UNITED
STATES SECURITIES AND EXCHANGE COMMISSION Washington,
D.C. 20549  
 FORM
10-K/A 
  x
 ANNUAL
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
  For
  the fiscal year ended: December 31, 2018ORo
 TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  Commission
file number:0-30786  Video
River Networks, Inc. (Exact name of
registrant as specified in its Charter)  Nevada
 87-0627349(State or other jurisdiction of
  incorporation or organization)
 (I.R.S. Employer
  Identification No.)370 Amapola Ave., Suite 200ATorrance, California
 90501(Address of principal executive
  offices)
 (Zip Code)
  Registrant’s
telephone numberincluding area code:(1) 310-895-1839  Nighthawk Systems, Inc. (Former name or former address, if changed since
last report)  6500
 (Primary Standard
Industrial Classification Code Number)   Securities registered pursuant to Section 12(b) of the Act:  
None  Securities registered pursuant to Section 12(g) of the Act:  
None  Indicate by check mark if the Registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. YesoNox  Indicate by check mark if the Registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. YesoNox  Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YesxNoo


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Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of
this chapter) during the preceding 12 months (or such shorter period that the
registrant was required to submit and post such files. YesxNoo Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained 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.o  Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of “accelerated filer” and “larger accelerated filer” in Rule 12b-2
of the Exchange Act.  Large Accelerated FileroAccelerated FileroNon-Accelerated Filerx  Indicate by check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).  YesoNox     As of December 31, 2018, the aggregate market value of the
Registrant’s voting and non-voting stock held by non-affiliates of the
Registrant was approximately $106,335 using the average bid and ask price on
that day of $0.00080.  As at November 15, 2019, the number of shares of common stock issued
and outstanding was 139,153,206.     DOCUMENTS
INCORPORATED BY REFERENCE None.    
  VIDEO RIVER
NETWORKS, INC. FORM 10-K TABLE OF
CONTENTS  PagePART IItem
  1
 
 Business
 
 4Item
  1A
 
 Risk
  Factors
 
 12Item
  2
 
 Properties
 
 31Item
  3
 
 Legal
  Proceedings
 
 31Item
  4
 
 Mine
  Safety Disclosures.
 
 32PART IIItem
  5
 
 Market
  for Registrant’s Common Equity and Related Stockholder Matters
 
 32Item
  6
 
 Selected
  Financial Data
 
 33Item
  7
 
 Management’s
  Discussion and Analysis of Financial Condition and Results of Operation
 
 33Item
  8
 
 Financial
  Statements and Supplementary Data
 
 37Item
  9
 
 Changes
  in and Disagreements with Accountants on Accounting and Financial Disclosure
 
 49Item 9A
 
 Controls
  and Procedures
 
 50Item
  9B
 
 Other
  Information
 
 50PART IIIItem
  10
 
 Directors
  and Executive Officers and Corporate Governance
 
 51Item
  11
 
 Executive
  Compensation
 
 53Item
  12
 
 Security
  Ownership of Certain Beneficial OwnersandManagementand
  Related Stockholder Matters
 
 55Item
  13
 
 Certain
  Relationships and Related Transactions, and Director Independence
 
 56Item
  14
 
 Principal
  Accountant Fees and Services
 
 57PART IVItem
  15
 
 Exhibits
  and Financial Statement Schedules
 
 58Signatures
 
 
 
 59Exhibit
 
 
 
 60


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Cautionary Statement Regarding Forward Looking Statements  The discussion contained in this Annual
Report on Form 10-K (“Annual Report”) contains “forward-looking statements”
within the meaning of Section 27A of the United States Securities Act of 1933,
as amended, or the Securities Act, and Section 21E of the United States Securities
Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our
expectations, beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and may be forward-looking. These
statements are often, but not always, made through the use of words or
phrases like “anticipate,” “estimate,” “plans,” “projects,” “continuing,”
“ongoing,” “target,” “expects,” “management believes,” “we believe,” “we
intend,” “we may,” “we will,” “we should,” “we seek,” “we plan,” the negative
of those terms, and similar words or phrases. We base these forward-looking
statements on our expectations, assumptions, estimates and projections about
our business and the industry in which we operate as of the date of this Annual
Report. These forward-looking statements are subject to a number of risks and
uncertainties that cannot be predicted, quantified or controlled and that could
cause actual results to differ materially from those set forth in, contemplated
by, or underlying the forward-looking statements. Statements in this
Annual Report describe factors, among others, that could contribute to or cause
these differences. Actual results may vary materially from those anticipated,
estimated, projected or expected should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect.
Because the factors discussed in this Annual Report could cause actual results
or outcomes to differ materially from those expressed in any forward-looking
statement made by us or on our behalf, you should not place undue reliance on
any such forward-looking statement. New factors emerge from time to time, and
it is not possible for us to predict which will arise. In addition, we cannot
assess the impact of each factor on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement. Except as
required by law, we undertake no obligation to publicly revise our
forward-looking statements to reflect events or circumstances that arise after
the date of this Annual Report or the date of documents incorporated by
reference herein that include forward-looking statements.


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PART I  ITEM
  1
 BUSINESS
  When we use
the terms “NIHK,” “we,” “us,” “our,” and “the company,” we mean Video River
Networks, Inc., a Nevada corporation.  Corporate History  Video River
Networks, Inc. (“NIHK”), previously known as Nighthawk Systems Inc., a Nevada
corporation (OTC: NIHK), (the “Company”) used to be a provider of wireless and
IP-based control solutions for the utility and hospitality industries. Since
2002, the Company’s Power Controls Division has used wireless technology to
control both residential utility meters and remote, mission-critical devices.
The Set Top Box Division, acquired in October 2007, enables hotels to
provide in-room high definition television (“HDTV”) broadcasts, integrated with
video-on-demand, and customized guest services information.  On October
29, 2019, the company sold one (1) Special 2019 series A preferred share (one
preferred share is convertible 150,000,000 share of common stocks) of the
company for an agreed upon purchase price to Community Economic Development
Capital LLC, (“CED Capital”) a California limited liability company. The
Special preferred share controls 60% of the company’s total voting rights. The
issuance of the preferred share to Community Economic Development Capital LLC
gave to Community Economic Development Capital LLC, the controlling vote to
control and dominate the affairs of the company going forward.  Pursuant to
the sale of this Special 2019 series A preferred share to CED Capital, all of
the company’s officers resigned and Mr. Frank I Igwealor, JD, CPA, CMA, CFM was
elected the President and Chief Executive Officer, Chief Financial Officer, and
Company Secretary of the company.  Mr. Igwealor and Ms. Patience C. Ogbozor
were also elected as new directors of the Company.  Following
the completion of above mentioned transactions, the company pivoted the business
model of NIHK to become a specialty real estate holding company for specialized
assets including hemp and cannabis farms, dispensaries, CBD related commercial
facilities, industrial and commercial real estate, and other real estate
related services to the CBD and the legal cannabis industry.  Because our
principal is a California Real Estate Broker, NIHK will become a leader in
providing real estate focused on hemp and cannabis growth, to the public
markets.  Furthermore, we are now, an
internally-managed real estate holding company focused on the acquisition,
ownership and management of specialized industrial properties leased to
experienced, state-licensed operators for their regulated state-licensed
cannabis facilities. We plan to acquire our properties through sale-leaseback
transactions and third-party purchases. We expect to lease our properties on a
triple-net lease basis, where the tenant is responsible for all aspects of and
costs related to the property and its operation during the lease term,
including structural repairs, maintenance, taxes and insurance.  We plan to conduct our
business through a traditional umbrella partnership real estate holding company,
in which our properties are owned by our Operating Partnership, directly or
through subsidiaries. We shall be the sole general partner of our Operating
Partnership and own, directly or through a subsidiary, 100% of the limited
partnership interests in our Operating Partnership. Our property acquisitions
would target all the states where medical-use marijuana has been legalized.  As of November 20,
2019, we had three full-time employees.  Our
corporate office is located at 370 Amapola Ave., Suite 200A, Torrance,
California 90501. Our telephone number is (310) 895-1839.


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Our Business Objectives and Growth Strategies  Our principal business
objective is to maximize stockholder returns through a combination of (1)
distributions to our stockholders, (2) sustainable long-term growth in cash
flows from increased rents, which we hope to pass on to stockholders in the
form of increased distributions, and (3) potential long-term appreciation in
the value of our properties from capital gains upon future sale. Our primary
strategy to achieve our business objective is to acquire and own a portfolio of
specialized industrial properties, including medical-use cannabis facilities
leased to tenants holding the requisite state licenses to operate in the
regulated medical-use cannabis industry. This strategy includes the following
components:  ·
 Owning Specialized Industrial Properties and
  Related Real Estate Assets for Income.We intend to primarily
  acquire medical-use cannabis facilities from licensed growers who will
  continue their cultivation operations after our acquisition of the property.
  We expect to hold acquired properties for investment and to generate stable
  and increasing rental income from leasing these properties to licensed
  growers.
  ·
 Owning Specialized Industrial Properties and
  Related Real Estate Assets for Appreciation.We
  intend to primarily lease our acquired properties under long-term, triple-net
  leases. However, from time to time, we may elect to sell one or more
  properties if we believe it to be in the best interests of our stockholders.
  Accordingly, we will seek to acquire properties that we believe also have
  potential for long-term appreciation in value.
  ·
 Expanding as Additional States Permit Medical-Use
  Cannabis Cultivation and Production.We intend to acquire
  properties in the United States, with a focus on states that permit cannabis
  cultivation for medical use. As of December 31, 2018, we owned properties in
  nine states, and we expect that our acquisition opportunities will continue
  to expand as additional states legalize medical-use cannabis and license new
  cultivators.
  ·
 Preserving Financial Flexibility on our Balance
  Sheet.We
  intend to focused on maintaining a conservative capital structure, in order
  to provide us flexibility in financing our growth initiatives.
  Our Target Markets  Our target markets include
states that permit cannabis cultivation for medical use. As of December 31,
2018, we owned zero properties located in Arizona, Colorado, Illinois,
Maryland, Massachusetts, Michigan, Minnesota, New York and Pennsylvania.
According to the National Conference of State Legislatures, as of December 31,
2018, 33 states and the District of Columbia have legalized cannabis for
medical use.  Although these states have
approved the medical use of cannabis, the applicable state and local laws and
regulations vary widely. For example, most states' laws allow commercial
production and sales through dispensaries and set forth rigorous licensing
requirements; in other states the licensing rules are unclear. In some states,
dispensaries are mandated to operate on a not-for-profit basis. Some states
permit home cultivation activities. The states also differ on the form in which
cannabis can be sold. For example, some states do not permit cannabis-infused
products such as concentrates, edibles and topicals, while other states ban
smoking cannabis.  In addition, we expect other
factors will be important in the development and growth of the medical-use
cannabis industry in the United States, including the timeframes for developing
regulations and issuing licenses in states that recently passed laws allowing
for medical-use cannabis, and continued legislative authorization of
medical-use cannabis at the state level. Progress in the regulated medical-use
cannabis industry, while encouraging, is not assured and any number of factors
could slow or halt progress in this area.  Market Opportunity  The Industrial Real Estate Sub-Market  The industrial real estate sub-market continues to perform well in
this real estate cycle. According to CBRE Group, Inc., the U.S. industrial
property vacancy rate declined to 4.3% in the fourth quarter of 2018,
reflecting the 35th consecutive quarter of positive net
absorption. Nearly 30.0 million square feet of industrial real estate were
absorbed in 2018, which resulted in the highest net asking rents since CBRE
Group, Inc. began tracking this metric in 1989.


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We
believe this supply/demand dynamic creates significant opportunity for owners
of industrial facilities, particularly those focused on niche categories, as
options are limited for tenants requiring specialized buildings. We intend to
capitalize on this opportunity by purchasing specialized industrial real estate
assets that are critical to the medical-use cannabis industry.  The Regulated Medical-Use Cannabis
Industry  Overview  We believe that a
convergence of changing public attitudes and increased legalization momentum in
various states toward regulated medical-use cannabis creates an attractive
opportunity to invest in the industrial real estate sector with a focus on
regulated medical-use cannabis facilities. We also believe that the increased
sophistication of the regulated medical-use cannabis industry and the
development of strong business, operational and compliance practices have made
the sector more attractive for investment. Increasingly, state-licensed,
medical-use cannabis cultivation and processing facilities are becoming
sophisticated business enterprises that use state-of-the-art technologies and
well-honed business and operational processes to maximize product yield and
revenues. Additionally, medical-use cannabis growers and dispensers have
developed a growing portfolio of products into which they are able to
incorporate legal medical-use cannabis in a safe and appealing manner.  In the United States, the
development and growth of the regulated medical-use cannabis industry has
generally been driven by state law and regulation, and accordingly, the market
varies on a state-by-state basis. State laws that legalize and regulate
medical-use cannabis allow patients to consume cannabis for medicinal reasons
with a doctor's recommendation, subject to various requirements and
limitations. States have authorized numerous medical conditions as qualifying
conditions for treatment with medical-use cannabis, which vary significantly
from state to state and may include, among others, treatment for cancer,
glaucoma, HIV/AIDs, wasting syndrome, pain, nausea, seizures, muscle spasms,
multiple sclerosis, post-traumatic stress disorder (PTSD), migraines,
arthritis, Parkinson's disease, Alzheimer's, lupus, residual limb pain, spinal
cord injuries, inflammatory bowel disease and terminal illness. As of December
31, 2018, 33 states, plus the District of Columbia, have passed laws allowing
their citizens to use medical cannabis.  We believe that the
following conditions, which are described in more detail below, create an
attractive opportunity to invest in industrial real estate assets that support
the regulated medical-use cannabis industry:  ·
 significant
  industry growth in recent years and expected continued growth;
  ·
 a
  shift in public opinion and increasing momentum toward the legalization of
  medical-use cannabis under state law; and
  ·
 limited
  access to capital by industry participants in light of risk perceived by
  financial institutions of violating federal laws and regulatory guidelines
  for offering banking services to cannabis-related businesses.
  Industry Growth and Trends  According to Arcview Market
Research, sales of state-legal cannabis in the United States grew to $8.6
billion in 2017, including $5.9 billion of medical-use cannabis sales, and are
expected to reach $22.2 billion by 2022.  According to ProCon.org, a
non-profit organization, as of May 2018, over 2.1 million people used or were
registered to use state-legalized medical cannabis in the United States, taking
data available from the 26 states and Washington, D.C. that had implemented
their medical cannabis programs as of that date. As the industry continues to
evolve, new ways to consume medical-use cannabis are being developed in order
for patients to have the treatment needed for their condition in a safe and
appealing manner. In addition to smoking and vaporizing of dried leaves,
cannabis can be incorporated into a variety of edibles, pills, spray products,
transdermal patches and topicals, including salves, ointments, lotions and
sprays with low or high levels of delta-9-tetrahydrocannabinol (“THC”), the
principal psychoactive constituent of the cannabis plant.


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As with any
nascent but growing industry, operational and business practices evolve and
become more sophisticated over time. We believe that the quality and experience
of industry participants and the development of sound business, operational and
compliance practices have strengthened significantly over time, increasing the
attractiveness for investment in the regulated medical-use cannabis industry.  Shifting Public Attitudes and State Law
and Legislative Activity  We believe that the growth of the
regulated medical-use cannabis industry has been fueled, in part, by the
rapidly changing public attitudes in the United States. A 2018 poll by
Quinnipiac University found that 93% of Americans support patient access to
medical-use cannabis, if recommended by a doctor.  As of December 31, 2018, 33 states, plus
the District of Columbia, have passed laws allowing their citizens to use
medical cannabis. The first state to permit the use of cannabis for medicinal
purposes was California in 1996, upon adoption of the Compassionate Care Act.
The law allowed doctors to recommend cannabis for serious medical conditions
and patients were permitted to use, possess and grow cannabis themselves.
Several other states adopted medical-use cannabis laws in 1998 and 1999, and
the remaining medical-use cannabis states adopted their laws on various dates
through 2018.  Following the approval of medical-use
cannabis, state programs must be developed and businesses must be licensed
before commencing cannabis sales. Some states have developed the necessary
procedures and licensing requirements quickly, while other states have taken
years to develop their programs for production and sales of cannabis. Even
where regulatory frameworks for medical-use cannabis production and sales are
in place, states tend to revise these rules over time. These revisions often
impact sales, making it difficult to predict the potential of new markets.
States may restrict the number of medical-use cannabis businesses permitted,
restrict the method by which medical cannabis can be consumed, limit the
medical conditions that are eligible for cannabis treatment or require
registration of doctors and/or patients, each of which can limit growth of the
medical-use cannabis industry in those states. Alternatively, states may relax
their initial regulations relating to medical-use cannabis production and
sales, which would likely accelerate growth of the medical-use cannabis industry
in such states.  Access to Capital  To date, the status of state-licensed
cannabis under federal law has significantly limited the ability of
state-licensed industry participants to fully access the U.S. banking system
and traditional financing sources. These limitations, when combined with the
high costs of maintaining licensed and stringently regulated medical-use
cannabis facilities (including meeting extensive zoning requirements),
substantially increase the cost of production. While future changes in federal
and state laws may ultimately open up financing options that have not been
available to date in this industry, we believe that such changes, if they do
occur, will take time, thereby creating an opportunity over the next few years
to provide our sale-leaseback and other real estate solutions to state-licensed
industry participants that have limited access to traditional financing
sources.  Market Opportunity and Associated Risks  We focus on purchasing specialized
industrial real estate assets for the regulated medical-use cannabis industry,
with emphasis on properties that we believe also have potential for long-term
appreciation in value. We believe that our sale-leaseback and other real estate
solutions offer an attractive alternative to state-licensed medical-cannabis
cultivators who have limited access to traditional financing alternatives. We
have acquired and intend to continue to acquire medical-use cannabis facilities
in states that permit medical-use cannabis cultivation.  Notwithstanding the foregoing market
opportunity and trends, and despite legalization at the state level, we
continue to believe that the current state of federal law creates significant
uncertainty and potential risks associated with investing in medical-use
cannabis facilities, including but not limited to potentially heightened risks
related to the use of such facilities for adult-use cannabis operations, if a
state passes such laws. For a more complete description of these risks, see the
sections "Risks Related to Regulation" and
"Business — Governmental Regulation" under Item 1A,
"Risk Factors."  Our Financing Strategy


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We intend to meet our long-term liquidity
needs through cash flow from operations and the issuance of equity and debt
securities, including common stock, preferred stock and long-term notes. Where
possible, we also may issue limited partnership interests in our Operating
Partnership to acquire properties from existing owners seeking a tax-deferred
transaction. We expect to issue equity and debt securities at times when we
believe that our stock price is at a level that allows for the reinvestment of
offering proceeds in accretive property acquisitions. We may also issue common
stock to permanently finance properties that were previously financed by debt
securities. However, we cannot assure you that we will have access to the
capital markets at times and on terms that are acceptable to us. Our ability to
access the capital markets and to obtain other financing arrangements is also
significantly limited by our focus on serving the medical-use cannabis
industry. Our investment guidelines initially provide that our aggregate
borrowings (secured and unsecured) will not exceed 50% of the cost of our
tangible assets at the time of any new borrowing, subject to our board of
directors' discretion.  We may file a shelf registration
statement, which would subsequently be declared effective by the SEC, which may
permit us, from time to time, to offer and sell common stock, preferred stock,
warrants and other securities to the extent necessary or advisable to meet our
liquidity needs.  Risk Management  As of December 31, 2018, we owned zero
properties. Once we start acquisitions, we will to attempt to diversify the
investment size and location of our portfolio of properties in order to manage
our portfolio-level risk. Over the long term, we intend that no single property
will exceed 25% of our total assets and that no single tenant will exceed 30% of
our total assets.  We expect that single tenants will occupy
our properties pursuant to triple-net lease arrangements in general and,
therefore, the success of our investments will be materially dependent on the
financial stability of these tenants. We expect the success of our future
tenants, and their ability to make rent payments to us, to significantly depend
on the projected growth and development of the applicable state market; as many
of these state markets have a very limited history, and other state markets are
still forming their regulations, issuing licenses and otherwise establishing
the market framework, significant uncertainty exists as to whether these
markets will develop in the way that we or our future tenants project.  We intend to evaluate the credit quality
of our future tenants and any guarantors on an ongoing basis by reviewing,
where available, the publicly filed financial reports, press releases and other
publicly available industry information regarding our future tenants and any guarantors.
In addition, we intend to monitor the payment history data for all of our
future tenants and, in some instances, we monitor our future tenants by
periodically conducting site visits and meeting with the tenants to discuss
their operations. In many instances, we will generally not be entitled to
financial results or other credit-related data from our future tenants. See the
section "Risks Related to Our Business" under Item 1A, "Risk
Factors."  Competition  The current market for properties that
meet our investment objectives is limited. In addition, we believe finding
properties that are appropriate for the specific use of allowing medical-use
cannabis growers may be limited as more competitors enter the market, and as
medical-use cannabis growers obtain greater access to alternative financing
sources, including but not limited to equity and debt financing sources. We
face significant competition from a diverse mix of market participants,
including but not limited to, other companies with similar business models,
independent investors, hedge funds and other real estate investors, hard money
lenders, and cannabis operators themselves, all of whom may compete with us in
our efforts to acquire real estate zoned for medical-use cannabis facilities.
In some instances, we will be competing to acquire real estate with persons who
have no interest in the cannabis industry, but have identified value in a piece
of real estate that we may be interested in acquiring.  These competitors may prevent us from
acquiring desirable properties or may cause an increase in the price we must
pay for properties. Our competitors may have greater financial and operational
resources than we do and may be willing to pay more for certain assets or may
be willing to accept more risk than we believe can be prudently managed. In
particular, larger companies may enjoy significant competitive advantages that
result from, amongother things, a lower cost of
capital and enhanced operating efficiencies. Our competitors may also adopt
transaction structures similar to ours, which would decrease our competitive
advantage in offering flexible transaction terms. In addition, due to a number
of factors, including but not limited to potential greater clarity of the laws
and regulations governing medical-use cannabis by state and federal
governments, the number of entities and the amount of funds competing for
suitable investment properties may increase substantially, resulting in
increased demand and increased prices paid for these properties. If we pay
higher prices for properties, our profitability may decrease, and you may
experience a lower return on our common stock. Increased competition for
properties may also preclude us from acquiring those properties that would
generate attractive returns to us.


