UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

|Washington, DC 20549
|--------------------



FORM 10-Q

| | x | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
| | - | ----------------------------------------------------------------------------------------



For the quarterly period ended March 31,
2015



or



| |  ̈ | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
| | - | -----------------------------------------------------------------------------------------



For the transition period from ________
  to ________



Commission file number: 0-22315



| | TUMBLEWEED HOLDINGS, INC.                              | 
| | ------------------------------------------------------ | 
| | (Exact name of registrant as specified in its charter) | 



|Utah                                                           |  |  | 34-1413104                          
|-------------------------------------------------------------- |  |  | ------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) |  |  | (I.R.S. Employer Identification No.)



| | 720 Fifth Avenue 10th Floor, New York, New York |  | 10019      | 
| | ----------------------------------------------- |  | ---------- | 
| | (Address of principal executive offices)        |  | (Zip Code) | 



| | (212) 247-0581                                       | 
| | ---------------------------------------------------- | 
| | (Registrant's telephone number, including area code) | 





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



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. YesxNo ̈



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 for such shorter period that the registrant was required to submit and post such files). Yes ̈Nox



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



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



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



As of May 8, 2015, there were 145,920,667 shares of the registrant’s common stock, par value $0.01 per share, outstanding.











TUMBLEWEED HOLDINGS, INC. AND SUBSIDIARY

FOR THE THREE MONTHS ENDED

MARCH 31, 2015



INDEX



|Part
I - FINANCIAL INFORMATION |                                                                                                                         
|------------------------------ | ------------------------------------------------------------------------------------------------------------------------
|                               |                                                                                                                         
|Item 1.                        | Financial Statements.                                                                                                   
|                               |                                                                                                                         
|                               | Condensed Consolidated Balance Sheets as of March 31, 2015  (Unaudited) and June 30, 2014                               
|                               |                                                                                                                         
|                               | Condensed Consolidated  Statements of Operations for the three and nine months ended March 31, 2015 and 2014 (Unaudited)
|                               |                                                                                                                         
|                               | Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2015 and 2014 (Unaudited)           
|                               |                                                                                                                         
|                               | Notes to Condensed Consolidated Financial Statements                                                                    
|                               |                                                                                                                         
|Item 2.                        | Management’s Discussion and Analysis of Financial Condition and Results of Operations.                                  
|                               |                                                                                                                         
|Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk.                                                             
|                               |                                                                                                                         
|Item 4.                        | Controls and Procedures.                                                                                                
|                               |                                                                                                                         
|Part II                        | OTHER INFORMATION                                                                                                       
|                               |                                                                                                                         
|Item 1.                        | Legal Proceedings.                                                                                                      
|                               |                                                                                                                         
|Item 1A.                       | Risk Factors.                                                                                                           
|                               |                                                                                                                         
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds.                                                            
|                               |                                                                                                                         
|Item 3.                        | Defaults Upon Senior Securities.                                                                                        
|                               |                                                                                                                         
|Item 4.                        | Mine Safety Disclosures.                                                                                                
|                               |                                                                                                                         
|Item 5.                        | Other Information.                                                                                                      
|                               |                                                                                                                         
|Item 6.                        | Exhibits.                                                                                                               
|                               |                                                                                                                         
|                               | Signatures                                                                                                              
|                               |                                                                                                                         
|                               | Certifications—pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.                                      



2







PART 1—FINANCIAL INFORMATION



Item 1.   Financial Statements.



Tumbleweed Holdings, Inc. and Subsidiary

Condensed Consolidated Balance Sheets

(in thousands, except number of shares and
per share data)



