NUTRALIFE BIOSCIENCES, INC - Quarter Report: 2019 March (Form 10-Q)

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 March 31, 2019

Commission File Number: 000-55144

6601 Lyons Road, Suite L-6 Coconut Creek, FL  33073

(Address of principal executive offices)        (Zip Code)

Telephone 888-509-8901

(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 periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate 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 x No ¨

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

(Do not check if a smaller reporting company)

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. ¨

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

As of March 31, 2019 and May 13, 2019 we had 128,689,465 and 131,514,229 shares of common stock outstanding, respectively.

TABLE OF CONTENTS

NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC. 

Condensed Consolidated Balance Sheets 

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

NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC. 

Condensed Consolidated Statements of Operations 

(Unaudited) 

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

NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC.
Condensed Consolidated Statement of Stockholders' Equity
(Unaudited)

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

NUTRALIFE BIOSCIENCES, INC., F/K/A NUTRAFUELS, INC. 

Condensed Consolidated Statements of Cash Flows 

(Unaudited)

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

NUTRALIFE BIOSCIENCES, INC. F/K/A NUTRAFUELS, INC.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 - NATURE OF OPERATIONS AND CONSOLIDATION

NutraLife BioSciences, Inc. F/K/A NutraFuels, Inc. (“We and the Company”) is the producer and distributor of nutritional supplements that uses micro molecular formulae and a utilization of an oral spray to provide faster and more efficient absorption.

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in the United States of America ("U.S.") as promulgated by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and with the rules and regulations of the U.S Securities and Exchange Commission ("SEC"). In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year.  Therefore, the interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Precision Analytic Testing, LLC, NutraDerma Technologies, Inc., PhytoChem Technologies, Inc. and TransDermalRX, Inc.  We operate as one reportable segment.  All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

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

Cash and Equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less.  The Company had no cash equivalents at March 31, 2019 and December 31, 2018.  The Company maintains its cash in bank deposit accounts, which may, at times, may exceed federally insured limits. The Company had cash balances in excess of FDIC insured limits of $491,955 and $244,501 at March 31, 2019 and December 31, 2018, respectively. 

Inventories

Inventories are stated at cost utilizing the weighted average method of valuation and consist of raw materials and finished goods. The Company reduces inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company's inventories for such declines in value.

Allowance for Doubtful Accounts

We establish the existence of bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of our customers. The allowance for doubtful accounts is $31,000 for periods ended March 31, 2019 and December 31, 2018, respectively.

Property and Equipment

All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, seven and twelve years, using the straight-line method.  Upon sale or retirement, the cost and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.  Leasehold improvements are amortized over their estimated useful lives or the remaining term of the lease, whichever is shorter.

Impairment of Long‑Lived Assets

A long‑lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying value amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long‑lived assets exceeds its fair value.

Impairment charges would be included with costs and expenses in the Company's condensed consolidated statements of operations, and would result in reduced carrying amounts of the related assets on the Company's condensed consolidated balance sheets. No adjustments were made to long-lived assets during the period ended March 31, 2019, as a result of management's assessments.

Advertising

Advertising costs are charged to operations as incurred and are included in operating expenses. The amounts charged for the three month periods ended March 31, 2019 and 2018 totaled approximately $21,000 and $ 0, respectively.

Revenue Recognition

The Company adopted ASU 2014-09, “Revenue from Contracts with Customers” on January 1, 2018, using the modified retrospective method, which did not have a material impact on the timing and amount of product revenues.

The new revenue recognition standard prescribes a five-step model that focuses on transfer of control and entitlement to payment when determining the amount of revenue to be recognized.  Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. 

The Company generates revenues from the sale of products.  The product is invoiced, and the revenue is recognized upon shipment and once transfer of risk has passed to the customer, which is the point at which the Company has satisfied its performance obligation.

The Company’s revenues accounted for under ASC 606 do not require significant estimates or judgements based on the nature of the Company’s revenue.  The company’s contracts do not include multiple performance obligations or variable consideration.

Income Taxes

The Company follows the provisions of ASC 740‑10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740‑10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more‑likely‑than‑not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company has no amounts accrued for interest or penalties as of September 30, 2018 and December 31, 2017, respectively.  The Company is no longer subject to examination by taxing authorities for years before December 31, 2014.  The company does not expect the total amount of unrecognized tax benefits to significantly change in the next 12 months. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years.

Net Loss Per Share

Basic loss per share excludes dilution and is computed by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company.  Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution.

Financial Instruments and Fair Value Measurements

The carrying value of the Company’s current consolidated financial instruments, which include cash and cash equivalents, accounts payable and accrued liabilities approximates their fair values because of the short‑term maturities of these instruments.

FASB ASC 820 Fair Value Measurement clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Related Party Transactions

All transactions with related parties are in the normal course of operations and are measured at the exchange amount.

Leases

Effective January 1, 2019, the Company adopted the requirements of FASB ASU 2016-02, Leases (Topic 842) which defines a lease as any contract that conveys the right to use a specific asset for a period of time in exchange for consideration.  Leases are classified as a finance lease, formerly called a capital lease, if any of the following criteria are met:

For any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases.  As of March 31, 2019, the Company has one finance lease and one operating lease.

