UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 September 30, 2016

o 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: 000-54368

_____________________________________

ROI LAND INVESTMENTS LTD.

(Exact name of registrant as specified in its charter)

_____________________________________

Nevada			26-1574051
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

999 Maisonneuve Blvd. West, Suite 750 Montreal, Quebec			H3A 3L4
(Address of principal executive offices)			(Zip Code)

(888) 351-7004

(Registrant’s telephone number, including area code)

_____________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

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

	Large accelerated filer o	Accelerated filer o
	Non-accelerated filer o	Smaller reporting company x
	Emerging growth company o

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of July 16, 2018, the registrant had 55,724,205 shares of its Series A Common Stock, $0.0001 par value, outstanding.

ROI LAND INVESTMENTS LTD.

FORM 10-Q

SEPTEMBER 30, 2016

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2016 (unaudited) and December 31, 2015	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2016 and 2015 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II – OTHER INFORMATION		32

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	33
Item 6.	Exhibits	33

SIGNATURES		34

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ROI Land Investments Ltd. And Subsidiaries

Condensed Consolidated Balance Sheets

	September 30,		December 31,
	2016		2015
	(unaudited)
ASSETS

Current assets:
Cash	$	329,097	$	424,218
Mortgage notes receivable		–		443,354
Advances to related party		17,468		185,061
Cash in escrow for interest payments		140,183		52,166
Acquisition deposit, related party		–		112,187
Other current assets		99,511		258,035
Total current assets		586,259		1,475,021

Other assets:
Real estate held for development and sale		15,715,340		14,798,000
Deposits on land		–		3,148,032
Investments in cost-method investees		56,080		56,080
Other assets, net		22,329		73,293
Total other assets		15,793,749		18,075,405

Total assets	$	16,380,008	$	19,550,426

See accompanying notes to condensed consolidated financial statements.

ROI Land Investments Ltd. and Subsidiaries

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2016			2015
	(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	4,847,149		$	1,973,512
Convertible notes payable, net of debt discounts, current		1,278,818			1,259,922
Mortgage note payable		2,317,834			865,080
Loans payable		3,803,185			3,765,000
Loans from related parties		633,201			486,528
Deposits on notes payable, net of issuance costs		5,371,340			3,741,821
Profit participation liability		197,146			197,146
Total current liabilities		18,448,673			12,289,009

Other liabilities
Convertible notes payable, net of debt discounts, noncurrent		3,060,326			2,892,047
Performance-linked notes payable, net of debt discounts		3,388,259			3,431,692
Total non current liabilities		6,448,585			6,323,739
Total liabilities		24,897,258			18,612,748

Commitments and contingencies

Stockholders’ equity:
Preferred stock, Series A, 30,000,000 shares authorized, par value $0.0001, 200,000 shares issued and outstanding as of September 30, 2016 and no shares issued or outstanding as of December 31, 2015		20			–
Preferred stock, Series B, 20,000,000 shares authorized, par value $0.0001, 2,239,226 shares issued and 2,634,321 shares outstanding as of September 30, 2016 and no shares issued and outstanding as of December 31, 2015		264			–
Common stock, Series A, 160,000,000 shares authorized, par value $0.0001, 53,971,846 shares issued and outstanding at September 30, 2016 and 50,615,397 shares issued and outstanding at December 31, 2015, respectively		5,606			5,062
Additional paid-in capital		26,546,556			20,035,692
Preferred stock issuable		166,983			–
Treasury common stock		(209	)		–
Accumulated other comprehensive loss		(1,706,678	)		(2,086,207	)
Accumulated deficit		(33,529,792	)		(17,016,869	)
Total stockholders' equity		(8,517,250	)		937,678

Total liabilities and stockholders' equity	$	16,380,008		$	19,550,426

See accompanying notes to condensed consolidated financial statements.

ROI Land Investments Ltd. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue:
Interest income, net	$	–		$	35,679		$	–		$	81,421


Operating expenses:
Compensation		52,106			159,069			400,906			228,100
Consulting fees		211,649			1,087,909			5,930,059			3,426,864
Professional fees		271,863			201,930			1,229,232			443,283
Travel expenses		136,872			129,057			838,860			554,528
Abandoned project costs		35,500			–			5,321,080			–
Provision for loan losses		–			–			443,354			–
Other		113,208			492,881			692,334			1,041,128

Total operating expenses		821,198			2,070,846			14,855,825			5,693,903

Loss from operations		(821,198	)		(2,035,167	)		(14,855,825	)		(5,612,482	)

Other income (expense):
Interest expense		(501,379	)		(368,697	)		(1,502,539	)		(903,685	)
Gain on extinguishment of debt		–			–			–			74,091
Foreign currency transaction gain (loss)		(87,425	)		36,067			(154,559	)		17,665
Total other expense		(588,804	)		(332,630	)		(1,657,098	)		(811,929	)

Loss before income taxes		(1,410,002	)		(2,367,797	)		(16,512,923	)		(6,424,411	)

Provision for income taxes		–			–			–			–

Net loss	$	(1,410,002	)	$	(2,367,797	)	$	(16,512,923	)	$	(6,424,411	)


Net loss per share - basic and diluted	$	(0.03	)	$	(0.05	)	$	(0.31	)	$	(0.15	)

Weighted average number of shares outstanding - Basic and Diluted		53,971,846			46,811,794			53,949,624			43,706,090



Net loss	$	(1,410,002	)	$	(2,367,797	)	$	(16,512,923	)	$	(6,424,411	)

Foreign currency translation gain (loss)		(14,297	)		(816,748	)		379,529			(1,353,465	)

Total comprehensive loss	$	(1,424,299	)	$	(3,184,545	)	$	(16,133,394	)	$	(7,777,876	)

See accompanying notes to condensed consolidated financial statements.

ROI Land Investments Ltd. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(16,512,923	)	$	(6,424,411	)
Adjustments to reconcile net loss to net cash used in operations:
Amortization		9,487			10,099
Stock based compensation		1,988,903			1,988,226
Stock issued for services		53,200			–
Amortization of debt issuance costs		235,687			253,187
Accretion of debt discount on convertible notes payable		77,289			77,007
Accretion of profit participation discount on convertible notes payable		54,192			49,150
Provision for loan losses		443,354			–
Gain on extinguishment of debt		–			(74,091	)
Abandoned project costs		5,321,080			–
Unrealized foreign exchange gain		(156,649	)		–
Changes in operating assets and liabilities:
Notes receivable		–			(1,047,621	)
Interest receivable		37,612			(67,331	)
Cash in escrow for interest payments		(88,017	)		181,987
Prepaid interest		–			–
Other current assets		120,910			(288,963	)
Real estate held for development and sale		(2,363,154	)		(3,901,232	)
Deposits on land		–			(1,085,205	)
Other assets		41,477			(28,498	)
Accounts payable and accrued expenses		2,873,637			1,107,390
Net cash used in operating activities		(7,863,915	)		(9,250,306	)

Cash flows used in investing activities:
Advance to related party		167,593			(114,102	)
Net Cash used in investing activities		167,593			(114,102	)

Cash flows from financing activities:
Payments on convertible notes payable		(115,000	)		(329,797	)
Proceeds from the issuance of mortgage note payable		1,500,000			–
Payments on mortgage notes payable		(135,336	)		–
Proceeds from the issuance of loans payable		38,185			–
Payments on loans payable		–			(1,160,865	)
Proceeds from loans from related parties, net		78,961			150,000
Proceeds from deposits for notes payable, net of cash issuance costs		1,947,879			2,937,166
Proceeds from issuance of performance-linked notes payable, net of cash issuance costs		–			2,277,860
Payments on performance-linked notes payable		(112,200	)		–
Proceeds from deposits for preferred stock issuance, net of cash issuance costs		545,022			–
Proceeds from issuance of common stock, net of cash issuance costs		3,847,030			5,095,994
Net Cash provided by financing activities		7,594,541			8,970,358

Effect of exchange rate changes on cash		6,660			(147,522	)

Net (decrease) increase in cash during the period		(95,121	)		(541,572	)

Cash, beginning of period		424,218			745,821

Cash, end of period	$	329,097		$	204,249

Continued

ROI Land Investments Ltd. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(unaudited)

	For the nine months ended September 30,
	2016			2015
Supplemental disclosure of cash flows information:
Cash paid for interest	$	976,483		$	378,234

Supplemental disclosure of non-cash flows investing and financing activities:

Acquisition of land held for development:
Real estate held for development and sale	$	–		$	(3,350,000	)
Loans payable	$	–		$	3,350,000

Series A preferred stock issued in exchange for common stock:
Common stock	$	(20	)	$	–
Series A preferred stock	$	20		$	–

Series B preferred stock issued in exchange for common stock:
Common stock	$	(189	)	$	–
Series B preferred stock	$	189		$	–

Series A preferred stock issued for debt issuance costs:
Preferred stock	$	(35	)		–
Additional paid-in capital	$	(94,465	)		–
Deferred debt issuance costs	$	94,500			–

Common stock issued for issuance costs:
Performance-linked notes payable, net of debt discounts	$	–		$	(116,638	)
Additional paid-in capital (equity issuance costs)	$	–		$	(337,754	)
Common stock	$	–		$	58
Additional paid-in capital	$	–		$	454,334

Common stock issued for payment of accrued expenses at December 31, 2014:
Accounts payable and accrued expenses	$	–		$	(443,327	)
Common stock	$	–		$	127
Additional paid-in capital	$	–		$	443,200

Common stock issued for services:
Common stock	$	(4	)	$	–
Additional paid-in capital	$	(53,196	)	$	–
Compensation expense	$	53,200		$	–

Notes payable converted to common stock:
Notes payable	$	(150,000	)	$	–
Common stock	$	12		$	–
Additional paid-in capital	$	149,988		$	–

See accompanying notes to condensed consolidated financial statements.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 1 – Business, Presentation and Going Concern

Business

ROI Land Investments, Ltd. (“ROI”), together with its subsidiaries (collectively the “Company”), is a land development company that owns and operates businesses in the land development industry. The Company's business model consists of acquiring attractive land, optimizing zoning restrictions, obtaining necessary permits, outsourcing developments of the infrastructure and profiting from the sale of the subdivided land units to established residential and commercial building developers. ROI may also opportunistically consider real estate development. The Company’s mission is to maximize its return on investment within the land development sector in North America as well as internationally. These investments and/or acquisitions may be directly acquired by the Company or via qualified Joint Venture Partners. Alternatively, our Company, for practical purposes, functions as a land banking firm.