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Governmental Regulation  Federal Laws Applicable to the Medical-Use
Cannabis Industry  Cannabis is classified as a Schedule I
controlled substance by the Drug Enforcement Agency ("DEA") and the
U.S. Department of Justice ("DOJ") with no medical use, and therefore
it is illegal to grow, possess and consume cannabis under federal law. The
Controlled Substances Act of 1910 ("CSA") bans cannabis-related
businesses; the possession, cultivation and production of cannabis-infused products;
and the distribution of cannabis and products derived from it. Moreover, on two
separate occasions the U.S. Supreme Court ruled that the CSA trumps state law.
That means that the federal government has the option of enforcing U.S. drug
laws, creating a climate of legal uncertainty regarding the production and sale
of medical-use cannabis.  Under the Obama administration, the DOJ
previously issued memoranda, including the so-called “Cole Memo” on August 29,
2013, providing internal guidance to federal prosecutors concerning enforcement
of federal cannabis prohibitions under the CSA. This guidance essentially
characterized use of federal law enforcement resources to prosecute those
complying with state laws allowing the use, manufacture and distribution of
cannabis as an inefficient use of such federal resources when state laws and
enforcement efforts are effective with respect to specific federal enforcement
priorities under the CSA.  On January 4, 2018, U.S. Attorney General
Jeff Sessions issued a written memorandum rescinding the Cole Memo and related
internal guidance issued by the DOJ regarding federal law enforcement
priorities involving cannabis (the “Sessions Memo”). The Sessions Memo
instructs federal prosecutors that when determining which cannabis-related
activities to prosecute under federal law with the DOJ’s finite resources,
prosecutors should follow the well-established principles set forth in the U.S.
Attorneys’ Manual governing all federal prosecutions. The Sessions Memo states
that “these principles require federal prosecutors deciding which cases to
prosecute to weigh all relevant considerations, including federal law
enforcement priorities set by the Attorney General, the seriousness of the
crime, the deterrent effect of criminal prosecution, and the cumulative impact
of particular crimes on the community.” The Sessions Memo went on to state that
given the DOJ’s well-established general principles, “previous nationwide
guidance specific to marijuana is unnecessary and is rescinded, effective immediately.”
It is unclear what impact the Sessions Memo will have on the medical-use
cannabis industry, if any.  In addition, pursuant to the current
omnibus spending bill previously approved by Congress, the DOJ is prohibited
from using funds appropriated by Congress to prevent states from implementing
their medical-use cannabis laws. A similar provision was also included in each
prior Congressional omnibus spending bill since 2014. This provision, however,
is currently set to expire on September 30, 2019, and there is no assurance
that Congress will approve inclusion of a similar prohibition on DOJ spending
in the appropriations bills for future years. InUSA vs. McIntosh,
the United States Circuit Court of Appeals for the Ninth Circuit held that this
provision prohibits the DOJ from spending funds from relevant appropriations
acts to prosecute individuals who engage in conduct permitted by state
medical-use cannabis laws and who strictly comply with such laws. However, the
Ninth Circuit's opinion, which only applies in the states of Alaska, Arizona,
California, Hawaii and Idaho, also held that persons who do not strictly comply
with all state laws and regulations regarding the distribution, possession and
cultivation of medical-use cannabis have engaged in conduct that is
unauthorized, and in such instances the DOJ may prosecute those individuals.  Furthermore, while we target the
acquisition of medical-use cannabis facilities, our leases do not prohibit
cannabis cultivation for adult-use that is permissible under the state and
local laws where our facilities are located. Consequently, certain of our
future tenants cultivate adult-use cannabis now (or may in the future) in our
medical-use cannabis facilities that are permitted by
such state and local laws, which may in turn subject the tenant, us and our
properties to greater and/or different federal legal and other risks than
exclusively medical-use cannabis facilities, including not providing protection
under the above Congressional spending provision.


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Federal prosecutors have significant
discretion and no assurance can be given that the federal prosecutor in each
judicial district where we purchase a property will not choose to strictly
enforce the federal laws governing cannabis production or distribution. Any
change in the federal government's enforcement posture with respect to
state-licensed cultivation of medical-use cannabis, including the enforcement
postures of individual federal prosecutors in judicial districts where we
purchase properties, would result in our inability to execute our business
plan, and we would likely suffer significant losses with respect to our
investment in medical-use cannabis facilities in the United States, which would
adversely affect the trading price of our securities. Furthermore, following
any such change in the federal government's enforcement position, we could be
subject to criminal prosecution, which could lead to imprisonment and/or the
imposition of penalties, fines, or forfeiture. See “Risk Factors – Risks
Relating to Regulation.”  State Laws Applicable to the Medical-Use
Cannabis Industry  In most states that have legalized
medical-use cannabis in some form, the growing and/or dispensing of cannabis
generally requires that the operator obtain one or more licenses in accordance
with applicable state requirements. In addition, many states regulate various
aspects of the growing and/or dispensing of medical-use cannabis. For example,
New York limits the types of treatable medical conditions, requires
registration of both patients and recommending physicians, limits the types of
strains that can be grown, sets prices through the State Program Commissioner,
requires that a registered pharmacist be on the premises of all dispensaries
during hours of operation, and prohibits cannabis in flower form. Local
governments in some cases also impose rules and regulations on the manner of
operating cannabis businesses. As a result, applicable state and local laws and
regulations vary widely. As a result of licensing requirements, if our future
tenants default under their leases, we may not be able to find new tenants that
have the requisite license to engage in the cultivation of medical cannabis on
the properties.  Laws Applicable to Banking for Cannabis
Industry  All banks are subject to federal law,
whether the bank is a national bank or state-chartered bank. At a minimum, all
banks maintain federal deposit insurance which requires adherence to federal
law. Violation of federal law could subject a bank to loss of its charter.
Financial transactions involving proceeds generated by cannabis-related conduct
can form the basis for prosecution under the federal money laundering statutes,
unlicensed money transmitter statutes and the Bank Secrecy Act. For example,
under the Bank Secrecy Act, banks must report to the federal government any
suspected illegal activity, which would include any transaction associated with
a cannabis-related business. These reports must be filed even though the
business is operating in compliance with applicable state and local laws.
Therefore, financial institutions that conduct transactions with money
generated by cannabis-related conduct could face criminal liability under the
Bank Secrecy Act for, among other things, failing to identify or report
financial transactions that involve the proceeds of cannabis-related violations
of the CSA.  The Financial Crimes Enforcement Network
("FinCen") issued guidance in February 2014 which clarifies how
financial institutions can provide services to cannabis-related businesses
consistent with their obligations under the Bank Secrecy Act. Concurrently with
the FinCen guidance, the DOJ issued supplemental guidance directing federal
prosecutors to consider the federal enforcement priorities enumerated in the
Cole Memo with respect to federal money laundering, unlicensed money
transmitter and Bank Secrecy Act offenses based on cannabis-related violations
of the CSA. The FinCen guidance sets forth extensive requirements for financial
institutions to meet if they want to offer bank accounts to cannabis-related
businesses, including close monitoring of businesses to determine that they
meet all of the requirements established by the DOJ, including those enumerated
in the Cole Memo. This is a level of scrutiny that is far beyond what is
expected of any normal banking relationship.  As a result, many banks are hesitant to
offer any banking services to cannabis-related businesses, including opening
bank accounts. While we currently have a bank account, our inability to
maintain that account or the lack of access to bank accounts or other banking
services in the future, would make it difficult for us to operate our business,
increase our operating costs, and pose additional operational, logistical and
security challenges. Similarly,if our proposed
tenants are unable to access banking services, they will not be able to enter
into triple-net leasing arrangements with us, as our leases will require rent
payments to be made by check or wire transfer.


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Furthermore, it is unclear what impact the
rescission of the Cole Memo will have, but federal prosecutors may increase
enforcement activities against institutions or individuals that are conducting
financial transactions related to cannabis activities. The increased
uncertainty surrounding financial transactions related to cannabis activities
may also result in financial institutions discontinuing services to the
cannabis industry. See “Risk Factors – Risks Relating to Regulation.”  Agricultural Regulation  The medical-use cannabis properties that
we acquire are used primarily for cultivation and production of medical-use
cannabis and are subject to the laws, ordinances and regulations of state,
local and federal governments, including laws, ordinances and regulations
involving land use and usage, water rights, treatment methods, disturbance, the
environment, and eminent domain.  Each governmental jurisdiction has its own
distinct laws, ordinances and regulations governing the use of agricultural
lands. Many such laws, ordinances and regulations seek to regulate water usage
and water runoff because water can be in limited supply, as is the case in
certain locations where our properties are located. In addition, runoff from
rain or from irrigation is governed by laws, ordinances and regulations from
state, local and federal governments. Additionally, if any of the water used on
or running off from our properties flows to any rivers, streams, ponds, the
ocean or other waters, there may be specific laws, ordinances and regulations
governing the amount of pollutants, including sediments, nutrients and
pesticides, that such water may contain.  We believe that our existing properties
have, and other properties that we acquire in the future will have, sources of
water, including wells and/or surface water that provide sufficient amounts of
water necessary for the current operations at each location. However, should
the need arise for additional water from wells and/or surface water sources, we
may be required to obtain additional permits or approvals or to make other
required notices prior to developing or using such water sources. Permits for
drilling water wells or withdrawing surface water may be required by federal,
state and local governmental entities pursuant to laws, ordinances, regulations
or other requirements, and such permits may be difficult to obtain due to
drought, the limited supply of available water within the districts of the
states in which our properties are located or other reasons.  In addition to the regulation of water
usage and water runoff, state, local and federal governments also seek to
regulate the type, quantity and method of use of chemicals and materials for
growing crops, including fertilizers, pesticides and nutrient rich materials.
Such regulations could include restricting or preventing the use of such
chemicals and materials near residential housing or near water sources.
Further, some regulations have strictly forbidden or significantly limited the
use of certain chemicals and materials. Licenses, permits and approvals must be
obtained from governmental authorities requiring such licenses, permits and
approvals before chemicals and materials can be used at grow facilities.
Reports on the usage of such chemicals and materials must be submitted pursuant
to applicable laws, ordinances, and regulations and the terms of the specific
licenses, permits and approvals. Failure to comply with laws, ordinances and
regulations, to obtain required licenses, permits and approvals or to comply
with the terms of such licenses, permits and approvals could result in fines,
penalties and/or imprisonment.  The use of land for agricultural purposes
in certain jurisdictions is also subject to regulations governing the
protection of endangered species. When agricultural lands border, or are in
close proximity to, national parks, protected natural habitats or wetlands, the
agricultural operations on such properties must comply with laws, ordinances
and regulations related to the use of chemicals and materials and avoid
disturbance of habitats, wetlands or other protected areas.  Because properties we intend to own may be
used for growing medical-use cannabis, there may be other additional land use
and zoning regulations at the state or local level that affect our properties
that may not apply to other types of agricultural uses. For example, certain
states in which our properties would be located require stringent security
systems in place at grow facilities, and require stringent procedures for
disposal of waste materials.


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As an owner of
agricultural lands, we may be liable or responsible for the actions or
inactions of our future tenants with respect to these laws, regulations and
ordinances.  Environmental Matters  Our properties and the operations thereon
are subject to federal, state and local environmental laws, ordinances and
regulations, including laws relating to water, air, solid wastes and hazardous
substances. Our properties and the operations thereon are also subject to
federal, state and local laws, ordinances, regulations and requirements related
to the federal Occupational Safety and Health Act, as well as comparable state
statutes relating to the health and safety of our employees and others working
on our properties. Although we believe that we and our future tenants are in
material compliance with these requirements, there can be no assurance that we
will not incur significant costs, civil and criminal penalties and liabilities,
including those relating to claims for damages to persons, property or the
environment resulting from operations at our properties.  Real Estate Industry Regulation  Generally, the ownership and operation of
real properties are subject to various laws, ordinances and regulations,
including regulations relating to zoning, land use, water rights, wastewater,
storm water runoff and lien sale rights and procedures. These laws, ordinances
or regulations, such as the Comprehensive Environmental Response and
Compensation Liability Act and its state analogs, or any changes to any such
laws, ordinances or regulations, could result in or increase the potential
liability for environmental conditions or circumstances existing, or created by
tenants or others, on our properties. Laws related to upkeep, safety and
taxation requirements may result in significant unanticipated expenditures,
loss of our properties or other impairments to operations, any of which would
adversely affect our cash flows from operating activities.  Our property management activities, to the
extent we are required to engage in them due to lease defaults by tenants or
vacancies on certain properties, will likely be subject to state real estate
brokerage laws and regulations as determined by the particular real estate
commission for each state.  Seasonality  Our business has not been, and we do not
expect it to become subject to, material seasonal fluctuations.   Where You Can Find More Information  We have
restarted filing annual, quarterly, and special reports, proxy statements, and
other information with the Securities and Exchange Commission (“SEC”). Our SEC
filings are available to the public over the Internet from the SEC’s website at
http://www.sec.gov. You may also read and copy any document we file at the
SEC’s public reference room in Washington, D.C. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. You can
also access these reports and other filings electronically on the SEC’s web
site, www.sec.gov.  ITEM 1A.
 RISK FACTORS
  Certain factors may have a material adverse effect on our
business, financial condition, and results of operations. You should consider
carefully the risks and uncertainties described below, in addition to other
information contained in this Annual Report on Form 10-K, including our
consolidated financial statements and related notes. The risks and
uncertainties described below are not the only ones we face. Additional risks
and uncertainties that we are unaware of, or that we currently believe are not
material, may also become important factors that adversely affect our business.
If any of the following risks actually occurs, our business, financial
condition, results of operations, and future prospects could be materially and
adversely affected. In that event, the trading price of our common stock could
decline, and you could lose part or all of your investment.  Risks Related to Our Business


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We have a limited operating history, and
may not be able to operate our business successfully or generate sufficient
cash flow to sustain distributions to our stockholders.  We have a limited operating history. We
currently own zero properties. We are subject to many of the business risks and
uncertainties associated with any new business enterprise. We cannot assure you
that we will be able to operate our business successfully or profitably or find
additional suitable investments. Our ability to provide attractive
risk-adjusted returns to our stockholders over the long term is dependent on
our ability both to generate sufficient cash flow to pay an attractive dividend
and to achieve capital appreciation, and we cannot assure you we will do
either. There can be no assurance that we will be able to continue to generate
sufficient revenue from operations to pay our operating expenses and make
distributions to stockholders. The results of our operations and the execution
on our business plan depend on several factors, including the availability of
additional opportunities for investment, the performance of our existing
properties and tenants, the availability of adequate equity and debt financing,
the federal and state regulatory environment relating to the medical-use
cannabis industry, conditions in the financial markets and economic conditions.  Our current real estate portfolio consists
of zero properties and will likely continue to be concentrated in a limited
number of properties in the future, which subjects us to an increased risk of
significant loss if any property declines in value or if we are unable to lease
a property.  We currently own zero properties. We have
no tenant nor rental revenues for the year ended December 31, 2018.  Lease
payment defaults by any of our future tenants or a significant decline in the
value of any single property would materially adversely affect our business,
financial position and results of operations, including our ability to make
distributions to our stockholders. A lack of diversification may also increases
the potential that a single underperforming investment could have a material
adverse effect on our cash flows and the price we could realize from the sale
of our properties. Any adverse change in the financial condition of any of our future
tenants, including but not limited to the state medical-use cannabis markets
not developing and growing in ways that we or our future tenants projected, or
any adverse change in the political climate regarding medical-use cannabis
where our properties are located, would subject us to a significant risk of
loss.  In addition, failure by any our future tenants
to comply with the terms of its lease agreement with us could require us to
find another lessee for the applicable property. We may experience delays in
enforcing our rights as landlord and may incur substantial costs in protecting
our investment and re-leasing that property. Furthermore, we cannot assure you
that we will be able to re-lease that property for the rent we currently
receive, or at all, or that a lease termination would not result in our having
to sell the property at a loss. The result of any of the foregoing risks could
materially and adversely affect our business, financial condition and results
of operations and our ability to make distributions to our stockholders.  Competition for the acquisition of
properties suitable for the cultivation and production of medical-use cannabis
may impede our ability to make acquisitions or increase the cost of these
acquisitions, which could adversely affect our operating results and financial
condition.  We compete for the acquisition of
properties suitable for the cultivation and production of medical-use cannabis
with other entities engaged in agricultural and real estate investment
activities, including corporate agriculture companies, cultivators and producers
of medical-use cannabis, private equity investors, and other real estate
investors (including public and private REITs). We also compete as a provider
of capital to medical-use cannabis operators with alternative financing sources
to these companies, including both equity and debt financing alternatives.
These competitors may prevent us from acquiring desirable properties, may cause
an increase in the price we must pay for properties or may result in us having
to lease our properties on less favorable terms than we expect. Our competitors
may have greater financial and operational resources than we do and may be
willing to pay more for certain assets or may be willing to accept more risk
than we believe can be prudently managed. In particular, larger companies may
enjoy significant competitive advantages that result from, among other things,
a lower cost of capital and enhanced operating efficiencies. Our competitors
may also adopt transaction structures similar to ours, which would decrease our
competitive advantage in offering flexible transaction terms. In addition, due
to a number of factors, including but not limited to potential greater clarity
of the laws and regulations governing medical-use cannabis by state and federal
governments, the number of entities and the amount of fundscompeting
for suitable investment properties may increase, resulting in increased demand
and increased prices paid for these properties. If we pay higher prices for
properties or enter into leases for such properties on less favorable terms
than we expect, our profitability and ability to generate cash flow and make
distributions to our stockholders may decrease. Increased competition for
properties may also preclude us from acquiring those properties that would
generate attractive returns to us.