Under the new guidance, both finance and operating leases are reflected on the balance sheet as lease or “right-of -use” assets and lease liabilities.  Further note that under previous guidance, operating leases (non-capital leases) were not required to be recorded as an asset on the balance sheet.

There are some exceptions, which the Company has elected in its accounting policies.  For leases with terms of twelve months or less, or below the Company’s general capitalization policy threshold, the Company elects an accounting policy to not recognize lease assets and lease liabilities for all asset classes.  The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term.

The Company determines if a contract is a lease at the inception of the arrangement.  The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain to be exercised.  Certain leases contain non-lease components, such as common area maintenance, which are generally accounted for separately.  In general, the Company will assess if non-lease components are fixed and determinable, or variable, when determining if the component should be included in the lease liability.  For purposes of calculating the present value of the lease obligations, the Company utilizes the implicit interest rate within the lease agreement when known and/or determinable, and otherwise utilizes its incremental borrowing rate at the time of the lease agreement.

As permitted under ASU 2018-11 the Company elected the optional transition method to adopt the new leases standard. Under this new transition method, the Company initially applied the new leases standard at the adoption date of January 1, 2019 and would have recognized a cumulative -effect adjustment, if appropriate, to the opening balance of retained earnings in the period of adoption. No cumulative-effect adjustment was recognized. The Company’s reporting for the comparative periods prior to 2019 in the financial statements will be presented in accordance with the existing GAAP in effect for 2018 and earlier (ASC Topic 840, Leases ).

The impact of the adoption of this new standard resulted in an increase to the Company’s operating lease assets and liabilities on January 1, 2019 of approximately $800,000. The implementation did not have a material impact on our condensed consolidated statements of income and statements of cash flows.

Intangible assets represent the value assigned to intellectual property and will be amortized based on the economic benefit expected to be realized. 

NOTE 3 - LIQUIDITY AND GOING CONCERN CONSIDERATIONS

Our condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We sustained a net loss of approximately $1,289,000 for the three months ended March 31, 2019, and have an accumulated deficit of approximately $36,122,000 at March 31, 2019. These conditions raise substantial doubt about our ability to continue as a going concern.

The independent auditors’ report on our consolidated financial statements for the year ended December 31, 2018 contain explanatory paragraphs expressing substantial doubt as to our ability to continue as a going concern.

Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels.

We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

NOTE 4 - ADVANCE FROM SHAREHOLDER

In March 2019, the Company received proceeds of $200,000 from a shareholder, pursuant to a short-term promissory note payable, bearing interest at an annual rate of 3%, due April 20, 2019.  The note and accrued interest was satisfied by subsequently converting to 2,389,470 shares common stock at $.17 per share.

NOTE 5 - STOCKHOLDERS’ EQUITY

Stock issued for cash:

In January 2019, the Company issued 120,004 shares of common stock in exchange for $20,000 in cash.

In January 2019, the Company issued 7,647,059 shares of common stock in exchange for $650,000 in cash.

In February 2019, the Company issued 3,176,470 shares of common stock in exchange for $270,000 in cash.

In March 2019, the Company issued 17,111,528 shares of common stock in exchange for $1,284,480 in cash

Stock issued for services:

In January 2019, the Company issued an aggregate of 883,781 shares of common stock valued at $149,956 for services.

In February 2019, the Company issued 62,500 shares of common stock valued at $10,625 for services.

Other

In March 2019, the Company issued 1,800,000 shares of common stock valued at $319,140 in connection with the acquisition of intellectual property.

In March 2019, the Company issued 100,000 shares of common stock valued at $18,600 in connection with a prior debt financing.

Additionally, the company reclassified $380,000 to Additional Paid-in Capital as a result of a settlement of a finance agreement with one of their investors.

Settlement Agreement

In March 2019, the Company reached an agreement with its third-party lender in connection with their $2,000,000 2018 “Investment Agreement” whereby the Company received only two payments from this lender aggregating $380,000 during 2018.  The lender was in default of this agreement and thereby settled by agreeing to fund $1,000,000 for 13,764,705 restricted shares of common stock.  Additionally, the lender received a warrant to purchase an additional 10 million common shares at a price of $.20 per share or an aggregate of $2 million under the terms set forth in this agreement.  The warrant expires on March 4, 2022.  Additionally, the lender had the ability to purchase an additional 7,647,058 common shares at the purchase price of $.085 per share on an aggregate of $650,000 at any time prior to April 8, 2019.  This option was never exercised and therefore expired.  In connection with this agreement, the $380,000 previously funded was reclassified to additional paid-in capital.

NOTE 6 – LEASES

In conjunction with the new guidance for leases, as defined by the FASB with ASU 2016-02, Leases (Topic 842), the Company has described the existing leases as operating as further described below:

The Company leases their office and warehouse facilities located in in Coconut Creek, Florida under a non-cancelable operating lease agreement that expired February 2019 and is currently on a month-to month basis.

In June 2017, the Company entered into a lease for an additional facility located in Deerfield Beach, Florida under a non-cancelable operating lease. The term of the lease is for 86 months beginning on January 1, 2018 and calls for yearly 3% increases to base rent, with monthly payments that commenced in March 2018.

In the March 31, 2019 condensed consolidated balance sheet, the Company has recorded right-of-use assets of approximately $742,000 and a lease liability of $782,000, of which $122,000 is reported as a current liability. The weighted average remaining lease term is 71 months and weighted average discount rate used is 10%.

