UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Q ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: September 30, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934(Mark One)

For the fiscal year ended June 30, 2019

Or

For the transition period from ______ to ______

Commission file number 333-147367

Registrant’s telephone number, including area code (720) 442-7000

Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act:Common Stock, $0.001 par value

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes¨     ☒ Noþ

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¨     ☒ Noþ

Indicate by check mark whether the registrant:registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the lastpast 90 days.

☐ Yesþ     ☒ 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¨     ☒ No¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. Yes¨Noþ

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

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).Act.) Yes¨ ☒     Noþ

☐

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates on December 31, 2019 (the last business day of the registrant on September 30, 2012, based on aregistrant’s most recently completed second fiscal quarter) was approximately $534,798, computed by reference to the closing sales price of $0.0013 was approximately $730,726. As of January 11, 2013, the registrant had 774,130,021 shares of its common stock par value $0.001 per share, outstanding.on December 31, 2019, which was $0.0420.

Documents Incorporated By Reference: None.

AQUALIV TECHNOLOGIES, INC.

FOR THE FISCAL YEAR ENDED

SEPTEMBER 30, 2012The number of shares outstanding of the registrant’s common stock as of September 15, 2020, was 127,333,060 shares.

TABLE OF CONTENTSDOCUMENTS INCORPORATED BY REFERENCE — NONE

TABLE OF CONTENTS

FORM 10-K

FORWARD LOOKING STATEMENTS

IncludedPart I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information contained in this annual report on Form 10-K are “forward-looking” statements, as well as historical information. Although we believe that the expectations reflected in thesecontains “forward-looking statements.” These forward-looking statements are reasonable, we cannot assure youcontained principally in the sections titled “Business,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our ability to consummate the Merger, as such term is defined below; the continued services of the Receiver, as such term is defined below; our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that themay be incorrect, and there can be no assurance that any projections or other expectations reflectedincluded in theseany forward-looking statements will provecome to be correct. Our actual results could differ materially from those anticipated in forward-looking statements as a result of certain factors, including matters described in the section titled “Risk Factors.” Forward-looking statements include those that use forward-looking terminology, such as the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “plan,” “will,” “shall,” “should,” and similar expressions, including when used in the negative. Although we believe that the expectations reflected in thesepass. Moreover, our forward-looking statements are reasonablesubject to various known and achievable, these statements involveunknown risks, and uncertainties and we cannot assure youother factors that may cause our actual results, willperformance or achievements to be consistent with thesematerially different from future results, performance or achievements expressed or implied by any forward-looking statements. WeThese risks, uncertainties and other factors include but are not limited to: the risks of limited management, labor and financial resources; our ability to establish and maintain adequate internal controls; our ability to develop and maintain a market in our securities; and our ability obtain financing, if and when needed, on terms that are acceptable. Except as required by applicable laws, we undertake no obligation to update or revise thesepublicly any forward-looking statements whetherfor any reason, even if new information becomes available or other events occur in the future.

As used in this annual report on Form 10-K, “ “we”, “our”, “us” and the “Company” refer to reflect events or circumstances afterHealthcare Solutions Management Group, Inc., a Delaware corporation and its subsidiaries unless the date initially filed or published, to reflect the occurrence of unanticipated events orcontext requires otherwise.

PART IItem 1. Business.

Item 1. Business.Recent Developments

BACKGROUNDCoronavirus (COVID-19)

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic which continues to spread throughout the U.S. and the globe. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most U.S. states and many countries have issued policies intended to stop or slow the further spread of the disease such as issuing temporary Executive Orders that, among other stipulations, effectively prohibit in-person work activities for most industries and businesses, having the effect of suspending or severely curtailing operations. COVID-19 and the U.S’s response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. The extent of the ultimate impact of the pandemic on the Company’s operational and financial performance will depend on various developments, including the duration and spread of the outbreak, which cannot be reasonably predicted at this time. Accordingly, while management reasonably expects the COVID-19 outbreak to negatively impact the Company, the related consequences and duration are highly uncertain and cannot be predicted at this time.

History and Overview

On December 31, 2012, AquaLiv Technologies, Inc., (“ALTI”) and Verity Farms II, Inc. (“Verity Farms”), a South Dakota corporation, entered into a Share Exchange Agreement. Pursuant to the Share Exchange Agreement, ALTI acquired 100% of the authorized and issued shares of Verity Farms in exchange (the “Exchange”) for 4,850,000 shares of Series B Convertible Preferred Stock, par value $0.001, of ALTI, representing approximately 86% of the outstanding shares of ALTI, on a fully-diluted basis, assuming conversion into common stock. As a result of the Exchange and the other transactions contemplated thereunder, Verity Farms became a wholly-owned subsidiary of ALTI and ALTI acquired Verity Farms’ business operations. ALTI was formed under the laws of the State of Nevada on April 11, 2006 originally under the name of Infrared Systems International “ISI” as a wholly-owned subsidiary of China Sxan Biotech, Inc. (“CSBI”) (then known as Advance Technologies, Inc.) to pursue a narrowly defined business objective called infrared security systems.

On JulyApril 1, 2013, the Company changed its name from AquaLiv Technologies Inc. to Verity Corp. and our stock symbol changed to VRTY.

The Company was the parent of Verity Farms and Aistiva Corporation (“Aistiva”) (f/k/a AquaLiv, Inc.). Verity Farms was dedicated to providing consumers with safe, high-quality and nutritious food sources through sustainable crop and livestock production. Aistiva previously released products in the industries of water treatment, skincare, and agriculture. Verity Farms was administratively dissolved in the State of South Dakota on May 4, 2018. Aistivia was administratively dissolved on April 9, 2015, in the State of Washington.

In February 2016, all of the Company’s officers and directors resigned, and the Company stopped substantially all operating activities. Since such time, and currently, the Company is a “shell company,” as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Receivership

The Company is currently in receivership.

On May 16, 2016, pursuant to Case Number A16-733815-B, Nevada’s 8th Judicial District, Business Court, appointed Robert Stevens as receiver (the “Receiver”) for the Company. Creditors were required to provide claims in writing under oath on or before November 3, 2016, or they would be barred under Nevada Revised Statute §78.675.

Since May 16, 2016, through the date of this Annual Report, the Company has been operating under the direction of the Receiver.

On March 22, 2018, the District Court in Clark County, Nevada approved a plan of reorganization that involved authorizing the cancellation of all preferred shares of the Company, the cancellation of certain insider shares, a reverse stock split up to a maximum of 200-1, and a reorganization that would place the liquidation of the Company’s assets under a liquidating trustee while maintaining the public, purchasers for value with equity in the surviving entity. Once the reorganization is completed the Receiver will be discharged.

Change of Domicile and Plan of Conversion

On March 15, 2019, Healthcare Solutions Management Group, Inc. was incorporated in the State of Delaware. Verity Delaware, Inc. was incorporated in the State of Delaware on March 11, 2007, CSBI acquired American SXAN Biotech,2019. Verity Merger Corp. was incorporated in the State of Delaware on March 15, 2019. On March 11, 2019, pursuant to an Agreement and Plan of Conversion, the Company, then a Nevada corporation named Verity Corp., converted into and became Verity Delaware, Inc., a Delaware Corporation (“American SXAN”) doing business exclusivelycorporation in Delaware and on May 30, 2019, the People's Republic of China under a registered capital corporation, Tieli XiaoXingAnling Forest Frog Breeding Co, Ltd. Tieli XiaoXingSnling engagedconversion was completed in the business of manufacturing and marketing wines and tonics derived from domesticated forest frogs.Nevada. As a result of the acquisition,foregoing, Verity Corp. a Nevada corporation converted into and became Verity Delaware, Inc., a Delaware corporation. On May 8, 2019, pursuant to a Plan of Merger, Verity Delaware, Inc. was merged with and into Verity Merger Corp., with Verity Merger Corp. surviving, and with Healthcare Solutions Management Group, Inc. becoming a successor in interest to Verity Delaware Inc. and the stockholdersparent company of American SXAN Biotech, Inc. acquired control of CSBI.Verity Merger Corp.

PursuantName and Trading Symbol Change

Since Healthcare Solutions Management Group, Inc. became the successor in interest to one of the terms of the acquisition, all of the assets and liabilities of CSBI as of the date of the acquisition were transferred into ISI. From that time and until June 22, 2011, ISI had conducted not only the infrared security systems development forVerity Delaware Inc. a Delaware corporation which it was formed but also the other prior activities of CSBI.

Due to American SXAN’s disinterest in continuing the infrared visions business of CSBI, the parties agreed that the business and assets of CSBI would be transferred to CSBI’s wholly-owned subsidiary, ISI, and that the common stock of CSBI would be distributed to the persons who were shareholders of CSBI prior to the July 2007 merger, and any subsequent purchasers of their shares. The shares of ISI owned by CSBI were subsequently distributed to shareholders upon the effectiveness of Form S-1 registration statement filed with the United States Securities and Exchange Commission. The Notice of Effectiveness was issued on July 11, 2008 and filed on July 14, 2008. 

In March 2010, ISI transferred all of the assets and liabilities of ISI intopreviously a newly created wholly-owned subsidiary, Infrared Applications, Inc. (“IAI”).   IAI continued to operate the previous business of ISI under this newly created company until June 22, 2011, when, in accordance with a Management and Distribution Agreement dated March 24, 2010, all of the outstanding stock of IAI was transferred to Gary Ball, the former CEO. Subsequent to this event, Ball shall be responsible to make, if any, a Subsidiary Stock Distribution toNevada corporation named Verity Corp., the Company’s shareholders of record as of March 23, 2010.

On April 12, 2010, the Company sold a majority interest in its common stock to Take Flight Equities,current name is Healthcare Solutions Management Group, Inc. (“TFE”). As part of the agreement, a change in control took place and William Wright was appointed CEO of the company.  Also included in the agreement were provisions for the future distribution of the IAI assets to the ISI shareholders of record on March 23, 2010 within 15 months of the agreement (which was completed on June 22, 2011).

On April 19, 2010, the Company purchased 100% of the outstanding common stock of Focus Systems, Inc. (“Focus”) from ProPalms, Inc.  Focus is held and operated as a wholly-owned subsidiary of the company. Focus was formed in August of 2007 as a technology company providing remote desktop - cloud computing - services and Voice over Internet Protocol (“VoIP”) phone services to small and mid-sized businesses.  For the calendar year 2008, Focus operated a regional Internet Service Provider (“ISP”) business under a management agreement with a third party.

On December 16, 2010 the Company purchased a 50% interest in AquaLiv, Inc. We have concluded, pursuant to the guidance in FASB ASC 810-10-25-38 (previously FIN 46R) that AquaLiv, Inc. is a Variable Interest Entity, that we are the primary beneficiary with a controlling financial interest in AquaLiv, Inc. and we are required to consolidate its financials accordingly. The remaining 50% non-controlling interest is owned by Craig Hoffman, AquaLiv, Inc.’s President and CEO. AquaLiv, Inc. is a life sciences research and development company creating novel products for numerous industries. The company's technology alters the behavior of organisms, including plants and humans, without chemical interaction. From increased crop yields to drug-free medicine, AquaLiv, Inc. is providing innovative, ingredient-free solutions to the world's largest problems.

On June 22, 2011, in accordance with Management and Distribution Agreement (“Agreement”) dated March 24, 2010, we completed the distribution of substantially all of the assets of IAI. All of the outstanding stock of IAI has been transferred to Gary Ball (“Ball”) in accordance with the Agreement. Subsequent to this event, Ball shall be responsible to make, if any, a Subsidiary Stock Distribution to the Company’s shareholders of record as of March 23, 2010, upon the earlier of the foregoing occurrence: (i) the net proceeds from the sale of substantially all of the assets of IAI or (ii) Ball elects to make a Subsidiary Stock Distribution. Any cost incurred in connection with a Subsidiary Stock Distribution shall be the responsibility of Ball. There is no certainty as to when or if a Subsidiary Stock Distribution will occur.

On September 6, 2011, the Company filed its Articles of Amendment with the State of Nevada to effect a name change to AquaLiv Technologies, Inc. and to increase its authorized common shares to 1,000,000,000. FINRA declared the corporate action effective on September 19, 2011. The name change was effected to more closely align the name with the future direction of the Company.

CORPORATE STRUCTURE AS OF SEPTEMBER 30, 2012

AQUALIV, INC.

AquaLiv, Inc.’s scientists discovered that most substances and compounds have a unique information signature that influences biological processes via a magnetic cellular mechanism (non-chemical). The company’s technology records this biologically significant magnetic information (bioinformation) from a compound or substance and allows for the manipulation, combining, and subsequent transmittal to an organism. Bioinformation from a variety of sources are combined and/or altered to produce a bioinformation composite designed to influence specific biological processes. The composite can be transmitted to an organism via a variety of methods, including mineralized water, electromagnetic wave, or magnetic field.

The technology, while still at an early stage of development, already has direct applications in the industries of water purification, environmental science, agriculture, animal husbandry, personal use products, and medicine. Revenues generated from AquaLiv, Inc. products for the fiscal year ended September 30, 2012 were $449,626.

AquaLiv Water System

The AquaLiv Water System is a water purification and enhancement apparatus available since 2008 that produces a high-quality drinking water. A variety of technologies are utilized in the system to remove impurities from the water, add minerals to the water, alter the molecule to molecule bonding structure of the water molecules, reduce the surface tension, improve the Oxidation Reduction Potential, and increase the pH, dissolved oxygen, and dissolved hydrogen content in the water. Additionally, the water’s bioinformation is altered to resemble spring water before processing and treatment. Users of the AquaLiv Water System have reported stabilized blood sugar, improvements in both high and low blood pressure, reduced allergy symptoms, less headaches, better digestion, and healthy glowing skin. Some diabetics have even reported that the AquaLiv Water System helped them decrease their insulin requirements. AquaLiv Water System testimonials are validated by a 3rd party. The AquaLiv Water System has approximately 400 users and produces 99% of the revenues.

Infotone Hydrating Mist

Infotone Hydrating Mist is a skincare product designed to clear blemishes, fade wrinkles, and even skin tone. The product has been available since 2010. Each mister contains a ceramic bead infused with AquaLiv Inc.'s bioinformation technology. The technology allows simple spring water to activate skin's natural healing ability resulting in clear, youthful, and glowing skin. Infotone Hydrating Mist is refillable for a full year making it an economical and sustainable skincare product. The mist is 100% natural and hypoallergenic and contains no parabens, additives, chemicals, GMOs, fragrances or artificial ingredients. The benefits of using the product are primarily derived through the elimination of a common skin parasite responsible for irritation (found on 50% of all adults), decreasing the production of melanin in cells that are overproducing, and increasing skin hydration. The Infortone Hydrating Mist has approximately 850 users and produces 1% of the revenues

AgSmart Rice

AgSmart Rice is a combined service and product offering that increases rice yields by 30-60% on average (data from actual commercial usage) while decreasing the duration before harvest by approximately one month. Treated rice crops are more resistant to pests, diseases, and wind/hail damage. AgSmart Rice is 100% natural and organic standards compliant and uses no chemical fertilizers, herbicides, or pesticides. AgSmart Rice benefits rice plants by encouraging greater root growth and photosynthesis ability. AgSMart Rice has been available since 2011 and is currently used by 2 farms at no charge for their aid in AgSmart Rice’s development. AgSmart Rice is not marketed due to a lack of financial resources and personnel. As of today, AgSmart Rice does not produce any revenue.

AgSmart Potato

AgSmart Potato is acombined service and product offering that has shown increases in potato yields by over 100% in market value (calculated using recent size/weight values coupled with average test results between treated and untreated test plots) under initial company testing. Treated potato crops have a consistent number of potatoes compared to untreated crops, however, the average size and weight are significantly increased while the normal counts of waste-sized potatoes are greatly reduced. Treated crops have also shown to be more resistant to pests and diseases caused by bacteria and viruses. AgSmart Potato is 100% natural and organic standards compliant and uses no chemical fertilizers, herbicides, or pesticides. AgSmart Potato benefits potato plants by encouraging greater root growth and photosynthesis ability while controlling bacterial and fungal activity. The Company plans on performing further third party commercial tests ofto submit an Issuer Company-Related Action Notification Form (the “Name Change”) to the product priorFinancial Industry Regulatory Authority (“FINRA”) to commercial distribution.request that the Company’s name be updated to its current name and to change the Company’s trading symbol accordingly. The product is still under development andCompany has not yet availablesubmitted the Name Change to the general public.

NatuRx Medication Alternatives

Based on AquaLiv Inc.'s bioinformation technology, NatuRx formulations utilize bioinformation composites in lieu of active-molecules (drugs) for treatment. NatuRx formulations are still under development waiting the necessary funding to begin clinical trials and not yet available to the general public.

COMPETITION

The Company competes directly with other companies offering similar products and services. 