On January 24, 2016, the Company organized ROI Land Investments FZ (“ROI FZ”), a UAE corporation as a wholly-owned subsidiary. ROI FZ was organized to acquire and manage land acquisitions and development in Dubai. On March 17, 2016, the Company organized ROI Land Investments AG (“ROI Swiss”), a Swiss corporation as a wholly-owned subsidiary. ROI Swiss was organized to provide investor relations services to the Company’s investors and potential investors in Europe. On March 23, 2016, the Company organized ROI Securitization SA, a Luxembourg corporation as a wholly-owned subsidiary. ROI Securitization SA was organized to sell debt securities in Europe to fund the Company’s land and real estate projects. ROI FZ and ROI Swiss are currently inactive.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statement presentation and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial position and results of operations and cash flows for the interim periods reported in this Form 10-Q. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

These unaudited condensed consolidated financial statements should be read in conjunction with the 2015 audited annual consolidated financial statements included in the Annual Report on Form 10-K, filed with the SEC on April 13, 2016.

Going Concern

The Company has incurred a net loss of $16,512,923 for the nine months ended September 30, 2016 and has incurred cumulative losses since inception of $33,529,792. The Company has a deficit in working capital of $17,862,414 as of September 30, 2016 and used cash in operations of $7,863,915 for the nine months ended September 30, 2016. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements.

There can be no assurance that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 1 – Business, Presentation and Going Concern (Continued)

Principles of Consolidation

The condensed consolidated financial statements include the accounts of ROI Land Investments Ltd. and its wholly-owned Subsidiaries, ROI DEV Canada Inc., 9497846 Canada Inc., ROI Land Investments FZ, ROI Land Investments AG and ROI Securitisation SA. All significant inter-company balances and transactions have been eliminated in consolidation.

Reclassifications

Certain items on the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2015 have been reclassified to conform to the current period presentation. These reclassifications have no impact on the previously reported net loss.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The most significant estimates, among other things, are used in accounting for allowances for loan losses and deferred income taxes, impairment of long-lived assets, contingencies, as well as the recording and presentation of its common stock and related stock option issuances. Estimates and assumptions are periodically reviewed and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ significantly from those estimates and assumptions.

Note 2 – Notes and Mortgage Notes Receivable

Notes receivable and mortgage notes receivable consisted of the following at September 30, 2016 and December 31, 2015:

	September 30, 2016							December 31, 2015
	Note		Reserve for					Note		Reserve for
Notes	Face Value		Loan Loss			Note, net		Face Value		Loan Loss			Note, net

Mortgage Notes:

3320 Kenney St., BC	$	443,354	$	(443,354	)	$	–	$	443,354	$	–		$	443,354

Unsecured Notes:

1015-1050 Nalabila Blvd, BC	$	1,012,237	$	(1,012,237	)	$	–	$	1,012,237	$	(1,012,237	)	$	–

3320 Kenney St., BC		630,788		(630,788	)		–		630,788		(630,788	)		–

	$	1,643,025	$	(1,643,025	)	$	–	$	1,643,025	$	(1,643,025	)	$	–

During the nine months ended September 30, 2016, the Company determined that the collectability of its mortgage notes receivable was doubtful and recorded a reserve for loan loss of $443,354 and recognition of interest income was suspended. For the three and nine months ended September 30, 2016, $-0- and $-0- of interest income was recognized on the above mortgage notes, respectively. For the three and nine months ended September 30, 2015, $35,679 and $81,421 of interest income was recognized, respectively.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 3 – Real Estate Held for Development and Sale

Real estate held for development and sale consisted of the following at September 30, 2016 and December 31, 2015:

	September 30, 2016				December 31, 2015
Property / Project	USD		CAD		USD		CAD

Beauport, BC	$	4,864,822	$	6,370,069	$	4,567,218	$	6,335,438

840 Graham Avenue, Terrace, BC		261,045		341,816		233,275		323,589

3304 Kenney Street, Terrace, BC		776,089		1,016,223		727,711		1,009,448

4922 Park Avenue, Terrace, BC		608,855		797,243		570,808		791,799

1015-1050 Nalabila Blvd, Kitimat, BC		1,721,029		2,253,540		1,529,141		2,121,155

Evans, Colorado		7,483,500		–		7,169,847		–

	$	15,715,340			$	14,798,000

On July 9, 2015, the Company, through its subsidiary ROI FZ, entered into a memorandum of understanding with PNC Investments LLC, a UAE corporation, for the potential purchase of 433,000 square feet of land in the Sobha Hartland district of Dubai, United Arab Emirates. The total acquisition price is $29,488,000 (AED 108,281,250). During the year ended December 31, 2015, the Company paid a total of $2,801,205 (AED 10,286,305) in non-refundable deposits to PNC Investments LLC and incurred evaluation and design costs of $346,827 (AED 1,273,583) for a total balance of $3,148,032 at December 31, 2015.

On February 7, 2016, the Company entered into a Development Sale and Purchase Agreement with PNC. During the nine months ended September 30, 2016, the Company made an additional payment of $1,900,000 (AED 6,980,144) in non-refundable deposits to PNC leaving a balance of $24,786,795 (AED 91,014,801).

On May 15, 2016, the Company received a termination letter from PNC terminating the agreement dated February 7, 2016 for non-payment of the amounts due under the agreement. As a result, the Company forfeited the $4,701,205 (AED 17,271,099) of deposits. A total of $5,048,032 (AED 18,545,258), including $346,827 (AED 1,273,583) of closing and development costs, has been charged to operating expenses for the nine months ended September 30, 2016 as abandoned project costs. However, the Company is still in negotiations with PNC to acquire a reduced size and price of the land it had agreed to under the agreement dated February 7, 2016 and apply the deposits to this restructured arrangement. Negotiations are under way, but the likelihood that the Company will be successful in reaching a satisfactory agreement is dependent on its ability to pay at least a portion of the new acquisition price. As a result, there can be no assurance that the acquisition will occur as contemplated or at all. During the nine months ended September 30, 2016, the Company also incurred $160,825 of other costs related to the project and wrote-off leasehold improvements related to a lease in Dubai for an amount of $256,048.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 4 – Notes and Loans Payable

Convertible Notes Payable

Convertible notes payable consisted of the following at September 30, 2016 and December 31, 2015:

	September 30, 2016
						Issuance			Profit
	Principal		Debt			Costs			Participation			Net
Beauport Note Series	Amount		Discount, net			Discount, net			Discount, net			Amount

Series A Convertible	$	1,200,000	$	(34,134	)	$	(56,610	)	$	(48,457	)	$	1,060,799

Series B Convertible		2,421,479		–			(121,419	)		–			2,300,060

Series C Convertible		874,000		(72,493	)		(41,241	)		–			760,266

Series D Convertible		250,000		–			(17,241	)		(14,740	)		218,019

	$	4,745,479	$	(106,627	)	$	(236,511	)	$	(63,197	)		4,339,144

Current portion													(1,475,964	)
Profit participation liability													197,146
Less current portion, net of profit participation liability													(1,278,818	)

Convertible notes payable, net of discounts, non-current												$	3,060,326

	December 31, 2015
						Issuance			Profit
	Principal		Debt			Costs			Participation			Net
Beauport Note Series	Amount		Discount, net			Discount, net			Discount, net			Amount

Series A Convertible	$	1,200,000	$	(58,875	)	$	(98,757	)	$	(90,010	)	$	952,358

Series B Convertible		2,421,479		–			(206,457	)		–			2,215,022

Series C Convertible		874,000		(125,041	)		(71,934	)		–			677,025

Series D Convertible		365,000		–			(30,057	)		(27,379	)		307,564

	$	4,860,479	$	(183,916	)	$	(407,205	)	$	(117,389	)		4,151,969

Current portion													(1,457,068	)
Profit participation liability													197,146
Less current portion, net of profit participation liability													(1,259,922	)

Convertible notes payable, net of discounts, noncurrent												$	2,892,047

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 4 – Notes and Loans Payable (Continued)

All series of the notes contain provisions that allow for a) pro rata prepayments of the notes by the Company in the event of sales of parcels of the Beauport Property, b) a call option by the Company to prepay the note at any time prior to the six month anniversary of the closing date of the note which includes a 15% premium in the form of the Company’s common stock, and c) an option of the noteholder to convert the note into shares of the Company’s common stock at a 10% discount to the average market price of the Company’s common stock during the thirty days’ trading period preceding the date of conversion. The Company has not recorded any beneficial conversion feature as of September 30, 2016 and December 31, 2015 as the embedded conversion options in its notes payable do not meet the firm commitment criterion as described under applicable U.S. GAAP. The Company has the option to extend the maturity date of the notes up to a period of 18 months.

