.





Our principal executive offices are located at 23 Vreeland Rd, Suite 110, Florham Park NJ 07923. Our telephone number is (855) PAZOO-US. Our internet address is www.pazoo.com.





On or about April 8, 2014 Pazoo moved into the pharmaceutical testing space with the acquisition of MA & Associates, LLC a Nevada limited liability company formed with the purpose of opening a cannabis testing laboratory based in Las Vegas, Nevada to be branded under the Steep Hill labs name.   Harris Lee Holdings, LLC was formed, as a Nevada limited liability company, on or about July 23, 2014 and was formed to hold a License from Steep Hill Labs, Inc. for cannabis testing protocols and the use of the Steep Hill Labs name.   Both entities are now a wholly owned subsidiaries of the Company.  The intent is that Harris Lee Holdings, LLC will directly own and operate testing laboratories in states where permitted to do so, and sub-license the Steep Hill testing protocol in states where direct ownership would be prohibited.




Sources of Revenue


We currently have three lines of business relating to and revolving around the health and wellness arena:





●
Advertising Revenue from Our Website,www.pazoo.com.   Through advertising providers and agencies, pazoo.com is paid for every ad impression that appears on a page for which a visitor goes to. As we build our visitor base, ad revenue will increase. However, just having the traffic does not effectively increase advertising revenue. To get the full value of each visitor, the time on site must be long enough so that a visitor is interested in going to multiple pages for which there are ads on each page. The only way this will transpire is if the visitor’s experience is gratifying. This is why pazoo.com is so focused on quality content that’s interesting and informative. A bad visitor experience will result in a low time on site and fewer page views. Internet tracking tools have much improved over the past decade and will continue to improve in the coming years, especially when it comes to advertising and overall website analytics. Pazoo continues to constantly improve is this area at all times.



Pazoo.com has a unique and compelling online marketing platform. Pazoo.com offers the following important marketing advantages to its target audiences:




1.
A comprehensive solution as a content source – information on a full spectrum of disciplines within the health and wellness marketplace;


2.
Health and wellness experts that have expertise in these varied disciplines and write about their areas expertise; and


3.
Content that is both for the health and wellness of people as well as their pets (over 60% of American homes have pets).









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●
E-commerce.   Our e-commerce offerings will increase as we build the traffic coming to pazoo.com. In this way we could establish a revenue source over and above advertising to increase the value of each visitor. We have the following e-commerce elements ready for an activated marketing program:





1.
An e-commerce platform that is functional;


2.
Relationships with manufacturers, distributors and other e-commerce companies so that increasing product offerings will not be time consuming;


3.
Members on the pazoo.com content team with merchandising experience: i.e. a Pazoo expert is buyer of pet products for a large pet retailer; and


4.
Members on the pazoo.com content team that are experienced in e-commerce marketing; i.e. we will look to offer our consumers low cost and timely delivery of product by negotiating with shipping companies to offer a flat rates on various products.





●
Pharmaceutical Testing Facilities. MA & Associates was launched to provide quality control services to the medical cannabis industry. MA & Associates’ primary mission is to protect the public health by providing infrastructure and analytical services to legally authorized distributors and producers of cannabis and to regulators tracking their operations. As of June, 2015, we have acquired a 100% equity stake in MA & Associates, LLC and the testing laboratory in Las Vegas Nevada is open for business.



The company will provide the medical cannabis industry guidelines on how the regulation and inspection by public health authorities is to be implemented. MA & Associates’ primary customer base includes all of the licensed cannabis cultivators, in the State of Nevada, and their customers are required by law to have their products tested before they can be transferred to the dispensaries.



We have further expanded our footprint in this arena through Harris Lee Holdings, LLC, a company formed to take the MA & Associates testing model outside of Nevada and into other states.  The company is currently managing Harris Lee Colorado, LLC, an existing lab in Denver, Colorado, after receiving approval from the Colorado Marijuana Enforcement Division in February of 2016. The Company also announced it has leased a space in Portland, Oregon where it will be establishing a testing lab. We are in a unique position to provide the mandated health and safety testing upon which this burgeoning industry must hinge moving forward. Lastly, our newly formed wholly owned subsidiary CK Distribution LLC, provides the marketing and sales agent for the distribution of non-controlled hemp products throughout the USA. Non-controlled hemp products are the items utilized by the industry that support grow facilities, infusion companies and dispensaries.





Critical Accounting Policy and Estimates


Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.  On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.