NOTE 6 – LEASES, continued

The following table presents a reconciliation of the undiscounted future minimum lease payments remaining under the operating lease reported as operating lease liability on the condensed consolidated balance sheet as of March 31, 2019:

A similar description of the lease obligation is disclosed in the Company’s December 31, 2018 Form 10-K.

Lease expense for the operating lease was approximately $67,000 for the first quarter ended March 31, 2019.

NOTE 7 - ACQUISITION OF INTELLECTUAL PROPERTY

In February 2019 the Company acquired certain intellectual property consisting of patent rights.  The aggregate purchase price paid in connection with the patent purchase was $714,640, consisting of $130,000 cash, and 3,300,000 shares of the Company’s common stock valued at $.177 per share or an aggregate of $584,640. Of the 3,300,000 shares, 1,800,000 shares were provided at closing and 1,500,000 will be provided one year thereafter.  The acquired patent will be amortized over its remaining estimated useful life of approximately 11 years.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company is subject to legal proceedings which arise in the ordinary course of the Company's business. Although there can be no assurance as to the ultimate disposition of these matters, the Company's management believes that the final disposition of such matters will not have a material adverse effect on the financial position or results of operations of the Company.

Consulting Agreement

In connection with the acquisition agreement discussed in Note 7, the Company entered into an agreement with the seller, whereby the seller has accepted the appointment to represent the Company to sell the products related to the above patent and intellectual property and receive a commission of 20% of the net sales from this product.

NOTE 9 - SUBSEQUENT EVENTS

In April, 2019 we issued an aggregate of 21,882 common shares for services rendered to us. We valued these shares at $0.186 or an aggregate of $4,070.

On April 2, 2019, we issued 2,389,470 common shares to a noteholder in exchange for the aggregate principal and interest of $203,104 outstanding under a promissory note.

In April, 2019 we issued 235,294 shares of common stock for a price of $.085 per share or an aggregate of $20,000.

CAUTIONARY NOTE FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Form 10-K, Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

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

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the audited annual and unaudited interim Financial Statements and related notes included in this Form 10-Q filing, as well as the sections entitled “Risk Factors” in of this filing, as well as other cautionary statements and risks described elsewhere in this filing. Our actual results could differ materially from those discussed in the forward-looking statements.

Overview

NutraLife BioSciences, Inc. (“us”, “we” or the “Company”) was formed as a limited liability company in the state of Florida on April 1, 2010, as NutraFuels, Inc. On December 3, 2012, the Company converted from a limited liability company to a Florida corporation. On March 6, 2019, the Company’s name change to NutraLife BioSciences, Inc. was effective. The Company has four wholly owned subsidiaries:

The Company is engaged in the development, manufacturing and distribution of nutritional and dietary oral spray products in the United States. The Company offers 13 different core formulations which it modifies to meet the specifications of its private label customers. The Company provides approximately 50 different variations of its core formulations. The Company’s products include CBD-­infused oral sprays, tinctures, pet drops, pain balms, face creams, and nutraceutical oral spray products for sleep support and weight loss packaged under the customer’s brand names. The Company’s products are primarily sold to private label distributors who sell the products the Company manufacturers under their own brand names.

Three Months Ended March 31, 2019 and 2018

We had sales of $720,799 and $722,905 for the three months ended March 31, 2019 and 2018, respectively, or .3 % decrease from the first quarter of 2018.

Cost of sales was $631,565 compared to $355,685 for the three months ended March 31, 2019 and 2018, respectively, or a seventy-seven-point six percent (77.6%) increase. This increase is directly related to the reclassification of certain labor expenses from general and administrative costs to production costs.  The Company also, significantly increased its production labor force.

Gross margin was $89,234 and $367,220 for the three months ended March 31, 2019 and 2018, respectively, or a seventy-five-point seven percent (75.7%) decrease.  This is the result of the increase of the cost of goods sold.

General and administrative expenses were $901,167 compared to $418,422 for the three months ended March 31, 2019 and 2018, respectively, an increase of one-hundred-fifteen-point four percent (115.4%).  This increase is primarily due to the increase in the Company’s payroll.

Stock based compensation was $160,581 and $511,902 for the three months ended March 31, 2019 and 2018, respectively, or a sixty-eight-point six percent (68.6%) decrease.

Our interest expense was $289,901 compared to $487 for the three months ended March 31, 2019 and 2018, respectively, an increase $289,414. This increase is the result of the recognizing the expense related to the discount on convertible debt that was paid off in 2019.

We recorded a net loss of ($1,288,592) compared to ($614,452) for the three months ended March 31, 2019 and 2018, respectively.

Liquidity and Capital Resources

Historically, the Company’s primary cash needs have been related to working capital items, which the Company has largely funded through our revenues, working capital, cash on hand, proceeds from lending and proceeds from the issuance of stock.

As of March 31, 2019, the Company had a cash balance of $676,822.

Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels.

We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Cash Flow Activities

As of March 31, 2019, the Company had a cash balance of $676,822.

Operating Activities

Our cash increased $256, 847 for the three months ended March 31, 2019. Cash used in operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities, such as those included in working capital.