AquaLiv Water System

The AquaLiv Water System competes with all consumer drinking water purification and enhancement systems priced between $350 and $4,000. Direct competition comes from so-called water ionizing machines. However, the AquaLiv Water System has many advantages over them including the ability to remove sodium fluoride and alkalize water naturally and without electricity. The AquaLiv Water System is further differentiated in the marketplace by an industry leading 90-Day Unconditional Money Back Guarantee and a 15-Year warranty against defects.

Infotone Hydrating Mist

Infotone Hydrating Mist competes against all cosmetic water misters often sold by popular bottled water brands. When the water is used up in competing products, consumers must purchase a new mister. However, integrated technology in the Infotone Hydrating Mist apparatus enhances ordinary water with skin enhancing effects while also allowing consumers to refill the mister with ordinary water. While the initial cost of Infotone Hydrating Mist is slightly higher than competing products, the ability to refill it greatly increases its value to consumers, making it a unique product in the marketplace. 

AgSmart Rice

Because no other available yield enhancing agriculture product exploits the same natural phenomenon, AgSmart Rice can be used in conjunction with other technologies, e.g. hybridization, agrochemicals, and/or GMOs, while still delivering yield increases and other benefits. For this reason, other technologies currently available in rice agriculture do not compete directly with AgSmart Rice as most customers will combine many available technologies to realize even greater increases yields.

FOCUS SYSTEMS

Remote Desktop and Cloud Computing

Focus System’s Remote Desktop services provide authorized remote users the ability to connect to resources on an external network owned and managed by Focus Systems from any Internet-connected device. The remote user may access their account from their own device or one leased or purchased from Focus Systems. Once connected, the remote user has access to a number of software packages made available through Focus Systems as a Microsoft product reseller for a monthly fee. The remote user may also request that other software packages be installed to the user’s virtual server and maintained by Focus Systems. The Company believes that there are inherent benefits of operating in a completely portable desktop office environment. Access to central data and shared recourses can increase productivity and reduce cost for businesses.  The remote environment is controlled, managed and updated by Focus Systems from a centralized location, further reducing operating costs for its customers. Revenues generated from remote desktop and other services for the fiscal year ending September 30, 2012 were $22,850 and included service to approximately 20 users.

VOIP Phone Service

VoIP phone service is a method for taking analog audio signals (similar to the kind you hear when you talk on the phone) and turning them into digital data that can be transmitted over the Internet. This allows VoIP service to replace traditional landline service for business and residential customers. Since the VoIP phone service is digital, companies are able to run both data and voice over the same network infrastructure thereby greatly reducing costs. This reduction in cost is experienced in both the initial start-up phase, as well as the ongoing maintenance and services fees associated with phone service. Company management believes that the trend away from traditional phone service to digital VoIP services will continue to grow.Revenues generated from VoIP services for the fiscal year ending September 30, 2012 were $7,054.

COMPETITION

The remote desktop and cloud computing environment is still relatively in its infancy.  While the advent of computers saw large uses of thin client applications, the PC age saw companies bringing servers and applications both in-house and distributed to the desktops.  Today, as companies struggle with IT cost and look for ways to reduce overhead and speed up deliver of changing software, they are beginning to look again at outsourcing of their IT and utilize the expanding power of cloud computing.  There are several large service providers servicing the commercial market, such as IBM, Hewlett Packard, VMware, and a number of others. They are betting big on this trend and will capture a large segment of the market related to large business.  However, providers of the service to small business have yet to make a large mark in the market space. Buying decisions with small business remain more local, and with the consolidation of the ISP market over recent years, there are less IT businesses in these communities to roll out and support this type of initiative.

VoIP competition is a bit fiercer when it comes to the residential market. Companies such as Vonage and Magic Jack (heavy marketer in the residential market) have made great inroads into the homes of Americans and those abroad.  However, when it comes to small businesses making decisions, they have been less eager (either due to familiarity or lack of knowledge) to move away from the traditional Telco provider and utilize VoIP.  The trend towards a VoIP solution is inevitable as companies continue to consolidate their IT solutions and take advantage of cost savings initiatives, both for initial capital outlay as well as ongoing monthly cost.  Focus is poised to take advantage of the technology decisions that these small business will make in the coming years, either as a provider of remote desktop solutions, VoIP, or both.

Dependence on One or Few Major Customers

The Company’s accounts receivable total was $1,856, or less than 2% of the Company’s total revenue for the current quarter and less than 1% of the total annual revenue for the fiscal year ended September 30, 2012. Furthermore, no single customer represented more than 1% of the total annual revenue. Therefore, the Company no longer anticipates being dependent on any one or few major customers.

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR CONTRACTS

AquaLiv® is a registered trademark belonging to AquaLiv, Inc. The trademark’s duration is perpetual while in use.

The Japanese patent personally owned by Dr. Ichimura, AquaLiv Inc.’s Chief Science Officer, covers some aspects of the AquaLiv, Inc.’s technology and was granted in 2008 for a term of 20 years. Dr. Ichimura, in his discretion, allows AcquaLiv, Inc. the exclusive use of such patent. The Company currently has no other patents or patent applications pending relating to AquaLiv, Inc. or Focus Systems, Inc.  

RESEARCH AND DEVELOPMENT ACTIVITIES

For the fiscal years ending September 30, 2012 and 2011, the Company and its subsidiaries have spent approximately $1,213 and $9,936 on research and development costs, respectively.

EMPLOYEES

As of September 30, 2012, the Company had three (3) current employees and one (1) independent contractor between the Company and its subsidiaries, with William Wright being the sole independent contractor at AquaLiv Technologies, Inc. Additional work is performed by subcontractors.

EXPENSES

We estimate that we will require approximately $500,000, in addition to our gross revenues, over the next twelve months in order to maintain operations. While our operating expenses for each of our prior fiscal years have exceeded this amount, a portion of those expenses have been non-cash expenses.

Item 1A. Risk Factors.

You should carefully consider the risks described below, together with all of the other information included in this report, in considering our business and prospects. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. The occurrence of any of the following risks could harm our business, financial condition or results of operations.

Risks Related to the Our Business and Industry

IF WE DO NOT GENERATE ADEQUATE REVENUES TO FINANCE OUR OPERATIONS, OUR BUSINESS MAY FAIL.

We were incorporated on April 11, 2006. As of September 30, 2012, we had a retained deficit of $3,063,113. During the years ended September 30, 2012 and 2011, respectively, we had net losses of $623,079 and $3,235,468. We expect our revenues during the next twelve months from our existing products and service customers to remain flat depending upon the US economic recovery and our ability to create market awareness with our AquaLiv brand. Our expected revenue generation and expenses are difficult to predict,FINRA and there can be no assurance that revenuesFINRA will be sufficient to cover operating costs forprocess the foreseeable future. It may be necessary to raise additional funds. If we are unable to raise funds to cover any operating deficit and our sales decrease in 2013, our business may fail.Name Change as planned, or at all.

BECAUSE WE HAD INCURRED A LOSS AND HAVE NOT FULLY COMMENCED OUR PLANNED PRINCIPAL OPERATIONS, OUR ACCOUNTANTS HAVE EXPRESSED DOUBTS ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.No Current Operations

In February 2016, all of the Company’s officers and directors resigned, and the Company stopped substantially all operating activities. Since such time, and currently, the Company is a “shell company,” as such term is defined in Rule 12b-2 under the Exchange Act. Since May 16, 2016, through the date of this Annual Report, the Company has been operating under the direction of the Receiver.

ForThe Company has no operations at this time, and currently does not have any principal products or services, customers or intellectual property. As the fiscal year endedCompany has no current operations, it also currently is not subject to any competitive business conditions. Further, the Company is not subject to any government approvals at this time, other than those related to the receivership and those applicable to it as a “shell company,” as such term is defined in Rule 12b-2 under the Exchange Act.

Employees

As of September 15, 2020, we have no part-time or full-time employees (excluding the Receiver and his staff). Since May 16, 2016, through the date of this Annual Report, the Company has been operating under the direction of the Receiver.

Merger Agreement with Healthcare Solutions Holdings, Inc.

On June 14, 2019, the Company (the successor in interest to Verity Delaware Inc., a Delaware corporation which was previously a Nevada corporation named Verity Corp.) entered into a Merger Agreement (the “Merger Agreement”) by and between the Company, Verity Merger Corp., a wholly-owned subsidiary of the Company (the “Merger Sub”), and Healthcare Solutions Holdings, Inc. (“HSH”). Pursuant to the terms of the Merger Agreement, the parties agreed that Merger Sub would merge with and into HSH, with HSH being the surviving entity and becoming a wholly-owned subsidiary of the Company (the “Merger”).

The closing of the Merger is planned to take place on the third business day following the satisfaction or waiver (by the party for whose benefit the condition exists) of the closing conditions in the Merger Agreement or on such other date and at such other time and place as the parties agree in writing.

Upon the effective time of the Merger, (i) HSH’s certificate of incorporation will be the certificate of incorporation of the surviving company, (ii) HSH’s bylaws will be the bylaws of the surviving company, (iii) HSH’s directors immediately prior to the effectiveness of the Merger will be the directors of the surviving company and (iv) HSH’s officers immediately prior to the effectiveness of the Merger will be the officers of the surviving company.

At the closing of the Merger, it is planned that the Receiver will elect Justin Smith, Jonathan Loutzenhiser and Dr. Charles Balaban as members of the Company’s board of directors, and then resign.

The aggregate Merger consideration to be paid to the holders of the HSH common stock at the effective time of the Merger will be an aggregate number of shares of the Company’s common stock constituting 90% of the issued and outstanding shares of Company common stock immediately following the closing.

At the effective time of the Merger, each share of HSH common stock issued and outstanding immediately prior to the effective time (other than shares canceled as provided in the Merger Agreement, if any), will be converted into shares of Company common stock, at an exchange ratio as required to cause the number of shares of Company common stock issued to the holders of the HSH common stock to be 90% of the issued and outstanding shares of the Company common stock immediately following the closing, which is currently expected to result in an exchange ratio of 127.33306 shares of Company common stock per share of HSH common stock (as ultimately so determined, the “Exchange Ratio”), with any fractional shares of Company common stock being rounded to the nearest whole share of Company common stock. The Exchange Ratio will be finally determined by the parties to the Merger Agreement prior to the closing.

As consideration for the services of Robert Stevens and his team, for acting as the court-appointed receiver for the Company and its predecessor and affiliated entities, and pursuant the Merger Agreement, the Company agreed to issue to certain parties as directed by Mr. Stevens, shares of Company common stock equal to 90% of the issued and outstanding shares of Company common stock prior to the closing, which will therefore constitute 9% of the issued and outstanding shares of Company common stock immediately following the closing (the “Receiver Shares”).

The completion of the Merger is subject to certain customary closing conditions, including that HSH will have provided to the Company, HSH’s audited and unaudited financial statements as required to be included in the Company’s filings with the Securities and Exchange Commission.

The Merger Agreement is not subject to a financing condition. The parties have made customary representations, warranties, and covenants in the Merger Agreement. The Merger Agreement also contains a customary “no-shop” covenant prohibiting the Company from soliciting proposals for alternative acquisition or providing information or participating in any discussions in connection with any such proposals.

The Merger Agreement contains certain termination rights that may be exercised by the Company or HSH, as applicable, including in the event that (i) both parties agree by mutual written consent to terminate the Merger Agreement, (ii) the Merger is not consummated by September 30, 2012,2020 (as set forth in the “Amendment” discussed below), or (iii) any law or order permanently restraining, enjoining or otherwise prohibiting consummation of the Merger having become final and non-appealable.

The Merger is intended to be a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Merger Agreement is intended to be a “plan of reorganization” within the meaning of the regulations promulgated under Section 368(a) of the Code and for the purpose of qualifying as a tax-free transaction for federal income tax purposes.

On August 25, 2020, the parties to the merger agreement entered into amendment no. 1 (the “Amendment”) to the Merger Agreement pursuant to which the date provided to consummate the Merger Agreement was extended from July 30, 2019 to September 30, 2020. Further, pursuant to the Amendment, the Company and HSH agreed to reasonably cooperate to terminate the engagement of the Company’s prior registered agent in Nevada, with the costs related thereto to be paid by HSH. Further, pursuant to the Amendment, the Company agreed to issue the Receiver Shares as required by the Merger Agreement in book entry within 10 days of August 25, 2020. The Receiver Shares were issued on August 27, 2020 and consisted of a total of 114,599,754 shares of Company common stock.

Further, pursuant to the Amendment, HSH agreed to pay the costs and expenses of the Company resulting from the Company’s engagement of professional service providers, including, but not limited to, those of the transfer agent, legal counsel and auditors, until the earlier of the closing or the termination of the Merger Agreement.

Further, pursuant to the Amendment, the parties acknowledged that the Company and HSH are represented by the same legal counsel and that counsel has advised each of the parties to retain separate counsel to review the terms of the Merger Agreement and the Amendment, and that each party waived such right and waived any related conflicts of interests and confirmed that the parties have previously negotiated the material terms of the Merger Agreement and the Amendment. Further, pursuant to the Amendment, the prior notice person for the Company was removed.

Other than the foregoing, no other material changes were made to the Merger Agreement in the Amendment.

The foregoing description of the Merger Agreement and the Amendment, and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the Merger Agreement, and the Amendment, copies of which are as Exhibit 2.1 and 2.2, respectively, to this Annual Report on Form 10-K and incorporated herein by reference.

As of the date of this Annual Report, the Merger has not been consummated; and neither HSH nor the Company has exercised its termination rights. The Company believes the Merger will be consummated, however, there can be no assurances.

Reports to Security Holders

We intend to furnish our accountantsshareholders’ annual reports containing financial statements audited by our independent registered public accounting firm and to make available quarterly reports containing unaudited financial statements for each of the first three quarters of each year. We file Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K with the Securities and Exchange Commission in order to meet our timely and continuous disclosure requirements. We may also file additional documents with the Commission if they become necessary in the course of our company’s operations.

The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is www.sec.gov.

Item 1A. Risk Factors.

YOU SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AND THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS ANNUAL REPORT ON FORM 10-K BEFORE DECIDING WHETHER TO INVEST IN THE COMPANY’S COMMON STOCK. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO THE COMPANY OR THAT THE COMPANY CURRENTLY DEEMS IMMATERIAL MAY ALSO IMPAIR THE COMPANY’S BUSINESS OPERATIONS. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, THE COMPANY’S BUSINESS, FINANCIAL CONDITION OR OPERATING RESULTS COULD BE MATERIALLY ADVERSELY AFFECTED. IN SUCH CASE, THE TRADING PRICE OR THE COMPANY’S COMMON STOCK COULD DECLINE AND YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT. THIS ANNUAL REPORT ON FORM 10-K ALSO CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. PLEASE SEE “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS”.

Risks Related to our Company

We are currently in receivership and there can be no assurance that the planned reorganization can be completed or that the Receiver will be discharged as planned.

The Company is currently in receivership. On May 16, 2016, pursuant to Case Number A16-733815-B, Nevada’s 8th Judicial District, Business Court, appointed Robert Stevens as receiver (the “Receiver”) for the Company. Creditors were required to provide claims in writing under oath on or before November 3, 2016, or they would be barred under Nevada Revised Statute §78.675. Since May 16, 2016, through the date of this Annual Report, the Company has been operating under the direction of the Receiver. On March 22, 2018, the District Court in Clark County, Nevada approved a plan of reorganization that involved authorizing the cancellation of all preferred shares of the Company, the cancellation of certain insider shares, a reverse stock split up to a maximum of 200-1, and a reorganization that would place the liquidation of the Company’s assets under a liquidating trustee while maintaining the public, purchasers for value with equity in the surviving entity. Once the reorganization is completed the Receiver will be discharged. There can be no assurance that the planned reorganization can be completed or that the Receiver will be discharged as planned.

We have expresseda history of operating losses and our auditors have indicated that there is substantial doubt about our ability to continue as a going concern.

The Company is currently in receivership. The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At June 30, 2019, the Company had a retained deficit of $13,076,755 and negative working capital of $4,386,083. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s continuation as a going concern is solely dependent upon the Receiver’s ability to raise financing from third parties. There is no assurance that the Company will be successful in doing so. For further discussion about our ability to continue as a going concern and our plan for future liquidity, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Because we are a “shell company” the holders of our restricted securities will not be able to sell their securities in reliance on Rule 144 and we cannot file registration statements under Section 5 of the Securities Act using a Form S-8, until we cease being a “shell company”.