Results of Operations


Comparison of the three months ended March 31, 2016 to the three months ended March 31, 2015





Net Sales.  We had net sales of $7,326 and $20,233 in the three months ended March 31, 2016 and March 31, 2015, respectively.





Operating Expenses.  Operating expenses consisted primarily of selling, general and administrative expenses and professional fees.  Total operating expenses decreased to $851,096 for the three month period ended March 31, 2016 from $1,366,503 for the three month period ended March 31, 2015.  The components of operating expenses are detailed below.





Selling, General and Administrative expenses decreased to $701,686 from $1,080,862, in 2016 versus 2015 which was mainly comprised of administrative fees, stock compensation, and marketing & advertising.





Professional fees decreased to $144,443 from $228,521 in 2016 versus 2015. The decrease in professional fees was attributed to a decrease in investor relations and investor consultants.






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Net Income (Loss). Our net loss increased to a net loss of $4,342,042 for the three months ended March 31, 2016 compared to a net loss of $1,924,528 for the same period in 2015. The increase is primarily attributable to the loss on debt extinguishment from the various debt conversions and write off of the derivative liability.




In the three month period ended March 31, 2016, we had outstanding 24,730,296 common shares, 553,449 Series A Preferred Stock shares, 1,762,500 Series B preferred stock, and 2,169,930 shares of Series C Preferred Stock shares to fund business operations and invest in companies.




Our total assets were $2,308,823 as of March 31, 2016, which primarily consisted of fixed assets of 703,337, intangible assets of 1,565,570, and cash and cash equivalents of $30,625.




We had negative working capital of $7,098,307 as of March 31, 2016.




Our total liabilities were $8,723,806 which was mainly comprised of derivative liabilities of $3,618,509, capital lease of 223,135, convertible debt of $1,392,973 and contingent consideration liabilities of $713,581.




Our total stockholder’s deficit as of March 31, 2016 was $6,414,984 and we had a retained deficit of $16,240,716 through the same period.




We used $413,264 in net cash for operating activities for the three months ended March 31, 2016, which included a net loss of $4,342,042.




We had $427,070 net cash provided by financing activities in the three month period ended March 31, 2016 due primarily to borrowings on convertible notes.





The consolidated financial statements included in this report have been prepared in conformity with generally accepted accounting principles that contemplate our continuance as a going concern. The Company has had minimal revenues and has generated losses from operation. As set forth in Note 2 of these financial statements, the continuation of the Company as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses until it becomes profitable, if ever. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.





Off-Balance Sheet Arrangements.  We have no off-balance sheet arrangements.





Subsequent Events.In accordance with FASB ASC 855-10-50-1 we evaluated our subsequent events through May 20, 2016.  Refer to Note 12, Subsequent Events, for detailed information.





Item 3     Quantitative and Qualitative Disclosures About Market Risk





As a “smaller reporting company”, as defined by Item 10(f) of Regulation S-K, we are not required to provide the information required by Item 3.





Item 4     Controls and Procedures





Evaluation of disclosure controls and procedures.





We carried out an evaluation, under the supervision of and with our executive officers, David M. Cunic in his role as Chief Executive Officer and Ben Hoehn in his role as Chief Operating Officer and Acting Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934).  Based upon that evaluation, the officers concluded that because of the limited size of our organization our disclosure controls and procedures are not effective as of March 31, 2016.





We have not made any changes in our internal control over financial reporting during the three months ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.






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PART II – OTHER INFORMATION





Item 1     Legal Proceedings





No updates for the period ending March 31, 2016.





Item 1A   Risk Factors





As a “smaller reporting company” as defined by Item 10(f) of Regulation S-K, we are not required to provide information required by this item.





Item 2     Unregistered Sales of Equity Securities and Use of Proceeds





None.





Item 3     Defaults UponSenior Securities





None.





Item 4     (Reserved)








Item 5     Other Information





None.





Item 6     Exhibits





Exhibit

Number

Description31.1

Certification of David Cunic, Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.31.2

Certification of Ben Hoehn, Acting Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.32.1

Certification of David Cunic, Chief Executive Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2

Certification of Ben Hoehn, Acting Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.








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SIGNATURE





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








May 23, 2016
PAZOO, INC./s/ David M. CunicDavid M. CunicChief Executive OfficerMay 23, 2016
PAZOO, INC./s/ Ben HoehnBen Hoehn,Chief Operating Officer, Acting Chief Financial Officer (Principal Financial and Accounting Officer)































18