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Our growth will depend upon
future acquisitions of medical-use cannabis facilities, and we may be unable to
consummate acquisitions on advantageous terms.  Our growth strategy will be
focused on the acquisition of specialized industrial real estate assets on
favorable terms as opportunities arise. Our ability to acquire these real
estate assets on favorable terms is subject to the following risks:  ·
 competition
  from other potential acquirers or increased availability of alternative debt
  and equity financing sources for tenants may significantly increase the
  purchase price of a desired property;
  ·
 we
  may not successfully purchase and lease our properties to meet our
  expectations;
  ·
 we
  may be unable to obtain the necessary equity or debt financing to consummate
  an acquisition on satisfactory terms or at all;
  ·
 agreements
  for the acquisition of properties are typically subject to closing
  conditions, including satisfactory completion of due diligence
  investigations, and we may spend significant time and money and divert
  management attention on potential acquisitions that we do not consummate; and
  ·
 we
  may acquire properties without any recourse, or with only limited recourse,
  for liabilities, whether known or unknown, against the former owners of the
  properties.
  Our failure to consummate
acquisition on advantageous terms without substantial expense or delay would
impede our growth and negatively affect our results of operations and our
ability to generate cash flow and make distributions to our stockholders.  There may only be a limited number of
medical-use cannabis facilities operated by suitable tenants available for us
to acquire, which could adversely affect the return on our common stock.  We target medical-use
cannabis facilities for acquisition and leasing to licensed growers under
triple-net lease agreements. We also target properties owned by growers that
have been among the top candidates in the rigorous state licensing process and
have been granted one or more licenses to operate multiple facilities. In light
of the current regulatory landscape regarding medical-use cannabis, including but
not limited to, the rigorous state licensing processes, limits on the number of
licenses granted in certain states and in counties within such states, zoning
regulations related to medical-use cannabis facilities, the inability of
potential tenants to open bank accounts necessary to pay rent and other
expenses and the ever-changing federal and state regulatory landscape, we may
have only a limited number of medical-use cannabis facilities available to
purchase that are operated by licensees that we believe would be suitable
tenants. These tenants may also have increased access to alternative equity and
debt financing sources over time, which may limit our ability to negotiate
leasing arrangements that meet our investment criteria. Our inability to locate
suitable investment properties and tenants would have a material adverse effect
on our ability to generate cash flow and make distributions to our
stockholders.  Many of our existing tenants are, and we
expect that most of our future tenants will be, start-up businesses and may be
unable to pay rent with funds from operations or at all, which could adversely
affect our cash available to make distributions to our stockholders or
otherwise impair the value of our common stock.  Single tenants currently
occupy our properties, and we expect that single tenants will occupy our
properties that we acquire in the future. Therefore, the success of our
investments will be materially dependent on the financial stability of these
tenants. We rely on our management team to perform due diligence investigations
of our potential tenants, related guarantors and their properties, operations
and prospects, of which there is generally little or no publicly available
operating and financial information. We may not learn all of the material
information we need to know regarding these businesses through our
investigations. As a result it is possible that we could enter into a
sale-leaseback arrangement with tenants or otherwise lease properties to
tenants that ultimately are unable to pay rent to us, which could adversely
impact our cash available for distributions.


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We expect that
most of our future tenants will be, start-up businesses that have little or no
revenue when they enter triple-net leasing arrangements with us and therefore,
may be unable to pay rent with funds from operations. Many of these future
tenants are not profitable and have experienced losses since inception, or have
been profitable for only a short period of time. As a result, we expect that
most our future tenants will make, initial rent payments to us from proceeds
from the sale of the property, in the case of sale-leaseback transactions, or other
cash on hand.  In addition, in general, as start-up
businesses, our future tenants are more vulnerable to adverse conditions
resulting from federal and state regulations affecting their businesses or
industries and have limited access to traditional forms of financing. The
success of our future tenants will heavily depend on the growth and development
of the state markets in which the tenants operate, many of which have a very
limited history or are still in the stages of establishing the regulatory
framework. For example, New York’s medical-use cannabis market is in its early
stages, and is subject to strict regulations providing for, among other things,
limited medical conditions for treatment with medical-use cannabis, limitations
on the form in which medical cannabis can be consumed and enhanced registration
requirements for patients and physicians, which may result in the New York
market not growing and developing in the way that we or our future tenants
projected. In Maryland, the medical-use cannabis market is also in its very
early stages, with commercial operations commencing upon the issuance of the
first round of final licenses in late 2017, after significant delays in the
development of the state's regulatory framework and litigation surrounding the
application process.  In our evaluation of tenants for leases at
our properties, we intend to record associated revenue on a cash basis due to
the uncertainty of collectability of lease payments from tenants due to their
limited operating history and the U.S. federal regulatory uncertainty surrounding
the medical-use cannabis industry (see the section entitled "Critical
Accounting Policies — Revenue Recognition and Accounts Receivable" in Item
7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for more information).  Some of these prospective tenants may also
be subject to significant debt obligations. Tenants that are subject to
significant debt obligations may be unable to make their rent payments if there
are adverse changes in their business plans or prospects, the regulatory
environment in which they operate or in general economic conditions. In
addition, the payment of rent and debt service may reduce the working capital
available to tenants for the start-up phase of their business. Furthermore, we
may be unable to monitor and evaluate tenant credit quality on an on-going
basis.  In addition, many states issue licenses
for medical-use cannabis operations for a limited time period, which must be
renewed periodically. If one or more of our future tenants is unable to renew
or otherwise maintain its license, or if it is unable to renew or otherwise
maintain other requisite authorizations on state and local levels for business
operations, that tenant will not be able to operate its business, and may
default on its lease payments to us.  Any lease payment defaults by a tenant
could adversely affect our cash flows and cause us to reduce the amount of
distributions to stockholders. In the event of a default by a tenant, we may
also experience delays in enforcing our rights as landlord and may incur
substantial costs in protecting our investment and re-leasing our property as
operators of medical-use cannabis cultivation and production facilities are
generally subject to extensive state licensing requirements. Furthermore, we
will not operate any of the facilities that we purchase.  We may acquire our properties  "as-is,"
which increases the risk of an investment that requires us to remedy defects or
costs without recourse to the prior owner.  We may acquire other real
estate properties, "as is" with only limited representations and
warranties from the property seller regarding matters affecting the condition,
use and ownership of the property. There may also be environmental conditions
associated with properties we acquire of which we are unaware despite our
diligence efforts. In particular, medical-use cannabis facilities may present
environmental concerns of which we are not currently aware. If environmental
contamination exists on properties we acquire or develops after acquisition, we
could become subject to liability for the contamination. As a result, if
defects in the property (including any building on the property) or other
matters adversely affecting the property are discovered, including but not
limited to environmental matters, we may not be able to pursue a claim for any
or all damages against the property seller. Such a situation could harm our
business, financial condition, liquidity and results of operations.


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Our
properties are expected to be geographically concentrated in states that permit
medical-use cannabis cultivation, and we will be subject to social, political
and economic risks of doing business in these states and any other state in
which we may own property.  Our properties acquisition
would be located in Arizona, California, Colorado, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, New York and Pennsylvania, and we expect
that the properties that we acquire will be geographically concentrated in
these states and other states that permit medical-use cannabis cultivation.
Circumstances and developments related to operations in these markets that
could negatively affect our business, financial condition, liquidity and
results of operations include, but are not limited to, the following factors:  ·
 the
  responsibility of complying with multiple and, in some respects, conflicting
  state and federal laws in the United States, including with respect to
  cultivation and distribution of medical-use cannabis, licensing, banking and
  insurance;
  ·
 difficulties
  and costs of staffing and managing operations;
  ·
 unexpected
  changes in regulatory requirements and other laws;
  ·
 potentially
  adverse tax consequences;
  ·
 the
  state medical-use cannabis market fails to develop and grow in ways that we
  or our future tenants projected;
  ·
 the
  impact of national, regional or state specific business cycles and economic
  instability; and
  ·
 access
  to capital may be more restricted, or unavailable on favorable terms or at
  all in certain locations.
  Because our real estate investments would
consist of primarily industrial and greenhouse properties suitable for
cultivation and production of medical-use cannabis, our rental revenues would
be significantly influenced by demand for these facilities generally, and a
decrease in such demand would likely have a greater adverse effect on our
rental revenues than if we owned a more diversified real estate portfolio.  Because our portfolio of
properties would consist of industrial and greenhouse properties used in the
regulated medical-use cannabis industry, we would be subjected to risks
inherent in investments in a single industry. A decrease in the demand for
medical-use cannabis cultivation facilities would have a greater adverse effect
on our rental revenues than if we owned a more diversified real estate
portfolio. Demand for medical-use cannabis cultivation facilities has been and
could be adversely affected by changes in current favorable state or local laws
relating to cultivation and production of medical-use cannabis or any change in
the federal government's current enforcement posture with respect to
state-licensed cultivation of medical-use cannabis, among others. To the extent
that any of these conditions occur, they are likely to affect demand and market
rents for medical-use cannabis cultivation facilities, which could cause a
decrease in our rental revenue. Any such decrease could impair our ability to
make distributions to you. We do not currently and do not expect in the future
to invest in other real estate or businesses to hedge against the risk that
industry trends might decrease the profitability of our medical-use cannabis
cultivation facilities.  We face significant risks associated
with the development and redevelopment of properties that we acquire.  We may, from time to time,
engage in development or redevelopment of properties that we acquire.
Development and redevelopment activities entail risks that could adversely
impact our financial condition and results of operations, including:  ·
 construction
  costs, which may exceed our original estimates due to increases in materials,
  labor or other costs, which could make the project less profitable;
  ·
 permitting
  or construction delays, which may result in increased project costs, as well
  as deferred revenue;
  ·
 unavailability
  of raw materials when needed, which may result in project delays, stoppages
  or interruptions, which could make the project less profitable;
  ·
 claims
  for warranty, product liability and construction defects after a property has
  been built;
  ·
 health
  and safety incidents and site accidents;
  ·
 poor
  performance or nonperformance by, or disputes with, any of our contractors,
  subcontractors or other third parties on whom we rely;
  ·
 unforeseen
  engineering, environmental or geological problems, which may result in delays
  or increased costs;


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·
 labor
  stoppages, slowdowns or interruptions;
  ·
 liabilities,
  expenses or project delays, stoppages or interruptions as a result of
  challenges by third parties in legal proceedings; and
  ·
 weather-related
  and geological interference, including landslides, earthquakes, floods,
  drought, wildfires and other events, which may result in delays or increased
  costs.
  Failure to complete
development or redevelopment activities on budget or on schedule may adversely
affect our financial condition and results of operations and the ability of our
future tenants at such properties to make payments under their leases with us.  If our properties' access to adequate
water and power supplies is interrupted, it could harm our ability to lease the
properties for medical-use cannabis cultivation and production, thereby
adversely affecting our ability to generate returns on our properties.  In order to lease the
properties that we acquire, these properties require access to sufficient water
and power to make them suitable for the cultivation and production of
medical-use cannabis. Although we expect to acquire properties with sufficient
access to water, should the need arise for additional wells from which to
obtain water, we would be required to obtain permits prior to drilling such
wells. Permits for drilling water wells are required by state and county
regulations, and such permits may be difficult to obtain due to the limited
supply of water in areas where we acquire properties. Similarly, our properties
may be subject to governmental regulations relating to the quality and
disposition of rainwater runoff or other water to be used for irrigation. In
such case, we could incur costs necessary in order to retain this water. If we
are unable to obtain or maintain sufficient water supply for our properties,
our ability to lease them for the cultivation and production of medical-use cannabis
would be seriously impaired, which would have a material adverse impact on the
value of our assets and our results of operations.  Historically, states that have legalized
medical-use cannabis cultivation have typically required that such cultivation
take place indoors. Indoor cultivation of medical-use cannabis requires
significant power for growing lights and ventilation and air conditioning to
remove the hot air generated by the growing lights. While outdoor cultivation
is gaining acceptance in many states with favorable climates for such growth,
we expect that a significant number of our properties will continue to utilize
indoor cultivation methods. Any extended interruption of the power supply to
our properties, particularly those using indoor cultivation methods, would
likely harm our future tenants' crops, which could result in their inability to
make lease payments to us for our properties. Any lease payment defaults by a
tenant could adversely affect our cash flows and cause us to reduce the amount
of distributions to stockholders.  Some of our future tenants could be
susceptible to bankruptcy, which would affect our ability to generate rents
from them and therefore negatively affect our results of operations.  In addition to the risk of tenants being
unable to make regular rent payments, certain of our future tenants may depend
on debt, which could make them especially susceptible to bankruptcy in the
event that their cash flows are insufficient to satisfy their debt. Any
bankruptcy, if allowed, of one of our future tenants would result in a loss of
lease payments to us, as well as an increase in our costs to carry the
property.  Additionally, under bankruptcy law
generally, a tenant who is the subject of bankruptcy proceedings generally has
the option of continuing ("assuming") or giving up
("rejecting") any unexpired lease of non-residential real property.
If a bankrupt tenant decides to give up (reject) a lease with us, any claim we
might have for breach of the lease, excluding a claim against (1) collateral
securing the lease, or (2) a guarantor guaranteeing lease obligations, would be
treated as a general unsecured claim in the tenant's bankruptcy case. The laws
governing bankruptcy cases would impact the treatment of our general unsecured
claim. Our claim would likely be capped at the amount the tenant owed us for
unpaid rent prior to the bankruptcy unrelated to the termination, plus the
greater of one year of lease payments or 15% of the lease payments payable
under the remaining term of the lease, but in no case more than three years of
lease payments. In addition to the cap on our damages for breach of the lease,
even if our claim is timely submitted to the bankruptcy court, there is no
guaranty that the tenant's bankruptcy estate would have sufficient funds to
satisfy the claims of general unsecured creditors. Finally, a bankruptcy court
could re-characterize a net lease transaction as a disguised secured lending
transaction. If that were to occur, we would not be treated asthe owner of the property, but might have additional
rights as a secured creditor. This would mean our claim in bankruptcy court
could be limited to the amount we paid for the property, which could adversely
impact our financial condition.


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Furthermore, U.S. bankruptcy courts have
generally refused to grant bankruptcy protections to cannabis businesses. The
inability of our future tenants to seek bankruptcy protection may impact their
ability to secure financing for their operations and prevents our future tenants
from utilizing the benefits of reorganization of their businesses under
bankruptcy protection to operate in a financially sustainable way, thereby
reducing the probability that such a tenant would be able to honor its lease
obligations with us.  Our real estate investments would consist
of primarily industrial and greenhouse properties suitable for cultivation and
production of medical-use cannabis, which may be difficult to sell or re-lease
upon tenant defaults or early lease terminations, either of which would
adversely affect returns to stockholders.  While our business objectives would
consist of principally acquiring and deriving rental income from industrial and
greenhouse properties used in the regulated medical-use cannabis industry, we
expect that at times we will deem it appropriate or desirable to sell or
otherwise dispose of certain properties we own. These types of properties are
relatively illiquid compared to other types of real estate and financial
assets. This illiquidity could limit our ability to quickly dispose of
properties in response to changes in regulatory, economic or other conditions.
Therefore, our ability at any time to sell assets may be restricted and this
lack of liquidity may limit our ability to make changes to our portfolio
promptly, which could materially and adversely affect our financial
performance. We cannot predict the various market conditions affecting the
properties that we expect to acquire that will exist in the future. Due to the
uncertainty of regulatory and market conditions which may affect the future
disposition of the real estate assets we expect to acquire, we cannot assure
you that we will be able to sell these assets at a profit in the future.
Accordingly, the extent to which we will realize potential appreciation on the
real estate investments we expect to acquire will depend upon regulatory and
other market conditions. In addition, in order to maintain our REIT status, we
may not be able to sell properties when we would otherwise choose to do so, due
to market conditions or changes in our strategic plan.  Furthermore, we may be required to
make expenditures to correct defects or to make improvements before a property
can be sold and we cannot assure you that we will have funds available to
correct such defects or to make such improvements. With these kinds of
properties, if the current lease is terminated or not renewed, we may be
required to make expenditures and rent concessions in order to lease the
property to another tenant. In addition, in the event we are forced to sell or
re-lease the property, we may have difficulty finding qualified purchasers who
are willing to buy the property or tenants who are willing to lease the
property on terms that we expect, or at all. These and other limitations may
affect our ability to sell or re-lease properties, which may adversely affect
returns to our stockholders.  Liability for uninsured losses could
adversely affect our financial condition.  While the terms of our leases with our future
tenants would generally require property and casualty insurance, losses from
disaster-type occurrences, such as earthquakes, floods and weather-related
disasters, and other types of insurance, such as landlord's rental loss
insurance, may be either uninsurable or not insurable on economically viable
terms. Should an uninsured loss occur, we could lose our capital investment or
anticipated profits and cash flows from one or more properties.  Contingent or unknown liabilities could
materially and adversely affect our business, financial condition, liquidity
and results of operations.  We may in the future acquire properties,
subject to liabilities and without any recourse, or with only limited recourse,
with respect to unknown liabilities. As a result, if a claim were asserted
against us based on ownership of any of these properties, we may have to pay
substantial amounts to defend or settle the claim. If the magnitude of such
unknown liabilities is high, individually or in the aggregate, our business, financial
condition, liquidity and results of operations would be materially and
adversely affected.  The assets we acquire may be subject to
impairment charges.


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We would periodically evaluate the real
estate investments we acquire and other assets for impairment indicators. The
judgment regarding the existence of impairment indicators is based upon factors
such as market conditions, tenant performance and legal structure. For example,
the termination of a lease by a tenant may lead to an impairment charge. If we
determine that an impairment has occurred, we would be required to make an
adjustment to the net carrying value of the asset which could have an adverse
effect on our results of operations in the period in which the impairment
charge is recorded.  Due to our involvement in the regulated
medical-use cannabis industry, we may have a difficult time obtaining the
various insurance policies that are desired to operate our business, which may
expose us to additional risks and financial liabilities.  Insurance that is otherwise readily
available, such as workers' compensation, general liability, and directors' and
officers' insurance, could be more difficult for us to find and more expensive,
because we lease our properties to companies in the regulated medical-use
cannabis industry. There are no guarantees that we will be able to find such
insurance in the future, or that the cost will be affordable to us. If we are
forced to go without such insurance, it may prevent us from entering into
certain business sectors, may inhibit our growth, and may expose us to
additional risk and financial liabilities.  We may purchase properties subject to
ground leases that expose us to the loss of such properties upon breach or
termination of the ground leases.  A ground lease agreement permits a tenant
to develop and/or operate a land parcel (property) during the lease period,
after which the land parcel and all improvements revert back to the property
owner. Under a ground lease, property improvements are owned by the property
owner unless an exception is created and all relevant taxes incurred during the
lease period are paid for by the tenant. Ground leases typically have a long
duration generally ranging from 50 to 99 years with additional extension
options. As a lessee under a ground lease, we would be exposed to the
possibility of losing the property upon termination, or an earlier breach by
us, of the ground lease, which could have a material adverse effect on our
business, financial condition and results of operations, our ability to make
distributions to our stockholders and the trading price of our common stock.  The occurrence of cyber incidents or cyber
attacks could disrupt our operations, result in the loss of confidential
information and/or damage our business relationships and reputation.  We rely on technology to run our business,
and as such we are subject to risk from cyber incidents, including cyber attacks
attempting to gain unauthorized access to our systems to disrupt operations,
corrupt data or steal confidential information, and other electronic security
breaches.  While we have implemented measures to help mitigate these
threats, such measures cannot guarantee that we will be successful in
preventing a cyber incident.  The occurrence of a cyber incident or cyber
attack could disrupt our operations, compromise the confidential information of
our employees or tenants, and/or damage our business relationships and
reputation.  We cannot predict every event and
circumstance that may affect our business, and therefore, the risks and
uncertainties discussed herein may not be the only ones you should consider.  We are not aware of any other community
development holding company that focuses on the acquisition, ownership and
management of medical-use cannabis facilities. Therefore, we may encounter
risks of which we are not aware at this time, which could have a material
adverse impact on our business.  Risks Related to Regulation  Cannabis remains illegal under federal
law, and therefore, strict enforcement of federal laws regarding cannabis would
likely result in our inability and the inability of our future tenants to
execute our respective business plans.  Cannabis is a Schedule I controlled
substance under the CSA. Even in those jurisdictions in which the manufacture
and use of cannabis has been legalized at the state level, the possession, use
and cultivation all remain violations of federal law that are punishable by
imprisonment, substantial fines and forfeiture. Moreover, individualsand entities may violate federal law if they
intentionally aid and abet another in violating these federal controlled
substance laws, or conspire with another to violate them. The U.S. Supreme
Court has ruled inUnited States v. Oakland Cannabis Buyers' Coop.andGonzales
v. Raichthat it is the federal government that has the right to
regulate and criminalize the sale, possession and use of cannabis, even for
medical purposes. We would likely be unable to execute our business plan if the
federal government were to strictly enforce federal law regarding cannabis.