For the first three months of 2019, the Company’s operating activities used cash of $1,208,126, compared to the first quarter of 2019 which used cash of $6,900. For details of the operating cash flows refer to the condensed consolidated statements of cash flows in Part I – Financial Information.

Investing Activities

Cash used in investing activities during the first three months of 2019 and 2018 was $829,507 and $14,341, respectively. During 2019, cash was used to purchase manufacturing equipment and for the acquisition of intellectual property..

Financing Activities

During the three months ended March 31, 2019, we received proceeds of $2,224,480 from the sale of common stock and $200,000 as an advance from a shareholder. We paid $100,000 on short-term notes payable.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require the more significant judgments and estimates in the preparation of financial statements, including the following:

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The most significant estimates and assumptions relate to revenue recognition and, accounts receivable valuations, investment valuations, inventory valuations, goodwill valuation, stock-based compensation valuations and accounting for income taxes. Actual amounts could differ significantly from these estimates.

Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, prepaid expenses, payables and accrued expenses. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. We consider the carrying values of our financial instruments in the consolidated financial statements to approximate fair value, due to their short-term nature.

Revenue Recognition

The Company adopted ASU 2014-09, “Revenue from Contracts with Customers” on January 1, 2018, using the modified retrospective method, which did not have a material impact on the timing and amount of product revenues.

The new revenue recognition standard prescribes a five-step model that focuses on transfer of control and entitlement to payment when determining the amount of revenue to be recognized. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company generates revenues from the sale of products. The product is invoiced, and the revenue is recognized upon shipment and once transfer of risk has passed to the customer, which is the point at which the Company has satisfied its performance obligation.

The Company’s revenues accounted for under ASC 606 do not require significant estimates or judgements based on the nature of the Company’s revenue. The company’s contracts do not include multiple performance obligations or variable consideration.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is provided for using straight-line methods over the estimated useful lives of the respective assets.

Leases

Effective January 1, 2019, the Company adopted the requirements of FASB ASU 2016-02, Leases (Topic 842) which defines a lease as any contract that conveys the right to use a specific asset for a period of time in exchange for consideration. Leases are classified as a finance lease, formerly called a capital lease, if any of the following criteria are met:

For any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases. As of March 31, 2019, the Company has one finance lease and one operating lease.

Under the new guidance, both finance and operating leases are reflected on the balance sheet as lease or “right-of -use” assets and lease liabilities. Further note that under previous guidance, operating leases (non-capital leases) were not required to be recorded as an asset on the balance sheet.

There are some exceptions, which the Company has elected in its accounting policies. For leases with terms of twelve months or less, or below the Company’s general capitalization policy threshold, the Company elects an accounting policy to not recognize lease assets and lease liabilities for all asset classes. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term.

The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain to be exercised. Certain leases contain non-lease components, such as common area maintenance, which are generally accounted for separately. In general, the Company will assess if non-lease components are fixed and determinable, or variable, when determining if the component should be included in the lease liability. For purposes of calculating the present value of the lease obligations, the Company utilizes the implicit interest rate within the lease agreement when known and/or determinable, and otherwise utilizes its incremental borrowing rate at the time of the lease agreement.

As permitted under ASU 2018-11 the Company elected the optional transition method to adopt the new leases standard. Under this new transition method, the Company initially applied the new leases standard at the adoption date of January 1, 2019 and would have recognized a cumulative -effect adjustment, if appropriate, to the opening balance of retained earnings in the period of adoption. No cumulative-effect adjustment was recognized. The Company’s reporting for the comparative periods prior to 2019 in the financial statements will be presented in accordance with the existing GAAP in effect for 2018 and earlier (ASC Topic 840, Leases ).

The impact of the adoption of this new standard resulted in an increase to the Company’s operating lease assets and liabilities on January 1, 2019 of approximately $800,000. The implementation did not have a material impact on our condensed consolidated statements of income and statements of cash flows.

Valuation of Long-Lived Assets

We periodically evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset were less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value.

Derivatives

The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion or exercise of a convertible note containing an embedded derivative instrument, the instrument is marked to fair value at the conversion date and that fair value is reclassified to equity. The shares issued upon conversion of the note are recorded at their fair value with gain or loss recognition as applicable.

Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4).

Recent Accounting Pronouncements

(See “Recently Issued Accounting Pronouncements” in Note 2 of Notes to the Condensed Consolidated Financial Statements.)

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Smaller reporting companies are not required to provide the information required by this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s President, Chief Financial Officer, Secretary, Treasurer and Director, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure for the reasons discussed below.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during the three month period ending March 31, 2019 or in other factors that could significantly affect these controls, that materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company may become involved in litigation relating to claims arising out of its operations in the normal course of business. To the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on the Company.

Item 1A. Risk Factors

Smaller reporting companies are not required to provide the information required by this item.

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

Unregistered Securities

From January 2, 2017 to present, we offered and sold the securities below which were not registered under the Securities Act of 1933, as amended. None of the issuances involved underwriters, underwriting discounts or commissions. We relied upon Sections 4(2) of the Securities Act, and Rule 506(b) of the Securities Act of 1933, as amended for the offer and sale of the securities. We believed these exemptions were available because:

On January 2, 2017, we issued 50,000 shares to Patagonia Global Trading, a Florida corporation, for services rendered. We valued these shares at $.25 per share or an aggregate of $12,500.00.

