Right On Brands, Inc. - Annual Report: 2017 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the Fiscal Year Ended March 31, 2017

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from ____________ to ____________

Commission File Number: 000-55704

(424) 259-3521

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Act:

Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

Common stock, par value of $0.001

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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 past 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 x No o

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. Approximately $17,698,831 as of September 30, 2016, using an average of bid and asked prices of $0.70 per share.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 52,991,369 as of June 28, 2017.

TABLE OF CONTENTS

PART I

Item 1. Business

Our primary line of business, conducted through our wholly-owned subsidiary, Humbly Hemp, Inc., offers a line of energy / snack bars featuring all-natural hemp and other healthy ingredients. We will provide high quality and affordable hemp products (focusing on snacks) that are packed with protein, omegas, and free of all major allergens. Our initial product line will feature healthy snacks, highlighting hemps nutritional benefits, and tapping into the nutritious snacking boom. We are currently creating a 3 flavor line of energy/snack bars. We are also developing a line of “Hemp Hunks” hemp seed bar coated with high quality dark chocolate, and another coated in yogurt. We will then move into; artisan hemp milks, protein drinks and powders, body care, flavored hemp seeds, hemp granola/cereal, hemp milks, etc.

In our business model, we will source quality ingredients, and reach out to private label manufactures that already possess the infrastructure to make these products, and to provide them at an affordable price, through a seamless online marketplace, and through regular distribution channels like Whole Foods, Sprouts, etc. We are already working on a partnership in with Statewide Distribution, in Los Angeles to get our products in up to 3,000 stores throughout southern California.

Through constant education and promotion, we plan make hemp a part of everyone’s lives. Our unique branding will appeal to every demographic and our commitment to hemp education will grow our market, creating an even bigger category in the U.S. Our goal is to highlight hemp’s versatility through a wide range of nutritional products.

Product Line

Our initial product line will consist of a set of three nutrition bars. We believe this type of product is a perfect start for Humbly Hemp. It will highlight all of the nutritional benefits of hemp, and from the market research we have done, nutrition bars are in huge demand right now.

Humbly Hemp Snack Bar: (Launched June 10^th 2017)

The Humbly Hemp Bar is a superfood snack bar that is the first of its kind. It is powered with Hemp Seeds, Hemp Protein, and other amazing superfoods.

Flavors:

We launched with three initial flavors:

ENDO Water: (Launching Summer 2017)

ENDO Water will be a one of a kind Wellness drink. Structured Water, CBSs, and Omegas are some of the biggest wants in the health and wellness market. ENDO Water will be a herbal flavorered water type drink targeted to increase the performance of the Endo-Cannabanoid System. It will be lightly flavored, almost an essence, and infused with CBDs (Cannabidiol) and Omegas. We will also be featuring Ojai Energetics “Blast Cap” of the highest quality CBD on the market. I think this is going to create a market of its own in wellness drinks. CBD IS NON PHSYCOACTIVE and is legal in all 50 states to consume and sell.

The endocannabinoid system (ECS) is a group of endogenous cannabinoid receptors located in the mammalian brain and throughout the central and peripheral nervous systems, consisting of neuromodulatory lipids and their receptors.

The name ENDO Water is in process of being trademarked. On June 27, 2017, we formed a wholly-owned subsidiary, Endo Water, Inc., to conduct our planned operations in this product sector.

On May 31, 2017, we entered into a venture for the development of a commercial bottled water operation near Browning, Montana. The new venture will be operated through Spring Hill Water Company, LLC, a Nevada limited liability company (“Spring Hill”). Spring Hill is 49% owned by our subsidiary corporation, Humble Water Company, and 51% owned by Doore, LLC. Doore, LLC, which will serve as the Manager of Spring Hill, has contributed the land and water source to be used in the new operation through a Land & Water Lease Agreement under which Spring Hill will have the use of 2 acres of land and no less than 5 acre-feet of water for an initial term of 25 years and at a lease rate of $1 per year. Through Humble Water Company, our initial capital contribution to Spring Hill will be $100,000 to be used in commencing operations. In addition, we have committed to provide additional capital to be used for a bottling facility and equipment, in an amount up to $530,000, within the next 3 years. Should we fail to provide this additional capital within the next 3 years, our ownership percentage in Spring Hill will be reduced from 49% to 20%. Although we hold a minority ownership percentage in Spring Hill, we will have voting control over the company with 75% of the voting membership units. Further, 100% of the losses, expenditures, and deductions from Spring Hill will be allocated to our subsidiary, Humble Water Company.