We are a “shell company” as that term is defined by the applicable federal securities laws. Applicable provisions of Rule 144 specify that during that time that we are a “shell company” and for a period of one year thereafter, holders of our restricted securities cannot sell those securities in reliance on Rule 144. This restriction may have potential adverse effects on future efforts to form additional capital through unregistered offerings. Another implication of us being a shell company is that we cannot file registration statements under Section 5 of the Securities Act using a Form S-8, a short form of registration to register securities issued to employees and consultants under an employee benefit plan. As result, one year after we cease being a shell company, assuming we are “current” in our reporting requirements with the Securities and Exchange Commission and have filed current “Form 10 information” with the SEC reflecting our status as an entity that is no longer a shell company for a period of not less than 12 months, holders of our restricted securities may then sell those securities in reliance on Rule 144 (provided, however, those holders satisfy all of the applicable requirements of that rule). We are currently a shell company, and while we believe that as a result of operating losses since inception, the failureplanned Merger, the Company will cease to yet commencebe a shell company, the SEC and others whose approval is required in order for shares to be sold under Rule 144 or for a Form S-8 filing, might take a different view. Additionally there can be no assurance that the Merger can close as planned, principal operations,or at all.

We may fail to successfully execute our business plan.

Our shareholders may lose their entire investment if we fail to execute our business plan. Our prospects must be considered in light of the following risks and current liabilities in excess of current assets. Ouruncertainties, including but not limited to, competition, the ability to achieveretain experienced personnel and maintain profitability and positive cash flow is dependent on such factors as our ability to sell AquaLiv Water Systems and Infotone Face Mist, generate new sales for AquaLiv’s AgSmart and NatuRx product lines, and to capture and retain new remote desktop and VoIP customers. Based upon current plans, we expect our operating costs to range between $200,000 and $250,000 for the fiscal year ending September 30, 2013.general economic conditions. We cannot guarantee that we will be successful in generating sufficient revenuesexecuting our business plan. If we fail to successfully execute our business plan, our shareholders may lose their entire investment.

The Company may suffer from lack of availability of additional funds.

We expect to have ongoing needs for working capital in order to fund operations and to continue to expand our operations. To that end, we will be required to raise additional funds through equity or debt financing. However, there can be no assurance that we will be successful in securing additional capital on favorable terms, if at all. If we are successful, whether the terms are favorable or unfavorable, there is a potential that we will fail to comply with the terms of such financing, which could result in severe liability for our Company. If we are unsuccessful, we may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund liabilities, or (d) seek protection from creditors. In addition, any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially below prices at which our shares currently trade. Our inability to raise capital could require us to significantly curtail or terminate our operations altogether. We may seek to increase our cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties.

In addition, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our shareholders losing all of their investment in our Company.

Our acquisition strategy creates risks for our business.

We expect that we will pursue acquisitions of other fundsbusinesses, assets or technologies to grow our business. We may fail to identify attractive acquisition candidates or we may be unable to reach acceptable terms for future acquisitions. We might not be able to raise enough cash to compete for attractive acquisition targets. If we are unable to complete acquisitions in the future, our ability to cover these operating costs. Failure to generate sufficient revenuesgrow our business will cause us to go out of business or take draconian actions.be impaired.

ISSUANCES OF OUR STOCK COULD DILUTE CURRENT STOCKHOLDERS AND ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK, IF A PUBLIC TRADING MARKET DEVELOPS.

We have the authority to issue up to 1,000,000,000 shares of common stock, 50,000,000 shares of preferred stock, and to issue options and warrants to purchasemay pay for acquisitions by issuing additional shares of our common stock, without stockholder approval. We are currently working on financing plans for future growth and acquisitions, product and service development, and we may need to raise additional capital to fund operations. If we raise fundswhich would dilute our stockholders, or by issuing equity securities,debt, which could include terms that restrict our existing stockholdersability to operate our business or pursue other opportunities and subject us to meaningful debt service obligations. We may experience substantial dilution. In addition,also use significant amounts of cash to complete acquisitions. To the extent that we complete acquisitions in the future, we likely will incur future depreciation and amortization expenses associated with the acquired assets. We may also record significant amounts of intangible assets, including goodwill, which could issue large blocksbecome impaired in the future. Acquisitions involve numerous other risks, including:

The recent outbreak of the coronavirus may cause an overall decline in the economy as a whole and may materially harm our Company.

If the recent outbreak of the COVID-19 coronavirus continues to grow, the effects of such a widespread infectious disease and epidemic may cause an overall decline in the economy as a whole. The actual effects of the spread of coronavirus are difficult to assess at this time as the actual effects will depend on many factors beyond the control and knowledge of the Company. However, the spread of the coronavirus, if it continues may cause an overall decline in the economy as a whole and therefore may materially harm our Company. Accordingly, while management reasonably expects the COVID-19 outbreak to negatively impact the Company, the related consequences and duration are highly uncertain and cannot be predicted at this time.

We may be unable to scale our operations successfully.

Our growth strategy will place significant demands on our management and financial, administrative and other resources. Operating results will depend substantially on the ability of our common stockofficers and key employees to fend off unwanted tender offersmanage changing business conditions and to implement and improve our financial, administrative and other resources. If the Company is unable to respond to and manage changing business conditions, or hostile takeovers without further stockholder approval,the scale of its operations, then the quality of its services, its ability to retain key personnel, and its business could be harmed.

The Company may suffer from a lack of liquidity.

By incurring indebtedness, the Company subjects itself to increased debt service obligations which could result in operating and financing covenants that would restrict our operations and liquidity. This would impair our ability to hire the necessary senior and support personnel required for our business, as well as carry out its acquisition strategy and other business objectives.

Economic conditions or changing consumer preferences could adversely impact our business.

A downturn in connection witheconomic conditions in one or more acquisitions. No such transactions currently are planned.

The issuance of preferred stock by our board of directors could adversely affect the rights of the holdersCompany’s future markets could have a material adverse effect on our results of our common stock. An issuance of preferred stock could result in a class of outstanding securities that would have preferences with respect to voting rightsoperations, financial condition, business and dividends and in liquidation over the common stock and could, upon conversion or otherwise, have all of the rights of our common stock. Our board of directors' authority to issue preferred stock could discourage potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult or costly to achieve.

OUR ARTICLES OF INCORPORATION PROTECT OUR DIRECTORS FROM CERTAIN TYPES OF LAWSUITS, WHICH COULD MAKE IT DIFFICULT FOR US TO RECOVER DAMAGES FROM THEM IN THE EVENT OF A LAWSUIT.

Our Articles of Incorporation eliminate the liability of our directors for monetary damages to the fullest extent permissible under Nevada law. Nevada law permits the elimination of the personal liability of a director or officer for damages for breach of fiduciary duty as a director or officer, although such a provision must not eliminate the liability of a director or officer for (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or (b) the payment of distributions in violation of Nevada Revised Statutes Section 78.300. This exculpatory provision may have the effect of preventing stockholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances.prospects. The indemnification provisions may require our company to use our assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

INTENSE COMPETITION IN THE LIFE SCIENCES AND INFORMATION TECHNOLOGY COULD AFFECT OUR ABILITY TO SUCCESSFULLY MARKET OUT PRODUCTS.

Our business plan involves deployment of technology services, and developing, deploying, and licensing products. These businesses are highly competitive. There are numerous similar companies providing such services and products in the United States. Our competitors will have greater financial resources and more expertise in these businesses. Our ability to deploy our AgSmart and NatuRx products under AquaLiv, Inc.,existing federal deficit, as well as deficit spending by the government as the result of adverse developments in the economy or other reasons, can lead to continuing pressure to reduce government expenditures for other purposes. Such actions in turn may adversely affect our remote desktopresults of operations. Although we attempt to stay informed of government and VoIP phone services under Focus Systems, Inc. will dependcustomer trends, any sustained failure to identify and respond to trends could have a material adverse effect on our ability to successfully market our products in this highly competitive environment. We cannot guarantee that we will be able to do so successfully.results of operations, financial condition, business and prospects.

FAILURE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD ADVERSELY AFFECT OUR BUSINESS.The requirements of remaining a public company may strain our resources and distract our management, which could make it difficult to manage our business.

While weWe are required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements are time-consuming and expensive and could have exclusive use of the patent personally owned by AquaLiv, Inc’s Chief Science Officer Dr. Ichimura, we cannot be assured that it will be sufficiently broad enough to protect our technology. In addition, we cannot assure that any patents issued to us in the future will not be challenged, invalidated, or circumvented. In order to safeguard our unpatented proprietary know-how, trade secrets, and technology, we rely primarily upon trade secret protection and nondisclosure provisions in agreements with employees and others having access to confidential information. We cannot assure that these measures will adequately protect us from improper disclosure or misappropriation of our proprietary information.

ENFORCING AND PROTECTING OUR PROPRIETARY INFORMATION CAN BE COSTLY AND ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

If we are not able to adequately protect or enforce our proprietary information or if we become subject to infringement claims by others,a negative effect on our business, results of operations and financial condition maycondition.

We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) and if we fail to continue to comply, our business could be materially adversely affected. We may need to engage in future litigation to enforce our intellectual property rights orharmed, and the rightsprice of our customers,securities could decline.

Rules adopted by the SEC pursuant to protectSection 404 of the Sarbanes-Oxley Act require an annual assessment of internal control over financial reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered public accounting firm. The standards that must be met for management to assess the internal control over financial reporting as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards. We expect to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or costly it will be to complete the assessment of the effectiveness of our trade secrets orinternal control over financial reporting for each year and to determine the validity and scope of proprietary rights of others, includingremediate any deficiencies in our customers. We also may need to engage in litigation in the future to enforce any patent rights. In addition,internal control over financial reporting. As a result, we may receive innot be able to complete the future communications from third parties asserting that our products infringe the proprietary rights of third parties. We cannot assure you that any such claims would not result in protractedassessment and costly litigation. Such litigation could result in substantial costs and diversion of our resources and could materially and adversely affect our business, financial condition and results of operations. Furthermore, we cannot assure you that we will have the financial resources to vigorously defend or enforce our proprietary technology.

THE SHARE CONTROL POSITION OF GARY BALL MAY LIMIT THE ABILITY OF OTHER STOCKHOLDERS TO INFLUENCE CORPORATE ACTIONS.

In April 2010, pursuant to the agreement, the Company sold 11,557,217 (pre-split) shares of authorized and previously unissued shares of common stock, representing at that time 89.9% of the outstanding stock of the Company immediately after the transaction, to Take Flight Equities, Inc. forremediation process on a purchase price of $200,000, consisting of $30,000 cash and a promissory note for $170,000. Pursuant to the agreement, the shares were placed in escrow at closing.  As payments were made on the note, a portion of the shares were to be released from escrow.timely basis. In the event that a promissory note payment waswe determine that our internal control over financial reporting is not made when due and not cured withineffective as defined under Section 404, we cannot predict how regulators will react or how the time provided in the escrow agreement, or if an event default occurs under the note, then the shares held in escrow along with promissory notemarket prices of our securities will be transferred to Gary Ball, and Gary Ball will assume responsibility for the payment of the note. In July 2010, Take Flight Equities defaulted on its note obligationsaffected; however, we believe that there is a risk that investor confidence and the responsibility for the note payment along with voting rights to the stock remaining in escrow reverted to Gary Ball. As a result, Gary Ball retains voting control of the 88,572,170 common shares issued and held in escrow, thereby making Gary Ball the largest shareholder with control of approximately 16%market value of our outstanding shares. Because Gary Ball controls such a significant percentage of the outstanding shares, other stockholders, individually or as a group, willsecurities may be at a disadvantage in their ability to effectively influence the election or removal of our directors, the supervision and management of the business or a change in control of or the sale of our company, even if he believed such changes were in the best interest of our stockholders generally.negatively affected.

OUR FUTURE SUCCESS DEPENDS, IN LARGE PART, ON THE CONTINUED SERVICE OF OUR PRESIDENT.

We depend almost entirely on the efforts and continued employment of Mr. William Wright, our President and Secretary-Treasurer. Mr. Wright currently is our sole independent contractor of the parent company, and we will depend on him for nearly all aspects of our operations. We do not have an employment contract with Mr. Wright, and we do not carry key person insurance on his life. Mr. Wright currently is able to devote a substantial amount of his time on our behalf. The loss of the services of Mr. Wright, through incapacity or otherwise, would have a material adverse effect on our business. It would be very difficult to find and retain qualified personnel such as Mr. Wright.

THE COMPANY’S FAILURE TO COMPLY WITH THE OBLIGATIONS SET FORTH IN THE AGREEMENTS ENTERED INTO WITH TCA GLOBAL CREDIT MASTER FUND, LP MAY RESULT IN THE FORECLOSURE OF THE COMPANY’S OR ITS SUBSIDIARIES’ PLEDGED ASSETS AND OTHER ADVERSE CONSEQUENCES.

On April 27 2012, the Company entered into that certain securities and purchase agreement (“Purchase Agreement”) with TCA Global Credit Master Fund, LP (“TCA”). To secure the performance of the Company’s obligations under the Purchase Agreement, the Company and its subsidiaries were required to enter into security agreements, pledge and escrow agreements and a guaranty agreement. Pursuant to a security agreement, the Company granted a continuing, first priority security interest in all of our assets to TCA (the “First Security Agreement”). In addition, our subsidiary, Focus Systems, Inc. (“Focus”), pursuant to a security agreement, granted a continuing, first priority security interest in all of Focus’s assets to TCA (“Second Security Agreement”). Further, pursuant to a pledge and escrow agreement, the Company pledged 11,516,104 of the Company’s common stock to TCA in escrow (the “First P&E Agreement”). Pursuant to a second pledge and escrow agreement, the Company pledged its entire interest in its subsidiary, AquaLiv, Inc., to TCA in escrow (the “Second P&E Agreement”). Lastly, pursuant to a guaranty agreement, Focus has guaranteed and is to act as surety to TCA for the payment of the Company’s liabilities when they become due (the “Guaranty”, together with the Purchase Agreement, First Security Agreement, Second Security Agreement, First P&E Agreement and Second P&E Agreement, collectively, the “TCA Agreements”). The Company’s failure to comply with the obligations in the TCA Agreements or the occurrence of certain other specified events could result in an event of default that, if not cured or waived, could result in the acceleration of all or a substantial portion of our debt, potential foreclosure on our assets and other adverse consequences.

Risks Related to Our Common Stock

Our common stock currently trades on the Pink Tier of OTC Markets and is Labeled as “No Information” and as “Delinquent SEC Reporting.”

Our common stock currently trades on the Pink Tier of OTC Market Group LLC’s Marketplace under the symbol “VRTY” and is labeled as “No Information” and as “Delinquent SEC Reporting” at this time. The Company plans to update its symbol pending FINRA approval of the Company’s Name Change, which the Company has not yet submitted to FINRA. The OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks,” as well as volume information. The trading of securities on the OTC Pink is often sporadic and investors may have difficulty buying and selling our shares or obtaining market quotations for them, which may have a negative effect on the market price of our common stock.

Our common stock is subject to risks arising from restrictions on reliance on Rule 144 by shell companies or former shell companies.

Under a regulation of the SEC known as “Rule 144,” a person who beneficially owns restricted securities of an issuer and who is not an affiliate of that issuer may sell them without registration under the Securities Act provided that certain conditions have been met. One of these conditions is that such person has held the restricted securities for a prescribed period, which will be 6 months for the common stock. However, Rule 144 is unavailable for the resale of securities issued by an issuer that is a shell company (other than a business combination related shell company) or, unless certain conditions are met, that has been at any time previously a shell company.

The SEC defines a shell company as a company that has (a) no or nominal operations and (b) either (i) no or nominal assets, (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets.

The Company is currently a shell company as such term is defined in Rule 12b-2 under the Exchange Act.

Rule 144 is available for the resale of securities of former shell companies if and for as long as the following conditions are met:

(i) the issuer of the securities that was formerly a shell company has ceased to be a shell company,

(ii) the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,

(iii) the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and

(iv) at least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company known as “Form 10 Information.”

We are currently a shell company, and while we believe that as a result of the planned Merger, the Company will cease to be a shell company, the SEC and others whose approval is required in order for shares to be sold under Rule 144 might take a different view. Additionally there can be no assurance that the Merger can close as planned, or at all.

The sale of the additional shares of common stock could cause dilution as well as the value of our common stock to decline.

The sale of a substantial number of shares of our common stock, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish. Further, if we do sell or issue more common stock, any investors’ investment in the Company will be diluted. Dilution is the difference between what you pay for your stock and the net tangible book value per share immediately after the additional shares are sold by us. If dilution occurs, any investment in the Company’s common stock could seriously decline in value.

AT THIS TIME, WE ARE NOT LISTED ON THE OTCBB WHICH COULD LIMIT THE ABILITY OF BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET.Our common stock constitutes restricted securities and is subject to limited transferability.

At thisAll of our common stock shares, should be considered a long-term, illiquid investment. In addition, our common stock, is not registered under any state securities laws that would permit their transfer. Because of these restrictions and the absence of an active trading market for our securities, a stockholder will likely be unable to liquidate an investment even though other personal financial circumstances would dictate such liquidation.

Our common stock price may decrease due to factors beyond our control.