|                                                                                                                                                                        |  | March 31, 2015 |           |   | June 30, 2014 |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | - | ------------- | -
|                                                                                                                                                                        |  | (unaudited)    |           |   |               |  
|ASSETS                                                                                                                                                                  |  |                |           |   |               |  
|CURRENT ASSETS:                                                                                                                                                         |  |                |           |   |               |  
|Cash                                                                                                                                                                    |  | $              | 128.4     |   |               | $
|TOTAL CURRENT ASSETS                                                                                                                                                    |  |                | 128.4     |   |               |  
|                                                                                                                                                                        |  |                |           |   |               |  
|TOTAL ASSETS                                                                                                                                                            |  | $              | 128.4     |   |               | $
|                                                                                                                                                                        |  |                |           |   |               |  
|LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                    |  |                |           |   |               |  
|CURRENT LIABILITIES:                                                                                                                                                    |  |                |           |   |               |  
|Accrued expenses and other current liabilities                                                                                                                          |  | $              | 98.0      |   |               | $
|Dividends payable                                                                                                                                                       |  |                | 66.1      |   |               |  
|TOTAL CURRENT LIABILITIES                                                                                                                                               |  |                | 164.1     |   |               |  
|                                                                                                                                                                        |  |                |           |   |               |  
|CONTINGENCIES                                                                                                                                                           |  |                |           |   |               |  
|                                                                                                                                                                        |  |                |           |   |               |  
|STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                                          |  |                |           |   |               |  
|Preferred stock, par value $.01; 15,000,000 shares authorized; 152,200 shares designated; 14,847,800 shares undesignated; no undesignated shares issued and outstanding |  |                | -         |   |               |  
|Series A convertible preferred stock, par value $1 ; 2,200 shares authorized, issued and outstanding; liquidation preference of $29.2                                   |  |                | 2.2       |   |               |  
|Series C preferred stock, par value $100 ; 150,000 shares authorized; 500 issued and outstanding; liquidation preference of $ 134.5                                     |  |                | 50.0      |   |               |  
|Common stock, par value $.01; authorized 985,000,000 shares; issued and outstanding 145,920,667 and 143,420,667 shares at March 31, 2015 and June 30, 2014              |  |                | 1,459.2   |   |               |  
|Additional paid in capital                                                                                                                                              |  |                | 41,484.1  |   |               |  
|Accumulated deficit                                                                                                                                                     |  |                | (43,031.2 | ) |               |  
|TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                                    |  |                | (35.7     | ) |               |  
|                                                                                                                                                                        |  |                |           |   |               |  
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                    |  | $              | 128.4     |   |               | $



See accompanying notes to condensed consolidated
financial statements.



3







Tumbleweed Holdings, Inc. and Subsidiary

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except number of shares and
per share data)



|                                                                                          |  | For the Three Months Ended |             |   | For the Nine Months Ended |  
|----------------------------------------------------------------------------------------- |  | -------------------------- | ----------- | - | ------------------------- | -
|                                                                                          |  | March 31 ,                 |             |   | March 31,                 |  
|                                                                                          |  | 2015                       |             |   | 2014                      |  
|                                                                                          |  |                            |             |   |                           |  
|Revenue                                                                                   |  | $                          | -           |   |                           | $
|                                                                                          |  |                            |             |   |                           |  
|Operating Expenses                                                                        |  |                            |             |   |                           |  
|General and administrative expenses                                                       |  |                            | (73.7       | ) |                           |  
|                                                                                          |  |                            |             |   |                           |  
|Loss from Operations                                                                      |  |                            | (73.7       | ) |                           |  
|                                                                                          |  |                            |             |   |                           |  
|Net Loss                                                                                  |  |                            | (73.7       | ) |                           |  
|                                                                                          |  |                            |             |   |                           |  
|Undeclared Preferred Stock Dividends                                                      |  |                            | (1.3        | ) |                           |  
|                                                                                          |  |                            |             |   |                           |  
|Net Loss Applicable to Common Stockholders                                                |  | $                          | (75.0       | ) |                           | $
|                                                                                          |  |                            |             |   |                           |  
|Basic and Diluted Loss Per Share                                                          |  | $                          | 0.00        |   |                           | $
|Weighted Average Number of Common Shares Outstanding for Basic and Diluted Loss Per Share |  |                            | 145,920,667 |   |                           |  



See accompanying notes to condensed consolidated
financial statements.