For the Series A and Series D notes only, the noteholders have an option to call for immediate redemption in full or in part by the Company at a price which the Company shall reasonably determine as being the “fair market value” of the applicable note. As these notes can be immediately redeemable at the option of the noteholder, they have been classified as current liabilities in the accompanying condensed consolidated balance sheets.

The convertible notes are collateralized by the Beauport property acquired by ROI DEV and contain certain financial and other covenants. On April 27, 2015, the Company received written consent of waiver of the default from the required noteholders (greater than 50% of the noteholders in principal amount pari passu) and the applicable covenant was removed to ensure it will not be triggered in the future. As such, the amount representing the long- term portion of the notes payable, net of discounts, of $3,060,326 and $2,892,047, has been classified as noncurrent liabilities as of September 30, 2016 and December 31, 2015, respectively. On August 22, 2017, the Company sent a written notice to all of its convertible note holders to notify them that the Company shall execute its option to extend the maturity date of the convertible notes by an additional 18 months.

The Beauport Series A and Series D notes contain a premium payment to the noteholders on each sale of the Beauport project in an amount equal to fifty percent (50%) of the noteholder’s pro rata share of the total net profit on each parcel of the Beauport project sold. The potential profit in the Beauport project was estimated to be approximately $1.2 million, based on management’s best estimates at inception of the notes and as of September 30, 2016 and December 31, 2015, of which, $197,146 was the pro rata share of the Beauport Series A and D noteholders and was recorded as a profit participation liability, embedded within the notes.

Beauport Series A Convertible Notes

On October 14, 2014, the Company issued $1,200,000 of its Series A convertible notes payable to three investors for cash. The notes bear interest at 10% per annum and are due October 14, 2017. A total of 282,500 shares of the Company’s common stock were issued in conjunction with the notes to the noteholders at a fair value of $98,875 ($0.35 per share) based on the price of shares sold to investors. The $98,875 was recorded as a discount to the notes and $24,741 and $24,651 of the discount has been accreted as interest expense for the nine months ended September 30, 2016 and 2015, respectively, resulting in an unamortized discount of $34,134 at September 30, 2016 which will be amortized over the next 13.5 months.

The notes contain a premium payment to the noteholder on each sale of the Beauport project in an amount equal to fifty percent (50%) of the noteholder’s pro rata share of the total net profit on each parcel of the Beauport project sold. The potential profit in the Beauport project at inception of the notes and at September 30, 2016 and December 31, 2015 was estimated to be approximately $1.2 million, based on management’s estimates, of which, $151,165 is the pro rata share of the Series A noteholders and was recorded as a discount to the notes. $41,553 and $37,687 of the discount has been accreted as interest expense for the nine months ended September 30, 2016 and 2015, respectively, resulting in an unamortized discount of $48,457 at September 30, 2016 which will be amortized over the next 13.5 months.

The effective interest rate for the Series A convertible notes was 22.1% for the nine months ended September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 4 – Notes and Loans Payable (Continued)

Beauport Series B Convertible Notes

On October 14, 2014, the Company issued $2,900,497 of its Series B convertible notes payable to thirty-three investors for cash. The notes bear interest at 8% per annum and are due October 14, 2017. During the nine months ended September 30, 2015, the Company redeemed a $403,888 note from a noteholder, under a pre-existing agreement with the noteholder, for EUR 300,000 ($329,797), resulting in a gain from the extinguishment of the debt of $74,091.

The effective interest rate for the Series B convertible notes was 12.8% for the nine months ended September 30, 2016.

Beauport Series C Convertible Notes

On October 14, 2014, the Company issued $874,000 of its Series C convertible notes payable to an investor for cash. The note bears interest at 10% per annum and is due October 14, 2017. A total of 600,000 shares of the Company’s common stock were issued in conjunction with the note to the noteholder at a fair value of $210,000 ($0.35 per share) based on the price of shares sold to investors. The $210,000 was recorded as a discount to the note and $52,548 and $52,356 of the discount has been accreted as interest expense for the nine months ended September 30, 2016 and 2015, respectively, resulting in an unamortized discount of $72,493 at September 30, 2016 which will be amortized over the next 13.5 months.

The effective interest rate for the Series C convertible notes was 22.7% for the nine months ended September 30, 2016.

Beauport Series D Convertible Notes

On October 14, 2014, the Company issued $365,000 of its Series D convertible notes payable to five investors for cash. The notes bear interest at 10% per annum and are due October 14, 2017. During the nine months ended September 30, 2016, the Company redeemed notes totaling $115,000 from two noteholders.

The notes contain a premium payment to the noteholder on each sale of the Beauport project in an amount equal to fifty percent (50%) of the noteholder’s pro rata share of the total net profit on each parcel of the Beauport project sold. The potential profit in the Beauport project, at inception of the notes and at December 31, 2015 and September 30, 2016, is estimated to be approximately $1.2 million, based on management’s estimates, of which, $45,981 is the pro rata share of the Series D noteholders and was recorded as a discount to the notes. $12,639 and $11,463 of the discount has been accreted as interest expense for the nine months ended September 30, 2016 and 2015, respectively, resulting in an unamortized discount of $14,740 at September 30, 2016 which will be amortized over the next 13.5 months.

The effective interest rate for the Series D convertible notes was 18.2% for the nine months ended September 30, 2016.

Interest on Beauport Convertible Notes Payable

As a condition of the convertible note agreements, the Company has placed the first year’s interest in escrow with an agent who will make monthly interest payments to the noteholders on the Company’s behalf. A total of $321,102 and $65,784 was funded during the nine months ended September 30, 2016 and 2015, respectively. The escrow agent paid a total of $303,592 and $247,800 during the nine months ended September 30, 2016 and 2015, respectively, resulting in a balance of prepaid interest of $69,642 at September 30, 2016.

During the nine months ended September 30, 2016 and 2015, $326,044 and $342,250 of interest was accrued and expensed on the notes and $303,592 and $247,800, respectively, was paid by the escrow agent, resulting in accrued interest balance of $43,278 at September 30, 2016.

Debt Issuance Costs on Beauport Convertible Notes Payable

Issuance costs are amortized as interest expense over the term of the notes. $170,694 and $222,516 has been amortized as interest expense during the nine months ended September 30, 2016 and 2015, respectively, resulting in a balance of debt issuance costs discount of $236,511 at September 30, 2016 which will be amortized over the next 13.5 months.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 4 – Notes and Loans Payable (Continued)

Mortgage Notes Payable

On October 9, 2015, the Company entered into a mortgage loan agreement for $937,170 (CAD 1,300,000). At closing, the Company returned $72,090 (CAD 100,000) to the lender as a reduction of the principal resulting in a balance of $865,080 (CAD 1,200,000) at December 31, 2015. The loan bears interest at 20% per annum and was due December 9, 2015. The loan is collateralized by first rank mortgages on the Company’s Kenney Street and Park Avenue properties and second rank mortgages on its Kitimat and Beauport properties and is guaranteed by the Company’s President. On December 29, 2015, the Company and the lender entered into an extension agreement on the loan of three months until March 13, 2016 for a fee of $21,870 (CAD 30,000) and on March 15, 2016 the Company and lender entered into a second extension agreement of an additional three months until June 13, 2016 for a fee of $7,930 (CAD 11,000). The Company incurred $179,747 (CAD 237,413) of interest expense including fees and penalties during the nine months ended September 30, 2016. The Company is current on its payment of interest and penalty fees, however, it remains to be in default on its principal repayment. The Company is currently in discussions with the lender to enter into a loan amendment agreement to further extend the maturity date.

During the nine months ended September 30, 2016, the Company received a total of $1,500,000 from Alternative Strategy Partners Pte. Ltd., a Singapore limited company (“ASP”), in connection with the Company’s Dubai Sobha Hartland Acquisition and Development Project (“Sobha Dubai Project”). Pursuant to an agreement between the parties dated February 24, 2016, the Company agreed to issue to ASP certain notes (“ASP notes”) which shall have a two year maturity, bear interest at 8% per annum payable quarterly and have a mortgage on the First Plot of the Sobha Dubai Project, subordinated to loans from banks or other institutional lenders, if such a lien is determined to be valid and enforceable under Dubai law, otherwise, the notes shall be secured by a lien, similarly subordinated, upon all of the stock of ROI Land Investments Ltd., the beneficial owner of the Sobha Dubai Project. The ASP notes also contain an option either to convert all or part of its notes to the Company’s Series A common stock at $1.00 per share or to redeem all or part of its investment. Additionally, the ASP notes allowed ASP to receive certain profit participation of up to 50% of the net profits upon sale of the First Plot. On May 15, 2016, the Company received a termination letter from PNC terminating the agreement dated February 7, 2016 for non-payment of the amounts due under the agreement. As a result, the Company forfeited the deposits paid to PNC and defaulted on the ASP notes. The Company is currently in discussions with ASP to amend the terms of the notes. $73,793 of interest has been accrued on the notes as of September 30, 2016.

Loans Payable

On June 8, 2015, in connection with the acquisition of the Evans, Colorado property, the Company issued a promissory note in the amount of $3,350,000 to the seller. The note was due June 5, 2016, collateralized by the property bearing interest at 6% per annum. On May 3, 2016, the Company paid $100,000 as an extension fee to extend the maturity date of the note by ninety days through September 5, 2016 at 8% interest per annum. The Company subsequently defaulted on the note but cured its default by paying a $167,500 fee to the seller and 18% interest starting from October 15, 2016. On March 31, 2017, the Company entered into an agreement with the seller to restructure the note by making a partial repayment of $1,300,000 against the principal and an additional $237,536 as prepayment of interest through maturity at March 30, 2018. The terms of the note were modified so that the remaining principal of $2,378,667 shall bear 10% annual interest with a first lien on the property. For the nine months ended September 30, 2016, interest expense of $198,842 was incurred and interest and penalty payments of $192,500 were made resulting in accrued interest balance of $20,834 as of September 30, 2016.