---



In January 2018, the DOJ rescinded certain
memoranda, including the so-called “Cole Memo” issued on August 29, 2013 under
the Obama Administration, which had characterized enforcement of federal
cannabis prohibitions under the CSA to prosecute those complying with state
regulatory systems allowing the use, manufacture and distribution of medical
cannabis as an inefficient use of federal investigative and prosecutorial
resources when state regulatory and enforcement efforts are effective with
respect to enumerated federal enforcement priorities under the CSA. The impact
of the DOJ's recent rescission of the Cole Memo and related memoranda is
unclear, but may result in the DOJ increasing its enforcement actions against
the regulated cannabis industry generally, including our future tenants and us.  Congress previously enacted an omnibus
spending bill that includes a provision prohibiting the DOJ (which includes the
DEA) from using funds appropriated by that bill to prevent states from
implementing their medical-use cannabis laws. This provision, however, expires
on September 30, 2019, and must be renewed by Congress. InUSA vs.
McIntosh, the U.S. Court of Appeals for the Ninth Circuit held that this
provision prohibits the DOJ from spending funds from relevant appropriations
acts to prosecute individuals who engage in conduct permitted by state
medical-use cannabis laws and who strictly comply with such laws. However, the
Ninth Circuit's opinion, which only applies to the states of Alaska, Arizona,
California, Hawaii, and Idaho, also held that persons who do not strictly
comply with all state laws and regulations regarding the distribution,
possession and cultivation of medical-use cannabis have engaged in conduct that
is unauthorized, and in such instances the DOJ may prosecute those individuals.
Furthermore, while we target the acquisition of medical-use cannabis facilities,
our leases do not prohibit cannabis cultivation for adult-use that is
permissible under the state and local laws where our facilities are located,
such as in California, Colorado, Massachusetts and Michigan. Consequently,
certain of our future tenants currently (and additional tenants may in the
future) cultivate adult-use cannabis in our medical-use cannabis facilities, as
permitted by such state and local laws now or in the future, which may in turn
subject the tenant, us and our properties to greater and/or different federal
legal and other risks as compared to facilities where cannabis is cultivated
exclusively for medical use, including not providing protection under the
Congressional spending bill provision described above.  Additionally, financial
transactions involving proceeds generated by cannabis-related conduct can form
the basis for prosecution under the federal money laundering statutes,
unlicensed money transmitter statutes and the Bank Secrecy Act. The penalties
for violation of these laws include imprisonment, substantial fines and
forfeiture. Prior to the DOJ's rescission of the Cole Memo, supplemental
guidance from the DOJ issued under the Obama administration directed federal
prosecutors to consider the federal enforcement priorities enumerated in the
Cole Memo when determining whether to charge institutions or individuals with
any of the financial crimes described above based upon cannabis-related
activity. With the rescission of the Cole Memo, there is increased uncertainty and
added risk that federal law enforcement authorities could seek to pursue money
laundering charges against entities or individuals engaged in supporting the
cannabis industry.  Federal prosecutors have
significant discretion and no assurance can be given that the federal
prosecutor in each judicial district where we purchase a property will not
choose to strictly enforce the federal laws governing cannabis production or
distribution. Any change in the federal government's enforcement posture with
respect to state-licensed cultivation of cannabis, including the enforcement
postures of individual federal prosecutors in judicial districts where we
purchase properties, would result in our inability to execute our business
plan, and we would likely suffer significant losses with respect to our
investment in cannabis facilities in the United States, which would adversely
affect the trading price of our securities. Furthermore, following any such
change in the federal government's enforcement position, we could be subject to
criminal prosecution, which could lead to imprisonment and/or the imposition of
penalties, fines, or forfeiture.


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Certain
of our future tenants engage in operations for the adult-use cannabis industry
in addition to or in lieu of operations for the medical-use cannabis industry,
and such tenants, we and our properties may be subject to additional risks
associated with such adult-use cannabis operations.  We expect that leases that
we enter into with future tenants at other properties we acquire will not,
prohibit cannabis cultivation for adult-use that is permissible under state and
local laws where our facilities are located and certain of our future tenants
are currently engaged in operations for the adult-use cannabis industry, which
may subject our future tenants, us and our properties to different and greater
risks, including greater prosecution risk for aiding and abetting violation of
the CSA and federal laws governing money laundering. For example, the
prohibition in the current omnibus spending bill that prohibits the DOJ from
using funds appropriated by Congress to prevent states from implementing their
medical-use cannabis laws does not extend to adult-use cannabis laws. In
addition, while we may purchase properties in states that only permit
medical-use cannabis at the time of acquisition, such states may in the future
authorize by state legislation or popular vote the legalization of adult-use
cannabis, thus permitting our future tenants to engage in adult-use cannabis
operations at our properties. For example, the voters of the Commonwealth of
Massachusetts passed an initiative to legalize cannabis for adult-use in 2016,
having previously voted to legalize medical-use cannabis in 2012. Massachusetts
began issuing licenses to operators for the sale of adult-use cannabis in July
2018. Our existing leases at our Massachusetts properties do not prohibit our
future tenants from conducting adult-use cannabis cultivation, processing or
dispensing that is permissible under state and local laws. Similarly, the
states of California and Colorado permit licensed adult-use cannabis
cultivation, processing and dispensing, and our leases with tenants in
California and Colorado allow for adult-use cannabis operations to be conducted
at the properties in compliance with state and local laws. In addition,
Michigan voters passed an initiative in November 2018 to legalize cannabis for
adult-use.  New laws that are adverse to the
business of our future tenants may be enacted, and current favorable national,
state or local laws or enforcement guidelines relating to cultivation and
production of cannabis may be modified or eliminated in the future.  We are targeting for
acquisition properties that are owned by state-licensed cultivators and
producers of cannabis. Relevant state or local laws may be amended or repealed,
or new laws may be enacted in the future to eliminate existing laws permitting
cultivation and production of cannabis. If our future tenants were forced to
close their operations, we would need to replace those tenants with tenants who
are not engaged in the cannabis industry, who may pay significantly lower
rents. Moreover, any changes in state or local laws that reduce or eliminate
the ability to cultivate and produce cannabis would likely result in a high
vacancy rate for the kinds of properties that we seek to acquire, which would
depress our lease rates and property values. In addition, we would realize an
economic loss on any and all improvements made to properties that were specific
to the cannabis industry.  Our ability to grow our business depends
on state laws pertaining to the cannabis industry.  Continued development of the
medical-use cannabis industry depends upon continued legislative authorization
of cannabis at the state level. The status quo of, or progress in, the
regulated medical-use cannabis industry is not assured and any number of
factors could slow or halt further progress in this area. While there may be
ample public support for legislative action permitting the manufacture and use
of cannabis, numerous factors impact the legislative process. For example, many
states that voted to legalize medical and/or adult-use cannabis have seen
significant delays in the drafting and implementation of industry regulations
and issuance of licenses. In addition, burdensome regulation at the state level
could slow or stop further development of the medical-use cannabis industry, such
as limiting the medical conditions for which medical cannabis can be
recommended by physicians for treatment, restricting the form in which medical
cannabis can be consumed, imposing significant registration requirements on
physicians and patients or imposing significant taxes on the growth, processing
and/or retail sales of cannabis, which could have the impact of dampening
growth of the cannabis industry and making it difficult for cannabis
businesses, including our future tenants, to operate profitably in those
states. Any one of these factors could slow or halt additional legislative
authorization of medical-use cannabis, which could harm our business prospects.  FDA regulation of medical-use cannabis
and the possible registration of facilities where medical-use cannabis is grown
could negatively affect the medical-use cannabis industry, which would directly
affect our financial condition.


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Should the federal
government legalize cannabis for medical-use, it is possible that the U.S. Food
and Drug Administration ("FDA") would seek to regulate it under the
Food, Drug and Cosmetics Act of 1938. Additionally, the FDA may issue rules and
regulations including certified good manufacturing practices, or cGMPs, related
to the growth, cultivation, harvesting and processing of medical cannabis.
Clinical trials may be needed to verify efficacy and safety. It is also
possible that the FDA would require that facilities where medical-use cannabis
is grown register with the FDA and comply with certain federally prescribed
regulations. In the event that some or all of these regulations are imposed, we
do not know what the impact would be on the medical-use cannabis industry,
including what costs, requirements and possible prohibitions may be enforced.
If we or our future tenants are unable to comply with the regulations or
registration as prescribed by the FDA, we and or our future tenants may be
unable to continue to operate their and our business in its current form or at
all.  We and our future tenants may have difficulty
accessing the service of banks, which may make it difficult to contract for
real estate needs.  Financial transactions
involving proceeds generated by cannabis-related conduct can form the basis for
prosecution under the federal money laundering statutes, unlicensed money
transmitter statute and the Bank Secrecy Act. Previous guidance issued by the
FinCen, a division of the U.S. Department of the Treasury, clarifies how
financial institutions can provide services to cannabis-related businesses consistent
with their obligations under the Bank Secrecy Act. Prior to the DOJ’s
announcement in January 2018 of the rescission of the Cole Memo and related
memoranda, supplemental guidance from the DOJ directed federal prosecutors to
consider the federal enforcement priorities enumerated in the Cole Memo when
determining whether to charge institutions or individuals with any of the
financial crimes described above based upon cannabis-related activity. It is
unclear what impact the rescission of the Cole Memo will have, but federal
prosecutors may increase enforcement activities against institutions or
individuals that are conducting financial transactions related to cannabis
activities. The increased uncertainty surrounding financial transactions
related to cannabis activities may also result in financial institutions
discontinuing services to the cannabis industry.  Consequently, those businesses involved in
the regulated medical-use cannabis industry continue to encounter difficulty
establishing banking relationships, which may increase over time. Our inability
to maintain our current bank accounts would make it difficult for us to operate
our business, increase our operating costs, and pose additional operational,
logistical and security challenges and could result in our inability to
implement our business plan.  The terms of our leases require that our
future tenants make rental payments via check or wire transfer. The inability
of our current and potential tenants to open accounts and continue using the services
of banks will limit their ability to enter into triple-net lease arrangements
with us or may result in their default under our lease agreements, either of
which could materially harm our business and the trading price of our
securities.  Owners of properties located in close
proximity to our properties may assert claims against us regarding the use of
the property as a medical cannabis cultivation and processing facility, which
if successful, could materially and adversely affect our business.  Owners of properties located in
close proximity to our properties may assert claims against us regarding the
use of our properties for medical cannabis cultivation and processing,
including assertions that the use of the property constitutes a nuisance that
diminishes the market value of such owner's nearby property. Such property
owners may also attempt to assert such a claim in federal court as a civil
matter under the Racketeer Influenced and Corrupt Organizations Act. If a
property owner were to assert such a claim against us, we may be required to
devote significant resources and costs to defending ourselves against such a
claim, and if a property owner were to be successful on such a claim, our
future tenants may be unable to continue to operate their business in its
current form at the property, which could materially adversely impact the
tenant's business and the value of our property, our business and financial
results and the trading price of our securities.  Laws and regulations affecting the regulated
cannabis industry are constantly changing, which could materially adversely
affect our proposed operations, and we cannot predict the impact that future
regulations may have on us.


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Local, state and federal cannabis laws and
regulations are broad in scope and subject to evolving interpretations, which
could require us to incur substantial costs associated with compliance or alter
our business plan. In addition, violations of these laws, or allegations of
such violations, could disrupt our business and result in a material adverse
effect on our operations. It is also possible that regulations may be enacted
in the future that will be directly applicable to our proposed business. We
cannot predict the nature of any future laws, regulations, interpretations or
applications, nor can we determine what effect additional governmental
regulations or administrative policies and procedures, when and if promulgated,
could have on our business.  Applicable state laws may prevent us from
maximizing our potential income.  Depending on the laws of each particular
state, we may not be able to fully realize our potential to generate profit.
For example, some states have residency requirements for those directly
involved in the medical-use cannabis industry, which may impede our ability to
contract with cannabis businesses in those states. Furthermore, cities and
counties are being given broad discretion to ban certain cannabis activities.
Even if these activities are legal under state law, specific cities and counties
may ban them.  Assets leased to cannabis businesses may
be forfeited to the federal government.  Any assets used in conjunction with the
violation of federal law are potentially subject to federal forfeiture, even in
states where cannabis is legal. In July 2017, the U.S. Department of Justice
issued a new policy directive regarding asset forfeiture, referred to as the
"equitable sharing program." Under this new policy directive, federal
authorities may adopt state and local forfeiture cases and prosecute them at
the federal level, allowing for state and local agencies to keep up to 80% of
any forfeiture revenue. This policy directive represents a reversal of the
DOJ's policy under the Obama administration, and allows for forfeitures to
proceed that are not in accord with the limitations imposed by state-specific
forfeiture laws. This new policy directive may lead to increased use of asset
forfeitures by local, state and federal enforcement agencies. If the federal
government decides to initiate forfeiture proceedings against cannabis
businesses, such as the medical-use cannabis facilities that we have acquired
and intend to acquire, our investment in those properties may be lost.  We may have difficulty accessing
bankruptcy courts.  As discussed above, the cannabis is
illegal under federal law. Therefore, there is a compelling argument that the
federal bankruptcy courts cannot provide relief for parties who engage in the
cannabis or cannabis related businesses. Recent bankruptcy rulings have denied
bankruptcies for dispensaries upon the justification that businesses cannot
violate federal law and then claim the benefits of federal bankruptcy for the
same activity and upon the justification that courts cannot ask a bankruptcy
trustee to take possession of, and distribute cannabis assets as such action
would violate the CSA. Therefore, we may not be able to seek the protection of
the bankruptcy courts and this could materially affect our business or our
ability to obtain credit.  The properties that we acquire are subject
to extensive regulations, which may result in significant costs and materially
and adversely affect our business, financial condition, liquidity and results
of operations.  Our properties are and other properties
that we expect to acquire will be subject to various local laws and regulatory
requirements. Local property regulations, including restrictive covenants of
record, may restrict the use of properties we acquire and may require us to
obtain approval from local authorities with respect to the properties that we
expect to acquire, including prior to acquiring a property or when developing
or undertaking renovations. Among other things, these restrictions may relate
to cultivation of medical-use cannabis, the use of water and the discharge of
waste water, fire and safety, seismic conditions, asbestos-cleanup or hazardous
material abatement requirements. We cannot assure you that existing regulatory
policies will not materially and adversely affect us or the timing or cost of
any future acquisitions, developments or renovations, or that additional
regulations will not be adopted that would increase such delays or result in
additional costs. Our failure to obtain such regulatory approvals could have a
material adverse effect on our business, financial condition, liquidity and
results of operations.  Compliance with environmental laws could
materially increase our operating expenses.


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There may be
environmental conditions associated with properties we acquire of which we are
unaware. If environmental contamination exists on properties we acquire, we
could become subject to liability for the contamination. The presence of
hazardous substances on a property may materially and adversely affect our
ability to sell the property and we may incur substantial remediation costs. In
addition, although we may require in our leases that tenants operate in
compliance with all applicable laws and indemnify us against any environmental
liabilities arising from a tenant's activities on the property, we could
nonetheless be subject to liability by virtue of our ownership interest and we
cannot be sure that our future tenants would satisfy their indemnification
obligations to us. Such environmental liability exposure associated with
properties we acquire could harm our business, financial condition, liquidity
and results of operations.  Risks Related to Financing Our Business  Our growth depends on external sources of
capital, which may not be available on favorable terms or at all. In addition,
banks and other financial institutions may be reluctant to enter into lending
transactions with us, including secured lending, because we acquire properties
used in the cultivation and production of medical-use cannabis. If this source
of funding is unavailable to us, our growth may be limited and our levered
return on the properties we purchase may be lower.  We expect to acquire additional real
estate assets, which we intend to finance primarily through newly issued equity
or debt. We may not be in a position to take advantage of attractive investment
opportunities for growth if we are unable, due to global or regional economic
uncertainty, changes in the state or federal regulatory environment relating to
the medical-use cannabis industry, our own operating or financial performance
or otherwise, to access capital markets on a timely basis and on favorable
terms or at all.  Our access to capital will
depend upon a number of factors over which we have little or no control,
including general market conditions and the market's perception of our current
and potential future earnings. If general economic instability or downturn
leads to an inability to borrow at attractive rates or at all, our ability to
obtain capital to finance the purchase of real estate assets could be
negatively impacted. In addition, banks and other financial institutions may be
reluctant to enter into lending transactions with us, particularly secured
lending, because we intend to acquire properties used in the cultivation and
production of medical-use cannabis. If this source of funding is unavailable to
us, our growth may be limited and our levered return on the properties we
purchase may be lower.  If we are unable to obtain
capital on terms and conditions that we find acceptable, we likely will have to
reduce the number of properties we can purchase. In addition, our ability to
refinance all or any debt we may incur in the future, on acceptable terms or at
all, is subject to all of the above factors, and will also be affected by our
future financial position, results of operations and cash flows, which
additional factors are also subject to significant uncertainties, and therefore
we may be unable to refinance any debt we may incur in the future, as it
matures, on acceptable terms or at all. All of these events would have a
material adverse effect on our business, financial condition, liquidity and
results of operations.  Any future indebtedness reduces our cash
available for distribution and may expose us to the risk of default.  Payments of principal and
interest on our borrowings that we may incur in the future may leave us with
insufficient cash resources to operate the properties that we expect to
acquire. Our level of debt and the limitations imposed on us by debt agreements
could have significant material and adverse consequences, including the
following:  ·
 our
  cash flow may be insufficient to meet our required principal and interest payments;
  ·
 we
  may be unable to borrow additional funds as needed or on favorable terms, or
  at all;
  ·
 we
  may be unable to refinance our indebtedness at maturity or the refinancing
  terms may be less favorable than the terms of our original indebtedness;
  ·
 to
  the extent we borrow debt that bears interest at variable rates, increases in
  interest rates could materially increase our interest expense;
  ·
 we
  may be forced to dispose of one or more of the properties that we expect to
  acquire, possibly on disadvantageous terms;


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·
 we
  may default on our obligations or violate restrictive covenants, in which
  case the lenders may accelerate these debt obligations; and
  ·
 our
  default under any loan with cross default provisions could result in a
  default on other indebtedness.
  If any one of these events
were to occur, our financial condition, results of operations, cash flow, and
our ability to make distributions to our stockholders could be materially and
adversely affected.  Risks Related to Our Organization and Structure  We are dependent on our key personnel
for our success.  We depend upon the efforts,
experience, diligence, skill and network of business contacts of our senior
management team, and our success will depend on their continued service. The
departure of any of our executive officers or key personnel could have a
material adverse effect on our business. If any of our key personnel were to
cease their employment, our operating results could suffer. Further, we do not
intend to maintain key person life insurance that would provide us with
proceeds in the event of death or disability of any of our key personnel.  We believe our future
success depends upon our senior management team's ability to hire and retain
highly skilled managerial, operational and marketing personnel. Competition for
such personnel is intense, and we cannot assure you that we will be successful
in attracting and retaining such skilled personnel. If we lose or are unable to
obtain the services of key personnel, our ability to implement our investment
strategies could be delayed or hindered, and the value of our common stock may
decline.  Furthermore, we may retain
independent contractors to provide various services for us, including
administrative services, transfer agent services and professional services.
Such contractors have no fiduciary duty to us and may not perform as expected
or desired.  Our senior management team would manage
our portfolio subject to very broad investment guidelines.  Our senior management team will
have broad discretion over our investments, and our stockholders will have no
opportunity to evaluate the terms of transactions or other economic or
financial data concerning our investments that are not described in periodic
filings with the SEC. We will rely on the senior management team's ability to
execute acquisitions and dispositions of medical-use cannabis facilities,
subject to the oversight and approval of our board of directors. Our senior
management team will be authorized to pursue acquisitions and dispositions of
real estate investments in accordance with very broad investment guidelines,
subject to approval of our board of directors.  Our board of directors may change our
investment objectives and strategies without stockholder consent.  Our board of directors
determines our major policies, including with regard to financing, growth, debt
capitalization and distributions. Our board of directors may amend or revise
these and other policies without a vote of the stockholders. Our stockholders
generally have a right to vote only on the following matters:  ·
 the
  election or removal of directors;
  ·
 the
  amendment of our charter, except that our board of directors may amend our
  charter without stockholder approval to:
  ·
 change
  our name;
  ·
 change
  the name or other designation or the par value of any class or series of
  stock and the aggregate par value of our stock;
  ·
 increase
  or decrease the aggregate number of shares of stock that we have the
  authority to issue;
  ·
 increase
  or decrease the number of our shares of any class or series of stock that we
  have the authority to issue; and
  ·
 effect
  certain reverse stock splits;
  ·
 our
  liquidation and dissolution; and
  ·
 our
  being a party to a merger, consolidation, sale or other disposition of all or
  substantially all of our assets or statutory share
  exchange.