On January 3, 2017, we sold 75,000 units to James Laurain for the aggregate price of $7,500 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 3, 2019.

On January 3, 2017, we sold 195,000 units to Jerry Thompson for the aggregate price of $19,500 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 3, 2019.

On January 4, 2017, Jerry O’Leary converted $25,000 due under a promissory note into 100,000 of our common shares at the price of $.25 per share. On February 23, 2017, we issued 25,000 shares of our common stock to Jerry O’Leary in exchange for $5,000 for the exercise of the 25,000 options.

On January 4, 2017, we sold 500,000 units to Jerry O’Leary for the aggregate price of $50,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 4, 2019.

On January 4, 2017, William Ferri converted the principal and accrued interest due in the amount of $275,000 into our common shares at the price of $.25 per share or an aggregate of 1,100,000 shares. On May 12, 2017, Mr. Ferri exercised the 250,000 options at an exercise price of $.20 per share or an aggregate of $50,000.

On January 4, 2017, Craig Heatherington converted principal and accrued interest due in the amount of $882,235 pursuant to notes issued on June 7, 2013, August 26, 2013, March 26, 2014 and June 23, 2014 into our common shares at the price of $.25 per share or an aggregate of 3,528,940 shares.

On January 4, 2017, Michael Farr converted the amount of $65,000 under a promissory note into 300,000 our common shares.

On January 4, 2017, Jerry Thompson converted principal and accrued interest outstanding under a $15,000 promissory note into 61,368 common shares.

On January 4, 2017, Neil Catania, our Vice-President converted principal and accrued interest due in the amount of $841,750 pursuant to a November 15, 2012 and July 26, 2016 convertible notes and a December 31, 2013 line of credit into our common shares at the price of $.25 per share or an aggregate of 3,367,000 shares.

On January 4, 2017, John Hampton converted principal and accrued interest due in the aggregate amount of $147,583 pursuant to August 27, 2014 and October 3, 2014 convertible notes into our common shares at the price of $.25 per share or an aggregate of 590,332 shares.

On January 4, 2017, Michael Smyth converted principal and accrued interest due in the amount of $70,680 pursuant to a November 15, 2012 convertible note into our common shares at the price of $.25 per share or an aggregate of 282,720 shares.

On January 4, 2017, Donald Brennick converted principal and accrued interest due in the amount of $28,395 pursuant to an August 26, 2015 convertible note into our common shares at the price of $.10 per share or an aggregate of 283,950 shares.

On January 5, 2017, Richard Scott Lohan converted the principal due under a promissory note in the amount of $27,000 into 270,000 shares of our common stock and accrued interest of $11,700 into 117,000 common shares at the price of $.10 per share. On January 5, 2017, we sold 243,000 shares to Richard Scott Lohan for the aggregate price of $12,000 or $.05 per share.

Richard Scott Lohan was issued 700,000 common shares instead of 70,000 shares in conjunction with the exercise of June 22, 2016 cashless warrants. Mr. Lohan elected to convert the June 22, 2016 promissory note and accrued interest for 387,000 common shares and pay $12,000 in cash for the remaining 243,000 common shares of the 630,000 over-issuance instead of returning those shares.

On January 6, 2017, we sold 1,300,000 units to FMG Holdings LLC, a Florida limited liability company controlled by Michael Farr, for the aggregate price of $130,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 6, 2019.

On January 6, 2017, we sold 500,000 units to Jeff Luccesi for the aggregate price of $50,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 6, 2019.

On January 6, 2017, we sold 300,000 units to STF Partners, LP, a New York limited partnership controlled by Sharyn Frankel, for the aggregate price of $30,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $0.50 which expired on January 6, 2019.

On January 6, 2017, we sold 200,000 units to Breadfruit Tree Inc., a Florida corporation, doing business as NF Skin, our distributor, and controlled by F. Bruce Hutson, for the aggregate price of $20,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 6, 2019.

On January 7, 2017, we sold 100,000 units to Leon English for the aggregate price of $10,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 7, 2019.

On January 9, 2017, we sold 250,000 units to Gordon Langston for the aggregate price of $25,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 9, 2019.

On January 9, 2017, we sold 405,000 units to William Rodriguez for the aggregate price of $40,500 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 9, 2019.

On January 9, 2017, we sold 300,000 units to Davis Pallen for the aggregate price of $30,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 9, 2019.

On January 9, 2017, we sold 1,500,000 units to Forage Complete LLC, an Idaho limited liability company controlled by Cody Jensen, for the aggregate price of $150,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 9, 2019.

On January 11, 2017, we sold 500,000 units to Paul & Cheryl Botts for the aggregate price of $50,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 11, 2019.

On January 17, 2017, we sold 200,000 units to William Rodriguez for the aggregate price of $20,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 17, 2019.

On January 17, 2017, we issued 100,000 shares to Hamilton & Associates Law Group a Florida law firm controlled by Brenda Hamilton, Esq., for services rendered. We valued these shares at an aggregate $.10 per share or an aggregate of $10,000.00.

On January 20, 2017, we sold 150,000 units to John Berning for the aggregate price of $15,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on January 20, 2019.