Handfuls – (Launching in the next 6 months)

Handfuls are a uniqure new approach to snacking. They are sinlge serve packets of snackable superfoods that amount to a handful. They can be packed away for camping or any activity and will fit anywhere in stores. The beginning line will be roasted hemp seeds. Then we will create hemp insfused granola versions.

Hemp Hunks (In R&D) will be ready before the end of the year.

This product will be a package of crispy and thin hemp seed bars (Similar to Bark Thins). They will come in a variety of flavors, with the base always being high-quality hemp seeds and chocolate, with different superfood mixed in. The name Hemp Hunks is in the process of being trademarked

Humbly Hemp Milk Line (In R&D)

Hemp Protein Power & RTD Protein Drink (In R&D)

We are working on our Protein blend right now that will feature Hemp protein as the main ingredient, and will then mix that and our Hemp Milks to create fantastic RTD protein drinks.

Target Market

Health and wellness is becoming a part of everyone’s lives, and eating right is usually the first step. What we can do to test the market for a product like this, is to take a look at the types of consumer that would be looking for our solution. The number of diets trends in America continues to grow, and hemp is the perfect solution for many of them.

Global Industries Analyst Report (GIA), states that the global market for foods developed for individuals with allergies or intolerances is expected to grow to 24.8 billion by 2020. Food allergies and intolerances are a growing public health problem causing higher demand of products that meet special dietary requirements. The biggest concerns:

Hemp is not only attractive to those with food allergens; individuals who follow a strict diet for any reason will be extremely attracted to hemp. Some of the more popular lifestyle diets include:

Hemp based foods can be consumed by anyone in these segments. In 2014, the Hemp Industries Association (HIA), a non-profit trade association, released final estimates of the size of the U.S. retail market for hemp products. The estimated total retail value of hemp products sold in the U.S. in 2014 was at least $620 million. More importantly, the total retail sales of hemp food and body care products in the United States is estimated at $200 million.

Everyone can consume our hemp-based foods, but it is never smart to market a product that way. In order to pinpoint our ideal consumer, we have used research done by IRI and SPINS. In this study they broke down this new category of health CPG consumers into several segments. Those categories called “True Believers”, and “Enlightened Environmentalists” are the two main shopper segments for organic food. They make up 46% of organic food purchases. They each make up 9% of the shoppers, so 18% together.

True Believers: Their main concern is to keep a healthy body. They buy only organic, they try new things, are college educated, and have a median income of $65,000.

Enlightened Environmentalists: They care about the environment and buy products and live in a way that doesn’t hurt the environment. They specifically shop at places that carry mostly organic and environmentally friendly products; most of them have graduate school degrees and average 57 years of age. They have a median income of $57,000.

By taking these two groups we can highlight some main characteristics of our target consumer:

Competition

In the market we are going to occupy, we face four major competitors:

Our Potential Advantages

Our new brand offers a new take on hemp products. While these are very successful brands, they do not stray away from the same old health food positioning. Humbly Hemp will be approachable by every demographic. We will bring hemp into the daily routine of the “everyman”. Our branding and market position will be far more exciting than any other competitor. Humbly Hemp will be a “Lifestyle” brand. By aligning ourselves with hemp producers and manufactures we will be able to focus more on marketing and promotion side of the business. We will not have to worry about the overhead of a manufacturing facility. Our online store will allow us to reach every household in America at a competitive price, and our private label approach will give us the ability to offer a wide range of product lines. Our connections within the hemp, and CPG industry will create the opportunity for co-branding. We will be an early mover in this category.

Marketing, Sales, and Distribution Strategies

Marketing Plan

Growth Hacking: In the startup phase, we will utilize growth hacking to launch our brand. We will promote through all social media channels to build brand awareness for our initial products. The first of these attempts will be sending products to popular Bloggers, Vlogers, and social media celebrities, for promotion on their channels. These techniques cost very little, and are extremely effective for Internet businesses. We will also use Google Ad words to push the product through online advertisements and SEO.