4







Tumbleweed Holdings, Inc. and Subsidiary

Condensed Consolidated Statements of Cash
Flows

(unaudited)

(in thousands)



|                                                                            |  | For the Nine Months Ended |       
|--------------------------------------------------------------------------- |  | ------------------------- | ------
|                                                                            |  | March 31,                 |       
|                                                                            |  | 2015                      |       
|                                                                            |  |                           |       
|CASH FLOWS FROM OPERATING ACTIVITES                                         |  |                           |       
|Net loss                                                                    |  | $                         | (199.9
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                           |       
|Changes in assets and liabilities:                                          |  |                           |       
|Accrued expenses and other current liabilities                              |  |                           | (25.0 
|                                                                            |  |                           |       
|NET CASH USED IN OPERATING ACTIVITIES                                       |  |                           | (224.9
|                                                                            |  |                           |       
|CASH FLOWS FROM FINANCING ACTIVITES                                         |  |                           |       
|Proceeds from sale of common stock and warrant                              |  |                           | 50.0  
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                   |  |                           | 50.0  
|                                                                            |  |                           |       
|NET CHANGE IN CASH                                                          |  |                           | (174.9
|                                                                            |  |                           |       
|CASH, beginning                                                             |  |                           | 303.3 
|                                                                            |  |                           |       
|CASH, ending                                                                |  | $                         | 128.4 



See accompanying notes to condensed consolidated
financial statements.



5







TUMBLEWEED HOLDINGS,
INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

March 31, 2015

(unaudited)



NOTE 1- BASIS OF PRESENTATION



The accompanying condensed consolidated
financial statements are unaudited and have been prepared by Tumbleweed Holdings, Inc. and Subsidiary (the “Company”)
in accordance with the rules and regulations of the Securities and Exchange Commission relating to interim financial statements.
Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the
Unites States of America (“U.S. GAAP”) for a complete set of consolidated financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The
results of operations for the three and nine months ended March 31, 2015, are not necessarily indicative of the results to be expected
for the full fiscal year.



The condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form
10-K/A for the year ended June 30, 2014, which was filed with the Securities and Exchange Commission on November 14, 2014.



NOTE 2- LIQUIDITY AND FINANCIAL CONDITION



Our condensed consolidated unaudited financial
statements were prepared on the assumption that we will continue as a going concern. At March 31, 2015, we currently have negative
working capital and stockholders’ deficit of approximately $35,700 and $128,400 of cash on hand to satisfy our liabilities.
Our ability to obtain resources sufficient to continue to meet our obligations as they come due is dependent on raising additional
equity or by additional borrowings. We intend to use our cash as well as other funds in the event that they shall be available
on commercially reasonable terms, to finance our activities, although we can provide no assurance that these additional funds will
be available in the amounts or at the times we may require.



NOTE 3- PRINCIPLES OF CONSOLIDATION



The condensed consolidated financial statements
include the accounts of Tumbleweed Holdings, Inc. and its wholly owned subsidiary. All significant inter-company accounts and transactions
have been eliminated in consolidation.



NOTE 4- ACCRUED EXPENSES AND OTHER LIABILITIES



Accrued expenses primarily consist of accrued legal and other
professional fees and general administrative expenses of the Company.



NOTE 5- COMMITMENTS AND CONTINGENCIES



The Company is from time to time involved in ordinary and routine
litigation.

On April 1, 2014, GrowBlox Sciences, Inc.
(“Plaintiff” or “GrowBlox”) filed a lawsuit captioned GrowBlox Sciences, Inc. v. GCM Administrative
Services, LLC et al, Docket No. 14-cv-02280-ER (the “Lawsuit”) in the United States District Court for the Southern
District of New York (the “Court”) against Gary Herman, Seth Lukash, GCM Administrative Services, LLC, and Strategic
Turnaround Equity Partners, L.P. (together, the “Defendants”).   Mr. Herman serves as Chairman and CEO and
Seth Lukash serves as a Director and Advisor of the Company. GrowBlox is not seeking monetary damages against the Defendants.



On May 9, 2014, the Defendants filed an
answer with counter-claims and third-party claims against Plaintiff and certain individuals affiliated with Plaintiff seeking damages
of up to $20,000,000 for breach of fiduciary duty, unjust enrichment, quantum meruit, and breach of contract. The Company is a
third party counterclaim-plaintiff in this action.



The Company is not a named defendant in
any of these actions.