On January 30, 2017, we issued 250,000 shares to Bernadine Cawley for services rendered to us. We valued these shares at $.40 per share or an aggregate of $100,000.00.

On January 30, 2017, we issued 400,000 shares to Anthony Procelli, for services rendered. We valued these shares at $.40 per share or an aggregate of $160,000.00.

On January 30, 2017, we issued 50,000 shares to Patrick Kilcooley, for services rendered. We valued these shares at $.40 per share or an aggregate of $20,000.00.

On January 30, 2017, we issued 300,000 shares to Daniel Ryan, for services rendered. We valued these shares at $.40 per share or an aggregate of $120,000.00.

On February 1, 2017, we issued 50,000 shares to Sylvan Eudes, for services rendered. We valued these shares at $.12 per share or an aggregate of $6,000.00.

On February 23, 2017, we sold 41,666 units to Patricia Gleason for the aggregate price of $25,000 or $.60 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on February 23, 2019.

On February 23, 2017, we sold 83,333 units to David Corcoran for the aggregate price of $50,000 or $.60 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on February 23, 2019.

On March 3, 2017, we issued 7,220,585 shares to Edgar Ward, CEO of the Company, for services rendered. We valued these shares at $1.45 per share or an aggregate of $10,453,315. On November 27, 2017, we issued 6,674,837 shares to Edgar Ward, our Chief Executive Officer, President, Director and Founder of the Company, for services rendered. We valued these shares at $1.27 per share or an aggregate of $8,464,463.

On March 23, 2017, we sold 114,286 units to Barbara Ludwig for the aggregate price of $40,000 or $.10 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 which expired on March 23, 2019.

On April 10, 2017, we issued 250,000 shares of our common stock to Michael R. Anderson for services rendered. We valued these shares at $.69 per share or an aggregate of $172,500.00.

On April 24, 2017, we sold 500,000 units to Gregory Ross for the aggregate price of $100,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until April 24, 2019.

On May 10, 2017, we sold 375,000 units to Bernadine Cawley for the aggregate price of $75,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $0.50 at any time until May 10, 2019.

On May 17, 2017, we sold 200,000 units to Forage Complete LLC, an Idaho limited liability company controlled by Cory Jenkins, for the aggregate price of $40,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until May 17, 2019.

On May 18, 2017, we sold 150,000 units to FMG Holdings LLC, a Florida limited liability company controlled by Michael Farr, for the aggregate price of $30,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until May 18, 2019.

On May 21, 2017, we sold 50,000 units to James Rutledge for the aggregate price of $10,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until May 21, 2019.

On May 24, 2017, we sold 575,000 units to EW Strategies LLC, a Georgia limited liability company controlled by Greg Schantz, for the aggregate price of $115,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until May 24, 2019.

On July 7, 2017, we sold 250,000 units to Wolbers Family Trust, a trust controlled by Jennifer Wolbers, for the aggregate price of $50,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $0.50 at any time until July 7, 2019.

On July 17, 2017, we issued 100,000 shares to Kenneth Duchin, for services rendered. We valued these shares at $.80 per share or an aggregate of $80,000.00.

On July 19, 2017, we sold 150,000 units to Peter Mazza for the aggregate price of $30,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until July 19, 2019.

On July 28, 2017, we sold 100,000 units to FMG Holdings LLC, a Florida limited liability company controlled by Michael Farr, for the aggregate price of $20,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until July 28, 2019.

On July 28, 2017, we sold 100,000 units to Forage Complete LLC for the aggregate price of $20,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until July 28, 2019.

On August 1, 2017, we sold 50,000 units to David Dickman for the aggregate price of $10,000 or $.20 per unit. Each unit consists of one (1) share of common stock and one (1) warrant to purchase one (1) share of common stock at the price of $.50 at any time until August 1, 2019.

On December 17, 2017, we issued 500,000 shares Hongxiang Hui for services rendered to us. We valued these shares at $.15 and $.10 per share.

On January 5, 2018, February 26, 2018, April 11, 2018, April 20, 2018 and June 2, 2018, we issued 43,759, 125,400, 51,700, 147,600 and 700,000 shares of our common stock to Hamilton & Associates Law Group, P.A. for services rendered which we valued these shares at $.30, $.29, $.18, $.245 and $.20 per share, respectively.

On January 23, 2018, we issued 200,000 common shares to Randy Avon for services rendered to us. We valued these shares at $.21 per share or an aggregate of $41,446.

On January 23, 2018, we issued 150,000 common shares to Daniel Slane for services rendered to us. We valued these shares at $.21 per share or an aggregate of $31,085.

On January 23, 2018, we issued 100,000 common shares to Michel Lohan for services rendered to us. We valued these shares at $.4762 per share or an aggregate of $47,618.

On January 23, 2018, we issued 350,000 shares David Zirulnikoff for services rendered to us. We valued these shares at $.26 per share or an aggregate of $89,374.

On January 23, 2018, we issued 200,000 common shares to Ronald Silver for services rendered to us. We valued these shares at $.21per share or an aggregate of $41,446.

On February 15, 2018, we issued 2,000,000 shares to Hall Global LLC, a limited liability controlled by Michael Anderson for equipment provided to us. We valued these shares at $.2846 per share or an aggregate of $569,200. Hall Global LLC returned the 2,000,000 shares to us for cancellation on November 1, 2018 pursuant to a settlement agreement dated September 7, 2018.