Online Marketing: We will tailor an online marketing campaign to attract the two market segments mentioned earlier in the target market segment. This position will assure that we are promoting to the most viable group of consumers.

Instagram: We will take a strategy similar to that of Herschel Supply Co. on Instagram. They have been doing the same Instagram campaign since day one. #Welltraveled is the theme of their profile. They feature beautiful travel pictures from all over the world. This fits with the bag companies theme of beautiful modern travel bags and accessories. Our campaign will revolver around #LiveHumbly our trademark slogan. We will only show beautifully edits photography shots of an outstretched hand holding different flavors of our bars, in different cool spots, (Beaches, Gyms, Coffee Shops, Offices). This will follow up that our brand is meant to be enjoyed anywhere anytime. We will post one picture every day, year round.

Twitter: The Key to twitter is communication. This will be the key to success on this social channel. The best twitter accounts today are ones that do not broadcast to the consumer, but engage the consumer with interesting content in the form of:

Facebook: Facebook has gone from being a publishing channel for brands, to now a landing page of brand identity. We will utilize Facebook as a cornerstone of our online identity. We will be careful about being “too promotional” and we will be aiming for content that people will share. To achieve this we will:

Social Contests: We will have Quarterly Social Media Channel contests that span from our website to every single channel we have. These will range from, Photo contest, video contests, cooking contests, etc. These types of contests really boosts followership, sharing and all drive traffic directly back to the landing page. They are relatively cheap and the prizes we will give away consist of actual product, lifestyle related products, and company marketing materials.

Analysis and Execution: We will use Hootsuite to posts, and also analyze all of the social media channels. They are the industry leaders in the field, and it is an application that we have previous knowledge in.

Guerrilla Marketing: Once we have scaled, and doing business with the big box retailers, we will use more traditional marketing techniques including; in store promotions, trade shows, festival, and Brand Ambassador Programs. We will begin this during the second Quarter of our initial year by hiring two college students located in Los Angeles. They will assist in Social Media Content Creation, Event Marketing, and In Store Promotions in the Los Angeles area. We will quickly expand this program and have 2 students in each state we launch into. This will allow us to get our key demographic engaged in the products on campus, creating lifelong fans of Humbly Hemp.

Consumer Outreach & Education: The most important factor in the marketing of our products will be consumer education on the benefits of hemp. We will use a page in our website to promote this, and in our growth we will focus on this more and more. In the future we will work on doing some co-branding with Hemp associations, Non Profit Groups that share our goals in keeping people and our planet healthy.

Sales Plan

Retail Distribution: Our partnership with Statewide distribution will give us a leg up on the competition out of the gate. The ability to get our products into so many stores in Southern California is a huge win for Humbly Hemp. We will focus on Southern California and scale our growth from there.

Online Sales: Our website will be extremely easy to use, and the process of making a purchase will be seamless. We are working with the best website designers to ensure that our marketplace is both beautiful and functional.

B2B Online Sales: The number of online health food stores and especially health food subscription boxes is growing every day. They are always looking for quality products to stock their stores and monthly boxes. We will be targeting them to feature all Humbly Hemp products.

Manufacturing and Distribution

We are party to a Consulting Agreement with Protein Squared, LLC dba Bar One (“Bar One”). Under the agreement, Bar One has been contracted to develop our Humbly Hemp Snack Bar and to handle fulfillment of our product orders through a third party manufacturer. Under the agreement, we will compensate Bar One for these services by paying a $0.03 commission to Bar One for each product unit produced for us. We are currently seeking arrangements with distributors for our products and do not have any distribution agreements in place at this time. Upon receipt of initial product samples from Bar One, we intend to actively market our Humbly Hemp Snack Bar to distributors.

Item 2. Properties

We lease our corporate headquarters at 11749 W. Pico Blvd. in Los Angeles, California for $2,800 per month under the terms of a Commercial Lease Agreement. Our initial lease period runs until February 28, 2018. The property is sufficient for our current business size.