The stock market from time we are not listed onto time has experienced extreme price and volume fluctuations, which have particularly affected the OTCBB. We planmarket prices for early stage companies and which often have been unrelated to begin the relisting processoperating performance of the companies. These broad market fluctuations may adversely affect the market price of our stock if a trading market for the OTCBBour stock ever develops. If our shareholders sell substantial amounts of their stock in the next fiscal year. Currently,public market, the price of our stock could fall. These sales also might make it more difficult for us to sell equity, or equity-related securities, in the future at a price we deem appropriate.

The market price of our stock may also fluctuate significantly in response to, but not limited, to the following factors, most of which are solely listed onbeyond our control:

Any such fluctuations may adversely affect the OTC Markets OTCQB.market price or value of our common stock, regardless of our actual operating performance. As a result, the market liquidity for our securities could be adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTCBB, whichsell their shares, or may have an adverse material effect on our company.

BECAUSE THE PUBLIC MARKET FOR SHARES OF OUR COMMON STOCK IS LIMITED, INVESTORS MAY BE UNABLE TO RESELL THEIR SHARES OF COMMON STOCK.be forced to sell them at a loss.

Currently, thereOur common stock is only a limited publicsubject to the application of the “penny stock” rules which could adversely affect the market forprice of our common stock on the OTCQB in the United States. Thus, investors may be unable to resell their shares of our common stock. The development of an active public trading market depends upon the existence of willing buyers and sellers who are ableincrease transaction costs to sell their shares as well as market makers willing to create a market in suchthose shares. Under these circumstances, the market bid and ask prices for the shares may be significantly influenced by the decisions of the market makers to buy or sell the shares for their own account. Such decisions of the market makers may be critical for the establishment and maintenance of a liquid public market in our common stock. Market makers are not required to maintain a continuous two-sided market and are free to withdraw firm quotations at any time. We cannot give you any assurance that an active public trading market for the shares will develop or be sustained.

THE APPLICATION OF THE “PENNY STOCK” RULES COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON SHARES AND INCREASE YOUR TRANSACTION COSTS TO SELL THOSE SHARES.

The U.S. Securities and Exchange Commission (the “SEC”)SEC has adopted rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:

• that a broker or dealer approve a person’s account for transactions in penny stocks; and

• the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

• obtain financial information and investment experience objectives of the person; and

• make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

• sets forth the basis on which the broker or dealer made the suitability determination; and

• that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

AS AN ISSUER OF “PENNY STOCK,” THE PROTECTION PROVIDED BY THE FEDERAL SECURITIES LAWS RELATING TO FORWARD LOOKING STATEMENTS DOES NOT APPLY TO US.

Although federal securities laws provide a safe harborThe market price for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harborour common stock is not availableparticularly volatile which could lead to issuers of penny stocks. As a result, the Company will not have the benefit of this safe harbor protectionwide fluctuations in the event of any legal action based upon a claim that the material provided by the Company contained a material misstatement of factour share price. You may be unable to sell your common stock shares at or was misleading in any material respect because of the Company’s failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

COMPLIANCE AND CONTINUED MONITORING IN CONNECTION WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE MAY RESULT IN ADDITIONAL EXPENSES.

Changing laws, regulations and standards relating to corporate governance and public disclosureabove your purchase price, or at all, which may create uncertainty regarding compliance matters. New or changed laws, regulations and standards are subject to varying interpretations in many cases. As a result, their application in practice may evolve over time. We are committed to maintaining high standards of corporate governance and public disclosure. Complying with evolving interpretations of new or changed legal requirements may cause us to incur higher costs as we revise current practices, policies and procedures, and may divert management time and attention from the achievement of revenue generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to uncertainties related to practice, our reputation might be harmed which would could have a significant impact on our stock price and our business. In addition, the ongoing maintenance of these procedures to be in compliance with these laws, regulations and standards could result in significant increase in costs.

THE MARKET PRICE FOR OUR COMMON SHARES IS PARTICULARLY VOLATILE GIVEN OUR STATUS AS A RELATIVELY UNKNOWN COMPANY WITH A SMALL AND THINLY TRADED PUBLIC FLOAT, LIMITED OPERATING HISTORY AND LACK OF PROFITS WHICH COULD LEAD TO WIDE FLUCTUATIONS IN OUR SHARE PRICE. YOU MAY BE UNABLE TO SELL YOUR COMMON SHARES AT OR ABOVE YOUR PURCHASE PRICE, WHICH MAY RESULT IN SUBSTANTIAL LOSSES TO YOU.substantial losses to you.

The market for our common sharesstock is characterized by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats,seasoned issuers, and we expect that our share price will continue to be more volatile than the shares of such larger, more established companiesa seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our common shares are, compared to the shares of such larger, more established companies, sporadically and thinly traded. As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand. Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that trades on a national securities exchange and has a large public float.seasoned issuer. Many of these factors are beyond our control and may decrease the market price of our common shares,stock regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock shares will be at any time, including as to whether our common shares will sustain their current market prices, or as to what effect that the sale of shares or the availability of common stock shares for sale at any time will have on the prevailing market price.

Because we will likely issue additional shares of our common stock, investment in the Company could be subject to substantial dilution.

Investors’ interests in the Company will be diluted and investors may suffer dilution in their net book value per share when we issue additional shares. We are authorized to issue 1,400,000,000 shares of common stock. We anticipate that all or at least some or potentially all of our future funding, if any, will be in the form of equity financing from the sale of our common stock. If we do sell or issue more common stock, any investors’ investment in the Company will be diluted. Dilution is the difference between what you pay for your stock and the net tangible book value per share immediately after the additional shares are sold by us. If dilution occurs, any investment in the Company’s common stock could seriously decline in value.

WE DO NOT INTEND TO PAY DIVIDENDS.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted FINRA Rule 2111 that requires a broker-dealer to have reasonable grounds for believing that an investment is suitable for a customer before recommending the investment. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

We do not intend to pay dividends for the foreseeable future.

We do not anticipate payinghave never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We may not have sufficient funds to legally pay dividends. Even if funds are legally availableanticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends we may nevertheless decide in our sole discretion not to pay dividends. The declaration, payment and amount of anythe future dividends will be made at the discretion of our boardBoard of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors our board of directors may consider relevant. There is no assurance that we will pay any dividends in the future, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.Directors.

AS A PUBLIC COMPANY, WE ARE SUBJECT TO COMPLEX LEGAL AND ACCOUNTING REQUIREMENTS THAT WILL REQUIRE US TO INCUR SIGNIFICANT EXPENSES AND WILL EXPOSE US TO RISK OF NON-COMPLIANCE.

As a public company,If we are subject to numerous legal and accounting requirements that do not apply to private companies. The cost of compliance with many of these requirements is material, not only in absolute terms but, more importantly, in relation to the overall scope of the operations of a small company. Our relative inexperience with these requirements may increase the cost of compliance and may also increase the risk that we will fail to comply.

Failureunable to comply with thesethe financial reporting requirements can have numerous adverse consequences including, butmandated by the SEC’s regulations, investors may lose confidence in our financial reporting and the price of our common stock, if a market ever does develop for it, could decline.

If we fail to maintain effective internal controls over financial reporting, our ability to produce timely, accurate and reliable periodic financial statements could be impaired. If we do not limited to,maintain adequate internal control over financial reporting, investors could lose confidence in the accuracy of our inability to file required periodic reports onfiled under the Exchange Act. Additionally, our ability to obtain additional financing could be impaired or a timely basis, losslack of marketinvestor confidence and/or governmental or private actions against us.in the reliability and accuracy of our public reporting could cause our stock price to decline.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

The Company’s headquarters are located at 387 Corona St., Suite 555, Denver, CO 80218, which are provided to the Company at no cost. We cannot assure youbelieve that these facilities are adequate at this time and that we will be able to comply with all of these requirementsobtain appropriate additional facilities or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis our privately heldalternative facilities on commercially reasonable terms if and larger public competitors.when necessary.

WE MAY BE SUBJECT TO SHAREHOLDER LITIGATION, THEREBY DIVERTING OUR RESOURCES THAT MAY HAVE A MATERIAL EFFECT ON OUR PROFITABILITY AND RESULTS OF OPERATIONS.Item 3. Legal Proceedings.

As discussedThe Company may be involved in certain legal proceedings that arise from time to time in the preceding risk factors,ordinary course of its business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the market for our common sharesCompany is characterized by significant price volatility when compareda party, other than the receivership as discussed below, or which any of its property is the subject and which would have any material, adverse effect on the Company.

Receivership

The Company is currently in receivership. On May 16, 2016, pursuant to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuerCase Number A16-733815-B, Nevada’s 8th Judicial District, Business Court, appointed Robert Stevens as receiver (the “Receiver”) for the indefinite future.  InCompany. Creditors were required to provide claims in writing under oath on or before November 3, 2016, or they would be barred under Nevada Revised Statute §78.675. Since May 16, 2016, through the past, plaintiffs have often initiated securities class action litigation againstdate of this Annual Report, the Company has been operating under the direction of the Receiver. On March 22, 2018, the District Court in Clark County, Nevada approved a company following periodsplan of volatilityreorganization that involved authorizing the cancellation of all preferred shares of the Company, the cancellation of certain insider shares, a reverse stock split up to a maximum of 200-1, and a reorganization that would place the liquidation of the Company’s assets under a liquidating trustee while maintaining the public, purchasers for value with equity in the market price of its securities.  We may becomesurviving entity. Once the target of similar litigation. Securities litigationreorganization is completed it is expected the Receiver will result in substantial costs and liabilities and will divert management’s attention and resources.be discharged.

COMPLIANCE WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE WILL RESULT IN ADDITIONAL EXPENSES AND POSE CHALLENGES FOR OUR MANAGEMENT.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets.  Our management team will need to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Item 1B. Unresolved Staff Comments.4. Mine Safety Disclosures.

Not applicable.

Item 2. Property.

The Company’s corporate office is currently located at 4550 NW Newberry Hill Road, Suite 202, Silverdale Washington, 98383. The corporate office is shared by Focus Systems, Inc. We currently rent on a month to month basis and pay rent of $1,000 per month. We own no real estate nor have plans to acquire any real estate.

Item 3. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.  There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Part II

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

(a) Market Information

Our common stock is currently quotedCurrently Trades on the OTCQBPink Tier of OTC Market Group LLC’s Marketplace under the symbol “AQLV.” There“VRTY” and is labeled as “No Information” and as “Delinquent SEC Reporting” at this time. The Company plans to update its symbol pending FINRA approval of the Company’s name change to its current name, which the Company has not yet submitted to FINRA. The OTC Market is a limitednetwork of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks,” as well as volume information. The trading of securities on the OTC Pink is often sporadic and investors may have difficulty buying and selling our shares or obtaining market quotations for them, which may have a negative effect on the market price of our common stock. The closing price of our common stock on the OTC Pink on September 10, 2020 was $0.105.

The following table sets forth, for the range ofperiods indicated the high and low bid quotations for each quarter since September 30, 2010.our common stock. These quotations as reported by the OTCQB reflectrepresent inter-dealer pricesquotations, without adjustment for retail mark-up, mark-down,markup, markdown, or commissionscommission and may not necessarily represent actual transactions.

Quarter ended		High				Low
September 30, 2010		$	0.0200			$	0.0010
December 31, 2010		$	0.0180			$	0.0022
March 31, 2011		$	0.0128			$	0.0030
June 30, 2011		$	0.0160			$	0.0027
September 30, 2011		$	0.0070			$	0.0028
December 31, 2011		$	0.0055			$	0.0050
March 31, 2012		$	0.0059			$	0.0051
June 30, 2012		$	0.0060			$	0.0019
September 30, 2012		$	0.0045			$	0.0013

Period		High				Low
Fiscal Year 2020
First Quarter (July 1, 2019 – September 30, 2019)		$	0.1300			$	0.0070
Second Quarter (October 1, 2019 – December 31, 2019)		$	0.0490			$	0.0086
Third Quarter (January 1, 2020 – March 31, 2020)		$	0.0490			$	0.0230
Fourth Quarter (April 1, 2020 – June 30, 2020)		$	0.0800			$	0.0115

    

Period		High				Low
Fiscal Year 2019
First Quarter (July 1, 2018 – September 30, 2018)		$	0.0400			$	0.0112
Second Quarter (October 1, 2018 – December 31, 2018)		$	0.0270			$	0.0088
Third Quarter (January 1, 2019 – March 31, 2019)		$	0.0140			$	0.0061
Fourth Quarter (April 1, 2019 – June 30, 2019)		$	0.1000			$	0.0065

(b) Holders

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Dividends

The Company has not declared any dividends since inception and does not anticipate paying any dividends in the foreseeable future on its common stock. The payment of dividends is within the discretion of the Board of Directors and will depend on the Company’s earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit the Company’s ability to pay dividends on its common stock other than those generally imposed by applicable state law.

Equity Compensation Plans

None.

Holders

As of January 11, 2013, there were approximately1,402holders of recordSeptember 15, 2020, we had 127,333,060 shares of our common stock par value, $.0001 issued and outstanding. There were approximately 1,486 record owners of our common stock.

 

(c) DividendsTransfer Agent and Registrar

We have never paid any cash dividends on our common shares, and we do not anticipate that we will pay any dividends with respect to those securities in the foreseeable future. Our current business plan is to retain any future earnings to finance the expansion development of our business.

(d) Securities Authorized for Issuance under Equity Compensation Plan

The following table provides information as of September 30, 2012, with respect to the shares of the Company's common stock that may be issued under the Company's existing equity compensation plan, “2010 Incentive Compensation Plan”. 

Equity Compensation Plan Information
Plan category		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)				Weighted-average Exercise price of outstanding options, warrants and rights (b)				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders			0				0				0
Equity compensation plans not approved by security holders (1)			0				0				15,000,000
Total			0				0				15,000,000

(1) Consists of the 2010 Incentive Compensation Plan filed on Form S-8, July 9, 2010.

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Unregistered Sales of Equity Securities

During the fiscal year ending September 30, 2012, the Company issued the following securities pursuant to exemptions from registration provided by Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder.

In October, 2011, the Company issued 14,500,000 shares of common stock to Blulife, Inc. (“Bluelife”) to repay $7,250 in debt acquired from Silverdale Partners, LP (“Silverdale”).

In November, 2011, the Company issued 15,000,000 shares of common stock to Blulife to repay $7,500 in debt acquired from Silverdale.

In December 2011, the Company issued 2,500,000 shares of common stock to MRJ Resources LLC in exchange for $10,000 in cash.

In December 2011, the Company issued 500,000 shares of common stock to Robert Foster in exchange for $2,000 in cash.

In December 2011, the Company issued 1,000,000 shares of common stock to Jim Oakes in exchange for $4,000 in cash.

In December 2011, the Company issued 1,000,000 shares of common stock to Jeff and Cassandra Ruggles in exchange for $4,000 in cash.

In December, 2011, the Company issued 16,000,000 shares of common stock to Blulife to repay $8,000 in debt acquired from Silverdale.

In January, 2012, the Company issued 14,000,000 shares of common stock to Blulife to repay $7,000 in debt acquired from Silverdale.

In January 2012, the Company issued 5,000,000 shares of common stock to D Rick Edwards in exchange for $50,000 in cash.

In January 2012, the Company issued 250,000 shares of common stock to Christopher Bruyer in exchange for $2,500 in cash.

In February 2012, the Company issued 17,000,000 shares of common stock to Blulife to repay $8,500 in debt acquired from Silverdale.

In February 2012, the Company issued 2,727,273, 3,409,091 and 4,687,500 shares of common stock to Asher Enterprises, Inc. (“Asher”) to retire $42,000 in debt.

In March 2012, the Company issued 3,333,333 shares of common stock to Asher to repay $10,000 in debt and accrued interest.

In March 2012, the Company issued 1,500,000 shares of common stock to Proactive Capital Resources LLC for consulting services valued at $9,000.

In March 2012, the Company issued 1,000,000 shares of common stock to Spencer Edwards Investments Inc. for consulting services valued at $6,000.

In March 2012, the Company issued 19,000,000 shares of common stock to Blulife to repay $9,500 in debt acquired from Silverdale.

In April 2012, the Company issued 4,615,385, 3,409,091 and 4,687,500 shares of common stock to Asher to repay $39,000 in debt and accrued interest.

In April 2012, the Company issued 480,759 shares of common stock to Terry and Pam Morrow in exchange for 4,000 shares of preferred stock valued at $4,000.

In April 2012, the Company issued 2,403,846 shares of common stock to Greg and Melissa Morrow in exchange for 20,000 shares of preferred stock valued at $20,000.

In April 2012, the Company issued 240,385 shares of common stock to Joyce Morrow in exchange for 2,000 shares of preferred stock valued at $2,000.

In April 2012, the Company issued 961,538 shares of common stock to Rafa Parra in exchange for 8,000 shares of preferred stock valued at $8,000.

In April 2012, the Company issued 675,676 shares of common stock to Andrew Dempsey in exchange for 4,000 shares of preferred stock valued at $4,000.

In April 2012, the Company issued 3,378,378 shares of common stock to Muris Bisic in exchange for 20,000 shares of preferred stock valued at $20,000.