On February 15, 2018, we issued 500,000 common shares to Hongxiang Hui for services rendered to us. We valued these shares at $.28 per share or an aggregate of $140,000.

On May 11, 2018, we issued 250,000 common shares to Tony Hunter for services rendered to us. We valued these shares at $.19 per share or an aggregate of $54,750.

On June 1, 2018, we issued 500,000 common shares to Lyons Capital for services rendered to us. We valued these shares at $.20 per share or an aggregate of $100,000.

On July 25, 2018, we issued 62,500 common shares to Mary Ellen Mahon for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On July 25, 2018, we issued 62,500 common shares to Anthony Centorani for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On July 25, 2018, we issued 250,000 common shares to Michael P. Dulak for services rendered to us. We valued these shares at $.16 per share or an aggregate of $40,000.

On July 25, 2018, we issued 62,500 common shares to Robert Patrick Scott for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On July 25, 2018, we entered into an agreement with Breadfruit Tree DBA NFSkin, a Florida corporation where by we agreed to pay them 15% of their net sales of our product. The 15% is payable in up to 3,000,000 shares of our common stock which the number of shares will be calculated based on a value of $.20 per share. On September 10, 2018, we issued 514,549 of the shares issuable under the agreement.

On July 31, 2018, we entered into an agreement as amended March 10, 2019, with New Leaf Assets, LLC, a Delaware limited liability company, wherein NewLeaf invested the sums of $250,000, $130,000 and $1,000,000 in our securities on July 31, 2018, August 31, 2018 and March 15, 2019, respectively. On July 31, 2018, NewLeaf was granted 2,000,0000 shares on the Company’s common stock and warrants to purchase 625,000 shares of the Company’s common stock at the price of $.20 per share at any time for a period of three (3) years. On August 31, 2018 NewLeaf received warrants to purchase 325,000 shares of the Company’s common stock at the price of $.20 per share at any time for a period of three (3) years. On March 15, 2019, NewLeaf was issued 13,764,705 common shares, granted warrants to purchase an additional 10 million common shares at the price of $.20 per share at anytime until March 4, 2022 and an option to purchase an aggregate of 7,647,058 common shares at the aggregate price of $650,000 at any time prior to April 8, 2019. As a result, NewLeaf holds an aggregate of 15,764,705 of the Company’s common shares at an average price of $.0726 per share, warrants to purchase an additional 10,950,000 common shares and an option to purchase an additional 7,647,058 common shares for an aggregate price of $650,000 at any time prior to April 8, 2019.

On August 24, 2018, we issued 200,000 shares of our common stock to Barrington Jenoure for an aggregate price of $33,332 or the per share price of $.167 per share.

On August 28, 2018, we issued 60,000 shares of our common stock to Barrington Jenoure for an aggregate price of $10,000 or the per share price of $.167 per share.

On September 20, 2018, we issued 62,000 common shares to John Gross for services rendered to us. We valued these shares at $.20 per share or an aggregate of $12,400.

On September 20, 2018, we issued 26,000 common shares to Ann Mahfood for services rendered to us. We valued these shares at $.20 per share or an aggregate of $5,200.

On October 11, 2018, we issued 250,000 common shares to Nicholas Ward, the son of our Chief Executive Officer, President and Director for services rendered to us. We valued these shares at $.196 per share or an aggregate of $49,000.

On October 11, 2018, we entered into a convertible note agreement in the principal amount of $37,500 with FMG Holding LLC, a Florida limited liability company controlled by Michael Farr. The note bears interest at the rate of 10% and has a maturity date of November 30, 2018. The principal and interest due under the note are convertible into our common shares at the rate of $.20 in whole or in part at any time until maturity. Mr. Farr received warrants to purchase 1,000,000 of our common shares at the price of $.21 per share at any time until October 31, 2021 as additional consideration for the note.

On October 11, 2018, we entered into a convertible note agreement in the principal amount of $37,500 with Forage Complete, LLC, an Idaho limited liability company controlled by Cory Jenkins. The note bears interest at the rate of 10% and has a maturity date of November 30, 2018. The principal and interest due under the note are convertible into our common shares at the rate of $.20 in whole or in part at any time until maturity. Mr. Farr received warrants to purchase 1,000,000 of our common shares at the price of $.21 per share at any time until October 31, 2021 as additional consideration for the note..

On October 17, 2018, we issued 100,000 common shares to Michael P. Dulak for services rendered to us. We valued these shares at $ .19 per share or an aggregate of $19,000.

On October 17, 2018, we issued 62,500 common shares to Mary Ellen Mahon for services rendered to us. We valued these shares at $.19 per share or an aggregate of $11,875.

On October 17, 2018, we issued 62,500 common shares to Robert Patrick Scott for services rendered to us. We valued these shares at $.19 per share or an aggregate of $11,875.

On October 17, 2018, we issued 62,500 common shares to Anthony Centorani for services rendered to us. We valued these shares at $ .19 per share or an aggregate of $11,875.

On November 7, 2018, we entered into a convertible note agreement, as amended, on March 20, 2019 with Paul R. Botts, in the principal amount of $25,000. The note bears interest at the rate of 10% and has a maturity date of April 22, 2019. The principal and interest due under the note are convertible into our common shares at the rate of $.20 in whole or in part at any time until maturity. On March 19, 2019, we issued 100,000 common shares to Mr. Botts as additional consideration for the amended note.