Item 3. Legal Proceedings

We are not currently party to any material legal proceedings.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is quoted under the symbol “HLTK” on the OTCQB tier of the over-the-counter electronic quotation system operated by OTC Markets Group, Inc. The following tables set forth the range of high and low prices for our common stock for the each of the periods indicated as reported by the OTC Markets quotation system. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Fiscal Year Ended March 31, 2017

Fiscal Year Ended March 31, 2016

On June 28, 2017, the last sales price per share of our common stock was $0.51.

Penny Stock

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

Holders of Our Common Stock

As of June 28, 2017, we had 52,991,369 shares of our common stock issued and outstanding, held by 89 shareholders of record.

Dividends

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

Item 6. Selected Financial Data

A smaller reporting company is not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

During the year ended March 31, 2017, we generated revenue of $587. We incurred total operating expenses of $166,151, consisting of general and administrative expenses of $44,847, legal and professional fees of $46,722, executive compensation of $30,000, advertising and promotion costs of $24,582, and depreciation and amortization of $20,000. In addition, we incurred interest expense of $2,264 and a loss on extinguishment of debt in the amount of $2,770,451. The loss on extinguishment of debt reflects the issuance common stock in exchange for outstanding debt of $129,549. Our net loss for the year ended March 31, 2017 was $2,938,279.

By comparison, during the year ended March 31, 2016, we generated revenue of $16,060. We incurred total operating expenses of $66,990, consisting of general and administrative expenses of $12,046, legal and professional fees of $11,260, advertising and promotion costs of $23,684, and depreciation and amortization of $20,000. Our net loss for the year ended March 31, 2016 was $50.930.

Our expenses increased during the year ended March 31, 2017, as compared to the prior year, largely as a result of our new focus on the development and marketing of a new line of healthy hemp-based snack foods. As we continue with the development and marketing of our new health food and planned bottled water products, we expect that our expenses, as well as our revenues, will increase significantly over the current fiscal year.

Liquidity and Capital Resources

As of March 31, 2017, we had current assets in the amount of $167,764, consisting of cash in the amount of $130,787, prepaid expenses of $8,833, product inventory of $26,144, and a deposit of $2,000. As of March 31, 2017, we had current liabilities of $91,950, consisting of convertible debt in the amount of $68,000, accrued interest of $3,927, accrued executive compensation of $9,869, and accounts payable of $10,154.

In connection with our acquisition of the Humbly Hemp business, we assumed outstanding Convertible Promissory Notes issued by Humbly Hemp, and agreed that the notes shall be convertible to our common stock at the same prices, and on the same terms and conditions, as set forth therein. The Convertible Promissory Notes assumed were as follows:

Our ability to successfully execute our business plan is contingent upon us obtaining additional financing and/or upon realizing sales revenue sufficient to fund our ongoing expenses. Until we are able to sustain our ongoing operations through sales revenue, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Off Balance Sheet Arrangements

As of March 31, 2017 there were no off balance sheet arrangements.

Going Concern

We have experienced recurring losses from operations and had an accumulated deficit of $3,927,000 as of March 31, 2017. To date, we have not been able to produce sufficient sales to become cash flow positive and profitable on a consistent basis. The success of our business plan during the next 12 months and beyond will be contingent upon generating sufficient revenue to cover our costs of operations and/or upon obtaining additional financing. For these reasons, our auditor has raised substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that the following accounting policies currently fit this definition.

Inventory

Inventories are stated at the lower of cost (average cost) or market (net realizable value). Inventory consists of raw materials, work in process inventory and finished goods inventory of $26,144, $0 and $0, respectively.

Use of Estimates

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

Long-lived Assets

The Company’s long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360,” Property, Plant, and Equipment”, and FASB ASC Topic 205 “ Presentation of Financial Statements “. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through March 31, 2017 and 2016, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future.

Revenue Recognition

The Company expects to recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition”.

Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured.

Income Taxes

The Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In accordance with FASB ASC Topic 740, “Income Taxes,” the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. The Company accounts for income tax under the provisions of FASB ASC Topic 740, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Fair Value of Financial Instruments

The Company applies the provisions of accounting guidance, FASB Topic ASC 825 that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2017 and March 31, 2016 the fair value of cash and accounts payable, approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates.

Convertible Instruments

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

Recently Issued Accounting Pronouncements

Our management has considered all recent accounting pronouncements issued since the last audit of our financial statements. Our management believes that these recent pronouncements will not have a material effect on our financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements Required by Article 8 of Regulation S-X:

Audited Financial Statements:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

HealthTalk Live, Inc.