During the year ended December 31, 2015, the Company borrowed a total of $415,000 from Valescore Ltd., a Swiss company. The loans are unsecured, bear interest at 8% per annum and are due at various dates beginning January 1, 2016. On April 2, 2016, the maturity dates of all of the notes were extended to December 30, 2016. $25,267 of interest expense was incurred during the nine months ended September 30, 2016 resulting in of $30,417 of accrued interest as of September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 4 – Notes and Loans Payable (Continued)

Performance-Linked Notes Payable

Performance-linked notes payable consisted of the following at September 30, 2016 and December 31, 2015:

	September 30, 2016							December 31, 2015
Note Series	Principal Amount		Issuance Costs Discount, net			Net Amount		Principal Amount		Issuance Costs Discount, net			Net Amount

Kitimat Series A	$	2,292,830	$	(114,286	)	$	2,178,544	$	2,442,830	$	(167,904	)	$	2,274,926

Kitimat Series B		473,117		–			473,117		473,117		–			473,117

Terrace Series A		763,752		(27,154	)		736,598		722,178		(38,529	)		683,649

	$	3,529,699	$	(141,440	)		3,388,259	$	3,638,125	$	(206,433	)		3,431,692

Less current portion							–							–

Notes payable, net of discounts, noncurrent						$	3,388,259						$	3,431,692

The Kitimat and Terrace series of the notes contain provisions that allow for a) pro rata prepayments of the notes by the Company in the event of sales of parcels of the respective project and b) a call option by the Company to prepay the note at any time prior to the six month anniversary of the closing date of the note. The Company also has the option to extend the maturity date of the notes up to a period of 18 months.

Kitimat Series A Notes

On May 8, 2015, the Company issued $2,442,830 of its Series A notes payable to twenty-nine investors for cash. During the nine months ended September 30, 2016, the Company redeemed notes totaling $150,000 from two noteholders in exchange for 121,961 shares of its restricted common stock at a fair value on the date of exchange of $1.23. The notes bear interest at 8% per annum, are due May 8, 2018, and are collateralized by a secured interest in the Kitimat property. The Series A notes contain an option by the Company to prepay the notes on a pro rata basis in the event of sales of the Kitimat project in an amount equal to twenty-five percent (25%) of the net profits realized on such sales.

The effective interest rate for the Series A notes was 11.2% for the nine months ended September 30, 2016.

Kitimat Series B Notes

On May 8, 2015, the Company issued $473,117 of its Series B notes payable to two investors for cash. The notes bear interest at 8% per annum, are due May 8, 2018, and are collateralized by a secured interest in the Kitimat property. The Series B notes contain an option by the Company to prepay the notes on a pro rata basis in the event of sales of the Kitimat project in an amount equal to fifty percent (50%) of the net profits realized on such sales.

The effective interest rate for the Series B notes was 8.0% for the nine months ended September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 4 – Notes and Loans Payable (Continued)

Terrace Series A Notes

On July 17, 2015, the Company issued $824,416 (CAD 1,001,774) of its Terrace Series A notes payable to six investors for cash. The notes bear interest at 8% per annum, are due July 17, 2018, and are collateralized by a secured interest in the Terrace property. The Series A notes contain an option by the Company to prepay the notes on a pro rata basis in the event of sales of the Terrace project in an amount equal to twenty-five percent (25%) of the net profits realized on such sales.

The effective interest rate for the Series B notes was 12.9% for the nine months ended September 30, 2016.

Interest on Kitimat and Terrace Notes Payable

As a condition of the note agreements, the Company shall place the first year’s interest in escrow with an agent who will make monthly interest payments to the noteholders on the Company’s behalf. A total of $212,110 and $0 was funded to the escrow agent during the nine months ended September 30, 2016 and 2015, respectively.

During the nine months ended September 30, 2016, $216,288 of interest was incurred on the notes and $141,604 was paid by the escrow agent, resulting in a remaining prepaid interest of $60,674 at September 30, 2016.

Debt Issuance Costs on Kitimat and Terrace Notes Payable

Issuance costs are amortized as interest expense over the term of the notes. $64,993 and $30,671 has been amortized as interest expense during the nine months ended September 30, 2016 and 2015, respectively, resulting in a balance of debt issuance costs discount of $141,440 at September 30, 2016 which will be amortized over the next 19 months.

Deposits on Notes Payable

To fund the development of the Company’s projects, the Company has initialized a note offering and begun accepting subscriptions for up to a total of $18,000,000 for new series of notes payable, to be described as “BC Series 2”, “Colorado”, “Dubai” and “Dubai ASP”. As of September 30, 2016, the terms and provisions of the notes are yet to be determined and, as such, the deposits have been classified as current liabilities in the accompanying condensed consolidated balance sheets. As of September 30, 2016 and December 31, 2015, the Company has received deposits of $5,371,340 and $3,741,821 net of issuance costs of $730,388 and $284,673, respectively, for subscriptions for the future notes.

Profit Participation Liability

The Beauport Series A and Series D notes contain a premium payment to the noteholders on each sale of the Beauport project in an amount equal to fifty percent (50%) of the noteholder’s pro rata share of the total net profit on each parcel of the Beauport project sold. The potential profit in the Beauport project at September 30, 2016 is estimated to be approximately $1.2 million, based on management’s estimates, of which, $197,146 is the pro rata share of the Beauport Series A and D noteholders and is recorded as a profit participation liability as of September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 5 – Related Party Transactions

The Company leases a corporate apartment for Sebastien Cliche the Company’s President, a month-to-month basis. Monthly rental is $1,906 and total rent paid for the nine months ended September 30, 2016 was $5,719. This lease was cancelled on March 31, 2016. The Company also had advances of $11,837 to Sebastien Cliche as of September 30, 2016.

During the nine months ended September 30, 2016 and 2015, the Company incurred business related expenses for Philippe Germain, the Company’s former Co-President, totaling $2,080 and $-0-, respectively. The Company leased a corporate apartment for Philippe Germain on a month-to-month basis for which monthly rental was $675. This lease was cancelled on March 31, 2016. The Company also had $47,150 of accrued expenses due to Philippe Germain as of September 30, 2016.

During the nine month ended September 30, 2016, the Company entered into two loan agreements with Philippe Germain totaling $103,488. The loans are unsecured, due in ninety days and bear interest at 8% per annum and the proceeds were used for the Company’s general working capital purpose. $103,488 of the loan was outstanding as of September 30, 2016.

The Company leases a corporate apartment for Louise Gagner on a month-to-month basis. Ms. Gagner is the mother of Philippe Germain. Monthly rental is $1,000 and total rent paid for the nine months ended September 30, 2016 and 2015 was $3,000 and $3,000, respectively. This lease was cancelled as of March 31, 2016.

During the year ended December 31, 2015, the Company entered into multiple loan agreements with LMM Group Ltd. (“LMM”), a Swiss company, and received a total of $248,168. The loans are unsecured, bear interest at 8% per annum and are due at various dates beginning January 1, 2016. On December 10, 2015, $150,000 of the notes was assigned from LMM to 8010609 Canada Inc. The balance of the loans from LMM as of September 30, 2016 is $61,815 and the balance of accrued interest is $10,080. Philippe Germain is the sole shareholder of LMM.

On October 29, 2015, 8010609 Canada Inc. loaned the Company $36,475 which was repaid on November 20, 2015. Additionally, on December 10, 2015, the $150,000 note held by LMM was assigned to 8010609 Canada Inc. On the same date, the Company repaid $50,000 of the note. The notes are unsecured, bear interest at 8% per annum and are due on December 30, 2017. The balance of the loans from 8010609 Canada Inc. as of September 30, 2016 was $100,000 and interest was accrued on the loans for $6,733. The Company also incurred $50,000 of consulting fees to 8010609 Canada Inc. during the nine months ended September 30, 2016 of which $13,185 remained outstanding as of September 30, 2016. Philippe Germain is also the sole shareholder of 8010609 Canada Inc.

On October 13, 2015, the Company assumed a second mortgage note due to 9202 4462 Quebec Inc. of $288,360 (CAD 400,000). 9202 4462 Quebec Inc. and the owner of 9202 4462 Quebec Inc. are shareholders of the Company. The loan is secured by a second rank mortgage on a property owned by CTC, bears interest at 6% per annum and was due April 13, 2016. As of September 30, 2016, the principal balance of the loan was $305,480 and accrued interest was $10,669. As of September 30, 2016, the note is in default but the Company is currently in negotiation with the note holder for an extension.

During the nine months ended September 30, 2016, the Company incurred $44,246 for consulting services to Maxim Cliche, the brother of Sebastien Cliche.

The Company has $292,750 of accrued compensation and expenses due to Martin Scholz, the Company’s Chief Executive Officer, as of September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 5 – Related Party Transactions (continued)

On September 10, 2015, the Company entered into an agreement to acquire 14,400 shares of Capital Evolution Groupe SAS (“CEG”), a French limited liability company, for $112,187 (EUR 100,000). The Company’s Co-President, Philippe Germain, is a shareholder of CEG. As of December 31, 2015, $112,187 was paid for the investment and was classified as an acquisition deposit in the accompanying condensed consolidated balance sheets. On April 5, 2016, the Company agreed to acquire an additional 144,459 shares of CEG for $1,575,686 (EUR 1,444,590) from Philippe Germain, subject to completion of due diligence by the Company and official registration of the shares in France. The shares to be acquired will bring the Company’s interest in CEG to 58% once the transaction was consummated. On April 5, 2016, the total consideration for the shares was adjusted to $551,490 (EUR 505,607) by mutual agreement between the parties. During fiscal year 2016, the Company and the shareholders of CEG agreed to rescind the share purchase agreement, to reverse all past investments, expenditures and payables related to CEG and to reimburse all outstanding balances to the Company. For the nine months ended September 30, 2016, the Company recorded a net loss from investment in CEG of $2,174 as a result of the rescission of this acquisition and had no outstanding balances between CEG as of September 30, 2016.