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All other matters are
subject to the discretion of our board of directors.  Our authorized but unissued shares of
common and preferred stock may prevent a change in our control.  Our Articles of
Incorporation permits our board of directors to authorize us to issue
additional shares of our authorized but unissued common or preferred stock. In
addition, our board of directors may, without stockholder approval, amend our Articles
of Incorporation to increase the aggregate number of our shares of stock or the
number of shares of stock of any class or series that we have the authority to
issue and classify or reclassify any unissued shares of common or preferred
stock and set the terms of the classified or reclassified shares. As a result,
our board of directors may establish a class or series of shares of common or
preferred stock that could delay or prevent a transaction or a change in
control that might involve a premium price for shares of our common stock or otherwise
be in the best interest of our stockholders.  Severance agreements with our executive
officers could be costly and prevent a change in our control.  The severance agreements
that we entered into with our executive officers provide that, if their
employment with us terminates under certain circumstances (including upon a
change in our control), we may be required to pay them significant amounts of
severance compensation, including accelerated vesting of equity awards, thereby
making it costly to terminate their employment. Furthermore, these provisions
could delay or prevent a transaction or a change in our control that might
involve a premium paid for our common stock or otherwise be in the best
interests of our stockholders.  Because of our holding company
structure, we depend on our Operating Partnership and its subsidiaries for cash
flow and we will be structurally subordinated in right of payment to the
obligations of such operating subsidiary and its subsidiaries.  We are a holding company
with no business operations of our own. Our only significant asset is and will
be the general and limited partnership interests in our Operating Partnership.
We conduct, and intend to conduct, all of our business operations through our
Operating Partnership. Accordingly, our only source of cash to pay our
obligations is distributions from our Operating Partnership and its
subsidiaries of their net earnings and cash flows. We cannot assure our
stockholders that our Operating Partnership or its subsidiaries will be able
to, or be permitted to, make distributions to us that will enable us to make
distributions to our stockholders from cash flows from operations. Each of our
Operating Partnership's subsidiaries is or will be a distinct legal entity and,
under certain circumstances, legal and contractual restrictions may limit our
ability to obtain cash from such entities. In addition, because we are a
holding company, your claims as stockholders will be structurally subordinated
to all existing and future liabilities and obligations of our Operating
Partnership and its subsidiaries. Therefore, in the event of our bankruptcy,
liquidation or reorganization, our assets and those of our Operating
Partnership and its subsidiaries will be able to satisfy your claims as
stockholders only after all of our and our Operating Partnership's and its
subsidiaries' liabilities and obligations have been paid in full. Furthermore,
U.S. bankruptcy courts have generally refused to grant bankruptcy protections
to cannabis businesses.  Our Operating Partnership may issue
additional limited partnership interests to third parties without the consent
of our stockholders, which would reduce our ownership percentage in our
Operating Partnership and would have a dilutive effect on the amount of
distributions made to us by our Operating Partnership and, therefore, the
amount of distributions we can make to our stockholders.  We are the sole general partner
of our Operating Partnership and own, directly or through a subsidiary, 100% of
the outstanding partnership interests in our Operating Partnership. We may, in
connection with our acquisition of properties or otherwise, cause our Operating
Partnership to issue additional limited partnership interests to third parties.
Such issuances would reduce our ownership percentage in our Operating
Partnership and affect the amount of distributions made to us by our Operating
Partnership and, therefore, the amount of distributions we can make to our
stockholders. Because our stockholders will not directly own any interest in
our Operating Partnership, our stockholders will not have any voting rights
with respect to any such issuances or other partnership level activities of our
Operating Partnership.


---



If we issue limited partnership
interests in our Operating Partnership in exchange for property, the value
placed on such partnership interests may not accurately reflect their market
value, which may dilute your interest in us.  If we issue limited
partnership interests in our Operating Partnership in exchange for property,
the per unit value attributable to such interests will be determined based on
negotiations with the property seller and, therefore, may not reflect the fair
market value of such limited partnership interests if a public market for such
limited partnership interests existed. If the value of such limited partnership
interests is greater than the value of the related property, your interest in
us may be diluted.  Our rights and the rights of our
stockholders to take action against our directors and officers are limited,
which could limit your recourse in the event of actions not in your best
interests.  We intend to enter into
indemnification agreements with each of our executive directors and officers
that provide for indemnification to the maximum extent permitted by Nevada law.  The requirements of being a public
company impose costs and demands upon our management, which could make it
difficult to manage our business, particularly after we are no longer an
“emerging growth company.”  Complying with the reporting
and other regulatory requirements of the Exchange Act and the requirements of
the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") is
time-consuming and costly. The Exchange Act requires that we file annual,
quarterly and current reports with respect to our business and financial
condition. The Sarbanes-Oxley Act requires that we maintain effective
disclosure controls and procedures and internal controls over financial
reporting. To maintain and improve the effectiveness of our disclosure controls
and procedures and internal control over financial reporting, we have committed
additional resources and provided additional management oversight. We expect
these resources and management oversight requirements to continue. These
activities may divert management’s attention from other business concerns,
which could have a material adverse effect on our business, financial condition
and results of operations.  As an “emerging growth
company” as defined in the Jumpstart Our Business Startups Act of 2012 (the
"JOBS Act"), we benefit from certain temporary exemptions from
various reporting requirements, including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act and reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements. In addition, we have
elected under the JOBS Act to delay adoption of new or revised accounting
pronouncements applicable to public companies until such pronouncements are
made applicable to private companies. When these exemptions cease to apply, we
expect to incur additional expenses and devote increased management effort
toward ensuring compliance with them. We cannot predict or estimate the amount
of additional costs we may incur as these exemptions cease to apply.  We plan to continue to operate our
business so that we are not required to register as an investment company under
the Investment Company Act.  We intend to engage
primarily in the business of investing in real estate and we have not and do
not intend to register as an investment company under the Investment Company
Act. If our primary business were to change in a manner that would require us
register as an investment company under the Investment Company Act, we would
have to comply with substantial regulation under the Investment Company Act
which could restrict the manner in which we operate and finance our business
and could materially and adversely affect our business operations and results.  Risks Related to Our Common Stock  There
currently is only a minimal public market for our common stock. Failure to
develop or maintain a trading market could negatively affect the value of our
common stock and make it difficult or impossible for you to sell your shares.


---



There currently is only a minimal public market for shares of our
common stock and an active market may never develop. Our common stock is quoted
on the OTC Pink Market operated by the OTC Market’s Group, Inc. under the
symbol “NIHK”. We may not ever be able to satisfy the listing requirements for
our common stock to be listed on any stock exchange, including the trading
platforms of the NASDAQ Stock Market which are often more widely-traded and
liquid markets. Some, but not all, of the factors which may delay or prevent
the listing of our common stock on a more widely-traded and liquid market
include the following: our stockholders’ equity may be insufficient; the market
value of our outstanding securities may be too low; our net income from
operations may be too low; our common stock may not be sufficiently widely
held; we may not be able to secure market makers for our common stock; and we
may fail to meet the rules and requirements mandated by, any of the several
exchanges and markets to have our common stock listed.  Some of the factors that
could negatively affect the share price or result in fluctuations in the price
or trading volume of our common stock include:  ·
 our
  actual or projected operating results, financial condition, cash flows and
  liquidity or changes in business strategy or prospects;
  ·
 changes
  in government policies, regulations or laws;
  ·
 our
  ability to make acquisitions on preferable terms or at all;
  ·
 the
  performance of our current properties and additional properties that we
  acquire;
  ·
 equity
  issuances by us, or share resales by our stockholders, or the perception that
  such issuances or resales may occur;
  ·
 actual
  or anticipated accounting problems;
  ·
 publication
  of research reports about us, the real estate industry or the cannabis
  industry;
  ·
 changes
  in market valuations of similar companies;
  ·
 adverse
  market reaction to any increased indebtedness we may incur in the future;
  ·
 interest
  rate changes;
  ·
 additions
  to or departures of our senior management team;
  ·
 speculation
  in the press or investment community or negative press in general;·
 our
  failure to meet, or the lowering of, our earnings estimates or those of any
  securities analysts;
   ·
 refusal
  of securities clearing firms to accept deposits of our securities;
   ·
 the
  realization of any of the other risk factors presented in this report;
  ·
 actions
  by institutional stockholders;
  ·
 price
  and volume fluctuations in the stock market generally; and
  ·
 market
  and economic conditions generally, including the current state of the credit
  and capital markets and the market and economic conditions.
  Market factors unrelated to
our performance could also negatively impact the market price of our common
stock. One of the factors that investors may consider in deciding whether to
buy or sell our common stock.  The market price for our
common stock is particularly volatile given our status as a relatively unknown
company with a small and thinly traded public float, limited operating history
and lack of profits which could lead to wide fluctuations in our share price.
You may be unable to sell your common stock at or above your conversion price,
which may result in substantial losses to you.  The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
The volatility in our share price is attributable to a number of factors.
First, as noted above, our common stock are sporadically and thinly traded. As
a consequence of this lack of liquidity, the trading of relatively small
quantities of shares by our shareholders may disproportionately influence the
price of those shares in either direction. The price for our shares could, for
example, decline precipitously in the event that a large number of our common
stock are sold on the market without commensurate demand, as compared to a
seasoned issuer which could better absorb those sales without adverse impact on
its share price. Secondly, we are a speculative or “risky” investment due to our
limited operating history and lack of profits to date, and uncertainty of
future market acceptance for our potential products and services. As a
consequence of this enhanced risk, more risk-adverse investors may, under the
fear of losing all or most of their investment in the event of negative news or
lack ofprogress, be more inclined to sell their
shares on the market more quickly and at greater discounts than would be the
case with the stock of a seasoned issuer. Many of these factors are beyond our
control and may decrease the market price of our common stock, regardless of
our operating performance. We cannot make any predictions or projections as to
what the prevailing market price for our common stock will be at any time,
including as to whether our common stock will sustain their current market
prices, or as to what effect that the sale of shares or the availability of
common stock for sale at any time will have on the prevailing market price.


---



The application of the
“penny stock” rules could adversely affect the market price of our common stock
and increase your transaction costs to sell those shares.  The
SEC has adopted rule 3a51-1 which establishes the definition of a “penny
stock,” for the purposes relevant to us, as any equity security that has a
market price of less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. For any transaction
involving a penny stock, unless exempt, Rule 15g-9 requires:  ●
 that a broker or dealer approve a person’s account for
  transactions in penny stocks, and●
 the broker or dealer receives from the investor a written
  agreement to the transaction, setting forth the identity and quantity of the
  penny stock to be purchased.
  In order to approve a
person’s account for transactions in penny stocks, the broker or dealer must:  ●
 obtain financial information and investment experience
  objectives of the person, and●
 make a reasonable determination that the transactions in penny
  stocks are suitable for that person and the person has sufficient knowledge
  and experience in financial matters to be capable of evaluating the risks of
  transactions in penny stocks.
  The broker or dealer must
also deliver, prior to any transaction in a penny stock, a disclosure schedule
prescribed by the SEC relating to the penny stock market, which, in highlight
form:  ●
 sets forth the basis on which the broker or dealer made the
  suitability determination, and●
 that the broker or dealer received a signed, written agreement
  from the investor prior to the transaction.
  Generally, brokers may be
less willing to execute transactions in securities subject to the “penny stock”
rules. This may make it more difficult for investors to dispose of our common
stock and cause a decline in the market value of our stock.  The application of Rule
144 creates some investment risk to potential investors; for example, existing
shareholders may be able to rely on Rule 144 to sell some of their holdings,
driving down the price of the shares you purchased.  The
SEC adopted amendments to Rule 144 which became effective on February 15, 2008
that apply to securities acquired both before and after that date. Under these
amendments, a person who has beneficially owned restricted shares of our common
stock for at least six months would be entitled to sell their securities
provided that: (i) such person is not deemed to have been one of our affiliates
at the time of, or at any time during the three months preceding a sale, (ii)
we are subject to the Exchange Act periodic reporting requirements for at least
90 days before the sale and (iii) if the sale occurs prior to satisfaction of a
one-year holding period, we provide current information at the time of sale.  Persons
who have beneficially owned restricted shares of our common stock for at least
six months but who are our affiliates at the time of, or at any time during the
three months preceding a sale, would be subject to additional restrictions, by
which such person would be entitled to sell within any three-month period only
a number of securities that does not exceed the greater of either of the
following:


---



●
 1% of the total number of securities of the same class then
  outstanding (shares of common stock as of the date of this Report); or●
 the average weekly trading volume of such securities during the
  four calendar weeks preceding the filing of a notice on Form 144 with respect
  to the sale;
  provided, in each case, that
we are subject to the Exchange Act periodic reporting requirements for at least
three months before the sale. Such sales by affiliates must also comply with
the manner of sale, current public information and notice provisions of Rule 144.  Frank I Igwealor, our
majority stockholder, director and executive officer, owns a large percentage
of our voting stock, which allows her to exercise significant influence over
matters subject to stockholder approval.  Frank
I Igwealor, our majority stockholder, director and executive officer, will have
substantial influence over the outcome of corporate actions requiring
shareholder approval, including the election of directors, any merger,
consolidation or sale of all or substantially all of our assets or any other
significant corporate transaction. In particular, because our President, Chief
Executive Officer, Chief Financial Officer, Treasurer, Secretary and a
director, Mr. Igwealor, who controls 60% of our voting stock as of November 21,
2019, will be able to exert such influence. This shareholder may also delay or
prevent a change of control or otherwise discourage a potential acquirer from
attempting to obtain control of us, even if such a change of control would
benefit our other shareholders. This significant concentration of stock and
voting ownership may adversely affect the value of our common stock due to
investors’ perception that conflicts of interest may exist or arise.  We do not intend to pay
dividends on our common stock.  We
do not anticipate paying any cash dividends on our common stock in the
foreseeable future. We currently anticipate that we will retain all of our
available cash, if any, for use as working capital and for other general
corporate purposes. Any payment of future dividends will be at the discretion
of our Board of Directors and will depend upon, among other things, our
earnings, financial condition, capital requirements, level of indebtedness,
statutory and contractual restrictions applying to the payment of dividends and
other considerations that the Board of Directors deems relevant. Investors must
rely on sales of their common stock after price appreciation, which may never
occur, as the only way to realize a return on their investment. Investors
seeking cash dividends should not purchase our common stock.  We are an “emerging growth company” and
we cannot be certain if the reduced disclosure requirements applicable to
emerging growth companies will make our common stock less attractive to
investors.  We are an “emerging growth
company,” and we benefit from certain exemptions from various reporting
requirements that are applicable to other public companies that are not
“emerging growth companies” including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, which may increase the risk that weaknesses or deficiencies
in our internal control over financial reporting go undetected, and reduced
disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, which may make it more difficult for investors and
securities analysts to evaluate our company. In addition, we have elected under
the JOBS Act to delay adoption of new or revised accounting pronouncements
applicable to public companies until such pronouncements are made applicable to
private companies. As a result of this election, our financial statements may
not be comparable to companies that comply with public company effective dates.
If some investors find our common stock and existing preferred stock less
attractive as a result, there may be a less active trading market for our
common stock and existing preferred stock, and corresponding stock prices may
be more volatile. We may take advantage of these reporting exemptions until we
are no longer an “emerging growth company,” which in certain circumstances
could be up to five years.  We may enter into
acquisitions and take actions in connection with such transactions that could
adversely affect our business and results of operations.  Our
future growth rate depends in part on our selective acquisition of additional
businesses and assets. We may be unable to identify suitable targets for
acquisition or make further acquisitions at favorable prices. If we identify a
suitable acquisition candidate, our ability to successfully complete the
acquisition would depend on avariety of factors, and
may include our ability to obtain financing on acceptable terms and requisite
government approvals. In addition, any credit agreements or credit facilities
that we may enter into in the future may restrict our ability to make certain
acquisitions. In connection with future acquisitions, we could take certain
actions that could adversely affect our business, including:


---



●
 using a significant portion of our available cash;●
 issuing equity securities, which would dilute current
  stockholders’ percentage ownership;●
 incurring substantial debt;●
 incurring or assuming contingent liabilities, known or unknown;●
 incurring amortization expenses related to intangibles; and●
 incurring large accounting write-offs or impairments.
  We
may also enter into joint ventures, which involve certain unique risks,
including, among others, risks relating to the lack of full control of the
joint venture, potential disagreements with our joint venture partners about
how to manage the joint venture, conflicting interests of the joint venture,
requirement to fund the joint venture and its business not being profitable.  In
addition, we cannot be certain that the due diligence investigation that we
conduct with respect to any investment or acquisition opportunity will reveal
or highlight all relevant facts that may be necessary or helpful in evaluating
such investment opportunity. For example, instances of fraud, accounting
irregularities and other deceptive practices can be difficult to detect.
Executive officers, directors and employees may be named as defendants in
litigation involving a company we are acquiring or have acquired. Even if we
conduct extensive due diligence on a particular investment or acquisition, we
may fail to uncover all material issues relating to such investment, including
regarding controls and procedures of a particular target or the full scope of
its contractual arrangements. We rely on our due diligence to identify
potential liabilities in the businesses we acquire, including such things as
potential or actual lawsuits, contractual obligations or liabilities imposed by
government regulation. However, our due diligence process may not uncover these
liabilities, and where we identify a potential liability, we may incorrectly
believe that we can consummate the acquisition without subjecting ourselves to
that liability. Therefore, it is possible that we could be subject to
litigation in respect of these acquired businesses. If our due diligence fails
to identify issues specific to an investment or acquisition, we may obtain a
lower return from that transaction than the investment would return or
otherwise subject ourselves to unexpected liabilities. We may also be forced to
write-down or write-off assets, restructure our operations or incur impairment
or other charges that could result in our reporting losses. Charges of this
nature could contribute to negative market perceptions about us or our shares
of common stock.   ITEM 1B.
 UNRESOLVED STAFF COMMENTS
  As
of December 31, 2018, there were no unresolved SEC comments issued to the
Company.  ITEM
  2.
 PROPERTIES
  The
Company currently office space provided gratis by Cannabinoid Biosciences,
Inc., located at 370 Amapola Ave., Suite 200A, Torrance, CA 90501 as our
corporate headquarters. The office space is not subject to a lease. As of the
date of this Annual Report, we have not sought to move or change our office
site. Additional space may be required as we expand our operations. We
currently do not own any real property.   ITEM
  3.
 LEGAL
  PROCEEDINGS
  We know of no material, existing or pending legal proceedings
against our Company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which our
director, officer or any affiliates, or any registered or beneficial
shareholder, is an adverse party or has a material interest adverse to our
interest.