We have audited the accompanying balance sheets of HealthTalk Live, Inc. as of March 31, 2017 and the related statements of operations, stockholders’ equity (deficit), and cash flows for the year ended March 31, 2017. HealthTalk Live, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HealthTalk Live, Inc. as of March 31, 2017 and the results of its operations and its cash flows for the year ended March 31, 2017 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has minimal revenues, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ AMC Auditing

AMC Auditing

Las Vegas, Nevada

July 11, 2017

Report of Independent Registered Public Accounting Firm

Board of Directors of HealthTalk Live, Inc.

We have audited the accompanying balance sheet of HealthTalk Live, Inc. as of March 31, 2016, and the related statements of operations, stockholders’ equity, and cash flows for the year the ended. The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal controls over financial reporting. Our audit included consideration of internal controls over financials reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HealthTalk Live, Inc. as of March 31, 2016, and the results of its operations and their cash flows for the year ending March 31, 2016 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the accompanying financial statements, the Company has incurred continuing losses from operations not been profitable, a stockholders’ deficit of approximately $83,000 and has needed to rely on advances from its officers to operate, a sign indicating additional capital will be needed to advance the development of the Company’s services and products to the point at which they may become commercially viable. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts to the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

Glendale, California

July 15, 2016

HEALTHTALK LIVE, INC.

BALANCE SHEETS

See Accompanying Notes to Financial Statements.

HEALTHTALK LIVE, INC.

STATEMENTS OF OPERATIONS

See Accompanying Notes to Financial Statements.

HEALTHTALK LIVE, INC.

STATEMENT OF STOCKHOLDERS' DEFICIT

See Accompanying Notes to Financial Statements.

HEALTHTALK LIVE, INC.

STATEMENTS OF CASH FLOWS

See Accompanying Notes to Financial Statements.

HEALTHTALK LIVE, INC.

NOTES TO FINANCIAL STATEMENTS

1. BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Formation and Business Activity

HealthTalk Live, Inc. (the Company) was formed on April 1, 2011 in the State of Nevada and operations commenced immediately.

HealthTalk Live, Inc. was created to spread the importance of natural health and wellness throughout North America and the world. Since inception, the website HealthTalkLive.com has received visitors from North America, Canada, South America, Europe, Asia and Australia. With its soon-to-be-launched real-time interactive website, HealthTalkLive.com anticipates becoming one of the primary information websites available in the world. In partnership with naturopathic practitioners, dieticians and medical doctors, HealthTalkLive.com strives to provide healthy options for all, whether taking prescription drugs or preferring a total, natural health approach to well-being. Information is disseminated through the live chat forum, reference center, news, E-newsletters and email. This provides for a common sense approach to health and wellness, diet, exercise, cleanses and complete regimens, all created individually based upon each person’s unique requirements.

During the year ended March 31, 2017, the Company acquired Humbly Hemp, Inc. and now operates in two segments in accordance with accounting guidance Financial Accounting Standards Board (“FASB”) ASC Topic 280, Segment Reporting. Our Chief Executive Officer has been identified as the chief operating decision maker as defined by FASB ASC Topic 280.

Acquisition of Humbly Hemp, Inc.

Effective September 9, 2016, our former majority shareholders Johnie M. Yawn and Vicki L. Yawn transferred 22,800,000 of their shares of common stock to Daniel Crawford for a purchase price of $125,000 and pursuant to a Stock Purchase Agreement between the parties. The purchase price was paid by Mr. Crawford in the form of Secured Promissory Note (the “Note”) in favor of Dr. and Mrs. Yawn. The Note is due in full on or before December 9, 2016 and bears no interest except in case of default. The Note is secured, by a pledge of the shares purchased, under the terms of a Securities Pledge Agreement (the “Pledge”) between the parties. As a result of this transaction, a change in control of the company has occurred, and Mr. Crawford is the owner of approximately 70% of our issued and outstanding common stock. In connection with the change in control, Mr. Crawford was appointed as our new sole officer and director. In the event of Mr. Crawford’s future uncured default under the Note, Dr. and Mrs. Yawn would be entitled to foreclose on the shares purchased pursuant to the terms of the Pledge. There are no other arrangements known to the company, the operation of which may, at a subsequent date, result in a change in control of the registrant.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