6







TUMBLEWEED HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

March 31, 2015

(unaudited)



NOTE 6- INCOME (LOSS) PER SHARE



Basic income (loss) per share is computed
by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding.
Diluted income per share is computed by dividing the net income attributable to common stockholders by the weighted-average number
of common shares and potentially dilutive common share equivalents using the treasury stock method. Because the Company incurred
a net loss in all periods presented, all potentially dilutive securities were excluded from the computation of loss per share because
the effect of including them is anti-dilutive.



The following table summarizes the number
of common shares attributable to potentially dilutive securities outstanding for each of the periods presented which were excluded
from the calculation of diluted loss per share:



|                               |  | Three Months Ended |            |  | Nine Months Ended | 
|------------------------------ |  | ------------------ | ---------- |  | ----------------- | 
|                               |  | March 31,          |            |  | March 31,         | 
|                               |  | 2015               |            |  | 2014              | 
|                               |  |                    |            |  |                   | 
|Common stock options           |  |                    | 750,000    |  |                   | 
|Common stock purchase warrants |  |                    | 19,000,000 |  |                   | 
|Total                          |  |                    | 19,750,000 |  |                   | 



NOTE 7- EQUITY TRANSACTIONS



On October 27, 2014, the Company entered
into a securities purchase agreement with an investor pursuant to which the Company agreed to issue an aggregate of 2,500,000 Units
(each, a “Unit”) at a purchase price per Unit of $0.02 for an aggregate purchase price of $50,000, with each Unit consisting
of one common share in the capital of the Company (each, a “Share”) and one common share purchase warrant, each entitling
the holder, at its option, to purchase one additional Share at an exercise price of $0.05 per share (each, a “Warrant”).
The proceeds were used for general administrative purposes.



On March 25, 2015, the Company issued a
warrant to purchase 250,000 shares of the Company’s common stock to one individual for agreeing to provide services as a
member of the Company’s Board of Directors. The warrant has an exercise price of $0.02 per share and a term of five years.



NOTE 8- SUBSEQUENT EVENTS



The Company has evaluated all events that
occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.
The management of the Company determined that there certain reportable subsequent events to be disclosed as follows.



On March 23, 2015, the Company entered
into a Services Agreement with Barry Regenstein, effective as of April 1, 2015, appointing Mr. Regenstein as Interim Chief Financial
Officer. The Services Agreement included a grant of 4,000,000 shares of the Company’s restricted common stock. In addition,
the Company entered into an Advisory Board Agreement (“Advisory Agreement”) with Mr. Regenstein to provide advisory
services to the Board and officers of the Company on various business matters for one (1) year in exchange for 1,650,000 shares
of the Company’s restricted common stock.



Effective on April 1, 2015, Seth Lukash
resigned as the Interim Chief Financial Officer of the Company.



In April 2015, under
the Company’s 2014 Stock-Based Incentive Compensation Plan (the “Plan”), a consultant was granted an option
to purchase 2,000,000 shares of the Company’s common stock; and the Company’s Chief Executive Officer and a
director were granted a total of 23,000,000 shares of the Company’s restricted common stock, for their agreement to
provide services on various business matters for one (1) year. The option has an exercise price of $0.02 per share and a term
of five years.



In addition, the Company issued
warrants to purchase an aggregate of 16,800,000 shares of the Company’s common stock to its Chief Executive Officer, a
director and three (3) consultants for their agreement to provide services on various business matters for one (1) year. The
warrants have an exercise price of $0.02 per share and a term of five years.



7







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



Statements contained in this Quarterly
Report on Form 10-Q, other than the historical financial information, constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements involve known and unknown
risks, uncertainties or other factors which may cause actual results, performance or achievement of the Company to be materially
different from any future results, performance or achievement expressed or implied by such forward-looking statements. Factors
that might cause such a difference include, but are not limited to, risks and uncertainties related to the substantial capital
requirements, development of effective internal processes and systems, the ability to attract and retain high quality employees,
changing overall economy and other risks described herein and in the Company's June 30, 2014 Annual Report on Form 10-K/A.



Plan of Operation



The Company is a shell company and does
not have an operating business. The Company has since begun to search for candidates with which to enter into business combinations
or strategic transactions.