During the nine months ended September 30, 2016, the Company incurred $263,278 to Acadian for debt issuance costs. The Company had outstanding balances due to Acadian of $54,875 as of September 30, 2016.

During the year ended December 31, 2015, the Company paid $156,286 and has accrued 58,949 shares of its Series A common stock valued at $45,218 to be issued, to Rome Finance Investissement (“Rome”) for equity and debt issuance costs. Rome is a subsidiary of CEG. There are no transactions between the Company and Rome during the nine months ended September 30, 2016.

On January 19, 2016, the Company entered into a three-year Consulting Agreement (the “Consulting Agreement”) with SF International Consulting Limited (“SF”), to obtain the services of Slim Feriani. Pursuant to the terms of the Consulting Agreement, SF or Slim Feriani shall be paid a $100,000 signing bonus, and $50,000 a month for the duration of the Consulting Agreement. In addition, SF or Slim Feriani shall receive 23,333 shares of the Company’s Series A common stock and a five-year stock option to purchase 750,000 shares of the Company’s Series A common stock at the price of $1.50 a share. Such option will vest annually at 250,000 shares a year. In addition, SF or Slim Feriani will receive each quarter during the term of the Consulting Agreement a five-year option to purchase 250,000 shares of the Company’s common shares at a price which is 110% of the last subscription price. Each such option will vest annually in equal amounts of 83,333 shares (83,334 shares on the third anniversary). $432,750 of compensation was accrued for during the nine months ended September 30, 2016 and remained outstanding as of September 30, 2016. In August 2016, in connection with Slim Feriani’s resignation as the Company’s Chief Financial Officer, the Company also canceled its options issued to SF in accordance with the terms of the Consulting Agreement.

On January 19, 2016, the Company entered into a three-year Mutual Engagement Agreement with Gulf Central Agency Assets Management Ltd. (“GCA”), pursuant to which GCA will provide the Company with advice on a non-exclusive basis on securing financing of ROI’s foreign real estate ventures. GCA will be paid GBP 25,000 per month, payable quarterly, and a success fee equal to 4% of the principal amount of any investments which GCA arranges with foreign investors. The Company’s former Chief Financial Officer, Slim Feriani, is the Chairman of GCA. In August 2016, in connection with Slim Feriani’s resignation as the Company’s Chief Financial Officer, the Company also canceled its agreement with GCA. The Company incurred $305,339 of consulting fees to GCA during the nine months ended September 30, 2016 of which $178,249 was outstanding as of September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 6 – Stockholders’ Equity

Authorized Capital

The Company has 160,000,000 authorized shares of Series A Common Stock at $0.0001 par value, 40,000,000 authorized shares of Series B Common Stock at $0.0001 par value, and 50,000,000 authorized shares of Preferred Stock at par value of $0.0001 per share. Series A common shares have equal voting rights, are non-assessable and have one vote per share while Series B common shares have no voting rights. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.

Preferred Stock

Series A Preferred Stock

On May 9, 2016, the Company issued 100,000 shares each of Series A Preferred Stock, par value $0.0001 per share, to two directors, in exchange for their 100,000 shares each of the Company’s Series A common stock. No additional consideration was provided to the Company for the Series A Preferred Stock. The Series A Preferred Stock is identical to the common stock of the Company, except that each share of the 200,000 Series A Preferred Stock has 150 votes per share instead of the one vote per share of the Series A Common Stock.

Series B Preferred Stock

During the nine months ended September 30, 2016, the Company issued to 14 accredited investors a total of 1,889,226 shares of a class of preferred stock, par value $0.0001 per share (the “Series B Preferred Stock”) against receipt from them of 1,889,226 shares of the Company’s common stock held by them, plus $377,999 in cash. The Series B Preferred Stock is identical to the common stock of ROI, except that each share of the Series B Preferred Stock has the following features:

(1) The Series B Preferred Shares shall not be convertible into the Company’s common stock unless and until (i) a class of the Company's capital stock commences trading upon the U.S. NASDAQ trading system (the "NASDAQ Uplisting"), or (ii) the Company notifies the holders of the Series B Preferred Shares that their shares may be converted into common stock (whether or not the NASDAQ Uplisting has then yet occurred); after which time the Series B Preferred Shares shall be convertible as and to the extent set forth below.

(2) When any shares of Series B Preferred Shares are converted into common stock, they shall be converted at the rate of three (3) shares of common stock for the "Effective Value" (defined below) of each of the Series B Preferred Shares.

(3) The Series B Preferred Shares shall accumulate dividends at the rate of 8% per annum, prorated for partial years, such that, at the time of its conversion, every share of Series B Preferred Shares shall convert at a rate (the "Effective Value") computed by adding to it the cumulative value of its accumulated dividends. For example, if ten shares of the Series B Preferred Shares have been held for two years and six months, when they are converted into common stock they each will have an Effective Value of 1.20 shares, and collectively an Effective Value of 12 shares. Since each share of Series B Preferred Shares converts into three shares of common stock, all ten shares will convert into 36 shares of common stock. Upon conversion, no fractional shares of common stock shall be issued, but rather fractional common stock shares shall be settled in cash.

(4) If the purchaser of Series B Preferred Shares is an existing holder of the common stock, then the Company may at its discretion extend to any such purchaser the option to pay for some or all of the purchase price of the Series B Preferred Shares by means of submitting to the Company to be held in treasury some of such holder's shares of common stock, at a valuation to be determined by the Company's Board of Directors in their sole but reasonable discretion.

The cash received from the sale of the Series B Preferred Stock will be used for working capital purposes and the Company’s common stock received will be held in treasury and used for future option exercises or upon conversion of the Series B Preferred Stock.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 6 – Stockholders’ Equity (Continued)

During the nine months ended September 30, 2016, the Company received a total of $167,023 in deposits from investors which shall be exchanged for 395,095 shares of Series B preferred stock to be newly issued. These shares have not been issued by the Company as of September 30, 2016.

During the nine months ended September 30, 2016, the Company issued 350,000 shares of Series B preferred stock to an investor for debt issuance costs. The shares issued were valued at an average price of $0.55, based on the price of shares sold to investors, for a total of $94,500.

Common Stock

During the nine months ended September 30, 2016, the Company received cash of $4,050,238, net of cash issuance costs, for 5,280,381 shares of its Series A common stock.

During the nine months ended September 30, 2016, the Company issued 43,333 shares of Series A common stock for consulting services from certain individuals and entities. The shares were valued at an average price of $1.23, for a total of $53,200 and have been charged to consulting fee expense for the nine months ended September 30, 2016.

During the nine months ended September 30, 2016, the Company issued 121,961 shares of Series A common stock in conversion of $150,000 of notes payable. The shares were valued at $1.23, based on the fair market value of shares on the date of the conversion.

During the nine months ended September 30, 2016, the Company paid cash of $203,208 for equity issuance costs.

During the nine months ended September 30, 2016, 2,089,226 shares of Series A common stock were received by the Company to be held in treasury. These shares held in treasury will be used for future option exercises or for future conversion of the Series B Preferred Stock.

Failure-to-File Cease Trade Order in Canada

On September 7, 2016, the Company’s common shares were placed on a “failure-to-file cease trade order (FTFCTO)” in Canada by the Autorité des Marchés Financiers, the market regulatory authority in the province of Quebec, for failure to file its consolidated financial statements and management’s discussion and analysis for the interim fiscal periods ended June 30, 2016, September 30, 2016, March 31, 2017 and June 30, 2017 and its annual consolidated financial statements, management’s discussion and analysis and annual information form for the fiscal year ended December 31, 2016 in Canada within the time required by applicable securities laws. Once these filings have been completed, the Company expects to apply for a revocation of the FTFCTO and resume its status as an issuer current in its reporting obligations in Canada. On March 22, 2018, as amended, the Company completed its annual filing requirements for the year ended December 31, 2016.