On October 1, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Humbly Hemp, Inc., a private Nevada corporation (“Humbly Hemp”), and our subsidiary formed for the purposes of the transaction, Humble Merger Sub, Inc. (the “Merger Sub”). Pursuant to the Merger Agreement, Humbly Hemp merged with and into the Merger Sub, which resulted in Humbly Hemp becoming our wholly-owned subsidiary (the “Acquisition”). Humbly Hemp is a start-up company planning to offer a line of energy and snack bars featuring all-natural hemp and other healthy ingredients. Going forward, we intend to continue developing the business of Humbly Hemp, as well as our existing line of business. The sole officer, director, and controlling shareholder of Humbly Hemp was our own CEO and controlling shareholder, Daniel Crawford.

In addition, pursuant to the terms and conditions of the Merger Agreement:

Upon the closing of the share exchange with the Company and Humbly Hemp, Humbly Hemp will become a wholly owned subsidiary of the Company. The acquisition will be treated as a business combination. However, since Humbly Hemp was owned and controlled by Daniel Crawford, an officer and director of the Company, the assets will not be adjusted to fair value and will carry over as book value.

The Company may be subject to segment reporting in accordance with ASC 280-10 in future filings.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided by the straight-line method over the useful lives of the related assets, from three to five years.

The cost of building the Company’s website has been capitalized and amortized over a period of three years. Expenditures for minor enhancements and maintenance are expensed as incurred.

Inventory

Inventories are stated at the lower of cost (average cost) or market (net realizable value). Inventory consists of raw materials, work in process inventory and finished goods inventory of $26,144, $0 and $0, respectively.

Use of Estimates

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

Long-lived Assets

The Company’s long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360,” Property, Plant, and Equipment”, and FASB ASC Topic 205 “ Presentation of Financial Statements “. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through March 31, 2017 and 2016, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

The Company expects to recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition”.

Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured.

Income Taxes

The Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In accordance with FASB ASC Topic 740, “Income Taxes,” the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. The Company accounts for income tax under the provisions of FASB ASC Topic 740, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Fair Value of Financial Instruments

The Company applies the provisions of accounting guidance, FASB Topic ASC 825 that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2017 and March 31, 2016 the fair value of cash and accounts payable, approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments (continued)

Convertible Instruments

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

Recent Accounting Pronouncements

The Company has evaluated new accounting pronouncements that have been issued and are not yet effective for the Company and determined that there are no such pronouncements expected to have an impact on the Company’s future financial statements.

2. GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. For the year ended March 31, 2017, the Company had an accumulated deficit of approximately $3,297,000, had net losses of approximately $2,938,000, and net cash used in operating activities of approximately $172,000, with little revenue earned since inception, and a lack of operational history. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

2. GOING CONCERN (CONTINUED)

While the Company is attempting to generate greater revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. The Company has completely an acquisition in hopes to increase revenue and profitability. Management intends to raise additional funds by way of additional public and/or private offerings of its stock. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

3. PROPERTY AND EQUIPMENT

Depreciation and amortization expense for the years ended March 31, 2017 and 2016 were $20,000 and $20,000, respectively.

4. DUE TO OFFICERS

During the six months ended September 30, 2016, John and Vicki Yawn were repaid $3,050 and loaned the Company an additional $13,850, resulting in a net balance due them of $129,549. During September 2016, John and Vicki Yawn sold their debt of $129,549 to four noteholders and there was a remaining balance of $0 due to them as of September 30, 2016. (See Note 5)

5. CONVERTIBLE DEBT

During September 2016, the Company agreed to allow four unrelated noteholders holding a total of $129,549 in debt to convert into 5,000,000 shares of common stock which is a conversion rate of approximately $0.03 per share. There is no maturity date and no interest rate. The debt was acquired from John and Vicki Yawn.

During October 2016, the Company extinguished $129,549 of debt in exchange for 5,000,000 shares of newly issued common stock. A total of 4,200,000 shares were issued to three of the four noteholders. As of March 31, 2017, the remaining balance of 800,000 shares of common stock which is due to one noteholder is recorded in common stock payable at the fair value of the common stock of $464,000. The Company recorded a loss on extinguishment of debt of $2,770,451.