In April 2012, the Company issued 238,095 shares of common stock to John and Vickie Cooper in exchange for 2,000 shares of preferred stock valued at $2,000.

In April 2012, the Company issued 675,676 shares of common stock to Carl Bolstad in exchange for 4,000 shares of preferred stock valued at $4,000.

In April 2012, the Company issued 14,000,000 and 7,000,000 shares of common stock to Blulife to repay $10,500 in debt acquired from Silverdale.

In May 2012, the Company issued 625,000 shares of common stock to Sean Sleight in exchange for 4,000 shares of preferred stock valued at $4,000.

In May 2012, the Company issued 5,555,556 shares of common stock to TCA Global Credit Master Fund, LP (“TCA”) as incentive shares valued at $25,000.

In May 2012, the Company issued 11,516,104 shares of common stock to TCA in escrow as part of our financing agreement with TCA.

In May 2012, the Company issued 3,571,429 shares of common stock to Auctus Private Equity Management, Inc. (“Auctus Management”) as commitment shares valued at $12,500.

In June 2012, the Company issued 23,000,000 shares of common stock to Blulife, Inc. to retire $11,500 in debt acquired from Silverdale.

In July 2012, the Company issued 20,000,000 shares of common stock to Blulife to repay $10,000 in debt acquired from Silverdale.

In August 2012, the Company issued 11,538,462 shares of common stock to Asher to retire debt in the amount of $15,000.

In September 2012, the Company issued 39,469,250 shares of common stock to Asher to retire $32,000 in debt.

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Transfer Agent

OurCompany’s transfer agent is Pacific Stock Transfer, located at 4045 South Spencer Street, Suite 403, Las Vegas, NV, 89119.

 

Recent Sales of Unregistered Securities

On August 27, 2020, the Company issued the Receiver Shares, which consisted of 38,199,918 shares each of its common stock to three parties, totaling 114,599,754 shares of common stock in the aggregate, in accordance with the Amendment and the Merger Agreement as consideration for the services provided to the Company by its receiver.

The above issuances of shares of common stock were issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended and the provisions of Regulation D promulgated thereunder.

Our Securities

General

Our authorized capital stock consists of 1,400,000,000 shares of common stock, par value $0.0001 per share and 10,000,000 shares of preferred stock, $0.0001 par value per share, of which 127,333,060 shares of common stock are currently outstanding; and 0 shares of preferred stock are currently outstanding.

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Common Stock

Each holder of our common stock is entitled to one vote for each share owned of record on all matters voted upon by shareholders, and a majority vote is required for actions to be taken by shareholders. The common stock has no preemptive rights, no cumulative voting rights and no redemption, sinking fund or conversion provisions.

Preferred Stock

The Company is authorized to issue 10,000,000 shares of preferred stock, $0.0001 par value per share and the Company’s Board of Directors is authorized to establish, from the authorized shares of preferred stock, one or more classes or series of shares, to designate each such class and series, and fix the rights and preferences of each such class of preferred stock, which shall have voting powers, preferences, participating, optional or other special rights, qualifications and limitations or restrictions as adopted by the Board of Directors prior to the issuance of any such preferred shares.

Warrants

There are currently no outstanding warrants of the Company.

Options

There are currently no options outstanding.

Anti-Takeover Effects of Certain Provisions of Our Bylaws

Provisions of our Bylaws could make it more difficult to acquire us utilizing a merger, tender offer, proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.

Calling of Special Meetings of Stockholders. Our Bylaws provide that special meetings of the stockholders may be called only by the Board, unless otherwise required by law.

Item 6. Selected Financial Data.

 

Not applicable.required for smaller reporting companies.

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION AND RESULTS OF OPERATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS”AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.The following discussion and analysis of the results of operations and financial condition of the Company for the years ended June 30, 2019 and 2018, should be read in conjunction with the other sections of this Annual Report, including “Description of Business” and the Financial Statements and notes thereto of the Company included in this Annual Report. The various sections of this discussion contain forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Annual Report as well as other matters over which we have no control. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.

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Organizational History of the Company and Overview

On December 31, 2012, AquaLiv Technologies, Inc. (“ALTI”) and Verity Farms II, Inc. (“Verity Farms”), a South Dakota corporation, entered into a Share Exchange Agreement. Pursuant to the Share Exchange Agreement, ALTI acquired 100% of the authorized and issued shares of Verity Farms in exchange (the “Exchange”) for 4,850,000 shares of Series B Convertible Preferred Stock, par value $0.001, of ALTI, representing approximately 86% of the outstanding shares of ALTI, on a fully-diluted basis, assuming conversion into common stock. As a result of the Exchange and the other transactions contemplated thereunder, Verity Farms became a wholly-owned subsidiary of ALTI and ALTI acquired Verity Farms’ business operations. ALTI was formed under the laws of the State of Nevada on April 11, 2006 originally under the name of Infrared Systems International “ISI” as a wholly-owned subsidiary of China Sxan Biotech, Inc. (“CSBI”) (then known as Advance Technologies, Inc.) to pursue a narrowly defined business objective called infrared security systems.

On April 1, 2013, the Company changed its name from AquaLiv Technologies Inc. to Verity Corp. and our stock symbol changed to VRTY.

 

The Company iswas the parent of Verity Farms and Aistiva Corporation (“Aistiva”) (f/k/a AquaLiv, Inc.). Verity Farms was dedicated to providing consumers with safe, high-quality and Focus Systems, Inc. (“Focus Systems”). AquaLiv, Inc.’s technology alters the behavior of organisms, including plantsnutritious food sources through sustainable crop and humans, without chemical interaction. From increased crop yields to drug-free medicine, AquaLiv, Inc. is providing innovative, ingredient-free solutions to the world's largest problems. The company’s platform technology influences biological processes naturally and without chemical interaction. To date, AquaLiv, Inc. haslivestock production. Aistiva previously released products in the industries of water treatment, skincare, and agriculture. The company is primarily known forVerity Farms was administratively dissolved in the AquaLiv Water System product which also producesState of South Dakota on May 4, 2018. Aistivia was administratively dissolved on April 9, 2015 in the majorityState of Washington.

In February 2016, all of the company’s revenue. Focus SystemsCompany’s officers and directors resigned, and the Company stopped substantially all operating activities. Since such time, and currently, the Company is a technology“shell company, providing customers with remote desktop services and Voice over Internet Protocol (VoIP) phone services. Focus Systems maintains servers that house data and applications that its customers can access remotely without” as such term is defined in Rule 12b-2 under the need for the customers to maintain a server. The company’s VoIP service utilizes the internet for phone service rather than through a traditional telecommunications company.Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Receivership

 

The Company continuesis currently in receivership. On May 16, 2016, pursuant to struggle with liquidity and capital resources sufficientCase Number A16-733815-B, Nevada’s 8th Judicial District, Business Court, appointed Robert Stevens as receiver (the “Receiver”) for the Company. Creditors were required to provide claims in writing under oath on or before November 3, 2016, or they would be able to fully execute on its business plan. Previously we have issued press releases regardingbarred under Nevada Revised Statute §78.675. Since May 16, 2016, through the potential for a $50 million capital infusion. Whiledate of this Annual Report, the Company has continued to work withbeen operating under the funding group towards this goal, we have yet to receive any funds from this effort. Subsequently, our ability to execute on planned initiatives, such asdirection of the acquisitionReceiver.

On March 22, 2018, the District Court in Clark County, Nevada approved a plan of reorganization that involved authorizing the cancellation of all preferred shares of the Company, the cancellation of certain Japanese operations owned by our Chief Science Officer, have been suspended until such timeinsider shares, a reverse stock split up to a maximum of 200-1, and a reorganization that adequate capital resources are obtained and business initiatives can be reevaluated. Additionally,would place the lack of funding has hampered our ability to properly market our existing products and services. Our AquaLiv, Inc. retail product lines, AquaLiv Water System and Infotone Hydrating Mist, each suffer from our inability to market the products to greater numbers of people, and such the sales of each have remained relatively stagnate over the courseliquidation of the past year. Our Focus Systems services, Remote Desktop and VoIP phones service, have also been impacted by our inability to hire sales personnel and properly market these service lines, which has resultedCompany’s assets under a liquidating trustee while maintaining the public, purchasers for value with equity in declining numbers of customers for each service line. Without an increase in liquidity and capital resources, these trends may continue, which could greatly impact the ability for these subsidiaries to thrive.

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Plan of Operationsurviving entity. Once the reorganization is completed the Receiver will be discharged.

 

Recent advancements in AquaLiv,Change of Domicile and Plan of Conversion

On March 15, 2019, Healthcare Solutions Management Group, Inc.’s technology have created opportunities was incorporated in the industriesState of water purification, environmental science, agriculture, animal husbandry, personal use products,Delaware. Verity Delaware, Inc. was incorporated in the State of Delaware on March 11, 2019. Verity Merger Corp. was incorporated in the State of Delaware on March 15, 2019. On March 11, 2019, pursuant to an Agreement and medicine. AquaLiv, Inc. is ready to expand its innovative product offering.Additionally, management is investigating possible acquisitions that would be accretive to the core business and enable the growthPlan of its revenues both locally and abroad.

The technology industry, especially as it applies to the small business sector, has slowed drastically during the recession. New service orders for both remote desktop and VoIP products have been slow since acquisition. Management is working on increasing exposure for its remote desktop product and is working to expand its VoIP phone service from the small business market into the residential market as well. Management is investigating possible acquisitions that would be accretive to the core business and enable the growth of its revenues.

Results of Operations

For the Year Ended September 30, 2012 Compared to the Year Ended September 30, 2011

Revenues

Revenues were approximately $479,529 for the fiscal year ended September 30, 2012, as compared to approximately $590,138 for the prior fiscal year. Revenue was comprised of sales revenue, service revenue, and royalty revenue (stopped receiving June 22, 2011).  Sales revenue, the revenue generated by AquaLiv, Inc., for the fiscal year ended September 30, 2012 and 2011 amounted to $449,626 and $446,053, respectively. Sales revenue accounted for 93.8% of the revenue for the fiscal year ended September 30, 2012 and 76% of the revenue for the prior fiscal year.  Service revenue is the revenue generated by Focus Systems and includes fees for remote desktop and VoIP services provided by Focus Systems. Service revenue amounted to $29,904 for the fiscal year ended September 30, 2012, compared to $44,085 for the fiscal year ended September 30, 2011. Service revenue accounted for 6.2% of the total revenue, for the fiscal year ended September 30, 2012, and 7% for the fiscal year ended September 30, 2011. Royalty revenue for the fiscal year ended September 30, 2012 and 2011 amounted to $0 and $100,000, respectively. Royalty revenue accounted for 0% of the revenue for the fiscal year ended September 30, 2012 (stopped receiving June 22, 2011) and 17% of the revenue for the fiscal year ended September 30, 2011.  The decrease in total revenue was due to sales and service revenue remaining relatively flat for the current fiscal year compared to the prior fiscal year, and the lack of royalty revenue during the current fiscal year.  The decrease in revenues related to royalty revenue is a reflection of the distribution of the assets of Infrared Applications, Inc. (“Infrared”) on June 22, 2011, as which timeConversion, the Company, ceased recognizing royalty revenue.

Cost of Sales

Cost of sales forthen a Nevada corporation named Verity Corp., converted into and became Verity Delaware, Inc., a Delaware corporation in Delaware and on May 30, 2019, the fiscal year ended September 30, 2012conversion was $123,173 as compared to $193,430 for the prior fiscal year. The decreasecompleted in cost of sales is a result of cost saving measures instituted and the outsourcing of certain services by our subsidiaries.

General and Administrative Expenses

Operating expense for the fiscal year ended September 30, 2012 was $783,537 as compared to $1,020,310 for the prior fiscal year, a decrease of 22%. The decrease was due to the reduction of expenses following the distribution of the Infrared assets on June 22, 2011. Additionally, consulting fees decreased from $60,819 in 2011 to $35,810 in 2012, a decrease of 41%, andNevada. As a result of the Company limiting its use of outside vendors to perform services for us. Researchforegoing, Verity Corp. a Nevada corporation converted into and development decreased from $9,936 in 2011 to $1,213 in 2012, an 88% decrease andbecame Verity Delaware, Inc., a result of reduced research work on AquaLiv, Inc.’s technologies during the fiscal year. Travel, meals, and entertainment decreased from $20,333 in 2011, to $18,769 in 2012, an 8% decrease and a result of management’s need to travel to meetings throughout the fiscal year slightly less than the prior fiscal year. Other general and administrative decreased from $287,412 in 2011 to $254,384 in 2012, a decrease of 10%, and primarily attributedDelaware corporation. On May 8, 2019, pursuant to a decreasePlan of Merger, Verity Delaware, Inc. was merged with and into Verity Merger Corp., with Verity Merger Corp. surviving, and with Healthcare Solutions Management Group, Inc. becoming a successor in utilities, rent,interest to Verity Delaware Inc. and other items associated with the dispositionparent company of Verity Merger Corp.

Name and Trading Symbol Change

Since Healthcare Solutions Management Group, Inc. became the successor in interest to Verity Delaware Inc. a Delaware corporation which was previously a Nevada corporation named Verity Corp., the Company’s current name is Healthcare Solutions Management Group, Inc. The Company plans to submit an Issuer Company-Related Action Notification Form (the “Name Change”) to the Financial Industry Regulatory Authority (“FINRA”) to request that the Company’s name be updated to its current name and to change the Company’s trading symbol accordingly. The Company has not yet submitted the Name Change to FINRA and there can be no assurance that FINRA will process the Name Change as planned, or at all.

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No Current Operations

In February 2016, all of the Infrared assets onCompany’s officers and directors resigned, and the Company stopped substantially all operating activities. Since such time, and currently, the Company is a “shell company,” as such term is defined in Rule 12b-2 under the Exchange Act. Since May 16, 2016, through the date of this Annual Report, the Company has been operating under the direction of the Receiver.

The Company has no operations at this time, and currently does not have any principal products or services, customers or intellectual property. As the Company has no current operations, it also currently is not subject to any competitive business conditions. Further, the Company is not subject to any government approvals at this time, other than those related to the receivership and those applicable to it as a “shell company,” as such term is defined in Rule 12b-2 under the Exchange Act.

Merger Agreement with Healthcare Solutions Holdings, Inc.

On June 22, 2011. There14, 2019, the Company (the successor in interest to Verity Delaware Inc., a Delaware corporation which was previously a onetime loss on goodwill impairment associated withNevada corporation named Verity Corp.) entered into a Merger Agreement (the “Merger Agreement”) by and between the AquaLiv, Inc. acquisition during the 2011 fiscal year in the amount of $315,484,Company, Verity Merger Corp., a resultwholly-owned subsidiary of the Company fully impairing the goodwill received in the acquisition. The reductions in operating expenses were offset by increases in other areas, including professional fees which increased from $88,683 in 2011 to $178,001 in 2012, an increase of 100%, attributed to the increase in legal and other fees. An increase in management fees from $105,900 in 2011 to $120,000 in 2012, an increase of 13%(the “Merger Sub”), and a result of fees paid to our acting President. Payroll expense increased from $127,455 in 2011 to $172,861 in 2012, and increase of 36% and attributed to the employees acquired in with the acquisition of AquaLiv,Healthcare Solutions Holdings, Inc.

Other Income and Expense

For the fiscal year ended September 30, 2012, the expense was $226,758 compared to income of $17,352 for the prior fiscal year, an increase of 1,306%. The increase in expense resulted primarily from a one time gain on distribution of assets of Infrared during the prior fiscal year and the authorization of debt expense associated with our derivative liabilities. Normal operations for the Company will result in a net other expense when accounting for interest expense.

Net (Loss) Before Provision for Income Taxes

The net loss for the fiscal year ended September 30, 2012 was $653,939 versus $606,250 for the prior fiscal year. The increase in the loss of $47,689 was due to a decrease in operating expenses of $196,421 and a decrease in cost of goods of $70,257. The decreases to expenses were primarily offset by a decrease in revenues of $110,609 and an increase in other expenses of $209,406.

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Liquidity and Capital Resources

Operating expenses for the fiscal year ended September 30, 2012 and 2011, were $783,537 and $1,020,310, respectively. The net loss for the fiscal year ended September 30, 2012 and 2011 was $653,939 and $606,250, respectively.

As of September 30, 2012,the Company did not have and continues to not have sufficient cash on hand to pay present obligations as they become due. In addition, due to current economic conditions and the Company’s related risks and uncertainties, there is no assurance that we will be able to raise additional capital on acceptable terms, if at all, to meet our current obligation over the next 12 months. Because of the foregoing, the Company’s auditors have expressed substantial doubt about our ability to continue as a going concern.

If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy. Our estimated working capital requirement for the next 12 months is $500,000, with an estimated burn rate of $35,000 per month.