The Company intends to locate and enter
into a transaction with an existing, public or privately-held company (a "Target Business"). A transaction with a Target
Business may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets of the Target
Business or any other form, which will result in the combined enterprise remaining a publicly-held corporation.



Acquisitions or business combinations involve
many risks, including:



| | · | Unforeseen obligations or liabilities;                                                                                                                      
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Difficulty assimilating the acquired operations and personnel;                                                                                              
| | · | Risks of entering markets in which we have little or no direct prior experience;                                                                            
| | · | Potential impairment of relationships with employees or customers as a result of changes in management;                                                     
| | · | Potential dilutive issuances of equity, large and immediate write-offs, the incurrence of debt, and amortization of goodwill or other intangible assets; and
| | · | Unforeseen obligations or liabilities.                                                                                                                      



We cannot make assurances that the Company
will make any acquisitions or business combinations or that the Company will be able to obtain additional financing for such acquisitions
or combinations, if necessary. If any acquisitions or combinations are made, we cannot make assurances that we will be able to
successfully integrate the acquired or combined business into our operations or that the acquired or combined business will perform
as expected. Furthermore, Federal and state tax laws and regulations have a significant impact upon the structuring of transactions.
Management will evaluate the possible tax consequences of any prospective transaction and will endeavor to structure a transaction
so as to achieve the most favorable tax treatment. There can be no assurance that the Internal Revenue Service or relevant state
tax authorities will ultimately assent to our tax treatment of a particular consummated transaction. To the extent the Internal Revenue
Service or any relevant state tax authorities ultimately prevail in recharacterizing the tax treatment of a transaction, there
may be adverse tax consequences to us, the target business, and/or their respective stockholders. Tax considerations as well as
other relevant factors will be evaluated in determining the precise structure of a particular transaction, which could be effected
through various forms of a merger, consolidation or stock or asset acquisition.



Pending negotiation and consummation of
a transaction, the Company anticipates that it will not have any business activities, aside from carrying on its search for a transaction
partner. Should the Company incur any significant liabilities prior to a combination with a Target Business, it may not be able
to satisfy, without additional financing, such liabilities as are incurred.



8







Results of Operations



Three and Nine Month Period Ended March 31, 2015 Compared
To The Three and Nine Month Period Ended March 31, 2014.



The Company had no operating revenues and experienced a net
loss of approximately $73,700 and $199,900 in the three and nine month periods ended March 31, 2015, respectively, compared to
a net loss of $9,000 and $27,000 in the corresponding periods of the prior year, respectively. The increase in net loss is primarily
due to professional fees associated with being a publicly held corporation and travel and related costs incurred in the current
year period as the Company continues to search for a business it deems suitable for acquisition or similar transaction.



Liquidity and Capital Resources



The Company's current liabilities exceeded
its current assets by approximately $35,700 at March 31, 2015. The Company increased its operating obligations by approximately
$73,700 during the three months ended March 31, 2015. These expenses were necessitated to meet filing requirements as a public
reporting entity and to continue our search for a business suitable for acquisition or similar transaction. Total liabilities were
approximately $164,000 at March 31, 2015.



The Company has nominal assets and presently
does not generate any revenue. The Company is dependent upon the receipt of capital investment or other financing to fund its ongoing
search for a private operating company and to execute its business plan of seeking a combination with such company. If continued
funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of combining
with a private operating company. The failure by us to obtain such financing whether on acceptable terms or at all, if needed,
would have a material adverse effect upon our business, financial condition and results of operations.



On October 27, 2014, the Company entered
into a securities purchase agreement with an investor pursuant to which the Company agreed to issue an aggregate of 2,500,000 Units
(each, a “Unit”) at a purchase price per Unit of $0.02 for an aggregate purchase price of $50,000, with each Unit consisting
of one common share in the capital of the Company (each, a “Share”) and one common share purchase warrant, each entitling
the holder, at its option, to purchase one additional Share at an exercise price of $0.05 per share (each, a “Warrant”).
The proceeds were used for general administrative purposes.



Capital Expenditures



The Company has no material commitments
for capital expenditures at this time.



Off-Balance Sheet Arrangements



The Company does not have any off-balance
sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources
that is material to investors.