The Company acquired convertible debt from the acquisition of Humbly Hemp as described below.

On February 1, 2016, the Company issued a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 8% per annum and is due on January 31, 2017. This note is convertible at $0.01 per share and can be converted on or before the maturity date. The Company and lender mutually agreed to extend the maturity date of the note to March 10, 2017.

On February 8, 2016, the Company issued a convertible promissory note with an entity for $8,000. The unsecured note bears interest at 8% per annum and is due on February 7, 2017. This note is convertible at $0.02 per share and can be converted on or before the maturity date. The Company and lender mutually agreed to extend the maturity date of the note to March 10, 2017.

On April 11, 2016, the Company issued a convertible promissory note with an entity for $10,000. The unsecured note bears interest at 8% per annum and is due on February 7, 2017. This note is convertible at $0.01 per share and can be converted on or before the maturity date. The Company and lender mutually agreed to extend the maturity date of the note to March 10, 2017.

On July 7, 2016, the Company issued a convertible promissory note with an entity for $25,000. The unsecured note bears interest at 6% per annum and is due on January 7, 2017. This note is convertible at $0.10 per share and can be converted on or before the maturity date. The Company and lender mutually agreed to extend the maturity date of the note to April 30, 2017.

5. CONVERTIBLE DEBT (CONTINUED)

On July 13, 2016, the Company issued a convertible promissory note with an entity for $20,000. The unsecured note bears interest at 6% per annum and is due on January 13, 2017. This note is convertible at $0.10 per share and can be converted on or before the maturity date. The Company and lender mutually agreed to extend the maturity date of the note to April 30, 2017.

During the year ended March 31, 2017 interest expense was $2,264. As of March 31, 2017, the balance of accrued interest was $3,927.

6. EARNINGS PER SHARE

FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations.

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

The Company had no potential additional dilutive securities outstanding for the years ended March 31, 2017 and 2016, except for the 2,350,000 and no, respectively, shares of common stock from the convertible debt.

The following table sets forth the computation of basic and diluted net income per share:

7. STOCKHOLDERS’ EQUITY

Series A Preferred Stock

During October 2016, the Company designated Series A Preferred Stock. The Series A Preferred Stock is convertible to common stock at a rate of five shares for every share held and votes together with our common stock at a rate of sixteen votes for every share held. Our new Series A Preferred Stock ranks equally, on an as-converted basis, to our common stock with respect to rights upon winding up, dissolution, or liquidation. Our Series A Preferred Stock does not have any special dividend rights.

On October 1, 2016, the Company issued 5,000,000 shares of our newly-designated Series A Preferred Stock to Daniel Crawford in exchange for 10,000,000 shares of Series A Preferred Stock in Humbly Hemp.

Common Stock

During the three months ended June 30, 2016, the Company issued a total of 40,000 shares of common stock to one investor for cash of $2,600.

On October 1, 2016, the Company issued 12,048,000 shares of common stock for the acquisition of Humbly Hemp, Inc.

On October 17, 2016, the Company issued a total of 4,200,000 shares of common stock to three lenders for the extinguishment of debt. There was 800,000 shares recorded to common stock payable and the shares will be issued upon request from the noteholder. The principal amount of the debt was $129,549 and the loss on extinguishment was $2,770,451.

During the six months ended March 31, 2017, the Company issued a total of 1,350,000 shares of common stock to eight investors for cash of $270,000.

8. INCOME TAXES

The provision (benefit) for income taxes for the years ended March 31, 2017 and 2016 assumes a 34% effective tax rate for federal income taxes.

8. INCOME TAXES (CONTINUED)

The Company had deferred income tax assets as of March 31, 2017 and 2016 are as follows:

The Company provided a valuation allowance equal to the deferred income tax assets for the fiscal years ended March 31, 2017 and 2016, respectively, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

At March 31, 2017, the Company had approximately $434,000 in federal and state tax loss carryforwards that can be utilized in future periods to reduce taxable income, and begin to expire in 2027. Pursuant to Internal Revenue Code Section 382, the future utilization of our net operating loss carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future.