On April 27, 2012, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with TCA Global Credit Master Fund, LP, a Cayman Islands limited partnership (“TCA”), pursuant to which TCA purchased from the Company a two hundred thousand dollar ($200,000) senior secured redeemable debenture (the “Debenture”). The maturity date of the Debenture is April 24, 2013, subject to adjustment (the “Maturity Date”). The Debenture bears interest at a rate of twelve percent (12%) per annum.

As further consideration, the Company issued to TCA 5,555,556 shares of the Company’s common stock on May 1, 2012 totaling an aggregate amount of twenty five thousand dollars ($25,000) (the “Incentive Shares”). In the event the value of the Incentive Shares issued to TCA does not equal $25,000 after a nine month evaluation date, the Purchase Agreement provides for an adjustment provision allowing for necessary action (either the issuance of additional shares to TCA or the return of shares previously issued to TCA to the Company’s treasury) to adjust the number of Incentive Shares issued. The Incentive Shares are not being registered for resale in this registration statement.

First Pledge and Escrow Agreement

On April 27, 2012, in connection with the Purchase Agreement, the Company entered into a pledge and escrow agreement (the “First P&E Agreement”), by and among the Company, TCA and David Kahan, P.A., as escrow agent (the “Escrow Agent”HSH”). Pursuant to the terms of the First P&EMerger Agreement, the parties agreed that Merger Sub would merge with and into HSH, with HSH being the surviving entity and becoming a wholly-owned subsidiary of the Company (the “Merger”).

The closing of the Merger is planned to take place on the third business day following the satisfaction or waiver (by the party for whose benefit the condition exists) of the closing conditions in the Merger Agreement or on such other date and at such other time and place as the parties agree in writing.

Upon the effective time of the Merger, (i) HSH’s certificate of incorporation will be the certificate of incorporation of the surviving company, (ii) HSH’s bylaws will be the bylaws of the surviving company, (iii) HSH’s directors immediately prior to the effectiveness of the Merger will be the directors of the surviving company and (iv) HSH’s officers immediately prior to the effectiveness of the Merger will be the officers of the surviving company.

At the closing of the Merger, it is planned that the Receiver will elect Justin Smith, Jonathan Loutzenhiser and Dr. Charles Balaban as members of the Company’s board of directors, and then resign.

The aggregate Merger consideration to be paid to the holders of the HSH common stock at the effective time of the Merger will be an aggregate number of shares of the Company’s common stock constituting 90% of the issued and outstanding shares of Company common stock immediately following the closing.

At the effective time of the Merger, each share of HSH common stock issued and outstanding immediately prior to the effective time (other than shares canceled as provided in the Merger Agreement, if any), will be converted into shares of Company common stock, at an exchange ratio as required to cause the number of shares of Company common stock issued to the holders of the HSH common stock to be 90% of the issued and outstanding shares of the Company common stock immediately following the closing, which is currently expected to result in an exchange ratio of 127.33306 shares of Company common stock per share of HSH common stock (as ultimately so determined, the “Exchange Ratio”), with any fractional shares of Company common stock being rounded to the nearest whole share of Company common stock. The Exchange Ratio will be finally determined by the parties to the Merger Agreement prior to the closing.

As consideration for the services of Robert Stevens and his team, for acting as the court-appointed receiver for the Company and its predecessor and affiliated entities and pursuant the Merger Agreement, the Company agreed to issue to certain parties as directed by Mr. Stevens shares of Company common stock equal to 90% of the issued and irrevocably pledgeoutstanding shares of Company common stock prior to TCA the lesserclosing, which will therefore constitute 9% of the issued and outstanding shares of Company common stock immediately following the closing (the “Receiver Shares”).

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The completion of the Merger is subject to certain customary closing conditions, including that HSH will have provided to the Company, HSH’s audited and unaudited financial statements as required to be included in the Company’s filings with the Securities and Exchange Commission.

The Merger Agreement is not subject to a financing condition. The parties have made customary representations, warranties, and covenants in the Merger Agreement. The Merger Agreement also contains a customary “no-shop” covenant prohibiting the Company from soliciting proposals for alternative acquisition or providing information or participating in any discussions in connection with any such proposals.

The Merger Agreement contains certain termination rights that may be exercised by the Company or HSH, as applicable, including in the event that (i) 4.99%both parties agree by mutual written consent to terminate the Merger Agreement, (ii) the Merger is not consummated by September 30, 2020 (as set forth in the “Amendment” discussed below), or (iii) any law or order permanently restraining, enjoining or otherwise prohibiting consummation of the Merger having become final and non-appealable.

The Merger is intended to be a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Merger Agreement is intended to be a “plan of reorganization” within the meaning of the regulations promulgated under Section 368(a) of the Code and for the purpose of qualifying as a tax-free transaction for federal income tax purposes.

On August 25, 2020, the parties to the merger agreement entered into amendment no. 1 (the “Amendment”) to the Merger Agreement pursuant to which the date provided to consummate the Merger Agreement was extended from July 30, 2019 to September 30, 2020. Further, pursuant to the Amendment, the Company and HSH agreed to reasonably cooperate to terminate the engagement of the Company’s prior registered agent in Nevada, with the costs related thereto to be paid by HSH. Further, pursuant to the Amendment, the Company agreed to issue the Receiver Shares as required by the Merger Agreement, with the shares to be issued in book entry within 10 days of August 25, 2020. The Receiver Shares were issued on August 27, 2020 and consisted of a total of 114,599,754 shares of Company common stockstock.

Further, pursuant to the Amendment, HSH agreed to pay the costs and (ii) 200%expenses of the outstanding amount underCompany resulting from the Debenture, subjectCompany’s engagement of professional service providers, including, but not limited to, adjustmentthose of the transfer agent, legal counsel and auditors, until the earlier of the closing or the termination of the Merger Agreement.

Further, pursuant to the Amendment, the parties acknowledged that the Company and HSH are represented by the same legal counsel and that counsel has advised each of the parties to retain separate counsel to review the terms of the Purchase Agreement. On May 1, 2012,Merger Agreement and the Amendment, and that each party waived such right and waived any related conflicts of interests and confirmed that the parties have previously negotiated the material terms of the Merger Agreement and the Amendment. Further, pursuant to the Amendment, the prior notice person for the Company issued 11,516,104 shareswas removed.

Other than the foregoing, no other material changes were made to the Merger Agreement in the Amendment.

The foregoing description of common stock to TCA in escrow. Upon timely payment in full of all obligations under the transaction documents, TCA will notify the Escrow Agent in writingMerger Agreement and the Escrow Agent shall returnAmendment, and the pledged materialstransactions contemplated thereby does not purport to be complete and is qualified in its entirety by the Merger Agreement, and the Amendment, copies of which are as Exhibit 2.1 and 2.2 to this Annual Report on Form 10-K and incorporated herein by reference.

As of the date of this Annual Report the Merger has not been consummated; and neither HSH nor the Company and all of TCA’s rights in and tohas exercised its termination rights. The Company believes the pledged materials and other collateral shallMerger will be terminated.consummated, however, there can be no assurances.

  

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Second Pledge and Escrow Agreement

 

Results of Operations

On April 27, 2012, in connection with the Purchase Agreement, the Company entered into a pledge and escrow agreement (the “Second P&E Agreement”), by and among the Company, TCA and the Escrow Agent. Pursuant to the terms of the Second P&E Agreement, the Company agreed to irrevocably pledge to TCA its entire ownership in Aqualiv, Inc., consisting of 50,000 shares of AquaLiv, Inc.’s common stock.

First Security Agreement

On April 27, 2012, the Company entered into a security agreement (the “First Security Agreement”) with TCA, related to the issuance of the Debenture, whereby the Company granted to TCA a continuing, first priority security interest inIn February 2016, all of the Company’s assets, wheresoever locatedofficers and whether now existing or hereafter arising or acquired.directors resigned, and the Company stopped substantially all operating activities. Since such time, and currently, the Company is a “shell company,” as such term is defined in Rule 12b-2 under the Exchange Act. The Company has not recorded any revenue since 2016. Since May 16, 2016, through the date of this Annual Report, the Company has been operating under the direction of the Receiver.

  

Second Security AgreementYear Ended June 30, 2019 Compared to the Year Ended June 30, 2018

Operating expenses for the year ended June 30, 2019 totaled $17,812, compared to $101,918 for the same period in 2018. The decrease is attributable to lower professional fees in 2019. Cash flows from operating activities for the year ended June 30, 2019 totaled $4,846 as opposed to $62,165 in 2018. The difference is related in part to the difference in accounts payable from 2018 to 2019.

Going Concern

The Company is currently in receivership. The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At June 30, 2019, the Company had a retained deficit of $13,076,755 and negative working capital of $4,386,083. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s continuation as a going concern is solely dependent upon the Receiver’s ability to raise financing from third parties. There is no assurance that the Company will be successful in doing so.

 

On April 27, 2012, Focus Systems, Inc., entered intoMarch 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a security agreement (the “Second Security Agreement”) with TCA, relatedglobal pandemic which continues to spread throughout the U.S. and the globe. In addition to the issuancedevastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most U.S. states and many countries have issued policies intended to stop or slow the further spread of the Debenture, whereby Focus Systems granteddisease such as issuing temporary Executive Orders that, among other stipulations, effectively prohibit in-person work activities for most industries and businesses, having the effect of suspending or severely curtailing operations. COVID-19 and the U.S’s response to TCAthe pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a continuing, first priority security interest in allresult, the ultimate effect of the Focus Systems assets, wheresoever locatedpandemic is highly uncertain and whether now existing or hereafter arising or acquired.subject to change. The extent of the ultimate impact of the pandemic on the Company’s operational and financial performance will depend on various developments, including the duration and spread of the outbreak, which cannot be reasonably predicted at this time. Accordingly, while management reasonably expects the COVID-19 outbreak to negatively impact the Company, the related consequences and duration are highly uncertain and cannot be predicted at this time.

 

Guaranty AgreementLiquidity and Capital Resources

At June 30, 2019, our liquid assets consisted of cash of $238.

The following tables set forth the components of the Company’s debt as of June 30, 2019, and June 30, 2018:

		June 30, 2019				June 30, 2018
Notes payable		$	215,323			$	215,323
Notes payable related parties		$	4,001,267			$	4,001,267
Receiver certificate		$	65,000				65,000

The notes payable and the notes payable related parties are unsecured and due to a former director and officer of the Company. As a result of the court order in Nevada in March 2018, no interest can be accrued on this debt. In February 2018, the Company obtained a Receiver’s Certificate for $65,000 which accrues interest at a rate of 10%.

As of June 30, 2019, there was $8,761 in accrued interest due and payable on the Receiver Certificate. The Receiver expects to discharge the notes payable and notes payable related parties with no further liability to the Company, prior to consummating the Merger Agreement. There can be no assurance the Receiver will be successful in discharging this debt.

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The Company is under the control of the court-appointed Receiver who is considered a related party. During the year ended June 30, 2019, the Receiver incurred $8,838 in professional fees in managing the Company. Additionally, the Receiver has extended a $65,000 loan to the Company which bears interest at 10%. The Company believes these services and loans are at market rate.

 

On April 27, 2012, Focus Systems entered into a guaranty agreement (the “Guaranty Agreement”) with TCA, in connection withJune 30, 2017, the Company’s issuanceCompany had the following shares of the Debenture. Pursuant to the terms of the Guaranty Agreement, Focus Systems has guaranteed and is to act as surety to TCA for the payment of the Liabilities (as defined below) when they become due. The “Liabilities” includes, collectively, (i) the repayment of all sums due under the Debenture and other transaction documents and (ii) the performance and observance of all terms, conditions, covenants, representations and warranties set forth in the transaction documents.Preferred Stock outstanding:

 

Further, on April 27, 2012, the Company entered into an Equity Facility Agreement (the “Equity Agreement”) with Auctus Private Equity Fund, LLC, a Massachusetts corporation (“Auctus”). Pursuant to the terms of the Equity Agreement, for a period of twenty-four (24) months commencing on the date of effectiveness of the a registration statement, Auctus has committed to purchase up to $3,500,000 of the Company’s common stock, par value $0.001 per share. Pursuant to the terms of the Debenture issued by the Company in favor of TCA, the Company shall cause Auctus to pay directly to TCA, for each advance taken by the Company under the Equity Agreement, 50% of any net proceeds otherwise payable to the Company, up to $25,000 per month.Series A 331,618 shares

Series B 4,300,000 shares

Series C 51 shares

 

Management has determinedPursuant to a Court order in March 2018, all of these preferred shares were canceled, and the amount of outstanding common shares were reduced from 17,838,306 shares outstanding as of June 30, 2017, to 12,733,306 shares outstanding as of June 30, 2018, and June 30, 2019.

We estimate that general expenditures mustwe will need approximately $100,000 to $150,000 to fully effectuate our business development plans, including to close the Merger as contemplated by the Merger Agreement. There can be reduced andno assurance that the Merger can occur as planner, or at all. Further, we are subject to the continued impact of COVID-19, as further discussed above. We are dependent on capital raised from third parties to fund our operating expenses. We cannot assure that additional capitalfunding will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we will be forced to continue to further accrue liabilities due to our limited cash reserves. There are no assurances that management will be able to raise capitalavailable on a timely basis, on terms acceptable to us, or at all. We currently have no agreement with any third party to provide us this additional financing and there can be no assurances that we will obtain this financing, either debt or equity or both, on favorable terms, or at all. Our inability to receive additional financing may have a significant negative impact on our continued development and results of our operations. COVID-19 has also caused significant disruptions to the Company.global financial markets, which impacts our ability to raise additional capital. If we arethe Company is unable to obtain sufficient amountsadequate capital due to the continued spread of additional capital, weCOVID-19, or otherwise, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned operations.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our planned development, which could harm our business, financial condition and operating results. Ifresults of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we obtain additional funds by selling anybase our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are fully described in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our equity securities or by issuing common stockconsolidated financial statements.

Income Taxes

Due to paythe historical operating losses, the inability to recognize an income tax benefit, and the failure to file tax returns for numerous years, there is no provision for current or deferred federal or state income taxes for the period from inception through the period ended June 30, 2019. As of June 30, 2019, the Company had a retained earnings deficit of $13,076,755, however, the amount of that loss that could be carried forward to offset future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.taxes is indeterminable.

 

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Going Concern

  

We have limited working capitalOff-Balance Sheet Arrangements

None.

Item 7A. Quantitative and limited revenues from salesQualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 8. Financial Statements and Supplementary Data.

The financial statements required by this Item 8 are included elsewhere in Annual Report on Form 10-K beginning on page F-1.

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

On August 24, 2020, the Company dismissed BMKR, LLP (“BMKR”) as its independent registered public accounting firm engaged to audit the Company’s financial statements. BMKR’s dismissal was approved by the Company’s receiver, acting under judicial order on behalf of products, services, or licensing. Duringthe Company on August 24, 2020.

BMKR had served as the Company’s independent auditors since the 2018 calendar year. BMKR’s reports on the Company’s financial statements for the fiscal yearyears ended SeptemberJune 30, 2012, our operating expenses continued2019 and 2018, did not contain any adverse opinions or disclaimers of opinion and were not qualified or modified as to be greater than our revenues. These factors have caused our accountantsuncertainty, audit scope or accounting principles, except that such reports included explanatory paragraphs with respect to express substantial doubt about ourthe Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

 

Our abilityDuring the fiscal years ended June 30, 2019 and 2018, respectively, and through August 24, 2020, there were no (a) disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K) with BMKR on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to continueBMKR’s satisfaction, would have caused BMKR to make reference to the subject matter thereof in connection with its reports for such years; or (b) reportable events, as a going concern has caused the Boarddescribed under Item 304(a)(1)(v) of Directors to continue to look for sources of investment capital, and investigate merger and acquisition opportunities. We will look to further diversify our holdings and sources of cash flow.Regulation S-K.

 

Off-Balance Sheet ArrangementsThe Company provided BMKR with a copy of the disclosures it is making in this Current Report on Form 8-K and requested that BMKR provide a letter addressed to the Securities and Exchange Commission indicating whether it agrees with such disclosures. A copy of BMKR’s letter, dated August 24, 2020, was filed as Exhibit 16.1 to the Company’s Form 8-K reporting the auditor change filed with the SEC on August 28, 2020.

 

AsEffective as of September 30, 2012,August 24, 2020, the Company has no off balance sheet arrangements.engaged BF Borgers CPA PC (“Borgers”) as the Company’s independent registered public accounting firm for the fiscal year ended June 30, 2020.

 

Item 7A. QuantitativeDuring the fiscal years ended June 30, 2019 and Qualitative Disclosures About Market Risk.2018 and through August 24, 2020, neither the Company nor anyone on its behalf has consulted with Borgers regarding either (a) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided nor oral advice was provided to the Company that Borgers concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (b) any matter that was either the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph 304(a)(1)(v)) of Regulation S-K).

 

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 8. Financial Statements and Supplementary Data.