2015 Equity Incentive Plan

On September 8, 2015, the Company’s board of directors approved and adopted the ROI Land Investments Ltd. 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan was approved by a majority of stockholders of the Company on November 9, 2015. The 2015 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards and performance compensation awards. No awards are outstanding under the 2015 Plan at September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 6 – Stockholders’ Equity (Continued)

Non Plan Options

During the nine months ended September 30, 2016, the Company issued certain stock options outside of the 2015 Plan. The following summarizes non-Plan option activity for the nine months ended September 30, 2016:

									Weighted
	Common Stock Options Outstanding								average
									exercise
	Employees		Non-employees			Total			price

Outstanding at December 31, 2015		500,000		6,457,250			6,957,250		$	1.51

Options granted		50,000		5,178,259			5,228,259		$	1.58

Options canceled or expired				(2,507,250	)		(2,507,250	)	$	1.57

Balance at September 30, 2016		550,000		9,128,259			9,678,259		$	1.53

The following table summarizes information with respect to stock options outstanding and exercisable by employees at September 30, 2016 and December 31, 2015:

			Options outstanding								Options vested and exercisable
					Weighted
					average		Weighted						Weighted
					remaining		average		Aggregate				average			Aggregate
			Number		contractual		exercise		intrinsic		Number		exercise			intrinsic
Exercise price			outstanding		life (years)		price		value		vested		price			value

As of September 30, 2016
	$	0.35		500,000		1.00	$	0.35	$	–		462,500	$	0.35	$	–
	$	1.50		50,000		2.37	$	1.50		–		50,000	$	1.50		–
				550,000		1.13	$	0.45		–		512,500	$	0.46		–

As of December 31, 2015
	$	0.35		500,000		1.75	$	0.35	$	575,000		350,000	$	0.35		$402,500

During the nine months ended September 30, 2016, the Company issued stock options to its employees to purchase a total of 50,000 shares. These options have contractual lives of three years and were valued at an average grant date fair value of $0.76 per option, or $37,841, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock Price		$1.35
Expected term		3.00 years
Expected volatility		92.2%
Risk-free interest rate		1.20%
Dividend yield		0.00

The stock price was based on the most recent traded stock price as of the grant date and volatility was based on the Company’s historical volatility. During the nine months ended September 30, 2016, $39,088 was recorded as compensation expense and $2 of unrecognized compensation costs related to employee stock options. The Company expects to recognize those costs through October 1, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 6 – Stockholders’ Equity (continued)

The following table summarizes information with respect to stock options outstanding and exercisable by non-employees at September 30, 2016:

		Options outstanding								Options vested and exercisable
				Weighted
				average		Weighted						Weighted
				remaining		average		Aggregate				average		Aggregate
		Number		contractual		exercise		intrinsic		Number		exercise		intrinsic
Exercise price		outstanding		life (years)		price		value		vested		price		value

As of September 30, 2016
$	0.35		25,000		1.00	$	0.35	$	–		25,000	$	0.35	$	–
$	0.75		300,000		3.42	$	0.75	$	–		120,000	$	0.75	$	–
$	0.86		15,000		2.50	$	0.86	$	–		–	$	0.86	$	–
$	1.50		1,148,259		1.16	$	1.50	$	–		1,048,259	$	1.50	$	–
$	1.65		7,640,000		7.70	$	1.65	$	–		1,032,500	$	1.65	$	–
			9,128,259		6.71	$	1.60	$	–		2,225,759	$	1.52	$	–

As of December 31, 2015
$	0.35		25,000		1.75	$	0.35	$	28,750		25,000	$	0.35	$	28,750
$	0.75		300,000		4.17	$	0.75	$	225,000		60,000	$	0.75	$	45,000
$	1.50		122,250		0.48	$	1.50	$	–		122,250	$	1.50	$	–
$	1.65		6,010,000		9.86	$	1.65	$	–		–	$	1.65	$	–
			6,457,250		9.83	$	1.60	$	253,750		207,250	$	1.14	$	73,750

During the nine months ended September 30, 2016, the Company issued options to purchase a total of 5,178,259 shares of Series A common stock to various consultants and investors. The fair value of the services provided by consultants is not reliably estimable as these services are traditionally transacted based on a percentage of transaction volume, making measurement of such services impractical. These options have contractual lives of six months to five years and were valued using the Black-Scholes Option Pricing Model at an weighted average grant date fair value of $0.50 per option, or $2,599,812, for the nine months ended September 30, 2016, with the following assumptions:

Stock Price		$0.18 - $1.50
Expected term		.5 to 5 years
Expected volatility		86.8% to 118.7%
Risk-free interest rate		1.20%
Dividend yield		0.00

The stock price was based on the most recent traded stock price as of the grant date and volatility was based on the Company’s historical volatility. As of September 30, 2016, $1,949,815 was charged to consulting fee expense and $1,806,108 of unrecognized compensation costs related to non-employee stock options. The Company expects to recognize those costs over a weighted average period of 1.96 years as of September 30, 2016.

A total of 2,507,250 options were either expired or canceled during the nine months ended September 30, 2016.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 7 – Commitments and Contingencies

The Company has entered into certain consulting agreements which call for introduction fees to be paid to the consultants for capital received by the Company from investors introduced by the consultants. The fees range from i) 2% in Series A common stock to ii) 13% in cash and 13% in Series A common stock of the amounts received by the Company.

On March 11, 2015, the Company entered into an agreement with Artizan Interior design (“Artizan”), a UAE corporation, whereby Artizan will provide project management and technical coordination services for its project in the Sobha Hartland district of Dubai, United Arab Emirates. The services of Artizan began October 1, 2015 at a monthly fee of $85,000 for a term of the development stage of the project until the handover of the project to the developer. On March 2, 2016, the Company entered into a Client Representative Consultancy Agreement with Artizan, whereby Artizan will provide construction and engineering design services for its project in the Sobha Hartland district of Dubai, United Arab Emirates. The services of Artizan began in March 2016 for a total fee of $1,200,000 in payments of 50% upon the commencement of work, 25% upon the approval of the design package from relevant authorities, and 25% upon the completion of all design services as agreed and approved by the Company. Upon receipt of a termination letter from PNC terminating the agreement related to the Sobha Hartland, Dubai project, the Company terminated its agreement between Artizan and $127,500 of payables is due to Aritizan as of September 30, 2016.

On February 7, 2016, the Company entered into a Development Sale and Purchase Agreement with PNC. During the nine months ended September 31, 2016, the Company made an additional payment of $1,900,000 (AED 6,980,144) in non-refundable deposits to PNC leaving a balance of $24,786,795 (AED 91,014,801). On May 15, 2016, the Company received a termination letter from PNC terminating the agreement dated February 7, 2016 for non-payment of the amounts due under the agreement. As a result, the Company forfeited the $4,701,205 (AED 17,271,099) of deposits. A total of $5,048,032 (AED 18,545,258), including $346,827 (AED 1,273,583) of closing and development costs, has been charged to operating expenses for the nine months ended September 30, 2016 as abandoned project costs. However, the Company is still in negotiations with PNC to acquire a reduced size and price of the land it had agreed to under the agreement dated February 7, 2016 and apply the deposits to this restructured arrangement. Negotiations are under way, but the likelihood that the Company will be successful in reaching a satisfactory agreement is dependent on its ability to pay at least a portion of the new acquisition price. As a result, there can be no assurance that the acquisition will occur as contemplated or at all.

The Company has two office lease agreements (Canada and Germany) with lease commitments totaling $150,957. The Company is contracted to make the following annual payments: not later than one year totaling $41,415; later than one year but not later than two years totaling $41,549; later than two years but not later than three years totaling $41,683; later than three years but not later than four years totaling $26,310; and no amounts later than four years.

Legal Matters

Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 7 – Commitments and Contingencies (Continued)

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed.

On August 6, 2015, Mrs. Gloria Julie Couillard and Tekno Forme (“Plaintiffs”) filed a complaint naming CTC, its President, ROI DEV, Philippe Germain and Sebastian Cliche as co-defendants claiming unpaid fees of $207,638. On September 2, 2015, a default judgement was served against CTC. CTC and its President are applying to set aside the default judgement against them and the Company is opposing the Plaintiff’s notice of Application. On October 9, 2015, the Plaintiff registered a lien on the Company’s Canadian properties in the amount of $207,638. On March 17, 2017, the Plaintiff agreed to release its judgment filed against the Company’s Canadian properties and removed its lien, in its entirety, registered on these properties.

On September 14, 2015, the Company received a notification from the American Arbitration Association (“AAA”) of a Request for Mediation, dated September 8, 2015, filed by Seth Shaw, pursuant to a mediation and arbitration clause contained in a Consulting Agreement allegedly entered into between the Company and Seth Shaw on May 1, 2014. The Company executed such agreement but believes that Seth Shaw failed to perform under said agreement. Mr. Shaw believes that the agreement is valid and in effect. The matter under dispute is 500,000 shares of the Company’s Series A common stock which were to be issued to Mr. Shaw pursuant to such agreement. A certificate for such shares was issued but never delivered to Mr. Shaw, because the Company cancelled the Agreement for failure to perform. The Company cancelled the shares and recorded a liability for the then value of the shares of $175,000 which was included in accounts payable and accrued expenses in the consolidated balance sheet as of December 31, 2015. The Company and Mr. Shaw met in mediation on February 22, 2016 with no resolution achieved. The parties then attended an arbitration evidentiary hearing on January 20, 2017 whereby a final arbitration award was issued on March 30, 2017 and subsequently a judgment was delivered by the United States District Court of Nevada on March 1, 2018 ruling that Mr. Shaw was entitled to recover $755,125 from the Company for breach of contract claim, $103,110 of legal fees and $3,625 in costs. The Company intends to vigorously take necessary actions to defend itself from these claims by Mr. Shaw and has not revised the recorded liability of $250,000 in accounts payable and accrued expenses in the consolidated balance sheet as of September 30, 2016, as it still represents the best estimate of the possible outflows to settle this case.

Note 8 – Subsequent Events

Subsequent to September 30, 2016, the Company received deposits of $216,887 net of issuance costs of $23,063 for subscriptions for Colorado Series notes payable.

Subsequent to September 30, 2016, the Company received from eight accredited investors a total of $1,079,749 as deposits for the purchase of its Series B preferred stock and shall also receive from them a total of 395,555 shares of the Company’s common stock held by them to be held in treasury in exchange for a total of 1,395,555 Series B preferred stock. The Company also received a total of $573,915 in deposits from investors which shall be exchanged for 1,129,556 shares of Series B preferred stock to be newly issued.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 8 – Subsequent Events (Continued)

Subsequent to September 30, 2016, the Company, through its wholly-owned subsidiary ROI SEC, issued a total of $1,580,400 (EUR 1,500,000) of its notes payable to two investors for cash. The notes bear interest at 7% per annum payable quarterly and have a maturity date of June 30, 2020. Pursuant to a loan facility agreement between ROI SEC and ROI DEV dated May 19, 2016, the notes hold security interests in the Company’s properties in British Columbia (Kenney Street, Park Avenue and Kitimat), Beauport and Colorado.