---



ITEM 4.
 MINE
  SAFETY DISCLOSURES
  Not applicable.        PART II  ITEM
  5.
 MARKET
  FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
  (a)Market for
Common Equity Our common
stock trades on the Over the Counter Bulletin Board ("OTCBB") under
the symbol "NIHK". The high and low bid quotations for our common
stock were as follows for the periods below (as reported by OTC Market Pink
Sheet).   The quotations below reflect inter-dealer prices
without retail markup, markdown, or commission, and may not represent actual
transactions:  Fiscal
  Year Ended on December 31, 2018
 
 High Bid
 
 
 Low Bid1stQuarter
 
 
 0.0007
 
 
 
 0.00072ndQuarter
 
 
 0.0017
 
 
 
 0.00173rdQuarter
 
 
 0.0009
 
 
 
 0.00094thQuarter
 
 
 0.0008
 
 
 
 0.0004
  Fiscal
  Year Ended on December 31, 2017
 
 High Bid
 
 
 Low Bid1stQuarter
 
 
 0.0006
 
 
 
 0.00062ndQuarter
 
 
 0.0006
 
 
 
 0.00053rdQuarter
 
 
 0.0009
 
 
 
 0.00064thQuarter
 
 
 0.0006
 
 
 
 0.0003
   (b)Security
Holders  The number
of record holders of our common stock at December 31, 2018 was 165
according to our transfer agent. This figure excludes an indeterminate number
of shareholders whose shares are held in "street" or
"nominee" name.  (c)Dividends  There have
been no cash dividends declared or paid on the Company’s common stock since the
inception of the Company, and no cash dividends are contemplated in the
foreseeable future. The Company may consider a potential dividend in the future
in either common stock or the stock of future operating subsidiaries.  Recent Sale of Unregistered Securities; Use of
Proceeds from Registered Securities  On October
29, 2019, the company sold one (1) Special 2019 series A preferred share (one
preferred share is convertible 150,000,000 share of common stocks) of the
company for an agreed upon purchase price to Community Economic Development
Capital LLC, a California limited liability company. The Special preferredshare controls 60% of the company’s total voting rights.
The issuance of the preferred share to Community Economic Development Capital
LLC gave to Community Economic Development Capital LLC, the controlling vote to
control and dominate the affairs of the company going forward.  The purchase
was made pursuant to the exemption from registration including, but not limited
to, Section 506 of Reg. D and Section 4.1.


---



The
securities described immediately above were issued to investors in reliance
upon an exemption from the registration requirements of the Securities Act of
1933, as set forth in Section 4(2) under the Securities Act of 1933 and
Rule 504, 505 or 506 of Regulation D promulgated thereunder relative
to sales by an issuer not involving any public offering, to the extent an
exemption from such registration was required. The purchaser of the securities
described immediately above this paragraph represented to us in connection with
their purchase that they were accredited investors and were acquiring the
shares for investment purposes only and not for distribution, that they could
bear the risks of the investment and could hold the securities for an
indefinite period of time.  The
purchasers received written disclosures that the securities had not been
registered under the Securities Act of 1933 and that any resale must be made
pursuant to a registration statement or an available exemption from such
registration. Each participant in the offering or offerings described above was
given access to full and complete information regarding us, together with the
opportunity to meet with our officers and directors for purposes of asking
questions and receiving answers in order to facilitate such participant's
independent evaluation of the risks associated with the purchase of our
securities.   Purchases of Equity Securities by Registrant and
Affiliated Purchasers  Not applicable.  ITEM
  6.
 SELECTED
  FINANCIAL DATA
  Not applicable.  ITEM
  7.
 MANAGEMENT’S
  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
  This report
contains certain forward-looking statements and information relating to us that
are based on the beliefs and assumptions made by our management as well as
information currently available to the management. When used in this document,
the words “anticipate,” “believe,” “estimate,” “expect,” and similar
expressions are intended to identify forward-looking statements. Such
statements reflect our current views with respect to future events and are
subject to certain risks, uncertainties, and assumptions. If one or more of
these risks or uncertainties materialize, or if underlying assumptions prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, or expected.  General  Video River
Networks, Inc. (“NIHK”), previously known as Nighthawk Systems Inc., a Nevada
corporation (OTC: NIHK), (the “Company”) used to be a provider of wireless and
IP-based control solutions for the utility and hospitality industries. Since
2002, the Company’s Power Controls Division has used wireless technology to
control both residential utility meters and remote, mission-critical devices.
The Set Top Box Division, acquired in October 2007, enables hotels to
provide in-room high definition television (“HDTV”) broadcasts, integrated with
video-on-demand, and customized guest services information.  On October
29, 2019, the company sold one (1) Special 2019 series A preferred share (one
preferred share is convertible 150,000,000 share of common stocks) of the
company for an agreed upon purchase price to Community Economic Development
Capital LLC, (“CED Capital”) a California limited liability company. The
Special preferred share controls 60% of the company’s total voting rights. The
issuance of the preferred share to Community Economic Development Capital LLC
gave to Community Economic Development Capital LLC, the controlling vote to
control and dominate the affairs of the company going forward.


---



Pursuant to the sale of this Special 2019 series A preferred
share to CED Capital, all of the company’s officers resigned and Mr. Frank I
Igwealor, JD, CPA, CMA, CFM was elected the President and Chief Executive
Officer, Chief Financial Officer, and Company Secretary of the company.  Mr.
Igwealor and Ms. Patience C. Ogbozor were also elected as new directors of the
Company.  Following
the completion of above mentioned transactions, the company pivoted the business
model of NIHK to become a specialty real estate holding company for specialized
assets including hemp and cannabis farms, dispensaries, CBD related commercial
facilities, industrial and commercial real estate, and other real estate
related services to the CBD and the legal cannabis industry.  Because our
principal is a California Real Estate Broker, NIHK will become a leader in
providing real estate focused on hemp and cannabis growth, to the public
markets.  Furthermore,
we are now, an internally-managed real estate holding company focused on the
acquisition, ownership and management of specialized industrial properties
leased to experienced, state-licensed operators for their regulated
state-licensed cannabis facilities. We plan to acquire our properties through
sale-leaseback transactions and third-party purchases. We expect to lease our
properties on a triple-net lease basis, where the tenant is responsible for all
aspects of and costs related to the property and its operation during the lease
term, including structural repairs, maintenance, taxes and insurance.  We plan to
conduct our business through a traditional umbrella partnership real estate
holding company, in which our properties are owned by our Operating
Partnership, directly or through subsidiaries. We shall be the sole general
partner of our Operating Partnership and own, directly or through a subsidiary,
100% of the limited partnership interests in our Operating Partnership. Our
property acquisitions would target all the states where medical-use marijuana
has been legalized.   Critical Accounting Policies, Estimates and New Accounting
Pronouncements  Management's
discussion and analysis of its financial condition and plan of operations is
based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of
America.  The preparation of these financial statements requires that
we make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities.  At each balance sheet date, management evaluates
its estimates.  We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances.  Actual results may differ from these estimates under
different assumptions or conditions.  The estimates and critical
accounting policies that are most important in fully understanding and
evaluating our financial condition and results of operations include those
stated in our financial statements and those listed below:  Going Concern  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As shown in the accompanying financial
statements, we had zero cash flows from operations for the twelve months ended December
31, 2018 and 2017.  These conditions raise substantial doubt as to
our ability to continue as a going concern. The financial statements do not
include any adjustments that might be necessary if we are unable to continue as
a going concern.  Management intends to finance these deficits by
making additional shareholder notes and seeking additional outside financing
through either debt or sales of its Common Stock.  Recently Adopted Accounting Standards  Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic
842). This ASU requires lessees to recognize a lease liability, on a discounted
basis, and a right-of-use asset for substantially all leases, as well as
additional disclosures regarding leasing arrangements. In July 2018, the FASB
issued ASU 2018-11, Leases (Topic 842), which provides an optional transition
method of applying the new lease standard.


---



In considering its qualitative disclosure
obligations under ASC 842-20-50-3, the Company determined that it has no leases
subject to treatment under ASC 842-20-50-3.  The adoption of this guidance resulted in no significant
impact to our results of operations or cash flows.  Revenue Recognition  For annual reporting periods after December 15, 2017, the
Financial Accounting Standards Board (“FASB”) made effective ASU 2014-09
“Revenue from Contracts with Customers” to supersede previous revenue
recognition guidance under current U.S. GAAP. Revenue is now recognized in
accordance with FASB ASC Topic 606, Revenue Recognition. The guidance presents
a single five-step model for comprehensive revenue recognition that requires an
entity to recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. Two
options are available for implementation of the standard which is either the
retrospective approach or cumulative effect adjustment approach. The guidance
became effective for annual reporting periods beginning after December 15,
2017, including interim periods within that reporting period, with early
adoption permitted. As we have no operations at this time that generate
revenue, we determined that upon adoption of ASC 606 there were no adjustments
converting from ASC 605 to ASC 606.  Income Taxes  We recognize deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns in accordance with applicable accounting
guidance for accounting for income taxes, using currently enacted tax rates in
effect for the year in which the differences are expected to reverse. We record
a valuation allowance when necessary to reduce deferred tax assets to the
amount expected to be realized. For the year ended December 31, 2018 and December
31, 2017, due to cumulative losses, we recorded a valuation allowance against
our deferred tax asset that reduced our income tax benefit for the period to
zero. As of December 31, 2018 and December 31, 2017, we had no liabilities
related to federal or state income taxes and the carrying value of our deferred
tax asset was zero.  Loss Contingencies  Consistent with ASC 450-20-50-1C, if the Company determines
that there is a reasonable possibility that a material loss may have been
incurred, or is reasonably estimable, regardless of whether the Company accrued
for such a loss (or any portion of that loss), the Company will confer with its
legal counsel, consistent with ASC 450. If the material loss is determinable or
reasonably estimable, the Company will record it in its accounts and as a
liability on the balance sheet. If the Company determines that such an estimate
cannot be made, the Company's policy is to disclose a demonstration of its
attempt to estimate the loss or range of losses before concluding that an
estimate cannot be made, and to disclose it in the notes to the financial
statements under Contingent Liabilities.  Net Income (Loss) Per Common Share  We report net income (loss) per common share in accordance
with ASC 260, “Earnings per Share.” This statement requires dual presentation
of basic and diluted earnings with a reconciliation of the numerator and
denominator of the earnings per share computations. Basic net income (loss) per
share is computed by dividing net income attributable to common stockholders by
the weighted average number of shares of common stock outstanding during the
period and excludes the effects of any potentially dilutive securities. Diluted
net income (loss) per share gives effect to any dilutive potential common stock
outstanding during the period. The computation does not assume conversion,
exercise or contingent exercise of securities that would have an anti-dilutive
effect on earnings.  Related Party Transactions


---



We follow ASC subtopic 850-10, “Related Party
Transactions,” for the identification of related parties and disclosure of
related party transactions.  Pursuant to ASC 850-10-20, related parties include: a)
affiliates of the Company; b) entities for which investments in their equity
securities would be required, absent the election of the fair value option
under the Fair Value Option Subsection of Section 825–10–15, to be accounted
for by the equity method by the investing entity; c) trusts for the benefit of
employees, such as pension and profit-sharing trusts that are managed by or
under the trusteeship of management; d) principal owners of the Company; e)
management of the Company; f) other parties with which the Company may deal if
one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be
prevented from fully pursuing its own separate interests; and g) other parties
that can significantly influence the management or operating policies of the
transacting parties or that have an ownership interest in one of the
transacting parties and can significantly influence the other to an extent that
one or more of the transacting parties might be prevented from fully pursuing
its own separate interests.  Material related party transactions are required to be
disclosed in the financial statements, other than compensation arrangements,
expense allowances, and other similar items in the ordinary course of business.
However, disclosure of transactions that are eliminated in the preparation of
or combined financial statements is not required in those statements. The
disclosures shall include: a) the nature of the relationship(s) involved; b) a
description of the transactions, including transactions to which no amounts or
nominal amounts were ascribed, for each of the periods for which statements of
operation are presented, and such other information deemed necessary to an
understanding of the effects of the transactions on the financial statements;
c) the dollar amounts of transactions for each of the periods for which
statements of operations are presented and the effects of any change in the
method of establishing the terms from that used in the preceding period; and d)
amounts due from or to related parties as of the date of each balance sheet
presented and, if not otherwise apparent, the terms and manner of settlement.   Results of Operations  Comparison of Fiscal Years 2018 and 2017  Our general and administrative expenses were $0.00 for the
twelve months ended December 31, 2019, versus $0.00 for the same period in
2017.  We do not have enough information to recognize either revenue
or expenses in the periods under review.  Liquidity and Capital Resources  Comparison of Fiscal Years 2018 and 2017  Our financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a
going concern, which contemplates the realization of assets and the liquidation
of liabilities in the normal course of business. We have no ongoing business or
income and for the year ended December 31, 2018, we reported a net loss of
$0.00 and an accumulated deficit of $19,113,872 as of December 31, 2018. These
conditions raise substantial doubt about our ability to continue as a going
concern. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the outcome
of these uncertainties. Our ability to continue as a going concern is dependent
upon our ability to raise additional debt or equity funding to meet our ongoing
operating expenses and ultimately in merging with another entity with
experienced management and profitable operations. No assurances can be given
that we will be successful in achieving these objectives.  Future financing of our operation depends largely on our controlling
shareholder, Community Economic Development Capital LLC, advancing most or all
of our operating budget.  We have not established operations and will be dependent upon
obtaining financing to pursue any future extensive acquisitions and activities.
For these reasons, our auditors stated in their report on our audited financialstatements that they have substantial doubt that we
will be able to continue as a going concern without further financing.


---



Off-Balance Sheet Arrangements  As of December 31, 2018, we did not engage in any off-balance
sheet arrangements as defined in Item 303(a)(4) of Regulation S-K promulgated
by the SEC under the Securities Exchange Act of 1934.  Contractual
Obligations  Not
applicable.  ITEM
  7A.
 QUANTITATIVE
  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  We are exposed to market risk, including changes in certain
interest rates. All of these market risks arise in the normal course of
business, as we do not engage in speculative trading activities. We have not
entered into derivative or hedging transactions to manage risk in connection
with such fluctuations.  This analysis does not take into consideration the effect of
changes in the level of overall economic activity on interest rate
fluctuations.  ITEM
  8.
 FINANCIAL
  STATEMENTS AND SUPPLEMENTARY DATA
  The unaudited consolidated financial statements of Video
River Networks, Inc. including the notes thereto, are presented beginning at
page F-1 and are incorporated by reference herein.                VIDEO RIVER
NETWORKS, INC. UNAUDITED
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DEC. 31, 2018 AND 2017


---



VIDEO RIVER NETWORKS,
INC. FINANCIAL STATEMENTS C O N T E N T S  PAGEBALANCE SHEETS AS OF DECEMBER 31, 2018 AND 2017
 F-3STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2018
  AND 2017
 F-4STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT FOR THE YEARS
  ENDED DECEMBER 31, 2018 AND 2017
 F-5STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018
  AND 2017
 F-6NOTES TO AUDITED FINANCIAL STATEMENTS FOR THE YEARS ENDED
  DECEMBER 31, 2018 AND 2017
 F-7 – F-13


---



VIDEO RIVER NETWORKS, INC.BALANCE SHEETS
  UNAUDITEDAs of December 31, 2018
  and 2017DECEMBER 31,2018
 
 2017ASSETSCurrent AssetsCash and Cash Equivalents
 
 $
 
 
 $
 0Total Current Assets
 
 
 0
 
 
 0Total Assets
 
 $
 0
 
 $
 0LIABILITIES AND
  SHAREHOLDERS' DEFICITCurrent LiabilitiesAccounts Payable
 
 $
 0
 
 $
 0Accruals - Related Parties
 
 
 0
 
 
 0Loans – Unrelated Parties
 
 
 0
 
 
 0Total Current Liabilities
 
 
 0
 
 
 0Total Liabilities
 
 
 0
 
 
 0Shareholders' DeficitPreferred Stock, $0.001 par value, 5,000,000 shares authorized,
  none issued or outstanding
 
 
 —
 
 
 —Common  Stock, $0.001 par value, 200,000,000 shares
  authorized, 139,153,206 issued and outstanding
 
 
 139,153
 
 
 139,153Additional Paid-In Capital
 
 
 18,974,719
 
 
 18,974,719Accumulated Deficit
 
 
 (19,113,872)
 
 
 (19,113,872)Total Shareholders' Deficit
 
 
 —
 
 
 —Total Liabilities and Shareholders' Deficit
 
 $
 —
 
 $
 —The accompanying notes are
  an integral part of these audited financial statements


---



VIDEO RIVER NETWORKS, INC.STATEMENTS OF OPERATIONS
  (UNAUDITED)Years Ended December 31, 2018 and 2017DECEMBER 31,2018
 
 2017REVENUE
 
 $
 —
 
 
 $
 —EXPENSESGeneral
  and administrative expenses
 
 
 0
 
 
 
 0Total
  Expenses
 
 
 0
 
 
 
 0OPERATING
  LOSS
 
 
 0
 
 
 
 0OTHER
  INCOMEGain
  on settlement of liabilities
 
 
 0
 
 
 
 0INCOME
  (LOSS) BEFORE TAXES
 
 
 0
 
 
 
 0TAXES
 
 
 —
 
 
 
 —NET
  INCOME (LOSS)
 
 $
 0
 
 
 $
 0Net
  Income (Loss) per Common Share: Basic and Diluted
 
 $
 0.00
 
 
 $
 0.00Weighted
  Average Common Shares Outstanding: Basic and Diluted
 
 
 139,153,206
 
 
 
 139,153,206The accompanying notes are an integral part of these unaudited
  financial statements


---



VIDEO RIVER NETWORKS, INC.STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
  (UNAUDITED)Years Ended December 31, 2018 and 2017AdditionalCommon
 
 
 
 
 Paid-In
 
 AccumulatedShares
 
 Amount
 
 
 Capital
 
 Deficit
 
 TotalBalance at December 31, 2007
 
 85,681,150
 $
 85,681
 
 $
 9,719,022
 $
 (11,725,011)
 $
 (1,920,308)Common Stock issued upon conversion
  of notes payable
 
 35,919,991
 
 35,920
 
 
 1,314,700
 
 
 
 1,350,620Common Stock issued for cash
 
 3,661,526
 
 3,662
 
 
 247,600
 
 
 
 251,262Common stock issued in satisfaction
  of convertible debt and accrued interest
 
 6,420,393
 
 6,420
 
 
 399.368
 
 
 
 405,788Balances, December 31, 2007
 
 134,433,060
 
 134,433
 
 
 13,423,111
 
 -15,013,048
 
 3,630,797Conversions to Common stocks in
  2008
 
 4,080,667
 
 4,081
 
 
 142,033
 
 
 