Our financial statements are contained in pages F-1 through F-14 which appear at the end of this Annual Report.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures ..Procedures.

 

(a) EvaluationConclusion Regarding the Effectiveness of Disclosure Controls and Control ProceduresProcedures.

 

Pursuant toWe carried out an evaluation as required by paragraph (b) of Rule 13a- 15(b) under13a-15 and 15d-15 of the Exchange Act, under the Company carried out an evaluation,supervision and with the participation of the Company’s management, including the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”),Receiver, of the effectiveness of the Company’sour disclosure controls and procedures, (asas defined under Rulein Rules 13a-15(e) and 15d-15(e) under the Exchange Act)Act as of the end of the period covered by this report.June 30, 2019. Based upon that evaluation, the Company’s PEO and PFOour receiver concluded that the Company’sour 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 PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.of June 30, 2019.

 

Report of Management on Internal Controls over Financial Reporting.

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(b) Management’s Assessment of Internal Control over Financial Reporting

    

Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined infor the Exchange Act Rules 13a-15(f). A systemCompany. As of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of management, including the principal executive officer and the principal financial officer, the Company’sJune 30, 2019, management has evaluated the effectivenessnot completed an effective assessment of its internal control over financial reporting as of September 30, 2012, based on the criteria established in a report entitled “Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission” and the interpretive guidance issued by the Commission in Release No. 34-55929. Based on this evaluation, the Company’s management has evaluated and concluded that the Company’s internal control over financial reporting was ineffectivebased on the 2013 Committee of Sponsoring Organizations (COSO) framework.

Management has concluded that as of SeptemberJune 30, 2012, and identified the following material weaknesses:

• The small size of2019, our Company limits our ability to achieve the desired level of separation of internal controls and financial reporting. We do not have a separate PEO and PFO. Until such time as the Company is able to hire a Chief Financial Officer, we do not believe we meet the full requirement for separation; and

• We have not achieved the desired level of documentation of our internal controls and procedures. When the Company obtains sufficient funding, this documentation will be strengthened through utilizing a third party consulting firm to assist management with its internal control documentation and further help to limit the possibility of any lapse in controls occurring.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatementwas not effective to detect the inappropriate application of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.U.S. GAAP.

 

Management intends to mitigateidentified the following material weaknesses set forth below in our internal control over financial reporting:

•	We did not perform an effective risk assessment or monitor internal controls over financial reporting.
•	There are insufficient written policies and procedures to ensure the correct application of accounting and financial reporting with respect to the current requirements of generally accepted accounting principles in the United States and SEC disclosure requirements.
•	Limited segregation of duties and oversight of work performed as well as lack of compensating controls in the Company’s finance and accounting functions due to the receivership.

•	The Company lacks sufficient in-house expertise and training in complex accounting principles and SEC reporting and disclosure requirements.
•	The Company’s systems that impact financial information and disclosures have ineffective information technology controls.
•	The Company lacks a system of tracking obligations to identify and file income tax and other tax reports on a timely basis.

A control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the material weaknesses going forward providedcontrol system are met. Management necessarily applied its judgment in assessing the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company has sufficient funding by utilizing external financial consulting services,have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Because of the inherent limitations in a more effective manner, priorcontrol system, misstatements due to the review by our principal independent accounting firm to ensure that all information required toerror or fraud may occur and not be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported accurately and within the time periods specified in the Commission’s rule and forms.detected.

 

(c) Changes in Internal Control over Financial ReportingReporting.

 

There werehave been no changes in our internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) underthat occurred during the Exchange Act, during our most recently completed fiscal quarteryear ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information.

 

None.

 

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PART III

    

Part III

Item 10. Directors, Executive Officers and Corporate Governance.

 

The following tableIn February 2016, all the Company’s officers resigned, and biographical summaries set forth information, including principal occupation and business experience, about our directors and executive officers at January 11, 2013:

Name		Age		Position		Officer and/or Director Since
Duane Spader		70		Chairman, Chief Executive Officer		2012
William M. Wright		47		Principal Financial Officer, Secretary		2010

Each director serves until his or her successor is elected. There are no arrangements or understandings between any director and any other person pursuant to which he or she was selected as a director or nominee.

Each officer serves until he or she is replaced by the Board of Directors. There are no arrangements or understandings between any officer of the Company and any other person pursuant to which he or she was selected as an officer.

Duane Spader

Duane Spader has been AquaLiv Technologies, Inc.’s Chief Executive Officer, President, and Chairman since December 2012. Mr. Spader has dedicated his time mentoring and growing Verity Farms as its Managing Member since June 2011. Previously, he had owned and operated Spader RV Centers for 46 years until its sale in 2010. Additionally, Mr. Spader founded The Spader Companies, including Spader Business Management (“SBM”) in 1977 and was its President until 2002. During his 35 years with SBM, Mr. Spader mentored over 4,000 companies and its executive teams on organizational and behavioral excellence in business. In 1983, Mr. Spader led the expansion and development of training software, which was eventually sold in 1997 to Bell and Howell Publications Systems Company. Mr. Spader has sat on numerous Boards of Directors, including local chamber of commerce, St. Joseph Cathedral, National Marine and RV Industry Associations, and others.He attended South Dakota State College prior to starting his business career in 1964.  

William M. Wright

Mr. Wright has been AquaLiv Technologies, Inc.’s Secretary and Principal Financial Officer, and a director since April 2010. Mr. Wright was AquaLiv Technologies, Inc.’s CEO and President from April 2010 to December 2012, and is currently the company’s Executive Vice President. Mr. Wrighthas been the President and CEO of Focus Systems, Inc., a Washington corporation, since its formation in 2008.  Focus Systems, Inc. provides Desktop Virtualization which can performstopped substantially all of the networking functions that can be utilized on standard in-house networks at a fraction of costs, and also Voice over Internet Protocol phone service to its customer base.  From July 2006 to July 2007, Mr. Wright was the Chief Operating Officer and a Director of Gottaplay Interactive, Inc., a Nevada corporation involved in the internet connectivity business and the video game subscription and rental business. Mr. Wright has over 20 years of experience and knowledge in financial management and business operations. His experience includes the startup of DONOBi, Inc., an internet Service Provider that specialized in the acquisition and rollup of numerous rural service providers, and the eventual taking of the company public in 2004. Mr. Wright served as both Chief Executive Officer and Chairman of the Board during his six year tenure with DONOBi, leading to the merger with Gottaplay in 2006. Prior to his work in the technology field, Mr. Wright was a Real Estate Broker in both California and Washington, and including the position of President and minority owner of a local property management company. Mr. Wright received his Bachelors of Science in Business Administration with an emphasis in Financial Services from San Diego State University.

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Committees of the Board of Directors

operating activities. Currently, we do not have any committees of the Board of Directors, and none are planned at this time. Our Board of Directors has determined that none of our directors is an audit committee financial expert.

Indemnification and Limitation on Liability of Directors

Our Articles of Incorporation eliminate the liability of our directors for monetary damages to the fullest extent permissible under Nevada law. Under the Nevada Revised Statutes, director immunity from liability to a company or its stockholders for monetary liabilities applies automatically unless it is specifically limited by a company's Articles of Incorporation. Excepted from that immunity are: (a) a willful failure to deal fairly with the company or its stockholders in connection with a matter in which the director has a material conflict of interest; (b) a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful; (c) a transaction from which the director derived an improper personal profit; and (d) willful misconduct.

Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding, or part thereof, initiated by such person unless such indemnification: (a) is expressly required to be made by law, (b) the proceeding was authorized by our board of directors, (c) is provided by us, in our sole discretion, pursuant to the powers vested in us under Nevada law or (d) is required to be made pursuant to the bylaws.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.

Family Relationships

There are no family relationships between any of our officers, directors or affiliates.

Legal Proceedings

To the best of our knowledge, during the past ten years, none of the following occurred, except as noted, 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, except that Mr. Bushnell was the President of a construction company that filed for Chapter 7 bankruptcy during 2010; (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 or 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.

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Compliance with Section 16(A) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).

Based solely on our review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock during the fiscal year ended September 30, 2012, were timely.

Code of Ethics

The Company does not have a written code of ethics applicable to its executive officers. The Board of Directors has not adopted a written code of ethics since the Company has only one officer who is also a director of the Company and due to the small size and limited funds of the Company.

Item 11. Executive Compensation.

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the periods ended September 30, 2012, 2011 and 2010.

NAME AND PRINCIPAL POSITION	Fiscal Year	Salary	Bonus	Stock Awards	Option Awards	NONEQUITY INCENTIVE PLAN COMPENSATION	NONQUALIFIED DEFERRED COMPENSATION EARNINGS	ALL OTHER COMPENSATION		TOTAL
William M. Wright, Chief Executive Officer (currently Executive Vice President)	2012	$0	0	0	0	0	0	$ 120,000		$120,000	(1)
	2011	$40,000(2)	0	0	0	0	0	$ 80,000	(1)	$80,000	(1)
	2010	$40,000(2)	0	0	0	0	0	$30,000	(2)	$70,000	(1)	(2)

 (1) Consists of management fees paid as Chief Executive Officer of the Company. The Company determined to pay Mr. Wright a consistent fixed fee of $5,000 to $10,000 per month for his services as Chief Executive Officer of the Company. Prior to July 2011, Mr. Wright received $5,000 per month and currently receives $10,000 per month for services rendered.

(2) Consists of a salary received as President of Focus Systems, Inc.

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Compensation Discussion and Analysis

As indicated in the Summary Compensation Table, the only compensation paid to an officer is the salary and management fee payable to William M. Wright. The total salary and management fee paid to Mr. Wright was $120,000 in fiscal year 2012.

Employment Agreements

We do not have a written employment agreement with any of the Company’s executive officers. Mr. Wright is an independent contractor of the Company.

Equity Incentive Plan

No stock options or similar instruments have been granted to any of our officers or directors.

 

LackSince May 16, 2016, through the date of Compensation Committeethis Annual Report, the Company has been operating under the direction of the Receiver, Robert Stevens.

Committees

 

We do not have a separatestanding nominating, compensation committee due to the fact that there is currently only one employeeor audit committee. Rather, our Receiver, acting under judicial order on behalf of the board of directors performs the functions of these committees. Additionally, because our common stock is not listed for trading or quotation on a national securities exchange, we are not required to have such committees.

Director Independence

We do not have any independent directors, as such term is defined in the listing standards of The NASDAQ Stock Market, at this time. The Company is not quoted on any exchange that requires director independence requirements.

Code of Ethics

We have not yet adopted a code of ethics that applies to all of our employees, officers and since nodirectors, including those officers responsible for financial reporting. We expect that we will adopt a code of ethics in the near future.

Family Relationships

None.

Involvement in Certain Legal Proceedings

No executive officer, member of the board of directors or control person of our Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.

Item 11. Executive Compensation.

No executive compensation currently iswas paid to directorsby the Company from February 2016, through the date of this filing. In February 2016, all the Company’s officers resigned, and the Company stopped substantially all operating activities. Since May 16, 2016, through the date of this Annual Report, the Company has been operating under the direction of the Receiver, Robert Stevens.

2019 Summary Compensation Table

Name		Year		Salary ($)				Bonus ($)				All Other Compensation ($)				Total ($)
Robert Stevens		2019		$	-			$	-			$	8,383	(1)		$	8,383
Receiver		2018		$	-			$	-			$	0			$	0

(1) During the year ended June 30, 2019, the Receiver incurred $8,838 in professional fees in managing the Company. The entire BoardReceiver has waived all court approved fees and costs from October 2, 2019 through the closing of Directors participates in the consideration of executive officer and director compensation.Merger.

 

Compensation Committee Interlocks and Insider ParticipationEmployment Agreements

The Company is not a party to any employment agreements at this time.

 

As of September 30, 2012, William M. Wright, the sole paid independent contractor of the Company, also is a director of the Company, and participates in determining the amount of his compensation.Outstanding Equity Awards at Fiscal Year-End

 

Compensation Committee Report

The Board of Directors of the Company has reviewed and discussed the Compensation Discussion and Analysis provided above with management and, based on such review and discussions, has recommended that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

The current members of the Board of Directors are:

William M. Wright

Duane Spader

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DIRECTOR COMPENSATION

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named directors by us during the years ended September 30, 2012, 2011 and 2010.

Name and Principal Position		Year				Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				All Other Compensation ($)				Total ($)
(a)		(b)				(b)				(b)				(b)				(b)				(b)				(b)				(b)
William M. Wright			2012			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Director			2011			$	0			$	0			$	0			$	0			$	0			$	0			$	0
			2010			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Tracy D. Bushnell			2012			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Director			2011			$	0			$	0			$	0			$	0			$	0			$	0			$	0
			2010			$	0			$	0			$	0			$	0			$	0			$	0			$	0

 (1) Mr. Bushnell resigned as a Director of the Company on December 31, 2012.

   

There were no outstanding equity awards at the 2019 fiscal year-end.

Compensation Plans

We have not adopted any compensation plan to provide for future compensation of any of our directors or executive officers.

Director Compensation

Historically, our directors have not received compensation for their service.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

At September 15, 2020, we had 127,333,060 shares of our common stock issued and outstanding. The following table sets forth information regarding the beneficial ownership of our common stock as of January 11, 2013,September 15, 2020 by:

	•	each person known by us to be the beneficial owner of more than 5% of our common stock;
	•	each of our directors;
	•	each of our named executive officers; and
	•	our executive officers and directors as a group.

Unless otherwise indicated, the numberbusiness address of each person listed is in care of the Company, at 387 CORONA ST. SUITE 555, DENVER CO 80218. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding rights or conversion privileges owned by (i) eachthat person who is known by us to ownat that date which are exercisable within 60 days of record or beneficially five percent (5%) or more of our outstanding shares, (ii) each of our directors, (iii) each of our executive officers and (iv) all of our directors and executive officersthat date. Except as a group. Unless otherwise indicated, each of the persons listed below hashave sole voting and investment power with respect to theall shares of our common stock beneficially owned.owned by them, except to the extent that power may be shared with a spouse.

Name of Beneficial Owner:		Amount and Nature of Beneficial Ownership				Percent of Class
Directors and Executive Officers
Robert Stevens(1)			-			*
More than 5% Holders		��
Next New Deal LLC(2)			38,199,918				30.00	%
Take Flight Equities Inc(3)			38,199,918				30.00	%
Thistle Investments LLC (4)			38,199,918				30.00	%

   

(1)Robert Stevens is currently the Receiver of the Company.

Name and Address (1)	Beneficial Relationship to Company		Outstanding Common Stock				Percentage of Ownership of Common Stock(4)
William M. Wright(1)	Executive Vice-President, Chief Financial Officer, Director			27,250,000	(2)			3.52	%
Tracy D. Bushnell(1)(5)	Director			25,000,000				3.23	%
Duane Spader (1)(6)	Chief Executive Officer, Chairman			0				0	%
Gary E. Ball				88,572,170	(3)			11.44	%(3)
Officers and Directors (2 persons)	-			52,250,000	(2)			6.78	%

(2)Stanley Teeple is the Manager or Next New Deal LLC and has the power to vote and dispose of the shares held by Next New Deal LLC.

(3)William M. Wright is the President of Take Flight Equities Inc and has the power to vote and dispose of the shares held by Take Flight Equities Inc.

(4)Jodi Stevens is the Manager of Thistle Investments LLC and has the power to vote and dispose of the shares held by Thistle Investments LLC.

 

* Less than 1%.

 

(1)

The business address for such persons is c/o Aqualiv Technologies, Inc., 4550 NW Newberry Hill Rd, Suite 202, Silverdale, WA 98383.

(2)

Includes 27,250,000 common shares held by Take Flight Equities, Inc., of which William Wright is President.

(3)

Includes the voting rights to 88,572,170 common shares held in escrow due to a default in a promissory note from Take Flight Equities, Inc.

	(4)	Based on 774,130,021 shares outstanding as of January 11, 2013.26
	(5)	Mr. Bushnell resigned as Director of the Company on December 31, 2012 and was issued the common shares subsequent to his resignation.
	(6)	Mr. Spader was appointed Chief Executive Officer and Chairman of the Company on December 31, 2012

Changes in Control

We are not aware of any arrangements that may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-K.

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Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Related Party Transactions

We do not have a written policy for the review, approval or ratification of transactions with related parties or conflicted transactions.

 

There are notes payable and due to a former director and officer of the Company in the amount of $4,001,267.

The Company is the control of the Receiver and the Receiver is considered a related party. During the year ended SeptemberJune 30, 2012, there were no related transactions required2019, the Receiver incurred $8,838 in professional fees in managing the Company. Additionally, the Receiver extended a loan of $65,000 to be reported under Item 404 of Regulation S-K.the Company, which bears interest at 10%.

 

Director Independence

The common stock of the Company is currently quoted on the OTCQB, an exchange which currently does not have director independence requirements.  On an annual basis, each director and executive officer will be obligated to disclose any transactions with the Company in which a director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest in accordance with Item 407(a) of Regulation S-K.  Following completion of these disclosures, the Board will make an annual determination as to the independence of each director using the current standards for “independence” that satisfy both the criteria for the Nasdaq and the American Stock Exchange.