The Company did not identify any material uncertain tax positions on tax returns that will be filed. The fiscal years ended March 31, 2017, 2016, 2015, 2014 and 2013 are open for potential examination.

9. SUBSEQUENT EVENTS

During the three months ended June 30, 2017, the Company issued 925,000 shares of common stock to several investors for cash of $185,000.

In May 2017, the Company issued a total of 411,118 shares to a lender in exchange for a full conversion of debt including principal and interest.

In May 2017, the Company formed a wholly owned subsidiary called Humble Water Company. On May 31, 2017 the subsidiary entered into a joint venture with Doore, LLC. The joint venture will be operated through Spring Hill Water Company, LLC which is owned 49% by our subsidiary and 51% by Doore, LLC.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

No events occurred requiring disclosure under Item 307 and 308 of Regulation S-K during the fiscal year ending March 31, 2017.

Item 9A. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year ended March 31, 2017. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of March 31, 2017 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of March 31, 2017, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending March 31, 2018: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Item 9B. Other Information

None

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following information sets forth the names, ages, and positions of our current directors and executive officers as of June 28, 2017.

Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.

Daniel Crawford – President, Chief Executive Officer, Chief Financial Officer and sole Director

Mr. Crawford has worked with both large and small brands, and has had experience launching a consumer packaged goods company in early stages. During his time in business development with Revolver Brewing in Dallas, Texas, he grew the business by over 100% percent and learned while wearing many hats for the organization. In this environment, he gained a lot of knowledge in consumer packaged goods and worked with major retailers like Kroger, Whole Foods, HEB, and Albertson’s.

Daniel graduated from the Rawls College of Business, at Texas Tech University. This is where Daniel realized that his skill set and interests centered on building brands. During his time at school he worked for GMR marketing, launching the shows Girls, and Game of thrones for their client HBO. This role taught him the ins and outs of guerrilla and social media marketing, two very important areas in modern marketing. He gained some initial consumer packaged goods experience working for Pura Vida Tequila, holding promotions and representing them in West Texas.

Term of Office

Our Directors are appointed for a one year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by the Company to become directors or executive officers other than Shirley Liao and Hangbo (Henry) Yu who are wife and husband.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Committees of the Board

We do not currently have a compensation committee, executive committee, or stock plan committee.

Audit Committee

We do not have a separately-designated standing audit committee. The entire Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by an audit committee. The Board approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the Board reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor. Our Board of Directors, which performs the functions of an audit committee, does not have a member who would qualify as an “audit committee financial expert” within the definition of Item 407(d)(5)(ii) of Regulation S-K. We believe that, at our current size and stage of development, the addition of a special audit committee financial expert to the Board is not necessary.

Nomination Committee

Our Board of Directors does not maintain a nominating committee. As a result, no written charter governs the director nomination process. Our size and the size of our Board, at this time, do not require a separate nominating committee.

When evaluating director nominees, our directors consider the following factors:

Our goal is to assemble a Board that brings together a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Board will also consider candidates with appropriate non-business backgrounds.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the Board may also consider such other factors as it may deem are in our best interests as well as our stockholders. In addition, the Board identifies nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of the Board does not wish to continue in service or if the Board decides not to re-nominate a member for re-election, the Board then identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Board are polled for suggestions as to individuals meeting the criteria described above. The Board may also engage in research to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the right in the future to retain a third party search firm, if necessary. The Board does not typically consider shareholder nominees because it believes that its current nomination process is sufficient to identify directors who serve our best interests.

Code of Ethics

As of March 31, 2017, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

Item 11. Executive Compensation

Compensation Discussion and Analysis

Currently, our sole executive officer, Daniel Crawford, receives a base salary of $72,000 per year under a one-year employment contract dated April 1, 2017. Any bonus compensation is at the discretion of the board, or the compensation committee.

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended March 31, 2017 and March 31, 2016.

SUMMARY COMPENSATION TABLE

Narrative Disclosure to the Summary Compensation Table

Our sole executive officer received, or was accrued, the cash compensation set forth above.

Stock Option Grants

We have not granted any stock options to the executive officers or directors since our inception.

Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of March 31, 2017.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Director Compensation

The table below summarizes all compensation of our directors for our last completed fiscal year.

DIRECTOR COMPENSATION