 146,114Net Loss in 2008
 
 
 
 
 
 
 
 
 -4,100,824
 
 -4,100,824September 2009 adjustment
 
 639,479
 
 639
 
 
 5,409,757Balance, December 31, 2018
 
 139,153,206
 $
 139,153
 
 $
 18,974,719
 $
 (19,113,872)
 $
 (42,982)The accompanying notes are an integral part of these unaudited
  financial statements


---



VIDEO RIVER
  NETWORKS, INC.STATEMENTS OF CASHFLOWS
  (UNAUDITED)Years Ended December 31, 2018 and 2017DECEMBER 31,2018
 
 2017Cash
  Flows from Operating Activities:Net
  Income (Loss)
 
 $
 0
 
 
 $
 0Adjustments
  to reconcile net income (loss) tonet
  cash used in operating activities:Net
  Cash Flows Used in Operating Activities
 
 
 0
 
 
 
 0Net
  Cash Flows from Investing Activities
 
 
 0
 
 
 
 0Net
  Cash Flows from Financing ActivitiesNew
  Cash Flows from Financing Activities
 
 
 0
 
 
 
 0Net
  Change in Cash:
 
 
 0
 
 
 
 0Beginning
  cash:Ending
  Cash:
 
 $
 0
 
 
 $
 0Supplemental
  Disclosures of Cash Flow Information:Cash
  paid for interest
 
 $
 0
 
 
 $
 0Cash
  paid for tax
 
 $
 0
 
 
 $
 0Supplemental
  Disclosures of Non-Cash Financing ActivitiesShares
  issued to settle accounts payable
 
 $
 0
 
 
 $
 0Shares
  issued to settle accruals - related parties
 
 $
 0
 
 
 $
 0The accompanying notes are an integral part of these unaudited
  financial statements


---



VIDEO RIVER NETWORKS, INC. NOTES
TO UNAUDITED FINANCIAL STATEMENTS Years
Ended December 31, 2018 and 2017   NOTE
1. NATURE OF OPERATIONS  Nature
of Business  Video River Networks, Inc., a Nevada corporation, (“Video
River Networks, Inc.,” “the Company,” “We," "Us" or “Our’),previously known as
Nighthawk Systems Inc., a Nevada corporation (OTC: NIHK), (the “Company”) used
to be a provider of wireless and IP-based control solutions for the utility and
hospitality industries. Since 2002, the Company’s Power Controls Division has
used wireless technology to control both residential utility meters and remote,
mission-critical devices. The Set Top Box Division, acquired in
October 2007, enables hotels to provide in-room high definition television
(“HDTV”) broadcasts, integrated with video-on-demand, and customized guest
services information.  As further discussed below inNote 10. Subsequent
Eventsbelow,On October 29, 2019, the company sold one (1) Special 2019
series A preferred share (one preferred share is convertible 150,000,000 share
of common stocks) of the company for an agreed upon purchase price to Community
Economic Development Capital LLC, (“CED Capital”) a California limited
liability company. The Special preferred share controls 60% of the company’s
total voting rights. The issuance of the preferred share to Community Economic
Development Capital LLC gave to Community Economic Development Capital LLC, the
controlling vote to control and dominate the affairs of the company going
forward.  Pursuant to the sale of this Special 2019 series
A preferred share to CED Capital, all of the company’s officers resigned and
Mr. Frank I Igwealor, JD, CPA, CMA, CFM was elected the President and Chief
Executive Officer, Chief Financial Officer, and Company Secretary of the
company.  Mr. Igwealor and Ms. Patience C. Ogbozor were also elected as new
directors of the Company.   Furthermore, following the completion of above mentioned
transactions, the company pivoted the business model of NIHK to become a
specialty real estate holding company for specialized assets including hemp and
cannabis farms, dispensaries, CBD related commercial facilities, industrial and
commercial real estate, and other real estate related services to the CBD and
the legal cannabis industry.  Because our principal is a California Real Estate
Broker, NIHK will become a leader in providing real estate focused on hemp and
cannabis growth, to the public markets.  As of the date of this filing, the Company has no
current business operations.  NOTE
2. GOING CONCERN  Our financial statements are prepared
using accounting principles generally accepted in the United States of America
applicable to a going concern, which contemplates the realization of assets and
the liquidation of liabilities in the normal course of business. We have no
ongoing business or income and for the year ended December 31, 2018, we
reported zero income and an accumulated deficit of $19,113,872 as of December
31, 2018. These conditions raise substantial doubt about our ability to
continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of these uncertainties. Our ability to continue as
a going concern is dependent upon our ability to raise additional debt or
equity funding to meet our ongoing operating expenses and ultimately in merging
with another entity with experienced management and profitable operations. No
assurances can be given that we will be successful in achieving these
objectives.  NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


---



Basis of Presentation  The summary of significant accounting
policies is presented to assist in the understanding of the financial
statements. These policies conform to accounting principles generally accepted
in the United States of America and have been consistently applied. The Company
has elected a calendar year of December 31 year-end.  Use
of Estimates  The preparation of financial statements in conformity with
generally accepted accounting principles (“GAAP”) 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 revenues and expenses
during the reporting period. Actual results could differ from those estimates.  Cash
and Cash Equivalents  We maintain cash balances in a non-interest-bearing account
that currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with a maturity of
three months or less are considered to be cash equivalents. As of December 31,
2018 and 2017, we did not maintain any balance of cash equivalents.  Financial
Instruments  The estimated fair values for financial
instruments were determined at discrete points in time based on relevant market
information. These estimates involved uncertainties and could not be determined
with precision. The carrying amount of the our accounts payable and accruals,
our accruals- related parties and loans – related parties approximate their
fair values because of the short-term maturities of these instruments.  Fair
Value Measurements:  ASC Topic 820, Fair Value Measurements and
Disclosures ("ASC 820"), provides a comprehensive framework for
measuring fair value and expands disclosures which are required about fair
value measurements.  Specifically, ASC 820 sets forth a definition of
fair value and establishes a hierarchy prioritizing the inputs to valuation
techniques, giving the highest priority to quoted prices in active markets for
identical assets and liabilities and the lowest priority to unobservable value
inputs.  ASC 820 defines the hierarchy as follows:  Level 1 – Quoted prices are available in
active markets for identical assets or liabilities as of the reported date. The
types of assets and liabilities included in Level 1 are highly liquid and
actively traded instruments with quoted prices, such as equities listed on the
New York Stock Exchange.  Level 2 – Pricing inputs are other than
quoted prices in active markets but are either directly or indirectly
observable as of the reported date.  The types of assets and
liabilities in Level 2 are typically either comparable to actively traded
securities or contracts or priced with models using highly observable inputs.  Level 3 – Significant inputs to pricing
that are unobservable as of the reporting date.  The types of assets
and liabilities included in Level 3 are those with inputs requiring significant
management judgment orestimation, such as complex and
subjective models and forecasts used to determine the fair value of financial
transmission rights.


---



Our financial instruments consist of
accounts payable and accruals and our accruals- related parties. The
carrying amount of the out accounts payable and accruals, accruals- related
parties and loans – related parties approximates their fair values because of
the short-term maturities of these instruments.  Related
Party Transactions:  A related party is generally defined as
(i) any person that holds 10% or more of our membership interests including
such person's immediate families, (ii) our management, (iii) someone that
directly or indirectly controls, is controlled by or is under common control
with us, or (iv) anyone who can significantly influence our financial and
operating decisions. A transaction is considered to be a related party transaction
when there is a transfer of resources or obligations between related parties.  Income
Taxes:  The provision for income taxes is computed
using the asset and liability method, under which deferred tax assets and
liabilities are recognized for the expected future tax consequences of
temporary differences between the financial reporting and tax bases of assets
and liabilities, and for operating losses and tax credit carry-forwards.
Deferred tax assets and liabilities are measured using the currently enacted
tax rates that apply to taxable income in effect for the years in which those
tax assets are expected to be realized or settled. We record a valuation
allowance to reduce deferred tax assets to the amount that is believed more
likely than not to be realized.  Uncertain
Tax Positions:  We evaluate tax positions in a two-step
process. We first determine whether it is more likely than not that a tax
position will be sustained upon examination, based on the technical merits of
the position. If a tax position meets the more-likely-than-not recognition
threshold it is then measured to determine the amount of benefit to recognize
in the financial statements. The tax position is measured as the largest amount
of benefit that is greater than 50% likely of being realized upon ultimate
settlement. We classify gross interest and penalties and unrecognized tax
benefits that are not expected to result in payment or receipt of cash within
one year as long term liabilities in the financial statements.  Revenue
Recognition:  In May 2014, the Financial Accounting
Standards Board (the “FASB”)issued Accounting
Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with
Customers. Since that
date, the FASB has issued additional ASUs providing further revenue recognition
guidance (collectively,“Topic 606”). Topic
606clarifies the
principles for recognizing revenues and costs related to obtaining and
fulfilling customer contracts, with the objective of improving financial
reporting. The core principle ofTopic 606is to recognize revenues when promised
goods or services are transferred to customers in an amount that reflects the
consideration the Company expects to receive in exchange for those goods or
services.Topic 606defines a five-step process to achieve this core principle, and
more judgment and estimates are required underTopic
606than were
required under the prior generally accepted accounting principles ofTopic
605, Revenue Recognition (“Topic 605”).  During the years endedDecember 31, 2018 or 2017, we did not recognize any revenue.


---



Advertising Costs:  We expense advertising costs when advertisements occur.
 No advertising costs were incurred during the year ended December 31,
2018 or 2017.  Stock
Based Compensation:  The cost of equity instruments issued to non-employees in
return in accordance with ASC 505-50 “Equity-Based Payments to Non-Employees”
for goods and services is measured by the fair value of the goods or services
received or the measurement date fair value of the equity instruments issued,
whichever is the more readily determinable. Measurement date for non-employees
is the earlier of performance commitment date or the completion of services.
The cost of employee services received in exchange for equity instruments is
based on the grant date fair value of the equity instruments issued in
accordance with ASC 718 “Compensation - Stock Compensation.”  Net
Loss per Share Calculation:  Basic net loss per common share ("EPS") is computed
by dividing loss available to common stockholders by the weighted-average
number of common shares outstanding for the period. Diluted earnings per share
is computed by dividing net income by the weighted average shares outstanding,
assuming all dilutive potential common shares were issued. Dilutive loss per
share excludes all potential common shares if their effect is anti-dilutive.  No potentially dilutive debt or equity instruments were
issued or outstanding during the years ended December 31, 2018 or 2017.  Subsequent
Events:  We have evaluated all transactions from December 31, 2018
through the date these financial statements were issued for subsequent event
disclosure consideration. SeeNote 10. Subsequent
Events.  Recently
Accounting Pronouncements:  We have reviewed all the recently issued, but not yet
effective, accounting pronouncements and do not believe any of these
pronouncements will have a material impact on our financial statements.  NOTE
4. ACCOUNTS PAYABLE AND ACCRUALS  N/A  NOTE
5. ACCRUALS - RELATED PARTIES  N/A  NOTE
6. LOANS- RELATED PARTIES  N/A  NOTE
7. INCOME TAXES


---



We did not
provide any current or deferred US federal income tax provision or benefit for
any of the periods presented in these financial statements because we have
accumulated substantial operating losses since inception.  When it is more
likely than not, that a tax asset cannot be realized through future income, we
must record an allowance against any future potential future tax benefit. 
We have provided a full valuation allowance against the net deferred tax asset,
consisting of net operating loss carry forwards, because management has
determined that it is more likely than not that we will not earn income
sufficient to realize the deferred tax assets during the carry forward periods.  The Company has not taken a tax position
that, if challenged, would have a material effect on the financial statements
for the years ended December 31, 2018 and 2017 as defined under ASC 740,
"Accounting for Income Taxes."  We did not recognize any adjustment
to the liability for uncertain tax position and therefore did not record any
adjustment to the beginning balance of the accumulated deficit on the balance
sheet.  The provision for income taxes differs
from the amount computed by applying the statutory federal income tax rate to
income before provision for income taxes.  The sources and tax effects of the
differences for the periods presented are as follows:  Year ended December 31,2018
 2017Statutory U.S. Federal Income Tax Rate
 
 21
 %
 
 21
 %State Income Taxes
 
 5
 %
 
 5
 %Change in Valuation Allowance
 
 (26
 )%
 
 (26
 )%Effective Income Tax Rate
 
 0
 %
 
 0
 %
   A reconciliation of the income taxes
computed at the statutory rate is as follows:  Year ended December 31,2018
 
 
 2017Tax credit (expense) at statutory rate (26%)
 $
 0
 
 $
 0Increase in valuation allowance
 
 0
 )
 
 0
 )Net deferred tax assets
 $
 —
 
 $
 —
   There was no change in valuation allowance
for the years ended December 31, 2018 and 2017 respectively.  As of December 31, 2018, the Company had a
federal net operating loss carryforward of approximately $19,113,872. The
annual offset of this carryforward loss against any future taxable profits will
be substantially limited under the provisions of Internal Revenue Code Section
381.


---



NOTE 8. COMMITMENTS & CONTINGENCIES  Legal
Proceedings  We were not subject to any legal
proceedings the years ended December 31, 2018 and 2017, and, to the best of our
knowledge, no legal proceedings are pending or threatened.  Contractual Obligations  We were not subject to any contractual
obligations during the years ended December 31, 2018 and 2017.  NOTE
9. SHAREHOLDERS’ DEFICIT  Preferred
Stock  As of December 31, 2018, we were authorized
to issue 5,000,000 shares of preferred stock with a par value of $0.0001.  No shares of preferred stock were issued
and outstanding during the years ended December 31, 2018 and 2017.  Common
Stock  As of December 31, 2018, we were
authorized to issue 200,000,000 shares of common stock with a par value of $0.001.  Year endedDecember 31, 2018  As of December 31, 2018, we issued 139,153,206
shares of our common stock to more than 171 shareholders.  Warrants  No warrants were issued or outstanding
during the years ended December 31, 2018 and 2017.  Stock
Options  The Company has never adopted a stock
option plan and has never issued any stock options.  NOTE 10.
SUBSEQUENT EVENTS  The Company evaluated subsequent events afterDecember 31, 2018through the date these financial
statements were issued and has determined there have been no subsequent events
for which disclosure is required, other than as disclosed below.  On October 29, 2019, the company sold one (1)
Special 2019 series A preferred share (one preferred share is convertible
150,000,000 share of common stocks) of the company for an agreed upon purchase
price to Community Economic Development Capital LLC, (“CED Capital”) a
California limited liability company. The Special preferred share controls 60%
of the company’s total voting rights. The issuance of the preferred share to
Community Economic Development Capital LLC gave to Community Economic
Development Capital LLC, the controlling vote to control and dominate the
affairs of the company going forward.


---



Pursuant to the sale of this Special 2019 series
A preferred share to CED Capital, all of the company’s officers resigned and
Mr. Frank I Igwealor, JD, CPA, CMA, CFM was elected the President and Chief
Executive Officer, Chief Financial Officer, and Company Secretary of the
company.  Mr. Igwealor and Ms. Patience C. Ogbozor were also elected as new
directors of the Company.   Furthermore, following the completion of above
mentioned transactions, the company pivoted the business model of NIHK to
become a specialty real estate holding company for specialized assets including
hemp and cannabis farms, dispensaries, CBD related commercial facilities, industrial
and commercial real estate, and other real estate related services to the CBD
and the legal cannabis industry.  Because our principal is a California Real
Estate Broker, NIHK will become a leader in providing real estate focused on
hemp and cannabis growth, to the public markets.  On November 13, 2019, subsequent to the hiring of
Mr. Frank I. Igwealor as our Chairman and CEO, a Sign-On Bonus of 30.77 million
shares of the company’s common stocks was awarded to him.    ITEM
  9.
 CHANGES
  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  None.  ITEM
  9A.
 CONTROLS
  AND PROCEDURES
  Conclusion Regarding the Effectiveness of
Disclosure Controls and Procedures  Pursuant to Exchange Act Rule 13a-15(b) our management has
performed an evaluation of the effectiveness of our disclosure controls and
procedures. The term disclosure controls and procedures as defined in Exchange
Act Rule Rule 13a-15(e) means controls and other procedures of an issuer that
are designed to ensure that information required to be disclosed by the issuer
in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
SEC’s rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the issuer’s
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.  Based on its assessment, management concluded that as of
December 31, 2018 our disclosure controls and procedures were ineffective. We plan
to take measures to improve our disclosure controls and procedures, including
instituting a new Enterprise Resource Planning (“ERP”) system and engaging an
outside accounting firm to advise the Company with respect to setting up
internal auditing and other controls and procedures. The ERP system, when fully
operational, will enable the centralization of all information required to be
disclosed pursuant to the Exchange Act to be digitally recorded, processed,
summarized and reported in a timely and secured manner.  Management’s
Report on Internal Control Over Financial Reporting  Our management is responsible for establishing and
maintaining adequate internal control over financial reporting, as such term is
defined in the rules promulgated under the Securities Exchange Act of
1934.  Under the supervision and with the participation of our
management, including our principal executive and financial accounting officer,
we have conducted an evaluation of the effectiveness of our internal control
over financial reporting.  Management’s assessment of internal
control over financial reporting was conducted using the criteria in “Internal
Control over Financial Reporting - Guidance for Smaller Public Companies”
issued by the Committee of Sponsoring Organizations of the Treadway
Commission.   Based on its assessment, management has concluded
that our internal controls over financial reporting are effective.


---



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 accounting firm pursuant to temporary rules of
the SEC that permit the Company to provide only management’s report in this
annual report.   Changes in internal control over financial
reporting  We are continuing our efforts to improve our internal
controls over financial reporting.  Among other improvements, we shall
implement a comprehensive ERP system that will improve the Company’s internal
controls. As of the date of this Form 10K, management is unable to meaningfully
determine the date the ERP system will be installed and become operational, but
expects it to be installed in the second quarter of 2020.   The
Company believes that full implementation of its new ERP System will improve
disclosure controls and procedures by performing the following functions:  ·
 Maintain
  detailed records and produce comprehensive financial statements on a periodic
  basis allowing management to review and detect irregular financial
  activities;
  ·
 Place
  different check-points on the progression of ordinary monetary activities of
  the business; and
  ·
 Delineate
  individual and/departmental responsibilities and effectively separate
  respective departmental transactions so as to prevent occurrence of
  intentional misappropriation of funds.
 Pending the implementation of the ERP system, we shall
implement additional controls to ensure that our internal controls over
financial reporting are effective.  These controls include:  ·
 All
  departments requesting funds must obtain written approval from the Chief
  Executive Officer or the Chairman of the Board before the accounting
  department may commence processing payments;
  ·
 All
  fund transfer applications must be approved by the applicable department
  supervisor before the application may be processed. No one can authorize
  their own application. This is applicable to all staff including staff at the
  managerial level;
  ·
 All
  fund transfer applications must be accompanied by supporting documentation,
  such as a copy of the relevant contract copy of the relevant invoice or stock
  pre-payment statement;
  ·
 Stock
  purchases require the approval of the supervisor or manager of the relevant
  department, the approval of the accounts department, and a stock receipt and
  suppliers’ certification. Finally the application must be approved by the Chairman
  of the Board before funds may be released; and
  ·
 All
  pre-payments must be tracked by the fund applicant and the payments must be
  cleared within the month of payment or in accordance with the date stipulated
  in the relevant contract.
    ITEM
  9B.
 OTHER
  INFORMATION
  None.