Subsequent to September 30, 2016, ROI SEC received an additional $1,316,068 as deposits for ROI Securitization notes. The terms of the notes and the issuance date have not yet been established.

On January 20, 2017, the Company attended an arbitration evidentiary hearing regarding the breach of contract claim filed by Mr. Seth Shaw whereby a final arbitration award was issued on March 30, 2017 and subsequently a judgment was delivered by the United States District Court of Nevada on March 1, 2018 ruling that Mr. Shaw was entitled to recover $755,125 from the Company for breach of contract claim, $103,110 of legal fees and $3,625 in costs. The Company intends to vigorously take necessary actions to defend itself from these claims by Mr. Shaw and has not revised the recorded liability of $250,000 in accounts payable and accrued expenses in the consolidated balance sheet as of September 30, 2016, as it still represents the best estimate of the possible outflows to settle this case.

On April 18, 2017, the Board of Directors increased the number of its members from 2 to 3 and reappointed Martin Scholz to fill the vacancy created by such increase and nominated to the position of Executive Vice President of the Company. Stéphane Boivin has been appointed as Chief Operating Officer, and Antoine Tronquoy will serve as the new Chief Financial Officer of the Company, replacing Mohsen Maaouia.

On May 18, 2017, the Company cancelled 100,000 shares of the Series A preferred stock held by Sami Chaouch upon his resignation as Director and Chief Executive Officer and his surrender of said shares. In connection with the Company’s settlement agreement between Sami Chaouch, the Company agreed to issue 1,000,000 shares of the Company’s Series B preferred stock, however, the Company has not yet issued these shares.

On August 10, 2017, Antoine Tronquoy resigned as Chief Financial Officer of the Company. On that same date the Company engaged Yuhi Horiguchi to serve as its new Chief Financial Officer. Yuhi Horiguchi is the controlling shareholder of Alternative Strategy Partners Pte. Ltd.

On August 22, 2017, the Company sent a written notice to all of its convertible note holders (Beauport, Quebec project) to notify them that the Company shall execute its option to extend the maturity date of the convertible notes by an additional 18 months.

On September 29, 2017, the maturity dates of all of the loans from Valescore Ltd, a Swiss company, were further extended to December 31, 2018.

On October 3, 2017, the Company’s Board of Directors of authorized the re-issuance of the 100,000 shares of Series A Preferred Stock previously re-acquired by the Company from Sami Chaouch on May 18, 2017, to Martin Scholz, the Company’s Chief Executive Officer.

On December 21, 2017, the Company entered into a Design & Licensing Agreement with Swarovski Brand License AG (“Swarovski”) which provides the Company with an exclusive license to design and to develop the Swarovski Towers building in the Dubai (United Arab Emirates) territory. The Company plans to develop the world’s first luxury hotel and residential property revealing the exceptional standards of high-quality design and decor of the Swarovski brand. The Company is still in discussions with project partners to achieve its plans to launch the project in year 2018.

On December 29, 2017, Sebastien Cliche resigned from the Company’s Board of Directors. The remaining two directors of the Company have decided not to fill the vacancy to the Board created by Mr. Cliche’s.

On February 6, 2018 the Company’s Board of Directors increased the number of its members from 2 to 3 by appointing Yuhi Horiguchi to fill the vacancy created by the resignation of Sebastien Cliche on December 29, 2017.

ROI LAND INVESTMENTS LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2016

(unaudited)

Note 8 – Subsequent Events (Continued)

On February 22, 2018, Mr. Stéphane Boivin resigned from the Company’s Board of Directors. On February 27, 2018, Mr. Peter Hoffman was appointed as a new Director of the Company to fill the vacancy created by Mr. Boivin and will also replace Mr. Martin Scholz as the Company’s new Chairman of the Board of Directors. Mr. Boivin was also removed from his role as Chief Operating Officer and from his directorship positions held in the Company’s subsidiaries, namely ROI DEV Canada Inc., ROI Securitisation SA and ROI Land Investments FZ.

On February 26, 2018, the Company appointed Ms. Claudia Nelke as Vice President of Administration.

On May 22, 2018, Yuhi Horiguchi resigned as the Company’s Director and will remain with his position as Chief Financial Officer. On that same date the Company appointed Marshall Scott Vayer as a Director to fill the board vacancy created by Mr. Horiguchi, and also appointed Mr. Vayer to act as the Company’s Executive Vice President.

The Company has evaluated subsequent events through the date the condensed consolidated financial statements were issued and filed with the SEC. The Company has determined that there are no other events that warrant disclosure or recognition in the condensed consolidated financial statements.

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

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements made in this Form 10-Q are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate and, therefore, there can be no assurance the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

The forward-looking statements included in this Form 10-Q and referred to elsewhere are related to future events or our strategies or future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe," "anticipate," "future," "potential," "estimate," "encourage," "opportunity," "growth," "leader," "expect," "intend," "plan," "expand," "focus," "through," "strategy," "provide," "offer," "allow," commitment," "implement," "result," "increase," "establish," "perform," "make," "continue," "can," "ongoing," "include" or the negative of such terms or comparable terminology. All forward-looking statements included in this Form 10-Q are based on information available to us as of the filing date of this report, and the Company assumes no obligation to update any such forward-looking statements, except as required by law. Our actual results could differ materially from the forward-looking statements.

The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

Company Overview

We operate in the land development sub-sector niche of the real estate industry, where its main activity consists of acquiring, zoning and converting raw land into a construction-ready site. The land development process implemented by ROI consists of four phases:

	·	Land acquisition - Purchasing land ready for development, in a strategic location and without any prohibited zoning restrictions
	·	Permits applications - Executed within the local municipalities to effectuate the legal right for current and future infrastructures development.
	·	Infrastructures - Outsourcing to qualified experts of the necessary technical and construction work
	·	Profit taking - Final Sale of the licensed, zoned and (by now) subdivided and construction-ready land unit to large regional residential developers

Our mission is to acquire, fund and service land development opportunities. We strive to become a leader in green land development by maintaining the utmost respect of the environment, particularly by emphasizing and preserving more green spaces than the local laws require. Additionally, the Company from time to time, reserves its right to participate on the construction of the properties.

Business

We specialize in land development. Our business model consist of acquiring attractive land, optimizing zoning restrictions, obtaining necessary permits, outsourcing developments of the infrastructure and profiting from the sale of the subdivided land units to established residential and commercial building developers. We may also opportunistically consider real estate development. The Company’s mission is to maximize our return on investment within the land development sector in North America as well as internationally. These investments and/or acquisitions may be directly acquired by our Company or via qualified Joint Venture Partners. Alternatively, our Company, for practical purposes, functions as a land banking firm.

Plan of Operation

We currently have the following real estate projects under development:

Beauport, QC

This project is a low density project in Beauport, a city in the suburbs of Quebec. No other parcel of land is available in this strategic sector of the city. There are already 3 building contractors interested in reserving lands on this parcel. The main roads are 2 km away from the project and all services, including a shopping center, restaurants, grocery store, clinic, primary school and high school etc. are less than 1 km away. The projects will consist of townhouses, semi- detached and standard houses. Infrastructures will be necessary and are included in the budget. No significant development of this property occurred during the nine months ended September 30, 2016. As of September 30, 2016, we have invested $4,864,822 (CAD 6,370,069) in the property.

Terrace, BC

Terrace is a city on the Skeena River in British Columbia, Canada. The Terrace region was a booming market in 2015 because of the Liquefied Natural Gas (LNG) projects underway. Companies invested hundreds of millions of dollars in advanced work in order to be prepared for LNG. We had decided to participate in this opportunity by buying lands on which we expect to build apartments as the Terrace region had a lack of available housing and a strong need to house their employees. Stemming from the significant decline in global oil and gas prices in 2016, many LNG projects across British Columbia were delayed or discontinued and as such, housing demands in this region also rapidly diminished. No significant development of these properties occurred during the nine months ended September 30, 2016. We currently own three properties in Terrace with a total cost to date of $1,645,989 (CAD 2,155,282).

Kitimat, BC

The Kitimat region was booming due to the LNG projects underway. Companies have invested hundreds of millions of dollars in advanced work in order to be prepared for the LNG projects. Accordingly, this region experienced a severe lack of infrastructure and single family dwellings needed to house their workers. Investments have been made into this region to help strengthen the local community and to create economic advantages for future generations of British Columbians. We incurred $50,000 of development costs on this property during the year ended December 31, 2015. Stemming from the significant decline in global oil and gas prices in 2016, many LNG projects across British Columbia were delayed or discontinued and as such, housing demands in this region also rapidly diminished. We acquired approximately 250,000 square feet of prime residential land development to build over 300 apartment units. To date, we have invested $1,721,029 (CAD 2,253,540) in the property in Kitimat.

Louisette, France

Louisette is located in Seyne sur Mer, Var, South of France. The land is less than 5 minutes from the Six-Fours beach, which is a region rich in tourism. We are co-investing on this project with Rome Finance Group and Capital Evolution Group SAS. As of September 30, 2016, we own 2% of the project through an investment in shares of Society Louisette Memories SARL.

Evans, Colorado

The town of Evans is located in Weld County, 60 miles from Denver, Colorado. Evans has a growing economy fueled by large oil & gas companies, investors and agriculture. The technology, aerospace, construction, financial and health care sectors are also prominent in Evans with continued hiring and job opportunities. Job creation, strong population growth and a continued influx of new residents and businesses to the area have led to an increased demand for housing in Evans. According to the Department of Labor, Weld County has seen the strongest job growth of any county in the U.S. from June 2013 to June 2014, the last period for which data is available.