Item 3. Quantitative and Qualitative Disclosures About Market
Risk.



Not required for smaller reporting companies.



Item 4. Controls and Procedures.



Evaluation of Disclosure Controls and Procedures



Our principal executive officer and principal
financial officer performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to
our management, including our principal executive and principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive officer
and principal financial officer concluded that, as of March 31, 2015, our disclosure controls and procedures were not effective
for the period ended March 31, 2015, for the reasons discussed below.



9







The following two material weaknesses in
our internal control over financial reporting existed on March 31, 2015:



(i)      We
do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls
over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the quarter ended
March 31, 2015. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures
on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented
a material weakness.



(ii)     We
do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and
nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the
extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by
separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure
controls and procedures, and concluded that the control deficiency that resulted represented a material weakness.



It should be noted that any system of controls,
however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are
met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events.
Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions, regardless of how remote.



Changes in Internal Controls



There were no changes in the Company’s
internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during
the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.



10







PART II. OTHER INFORMATION



Item 1. Legal Proceedings.



The Company is, from time to time, the
subject of litigation, claims and assessments arising out of matters occurring during the normal operation of the Company's business,
the majority of which have never led to the award of substantial damages.



Item 1A. Risk Factors.



Not required for smaller reporting companies.



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



None.



Item 3. Defaults upon Senior Securities.



The holders of the Series A Preferred Stock
are entitled to a cumulative dividend of $0.10 per share per annum. Such dividends accrue annually but are payable if and when
the Board of Directors declares a dividend. The Board of Directors has never declared any dividends with respect to the Series
A Preferred Stock. The 2,200 outstanding shares of Series A Preferred Stock are convertible into 3,300 shares of Common Stock for
no additional consideration at the option of the holder of the stock. The Series A Preferred Stock is entitled to a liquidation
preference of $1.00 per share, plus any accrued and unpaid dividends. The Series A Preferred Stock may be redeemed by the Company
at a redemption price of $1.00 per share plus all accrued and unpaid dividends. The amount of accumulated and undeclared dividends
was approximately $29,000 and $27,000 as of March 31, 2015 and June 30, 2014, respectively.



The Series C Preferred stock is not convertible,
but may be redeemed at the option of the Company at a redemption price of $100 per share plus accrued and unpaid dividends, at
any time after October 31, 1999. The holders of the preferred stock are entitled to a cumulative dividend of 10% per annum, payable
semiannually, if and when the Board of Directors declares a dividend. On April 30, 2013, the holders of an aggregate of 9,400 shares
of the Company’s Series C Preferred Stock, representing 95% of the total number of outstanding shares of Series C Preferred,
converted their shares of Series C Preferred into shares of the Company’s Common Stock. The Company declared a dividend payable
of approximately $66,100 for the remaining holders who had not converted their Series C Preferred Shares. As of March 31, 2015
and June 30, 2014, the Company had accumulated and undeclared dividends of approximately $18,000 and $15,000, respectively,
on this series of preferred stock.



Item 4. Mine Safety Disclosures.



None.



Item 5. Other Information.



None.



11







Item 6. Exhibits



|(a) | Exhibits:
|--- | ---------



31.01 Chief Executive Officer—Certification
pursuant to Rule 13a-14 (a) of the Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



31.02 Chief Financial Officer— Certification
pursuant to Rule 13a-14 (a) of the Exchange Act of  1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.



32.01 Chief Executive Officer—Certification
pursuant to Rule 13a-14(b) of the Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.(1)



32.02 Chief Financial Officer— Certification
pursuant to Rule 13a-14(b) of the Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.(1)



(1)     In accordance with Securities
and Exchange Commission Release No. 33-8212, these exhibits are being furnished, are not being filed as part of this Report on
Form 10-Q or as a separate disclosure document, and are not being incorporated by reference into any Securities Act of 1933 registration
statement.



12







SIGNATURES



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



|                     | TUMBLEWEED HOLDINGS, INC.
|-------------------- | -------------------------
|                     |                          
|Dated:  May 20, 2015 | By:                      
|                     |                          
|                     |                          
|                     |                          
|                     | By:                      
|                     |                          
|                     |                          



13