On December 21, 2018, we issued 848,484 common shares to FMG Holdings, LLC a Florida limited liability company controlled by Michael Farr, for services rendered to us. We valued these shares at $ .19 per share or an aggregate of $161,127.11.

On December 21, 2018, we issued 848,484 common shares to Forage Complete, LLC, an Idaho limited liability company controlled by Cory Jenkins, for services rendered to us. We valued these shares at $.19 per share or an aggregate of $161,127.11.

On December 21, 2018, we issued 5,294,117 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $449,479.50

On December 21, 2018, we issued 1,176,470 common shares to Dennis Poland for a price of $.085 per share or an aggregate of $99,882.35.

On December 21, 2018, we issued 294,117 common shares to Barrington Jenoure for a price of $.085 per share or an aggregate of $24,970.59.

On December 24, 2018, we issued 250,000 common shares to SunX Analytical, LLC, a Maryland limited liability company controlled by Barry Pritchard, for services rendered to us. We valued these shares at $.170 per share or an aggregate of $42,475.

On January 3, 2019, we issued 120,004 common shares to Joshua J. Gooden for a price of $.167 per share or an aggregate of $20,000.

On January 29, 2019, we issued 62,500 common shares to Robert Patrick Scott for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On January 29, 2019, we issued 62,500 common shares to Anthony Centorani for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On January 29, 2019, we issued 62,500 common shares to Liska Rodriguez for services rendered to us. We valued these shares at $ .16 per share or an aggregate of $10,000.

On January 29, 2019, we issued 62,500 common shares to John Gross for services rendered to us. We valued these shares at $ .16 per share or an aggregate of $10,000.

On January 29, 2019, we issued 62,500 common shares to Esco Bell for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On January 29, 2019, we issued 62,500 common shares to Mary Ellen Mahon for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On January 30, 2019, we issued 62,500 common shares to Lawrence Muchnick for services rendered to us. We valued these shares at $ .16 per share or an aggregate of $10,000.

On January 30, 2019, we issued 62,500 common shares to Michael John Deblasis for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On January 31, 2019, we issued 321,281 common shares to Hamilton & Associates Law Group for services rendered to us. We valued these shares at $.18 per share or an aggregate of $57,830.58.

On February 1, 2019, we issued 7,647,059 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $650,000. On February 8, 2019, we issued 2,941,176 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $650,000. On March 12, 2019, we issued 300,000 common shares to Kahn Family Limited PT II for a price of $.085 per share or an aggregate of $25,550.

On February 4, 2019, we issued 62,500 common shares to Karina Rodriguez for services rendered to us. We valued these shares at $.16 per share or an aggregate of $10,000.

On February 8, 2019, we issued 250,000 common shares to Sunx Analytical, LLC a Maryland Company controlled by Barry Pritchard, for services rendered to us. We valued these shares at $.20 per share or an aggregate of $50,000.

On February 14, 2019, we issued 117,647 common shares to Herbert & Rosalind Chasman Family Trust for a price of $.085 per share or an aggregate of $10,000.

On February 14, 2019, we issued 235,294 common shares to Deborah Axelrod for a price of $.085 per share or an aggregate of $20,000.

On February 21, 2019, we issued 117,647 common shares to Stephan Golding for a price of $.085 per share or an aggregate of $10,000.

On March 7, 2019, we issued 62,500 common shares to Austin Hunter for services rendered to us. We valued these shares at $.170 per share or an aggregate of $10,625.

On March 12, 2019, we issued 1,200,000 common shares to Bruce Burley for the purchase of certain assets. We value these shares at a price of $.17 per share or an aggregate of $204,000.

On March 12, 2019, we issued 300,000 common shares to Robert E. Borland Jr for the purchase of certain assets. We value these shares at a price of $.17 per share or an aggregate of $51,000.

On March 15, 2019, we issued 2,499,765 common shares to Orange Pumpkin Trust for a price of $.085 per share or an aggregate of $212,480.

On March 19, 2019, we issued 176,470 common shares to Antonio Morgado for a price of $.085 per share or an aggregate of $15,000.

On March 22, 2019, we issued 117,647 common shares to Scott Mast for a price of $.085 per share or an aggregate of $10,000.

On March 22, 2019, we issued 117,647 common shares to Charles Mast for a price of $.085 per share or an aggregate of $10,000.

On April 1, 2019, we issued 21,882 common shares to Paul R. Hemmes for services rendered to us. We valued these shares at $.186 per share or an aggregate of $4,070.00.

On April 2, 2019, we issued 200,000 common shares to Carmen Cortes for a price of $.085 per share or an aggregate of $17,000.

On April 2, 2019, we issued 2,389,470 common shares to Kahn Family Limited PT II in exchange for the aggregate principal and interest of $203,104 outstanding under a promissory note.

On April 9, 2019, we issued 117,647 common shares to Gerald Hersey for a price of $.085 per share or an aggregate of $10,000.

On April 16, 2019, we issued 117,647 common shares to Gloria G. Ruiz for a price of $.085 per share or an aggregate of $10,000.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

___________

* 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, there unto duly authorized.