We acquired 220 acres (equivalent to 9,583,200 square feet of land) and 763 water rights in Evans. As of September 30, 2016, we have invested $6,717,876 in the property in Evans and have incurred an additional $765,624 in development costs. Beginning in 2018 and in affiliation with a local construction company(s), ROI intends to develop approximately 950 lots in approximately four phases. The project will feature a mix of housing units, including single family homes, town homes, duplexes and condos. The Company also plans to build a park as well as commercial and retail areas. A new middle school was opened last fall adjacent to the property, which is expected to further fuel demand for quality housing.

Sobha Hartland, Dubai, UAE

Sobha Hartland is a mixed-use development that is located in Mohammed Bin Rashid Al Maktoum City. It affords a full view of the Dubai skyline and it is conveniently located close to the metro, the water canal, in front of the Dubai Design District and only minutes from downtown via Al Khail artery road. This complete community offers high net worth residents of Dubai a chance to reduce their commuting drive from 20-25 km to 3 km or 5 minutes to downtown. Dubai is among the fastest growing cities in the world. It is a major financial center and business hub for the Middle East and Africa. Dubai’s economy is fueled by a number of industries including tourism, finance, industrial consulting and communication technologies.

We have partnered with Sobha LLC, a subsidiary of PNC Investments LLC (“PNC”), for this project. Sobha LLC is a large and fully integrated developer in the region having developed 450 projects in the Middle East and Europe. On February 7, 2016, our wholly-owned subsidiary, ROI Land Investments FZ, entered into a Development Sale and Purchase Agreement with PNC for the purchase of approximately 433,000 square feet of land in Sobha Hartland. The total acquisition price is $29,488,000 (AED 108,281,250). This project features three, eight-story buildings for a total of 300 units. Each building offers Dubai residents with a variety of luxurious housing options including studio apartments, 1-bedroom apartments, 2-bedroom apartments, 3-bedroom apartments, two bedroom duplexes and three bedroom duplexes.

On May 15, 2016, the Company received a termination letter from PNC terminating the agreement dated February 7, 2016 for non-payment of the amounts due under the agreement. As a result, the Company forfeited the $4,701,205 (AED 17,271,099) of deposits. A total of $5,048,032 (AED 18,545,258), including $346,827 (AED 1,273,583) of closing and development costs, has been charged to operating expenses for the six months ended June 30, 2016 as abandoned project costs. However, the Company is still in negotiations with PNC to acquire a reduced size and price of the land it had agreed to under the agreement dated February 7, 2016 and apply the deposits to this restructured arrangement. Negotiations are under way, but the likelihood that the Company will be successful in reaching a satisfactory agreement is dependent on its ability to pay at least a portion of the new acquisition price. As a result, there can be no assurance that the acquisition will occur as contemplated or at all. During the nine months ended September 30, 2016, the Company also incurred $160,825 of other costs related to the project and wrote-off leasehold improvements related to a lease in Dubai for an amount of $256,048.

Results of Operations

For the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015

Revenues

Revenues were $-0- for the nine months ended September 30, 2016 compared to $81,421 for the nine months ended September 30, 2015. The revenues consisted of interest income earned on notes receivable. Recognition of interest income for the nine months ended September 30, 2016 was suspended as collectability was not reasonably assured.

Operating Expenses and Other Income (Expense)

For the nine months ended September 30, 2016, our total operating expenses were $14,855,825 compared to $5,693,903 for the nine months ended September 30, 2015, resulting in an increase of $9,161,922. The increase in operating expenses primarily resulted from an increase in abandoned project costs by approximately $5.3 million mostly attributable to the losses incurred on the Company’s Sobha Hartland Dubai project as well as an increase in consulting fees by approximately $2.5 million as the Company had two additional executives in the first half of 2016 and also retained more third-party consultants on existing and pipeline projects.

Other income and expenses were $1,657,098 in 2016 compared to $811,929 for the nine months ended September 30, 2015, resulting in an increase by $845,169. The increase was primarily due to the increase in interest expenses of $1,502,539 compared to $903,685 in the same period in 2015.

As a result, net loss was $16,512,923 for the nine months ended September 30, 2016 compared to $6,424,411 for the nine months ended September 30, 2015.

Liquidity and Capital Resources

Overview

Historically, we have financed our cash flow and operations from the sale of common stock and issuance of notes payable. Our principal use of funds during the nine months ended September 30, 2016 and 2015 was for the acquisition of properties, the funding for property projects and development, and general corporate expenses.

Liquidity and Capital Resources during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015

At September 30, 2016, we had cash of $329,097 and a deficit in working capital of $17,862,414. We used cash in operations of $7,863,915 for the nine months ended September 30, 2016 compared to cash used in operations of $9,250,305 for the nine months ended September 30, 2015. The negative cash flow from operating activities for the nine months ended September 30, 2016 is primarily attributable to the Company's net loss from operations of $16,512,923, offset by stock-based compensation of $1,988,903 and abandoned project costs of $5,321,080. Cash used in operations for the nine months ended September 30, 2015 is mostly attributable to the Company's net loss from operations of $6,424,411 and the decrease in changes in operating assets and liabilities by $5,129,473, partially offset by stock-based consulting fees of $1,988,226.

Cash provided by investing activities consisted of a repayment of advances to a related party of $167,593 for the nine months ended September 30, 2016. We had cash used in investing activities of $114,102 represented by advances to related party for the nine months ended September 30, 2015.

Net cash provided by financing activities for the nine months ended September 30, 2016 mostly consisted of $3,847,030 for the sale of common stock, net of issuance costs, $1,947,879 in proceeds from deposits of notes payable, net of debt issuance costs, and $1,500,000 in proceeds from the issuance of mortgage notes payable, net of issuance costs. Net cash provided by financing activities for the nine months ended September 30, 2015 mostly consisted of $5,095,994 for the sale of common stock, net of issuance costs, $2,937,166 for deposits received for notes payable, $2,277,860 in proceeds from the issuance of performance-linked notes payable, offset by payments on loans payable of $1,160,865.

We will require additional funds to fully implement our plans. These funds may be raised through equity financing, debt financing, or other sources, which may result in the dilution in the equity ownership of our shares. We currently do not have any guaranteed arrangements for additional financing and we may not be able to obtain financing when required. Our future is dependent upon our ability to obtain financing, a successful marketing and promotion program and, further in the future, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, or issuing additional notes payable, will increase our liabilities and future cash commitments.

Going Concern

The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies” in our audited financial statements as of and for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on April 13, 2016.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The disclosure required under this item is not required to be reported by smaller reporting companies.

Item 4. Controls and Procedures.

(a)

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this quarterly Report on Form 10-Q, an evaluation was carried out by the Company's management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of June 30, 2016. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted 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 that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company's management concluded, as of the end of the period covered by this report, that the Company's disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission's rules and forms, and that such information was not accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

(b)

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

During the course of business, litigation commonly occurs. From time to time the Company may be a party to litigation matters involving claims against the Company. The Company operates in a highly regulated industry and employs personnel which may inherently lend itself to legal matters. Management is aware that litigation has associated costs and that results of adverse litigation verdicts could have a material effect on the Company's financial position or results of operations. Management, in consultation with legal counsel, has addressed known assertions and predicted unasserted claims below.

Item 1A. Risk Factors.

The disclosure required under this item is not required to be reported by smaller reporting companies.

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

During the period from July 1, 2016 through September 30, 2016, the Company received cash, net of cash issuance costs, of $142,698 for subscriptions for 483,709 shares of its Series B preferred stock from seven accredited investors. 395,095 shares of these subscribed shares have not been issued as of September 30, 2016. The proceeds will be used for working capital.

During the period from July 1, 2016 through September 30, 2016, the Company issued 350,000 shares of Series B preferred stock to an investor for debt issuance costs. The shares issued were valued at an average price of $0.55, based on the price of shares sold to investors, for a total of $94,500.

During the period from July 1, 2016 through September 30, 2016, the Company received subscriptions to purchase notes of the Company for $619,397 in cash, net of issuance costs. The terms of the notes have not yet been finalized. When completed, the proceeds will be used to fund the Company’s projects and for working capital.

All of the foregoing securities were issued in reliance upon the exemption from registration provided by (a) Section 4(a)(2) of the Securities Act of 1933, as amended, (b) Regulation D or (c) Regulation S depending on the various residences of the accredited investors.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Item 2 of Part II above describes sales of the Company’s securities which should have been reported on a Form 8-K during the third quarter of 2016.

Item 6. Exhibits

Exhibit 31.1	Rule 13a-14(a) Certification by the Principal Executive Officer *
Exhibit 31.2	Rule 13a-14(a) Certification by the Principal Financial Officer *
Exhibit 32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
Exhibit 32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
Exhibit 101.INS	XBRL Instance Document *
Exhibit 101.SCH	XBRL Schema Document *
Exhibit 101.CAL	XBRL Calculation Linkbase Document *
Exhibit 101.DEF	XBRL Definition Linkbase Document *
Exhibit 101.LAB	XBRL Label Linkbase Document *
Exhibit 101.PRE	XBRL Presentation Linkbase Document *

* Filed herewith.

SIGNATURES

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

	ROI LAND INVESTMENTS LTD.

Date: July 17, 2018		By: /s/ Martin Scholz
		Martin Scholz
		Chief Executive Officer (Principal Executive Officer)

Date: July 17, 2018

By: /s/ Yuhi Horiguchi

Yuhi Horiguchi

Chief Financial Officer

(Principal Financial Officer)

ROI LAND INVESTMENTS LTD 10-Q