---



PART III  ITEM
  10.
 DIRECTORS
  AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  Name
 
 Age*
 
 Position within the Company
 
 TermMr. Frank I Igwealor
 
 47
 
 Chairman, Director and Chief Executive and Financial Officer
 
 November 2019 to presentMr. Patience Ogbozor
 
 33
 
 Director
 
 October 2019 to present
  *Age as at December 31, 2018.  Term
of Office  Each of our
directors is appointed to hold office until the next annual meeting of our
shareholders or until his respective successor is elected and qualified, or
until she resigns or is removed in accordance with the provisions of the Nevada
Statues.  Our officers are appointed by our board of directors and
hold office until removed by the board of directors or until their resignation.  Background
and Business Experience  The business
experience during the past five years of the persons listed above as an Officer
or Director of the Company either presently or during the year ended December
31, 2018 is as follows:  Frank Igwealor, CPA, CMA,
JD, MBA, MSRMis
a financial manager with broad
technical and management experience in accounting, finance, and business
advisory. 
Mr. Igwealor is a Certified Financial Manager, Certified Management
Accountant, and Certified Public Accountant.  Frank has an extensive freelance
consulting experience for the cannabis industry.  As a CPA, CMA, CFM
consultant, Frank have provided top-level financial reporting, Accounting, SEC
Reporting, Business Valuation, Mergers & Acquisitions, GAAP/ IFRS
Conversion, Pre IPO/RTO Prep, 280E Tax, and Biological Assets Valuation to more
than 26 cannabis businesses across 21 states.  Frank have substantial
experience with Section 280E of the Internal Revenue Code, having worked
for/with investors in the cannabis industry and helped them analyze the COGS
and Operating expenses of dispensaries.  Frank has been part of a team that
shepherded both big and small cannabis investments through the required audit
and conducted all the filings to take them public through IPO, DPO or RTO
transactions. I have worked with single dispensaries with cultivation as well
as ROLL-UP of multiple dispensaries that wanted to achieve revenue scale at
debut on the exchanges.  Frank has been an important part of the team that
successfully delivered on the following:  ·Helped Cannabis business owners
and investors with top-level financial reporting for SEC and Canadian
Securities Exchanges (CSE), and investor consumption. ·Consolidated dispensaries and
cultivations and shepherd the consolidated holding company through GAAP and
IFRS audit and get them listed on the US and Canadian exchanges. ·Prepared complete audit packages,
which includes workpapers and all necessary documentation. Frank does not do
audits or any attest work. This is as a result of Sarbanes-Oxley legislation
which prohibits auditors from preparing financial statements or conducting any
accounting work for their clients. ·Help dispensaries and cultivation
owners to set up standardized (best practice) accounting and financial
reporting systems.


---



·Frank continues to have ongoing
consulting project for legal-cannabis businesses such as managing the filing of
Form 10-K , 10-Q and the associated audit, or just assisting on a technical
accounting question such as providing a journal entry for a specific
transaction.  Ms.
Patience C. Ogbozor, President and CEO:Ms. Ogbozor joined Cannabinoid
Biosciences in May 2015 as a Finance Manager and became the President and CEO
in November 2018.  Ms. Ogbozor is the Chief Executive Officer, Director and
controlling
shareholder of the Company. Prior to joining the company, Ms. Ogbozor was with
New Haven Pharmacy, Abuja, from 2013 to 2015.  Except for Patience and Frank who have spousal relationship,
none of our directors are related to any of our other directors and none have
any pending legal claims or litigation against them.  Audit Committee Financial Expert  The Company
intends to establish an audit committee of the board of directors, which will
consist of soon-to-be-nominated independent directors. The audit committee’s
duties would be to recommend to the Company’s board of directors the engagement
of an independent registered public accounting firm to audit the Company’s
financial statements and to review the Company’s accounting and auditing
principles. The audit committee would review the scope, timing and fees for the
annual audit and the results of audit examinations performed by the internal
auditors and independent registered public accounting firm, including their
recommendations to improve the system of accounting and internal controls. The
audit committee would at all times be composed exclusively of directors who
are, in the opinion of the Company’s board of directors, free from any
relationship which would interfere with the exercise of independent judgment as
a committee member and who possess an understanding of financial statements and
generally accepted accounting principles.  Compensation Committee  The Company intends
to establish a compensation committee of the board of directors. The
compensation committee would review and approve the Company’s salary and
benefits policies, including compensation of executive officers.  Security Holders Recommendations to Board of Directors  We do not currently have a process for security holders to send
communications to the board of directors. However, we welcome comments and
questions from our shareholders. Shareholders can direct communications to the
Company at our executive offices.  Involvement in Certain Legal Proceedings  To our knowledge,
during the last ten years, none of our directors and executive officers
(including those of our subsidiaries) has:  •
 Had a bankruptcy petition filed by or against any business of
  which such person was a general partner or executive officer either at the
  time of the bankruptcy or within two years prior to that time.
  •
 Been convicted in a criminal proceeding or been subject to a
  pending criminal proceeding, excluding traffic violations and other minor
  offenses.


---



•
 Been subject to any order, judgment or decree, not subsequently
  reversed, suspended or vacated, of any court of competent jurisdiction,
  permanently or temporarily enjoining, barring, suspending or otherwise
  limiting his involvement in any type of business, securities or banking
  activities.
  •
 Been found by a court of competent jurisdiction (in a civil
  action), the SEC, or the Commodities Futures Trading Commission to have
  violated a federal or state securities or commodities law, and the judgment
  has not been reversed, suspended or vacated.
  •
 Been the subject to, or a party to, any sanction or order, not
  subsequently reverse, suspended or vacated, of any self-regulatory
  organization, any registered entity, or any equivalent exchange, association,
  entity or organization that has disciplinary authority over its members or
  persons associated with a member.
   Section 16(a) Beneficial Ownership Reporting Compliance  Section 16(a) of the
Exchange Act requires our executive officers and directors and persons who own
more than 10% of a registered class of our equity securities to file with the
SEC initial statements of beneficial ownership, reports of changes in ownership
and annual reports concerning their ownership of our Common Stock and other
equity securities, on Form 3, 4 and 5 respectively. Executive officers,
directors and greater than 10% shareholders are required by the SEC regulations
to furnish our company with copies of all Section 16(a) reports they file.   Code of
Ethics  We have adopted a corporate code of ethics. We believe our
code of ethics is reasonably designed to deter wrongdoing and promote honest
and ethical conduct; provide full, fair, accurate, timely and understandable
disclosure in public reports; comply with applicable laws; ensure prompt
internal reporting of code violations; and provide accountability for adherence
to the code. Please refer to Exhibit 14 for a copy of our Code of Ethics
(English translation). We will provide a copy of our Code of Ethics, without
charge, to any person who requests in writing to our corporate secretary at our
principal executive offices.    ITEM 11.
 EXECUTIVE COMPENSATION
  Compensation
Discussion and Analysis  Compensation Committee Interlocks and Insider Participation  As the Board of Directors does not have a Compensation
Committee, the independent directors of the Board oversee the Company’s
executive compensation program. We currently do not have independent directors
on our Board.  Compensation for the CEO and the CFO is approved by the
Independent Directors of the Board or the general Board. Compensation for other
executive officers and senior management is determined by the CEO and CFO
pursuant to the Board of Directors delegating to the CEO and CFO authority to
do so.  Elements to Executive Compensation  The Company’s executive compensation program is designed to
attract and retain executives responsible for the Company’s long-term success,
to reward executives for achieving both financial and strategic company goals
and to provide a compensation package that recognizes individual contributions
as well as overall business results.The Company’s
executive compensation program also takes into account the compensation
practices of companies with whom Video River Networks, Inc. competes for
executive talent.


---



The two components of the Company’s executive compensation
program are base salary and annual discretionary bonuses. Overall compensation
is intended to be competitive for comparable positions at peer companies.  Objectives. The
objectives of the Company’s executive compensation policies are to attract and
retain highly qualified executives by designing the total compensation package
to motivate executives to provide excellent leadership and achieve Company
goals; to align the interests of executives, employees, and stockholders by
establishing cohesive management, financial, operation and marketing goals that
reflect the Company’s strategic growth plan; and to provide executives with
reasonable security, through retirement plan and annual discretionary bonuses
that motivate them to continue employment with the Company and achieve goals
that will make the Company thrive and remain competitive in the long-run.  Linkage between compensation programs and Company objective
and values. We link executive compensation closely with the
Company objectives, which we believe are dependent on the level of employee
engagement, operational excellence, cost management and profitability achieved.
Currently, the primary quantifiable measurement of operational excellence for
the Company is the achievement of profitability, which is directly related to
increasing annual revenue. Executives’ annual performance evaluations are based
in part on their achievement of the aforementioned goals and in part on revenue
targets that may be established by the Board of Directors at the beginning of
each fiscal year. The Board of Directors has not set a specific revenue goal
for the award of bonuses for fiscal 2008. The Company currently does not have a
defined non-equity incentive plan in place for its named executives. Instead,
the disinterested members of the Board of Directors determine if any annual discretionary
bonuses should be awarded to named executives in conjunction with the named
executives’ annual performance evaluations. As indicated in the table below,
during the last three fiscal years, the Board of Directors has not elected to
award any annual discretionary bonuses to any named executives.  The roles of various elements of compensation. Executive compensation includes base salary, annual
discretionary bonuses awarded by the Board of Directors in conjunction with
named executives’ annual performance evaluations and other annual compensation
granted under the noncontributory defined benefit retirement plan.
Collectively, the Board’s objective is to ensure a total pay package that is
appropriate given the performance of both the Company and the individual named
executive.  Governance practices concerning compensation. The Board of Directors has implemented a number of
procedures that the Board follows to ensure good governance concerning
compensation. These include setting CEO and CFO salaries, authorizing the CEO
or the CFO to determine the salaries of presidents and vice presidents,
including Mrs. Huang, President of Shanghai operations, establishing annual
goals for the Company, reviewing proposals for stock incentive plans,
exercising fiduciary responsibilities over retirement plans, overseeing
management development and succession planning, and keeping adequate records of
its activities.  Base Salary  Each executive’s base salary is initially determined with
reference to competitive pay practices of peer companies (where such
information is publicly available) and is dependent upon the executive’s level
of responsibility and experience. The Board uses its discretion, rather than a
formal weighting system, to evaluate these factors and to determine individual
base salary levels. Thereafter, base salaries are reviewed periodically, and
increases are made based on the Board of Director’s subjective assessment of
individual performance, as well as the factors discussed above.  Annual Discretionary Bonuses  In future years we shall pay variable incentive compensation
to our executives, however, due to our overall performance in 2018, our
executive officers were not awarded bonuses.  Summary
Compensation Table


---



The following table sets forth information about the
compensation paid or accrued by our chief executive officer, chief financial
officer, and one other most highly compensated executive officer (our “named
officers”) for the last three completed fiscal years:  SUMMARY COMPENSATION TABLEName
  and Principal Position
 
 Year
 
 Salary
  ($)
 
 
 Bonus
  ($)
 
 
 Stock
  Awards
  ($)
 
 
 Option
  Awards
  ($)
 
 
 Non-Equity
  Incentive Plan
  Compensation ($)
 
 
 Nonqualified Deferred
  Compensation
  Earnings ($)
 
 
 All Other
  Compensation
  ($)
 
 
 Total
  ($)Mr.
  Frank I Igwealor
 
 2018
 
 
 0
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 0
 
 (iv)
 
 
 0Chair,
  CEO, CFO
 
 2017
 
 
 0
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 0
 
 (v)
 
 
 02016
 
 
 0
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 —
 
 
 
 0
 
 (vi)
 
 
 0
     Notes:  (i)(ii)(iii)
  (iv)
  (v)
  (vi)
  Stock Option Grants in the Last Fiscal Year;
Exercises of Stock Options  There were
no grants of stock options during the fiscal year ended December 31, 2018. The
Company has never granted any stock options.   ITEM
  12.
 SECURITY
  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
  MATTERS
  The following table sets forth the beneficial ownership of
shares of our common stock by (i) each person who is known to us to be the
beneficial owner of more than 5% of our common stock; (ii) each director and
named executive officer (defined above) individually; and (iii) all directors
and executive officers as a group. Beneficial ownership of common stock has
been determined for this purpose in accordance with Rules 13d-3 and 13d-5 of
the Securities and Exchange Commission, under the Securities Exchange Act of
1934, as amended. These rules provide, among other things, that a person is
deemed to be the beneficial owner of common stock if such person, directly or
indirectly, has or shares voting power or investment power with respect to the
common stock or has the right to acquire such ownership within sixty days after
the date of this registration statement.  Title of Class
 
 
 Name of Beneficial Owner
 
 Amount and Nature
  of Beneficial
  Ownership
 
 Percent of ClassCommon stock
 (a)
 
 H.
  Douglas Saathoff
 
 3,448,324
 
 2.5%Common
  stock
 (b)
 
 Raymond
  G. Romero
 
 525,000
 
 0.4%Common
  stock
 (c)
 
 Michael
  Mayer
 
 522,000
 
 0.4%Common
  stock
 (d)
 
 Directors
  and officers as a group
 
 4,495,324
 
 3.3%


---



NOTES: (a)Includes
500,000 options exercisable at $0.22 per share and 2,500,000 options
exercisable at $0.07 per share.  (b)Includes
500,000 options exercisable wit at $0.07 per share and 25,000 options exercisable
at $0.22 per share.  (c)Consists
of 500,000 options exercisable at $0.04 per share.  (d)As reported on 12/31/2008 and based on 139,153,206
shares of common stock outstanding as at December 31, 2018.  ITEM
  13.
 CERTAIN
  RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 None  Policy and Procedures with Respect to Related
Person Transactions  Our Board of Directors is charged with reviewing and
approving all potential related party transactions.  All such related
party transactions must then be reported under applicable SEC rules. We have
not adopted other procedures for review, or standards for approval, of such
transactions, but instead review them on a case-by-case basis.  We recognize that Related Person Transactions may raise
questions among shareholders as to whether those transactions are consistent
with the best interests of the Company and its shareholders. (Related Person
Transaction is defined as a transaction, arrangement or relationship in which
we were, are or will be a participant and the amount involved exceeds the
lesser of $120,000 or one percent of the average of our total assets for the
last two fiscal years, and in which any Related Person (defined below) had, has
or will have a direct or indirect interest.)  It is our policy to
enter into or ratify Related Person Transactions only when the Board of
Directors determines that the Related Person Transaction in question is in, or
is not inconsistent with, the best interests of the Company and its shareholders,
including but not limited to situations where we may obtain products or
services of a nature, quantity or quality, or on other terms, that are not
readily available from alternative sources or when we provide products or
services to Related Persons on an arm’s length basis on terms comparable to
those provided to unrelated third parties or on terms comparable to those
provided to employees generally.  “Related Person” is defined as follows:  1.
 any
  person who is, or at any time since the beginning of the Company’s last
  fiscal year was, a director or executive officer of the Company or a nominee
  to become a director of the Company;2.
 any
  person who is known to be the beneficial owner of more than 5% of any class
  of the Company’s voting securities;3.
 any
  immediate family member of any of the foregoing persons, which means any
  child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,
  father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law
  of the director, executive officer, nominee or more than 5% beneficial owner,
  and any person (other than a tenant or employee) sharing the household of
  such director, executive officer, nominee or more
  than 5% beneficial owner; and4.
 any
  firm, corporation or other entity in which any of the foregoing persons is
  employed or is a general partner or principal or in a similar position or in
  which such person has a 5% or greater beneficial ownership interest.


---



Directors and executive officers are required to submit to
the Board of Directors, acting in its role as audit committee, a list of
immediate family members and a description of any current or proposed Related
Person Transactions on an annual basis and provide updates during the year.  In our review of any Related Person Transactions, the Board
of Directors must consider all of the relevant facts and circumstances
available to it, including (if applicable) but not limited to: the benefits to
the Company; the impact on a director’s independence in the event the Related
Person is a director, an immediately family member of a director or an entity
in which a director is a partner, shareholder or executive officer; the
availability of other sources for comparable products or services; the terms of
the transaction; and the terms available to unrelated third parties or to
employees generally. No member of the Board of Directors may participate in any
review, consideration or approval of any Related Person Transaction with
respect to which such member or any of his or her immediate family members is
the Related Person. The Board of Directors will approve or ratify only those
Related Person Transactions that are in, or are not inconsistent with, the best
interests of the Company and its shareholders, as the Board of Directors
determines in good faith. The Board of Directors will convey the decision to
the Chief Executive Officer or the Chief Financial Officer, who will convey the
decision to the appropriate persons within the Company.   Director Independence  None of our directors qualifies as independent director as defined under
the NASDAQ Listing Rules.  ITEM
  14.
 PRINCIPAL
  ACCOUNTANT FEES AND SERVICES
  Audit Fees Year Ended
 
 Year EndedDecember 31, 2018
 December 31, 2017Audit
  fees
 
 $
 0
 
 
 $
 0Audit-related
  fees
 
 $
 0
 
 
 $
 0Tax
  fees
 
 $
 0
 
 
 $
 0All
  other fees
 
 $
 0
 
 
 $
 0Total
 
 $
 0
 
 
 $
 0
   Audit-Related Fees  No audit-related fees were incurred in 2018 or 2017.  Tax Fees  The aggregate fees
billed during the fiscal years ended December 31, 2018 and 2017 for
professional services rendered by our principal accountant tax compliance, tax
advice and tax planning were $0.  All
Other Fees


---



The aggregate fees
billed during the fiscal years ended December 31, 2018 and 2017 for products
and services provided by our principal independent accountants was $0.  Pre-Approval
Policies and Procedures  Our board of directors pre-approves all
audit and non-audit services performed by the Company's auditor and the fees to
be paid in connection with such services.      PART IV  ITEM
  15.
 EXHIBITS
  Item
15(a)  EXHIBIT NO
 
 DESCRIPTION24
 
 Power
  of Attorney is included on the signature page in this Annual Report on
  this Form 10-K.31.1
 
 Rule 13a-14(a)/15d
  - 14(a) Certification of Frank I Igwealor, Chief Executive Officer of Video
  River Networks, Inc., filed herewith.32.1
 
 Certificate
  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
  Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
  (b)  None


---



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, thereunto duly
authorized.  Date:
  November 21, 2019
 VIDEO
  RIVER NETWORKS, INC.By:
 /s/Frank I IgwealorName:
 Frank
  I IgwealorTitle:
 Chairman
  and Chief Executive Officer
  (Principal Executive Officer)
  Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.  Signature
 
 Title
 
 Date/s/Frank I Igwealor
  Frank I Igwealor
 
 Chief
  Executive Officer, Chief Financial Officer, President, Director
 
 November 21, 2019(Principal Executive Officer)
  (Principal Financial Officer)


---



Exhibit 31.1  I,
Frank I Igwealor, certify that:  1. I have reviewed this annual
report on Form 10-K for fiscal year ended December 31, 2018 of Video River
Networks, Inc.  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. As the registrant’s certifying
officer, I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control 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 me 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 our 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 the 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. As the registrant’s certifying
officer, I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit
committee of the 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 control over financial
reporting.  By:/s/Frank
I Igwealor Frank I Igwealor Principal
Executive Officer  Date:
November 21, 2019


---



Exhibit 31.2  I,
Frank I Igwealor, certify that:  1. I have reviewed this annual report on
Form 10-K for fiscal year ended December 31, 2018 for Video River Networks,
Inc.;  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. As the registrant’s other
certifying officer, I am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control 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 our 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 the 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. As the registrant’s certifying
officer I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit
committee of the 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 control over financial
reporting.  By:/s/
Frank I Igwealor Frank I Igwealor Principal
Financial Officer Date:November
21, 2019


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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 on Form 10-K of Video River Networks, Inc.
(the “Company”) for the year ending December 31, 2018, as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), Frank I
Igwealor, Chief Executive Officer and Chief Financial Officer of the Company,
hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:  (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 results of operations of the Company.   Dated:
   November 21, 2019
 By:/s/
  Frank I IgwealorFrank
  I IgwealorChief
  Executive Officer, Chief Financial Officer
     This
certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley
Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley
Act of 2002, be deemed filed by the Company for purposes of §18 of the
Securities Exchange Act of 1934, as amended.  A
signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to
the Securities and Exchange Commission or its staff upon request.