As of September 30, 2012, the Board determined that the following director is independent under these standards:

Tracy D. Bushnell

Item 14. Principal AccountingAccountant Fees and Services.

 

The following table sets forth the aggregate fees billed or to be billed to our company for each of the last two fiscal yearsyear ended June 30, 2019 and June 30, 2018 for professional services rendered by the principal accountantBMKR, LLP our former independent registered public accounting firm.

Fees		2019				2018
Audit Fees		$	19,275			$	51,964
Audit-Related Fees			-				-
Tax Fees			-				-
Other Fees			-				-
Total Fees		$	19,275			$	51,964

Audit Fees

Audit fees to BMKR, LLP were for professional services rendered for the audit of the Company'sour annual financial statements for the year ended June 30, 2019.

Audit-Related Fees

During 2019 and review of financial statements included in the Company's Form 10-Q quarterly reports or2018, BMKR, LLP did not provide any assurance and related services that are normally provided byreasonably related to the accountant in connection with statutoryperformance of the audit or review or our financial statements that are not reported under the caption “Audit Fees” above.

Tax Fees

As BMKR, LLP did not provide any services to us for tax compliance, tax advice and regulatory filingstax planning during 2019 and 2018, no tax fees were billed or engagements forpaid during those fiscal years.

 

		2012				2011
Audit Fees		$	19,200			$	19,200
Audit-Related Fees		$	—			$	20,500
Tax Fees		$	—			$	—
All Other Fees		$	14,252			$	3,000
TOTAL		$	33,452			$	42,700

Audit CommitteeAll Other Fees

 

Our auditor hasBMKR, LLP did not providedprovide any non-auditproducts and services not disclosed in the pasttable above during 2019 and does not anticipate providing any non-audit services to the Company. In the event non-audit services are contemplated in the future, our Board of Directors, which functions in the capacity of an audit committee, will consider whether the non-audit services provided by our auditors to us would be compatible with maintaining the independence of our auditors2018. As a result, there were no other fees billed or paid during 2019 and whether the independence of our auditors would be compromised by the provision of such services. Our Board of Directors pre-approves all auditing services and would approve any permitted non-audit services contemplated in the future, including the fees and terms of those services, to be performed for us by our independent auditor prior to engagement.

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PART IV

AQUALIV TECHNOLOGIES, INC.

SEPTEMBER 30, 2012 FINANCIAL STATEMENTS

TABLE OF CONTENTS2018.

 

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PART IV

ITEM 15. Exhibit And Financial Statement Schedules.

(a) Financial Statements.

Index to the Consolidated Financial Statements

Contents		Page
Reports of Independent Registered Public Accounting Firm	F-2	F-1
Consolidated Balance Sheets Septemberat June 30, 20122019, and 20112018	F-3	F-2
Consolidated Statements of Operations Forfor the Years Ended SeptemberJune 30, 20122019, and 2011 2018	F-4	F-3
Consolidated Statements of Cash Flows Forfor the Years Ended SeptemberJune 30, 20122019, and 20112018		F-5
Consolidated Statements of Changes in Stockholders'Stockholders’ Equity (Deficit), For for the Years Ended SeptemberJune 30, 20122019, and 20112018	F-6	F-4
Notes to the Consolidated Financial Statements	F-7	F-6

 

28

BMKR, LLP
Certified Public Accountants
		T 631 293-5000
1200 Veterans Memorial Hwy., Suite 350		F 631 234-4272
Hauppauge, New York 11788		www.bmkr.com

FL Office

Thomas G. Kober, CPA		Charles W. Blanchfield, CPA (Retired)
Alfred M. Rizzo, CPA		Bruce A. Meyer, CPA (Retired)
Joseph Mortimer, CPA

7951 SW 6th St., Suite. 216

Plantation, FL   33324

Tel:   954-424-2345

Fax:  954-424-2230

     

NC OfficeREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

19720 Jetton Road, 3rd Floor Cornelius,

NC   28031

Tel:  704-892-8733

Fax:  704-892-6487

To the Board of Directors and

Stockholders of Healthcare Solutions

AquaLiv Technologies,Management Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of AquaLiv Technologies,Healthcare Solutions Management Group, Inc. and its wholly owned subsidiaries (“The Company”( Formerly Verity Corp.) (the Company) as of SeptemberJune 30, 20122019 and 2011,2018, and the related consolidated statementsstatement of operations, changes in stockholders’ deficit,consolidated stockholders' equity, and cash flows for each of the years then ended.  in the two-year period ended June 30, 2019 and 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2019 and 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on these consolidatedthe Company's financial statements based on our audits.audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included considerationAs part of our audit, we are required to obtain an understanding 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 forof the Company’sCompany's internal control over financial reporting. Accordingly, we express no such opinion. An

Our audit includesincluded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidatedpresentation of the financial statement presentation.statements. We believe that our audits provideaudit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of AquaLiv Technologies, Inc. and its wholly owned subsidiaries as of September 30, 2012 and 2011, and the consolidated results of its operations and its consolidated cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussedshown in Note 2 to the consolidated financial statements, the Company has incurred recurring losses from operations, hashad a liquidity problem, and requires funds for its operational activities. These factorsdeficit net worth of $4,386,083 during the year ended June 30, 2019. The Company is in arrears with certain vendor creditors which, among other things, cause the balances to become due on demand. The Company is not aware of any alternate sources of capital to meet such demands, if made.

As discussed in Note 3 to the financial statements, the Company’s significant deficit net worth raise substantial doubt that the Company will be ableabout its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Bongiovanni & Associates, C.P.A.’s

Bongiovanni & Associates, C.P.A.’s

Cornelius, North Carolina

January 13, 2013 Our opinion is not modified with respect to that matter.

 

BMKR LLP

We have served as the Company's auditor since 2018.

Hauppauge, NY

November 26, 2019

Member American Institute of Certified Public Accounts

Member Public Company Accounting Oversight Board

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Healthcare Solutions Management Group, Inc.

Consolidated Balance Sheets

ASSETS		June 30, 2019				June 30, 2018
CURRENT ASSETS
Cash		$	238			$	5,084
Total current assets			238				5,084
TOTAL ASSETS		$	238			$	5,084
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable		$	95,970			$	84,953
Notes payable			215,323				215,323
Notes payable related parties			4,001,267				4,001,267
Real estate loans, current portion
Receiver certificate			65,000				65,000
Real estate loans, current portion related party
Accrued interest payable			8,761				2,280
Total current liabilities			4,386,321				4,368,823
Total liabilities			4,386,321				4,368,823
STOCKHOLDERS DEFICIT
Series A Preferred, $0.001 par value, -0- and -0- shares outstanding as of June 30, 2019 and 2018			-				-
Series B Preferred, $0.001 par value -0- shares and -0- outstanding as of June 30, 2019 and 2018			-				-
Series C Preferred, $0.001 par value, -0- and -0- shares outstanding as of June 30 2019 and 2018			-				-
Common stock, $0.001 12,733,306 shares issued and 12,733,306 outstanding as of June 30, 2019 and 2018			12,733				12,733
Paid in capital			8,677,939				8,677,939
Retained earnings deficit			(13,076,755	)			(13,054,411	)
Total stockholders’ deficit			(4,386,083	)			(4,363,739	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	238				5,084

  

See auditors report and notes to the consolidated financial statements.  

AQUALIV TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
		September 30, 2012				September 30, 2011
CURRENT ASSETS:
Cash		$	7,519			$	3,732
Accounts receivable			1,855				1,968
Total Current Assets			9,374				5,700
PROPERTY AND EQUIPMENT, net			22,987				8,427
INVENTORY			1,156				723
TOTAL ASSETS		$	33,517			$	14,850

    

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable		$	128,145			$	107,438
Credit cards payable			—				17,187
Notes payable			314,525				189,179
Accrued interest payable			19,166				—
Convertible note, net of discount of $2,444			8,556				—
Derivative liability			18,963				111,111
Other liabilities			6,721				20,746
Total Current Liabilities			496,076				445,661
STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001 par value, 50,000,000
shares authorized,
923,618 and 911,618 shares issued and			924				912
outstanding, respectively
Common stock, $0.001 par value, 1,000,000,000
shares authorized,
562,096,927 and 291,617,428 shares issued and			562,096				291,617
outstanding, respectively
Additional paid in capital			2,259,065				1,907,365
Retained (deficit)			(3,235,468	)			(2,612,390	)
Noncontrolling interest			(49,176	)			(18,315	)
Total Stockholders' (Deficit)			(462,559	)			(430,811	)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)		$	33,517			$	14,850

AQUALIV TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
		For the Years
		Ended September 30,
		2012				2011
REVENUES:
Sales		$	449,626			$	446,053
Service			29,904				44,085
Royalty			—				100,000
Total Revenues			479,529				590,138
COST OF GOODS SOLD			(123,173)				(193,430)
GROSS PROFIT			356,356				396,708
OPERATING EXPENSES:
Bad Debt			—				4,289
Consulting fees			35,810				60,819
Management fees			120,000				105,900
Payroll expense			172,861				127,455
Professional fees			180,501				88,683
Research and development			1,213				9,936
Travel, meals, and entertainment			18,769				20,333
Loss on goodwill impairment, AquaLiv			—				315,484
Other general and administrative			254,384				287,412
Total Operating Expenses			783,537				1,020,310
LOSS FROM OPERATIONS			(427,181	)			(623,602	)
OTHER INCOME (EXPENSE):
Recapture of loss on impairment of
note receivable			—				19,400
Gain on distribution of IAI, net			—				74,353
Loss on derivative liability			(68,904	)			(61,111	)
Interest expense			(157,854	)			(15,290	)
NET (LOSS) BEFORE INCOME TAX PROVISION			(653,939	)			(606,250	)
PROVISION FOR INCOME TAXES			—				—
CONSOLIDATED NET (LOSS)			(653,939	)			(606,250	)
Add: Net loss attributable to noncontrolling interest, AquaLiv, Inc.			30,860				41,956
NET (LOSS) ATTRIBUTABLE TO COMPANY		$	(623,079	)		$	(564,294	)
BASIC AND DILUTED NET (LOSS) PER SHARE		$	*			$	*
WEIGHTED AVERAGE SHARES
OUTSTANDING			428,938,761				228,052,093

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*= less than $.01. Healthcare Solutions Management Group, Inc.

Consolidated Statements of Operations

 

AQUALIV TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Years
		Ended September 30,
		2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(623,079	)		$	(564,294	)
Adjustments to reconcile net loss to net cash
provided by
(used in)  operating activities:
Noncontrolling interest in income (loss) of consolidated subsidiary			(30,860	)			(41,956	)
Depreciation			5,704				3,446
Amount reserved due to doubtful accounts			—				4,289
Recapture on impairment of note receivable			—				(19,400	)
Issuance of stock for services received			52,500				5,000
Loss on goodwill impairment, Aqualiv			—				315,484
Loss on derivative liability			68,904				61,111
Authorization of debt discount			131,945				—
Gain on distribution of IAI, net of intercompany transfers			—				(18,298	)
Net (increase) decrease in operating assets:
Accounts receivable			112				14,040
Net changes in inventory			(433	)			—
Net increase (decrease) in operating liabilities:
Accounts payable			20,707				6,925
Credit cards payable			(17,187	)			(29,075	)
Other liabilities			(14,025	)			(15,853	)
Net Cash  (Used in) Operating Activities			(405,711	)			(278,581	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property and equipment			(20,264	)			(6,873	)
Net Cash (Used in) Investing Activities			(20,264	)			(6,873	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable			331,562				105,988
Payments for notes payable			(14,300	)			(22,250	)
Proceeds of capital stock issuance			112,500				204,414
Net Cash Provided by Financing Activities			429,762				288,152
NET INCREASE IN CASH			3,787				2,698
CASH AT BEGINNING OF PERIOD			3,732				1,034
CASH AT END OF PERIOD		$	7,519			$	3,732
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest		$	—			$	—
Income taxes		$	—			$	—
NON-CASH INVESTING AND FINANCING ACTIVITIES
Issuance of stock to retire notes payable,		$	211,750			$	85,350
accrued interest, and derivative liability
Issuance of preferred stock for acquisition		$	—			$	400,000

		June 30,				June 30,
		2019				2018
Sales		$	-			$	-
Cost of goods sold			-				-
Gross margin			-				-
Operating expenses:
Employee benefits							999
Office supplies			84				21
Payroll expense			-				(8,453	)
Postage and delivery			77				14
Telephone expense			-				(46	)
Travel expense			-				4,911
Automobile expense			68				-
Bank services charges			114				347
Filing fees			1,434				5,798
Legal fees			460				10,187
Insurance expense			-				-
Meals and entertainment			443				1,092
Professional fees			8,838				85,765
Stock transfer fees			6,294				-
Sales tax			-				1,283
Total operating expenses			17,812				101,918
Income (loss) from operations			(17,812	)			(101,918	)
Other income (expense)
Interest income (expense), net			(6,482	)			(2,280	)
Miscellaneous income			1,950				-
Forgiveness of debt			-				1,193,177
Total other income (expense)			(4,532	)			1,190,897
Income (loss) before income taxes			(22,344	)			1,088,979
Provision for income taxes (benefit)			-				-
Net income (loss)			(22,344	)		$	1,088,979
Basic and diluted earnings (loss) per common share		$	(0.00	)		$	0.07
Weighted-average number of common shares outstanding:
Basic and diluted			12,733,306				16,215,895

  

See auditors report and notes to the consolidated financial statements. 

AQUALIV TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' (DEFICIT)
			Preferred Stock								Common Stock
																			Additional												Total
																			paid in				Retained				Noncontrolling				Stockholders
			Shares				Amount				Shares				Amount				capital				(Deficit)				interest				(Deficit)
BALANCES,
September 30, 2010				285,618			$	286				187,243,870			$	187,244			$	1,414,898			$	(2,024,455	)		$	—			$	(422,027	)
Issuance of common stock to
repay debt				—				—				100,623,558				100,623				(15,273	)			—				—				85,350
Issuance of preferre stock
for 50% purchase of AquaLiv,
Inc.				400,000				400				—				—				399,600				(23,641	)			23,641				400,000
Issuance of common stock				—				—				3,750,000				3,750				20,250				—								24,000
Preferred stock returned for
common stock				(24,000	)			(24	)			—				—				(23,976	)			—								(24,000	)
Issuance of preferred stock
for cash				240,000				240				—				—				119,760				—								120,000
Issuance of preferred stock
for sevices				10,000				10				—				—				4,990				—								5,000
Distribution of IAI assets,
net				—				—				—				—				(18,298	)			—								(18,298	)
Other capital contribution				—				—				—				—				5,414				—								5,414
Net Loss for
the year ended
September 30, 2011				—				—				—				—				—				(564,294	)			(41,956	)			(606,250	)
BALANCES,
September 30, 2011				911,618			$	912				291,617,428			$	291,617			$	1,907,365			$	(2,612,390	)		$	(18,315	)		$	(430,811	)
Issuance of common stock to
repay debt				—				—				238,923,151				238,923				(27,173)				—				—				211,750
Adjustment to derivative liability for value of conversions				—				—				—				—				245,441				—				—				245,441
Issuance of common stock
for cash				—				—				10,250,000				10,250				62,250				—								72,500
Issuance of common stock
for professional services				—				—				11,626,985				11,627				40,873				—								52,500
Preferred stock returned for
common stock				(68,000	)			(68	)			9,679,363				9,679				(9,611	)			—								—
Issuance of preferred stock
for cash				80,000				80				—				—				39,920				—								40,000
Net Loss for
the year ended
September 30, 2012				—				—				—				—				—				(623,079	)			(30,861	)			(653,939	)
BALANCES,
September 30, 2012				923,618			$	924				562,096,927			$	562,096			$	2,259,065			$	(3,235,468	)		$	(49,176	)		$	(462,559	)

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Healthcare Solutions Management Group, Inc.

Consolidated Statements of Changes

in Stockholders Equity (Deficit)

		Preferred Stock								Preferred Stock								Preferred Stock																Additional								Total
		Series A								Series B								Series C								Common Stock								Paid-in				Retained				Stockholders'
		Shares				Value				Shares				Value				Shares				Value				Shares				Value				Capital				Earnings				Equity
Balance June 30, 2017			331,618			$	332				4,300,000			$	4,300				51			$	-				17,838,306			$	17,838			$	8,668,202			$	(14,143,390	)		$	(5,452,718	)
Net income (loss)																																							1,088,979				1,088,979
Retirement of shares per court order			(331,618	)			(332	)			(4,300,000	)			(4,300	)			(51	)							(5,105,000	)			(5,105	)			9,737								-
			-
Balance June 30, 2018			-				-				-				-				-				-				12,733,306				12,733				8,677,939				(13,054,411	)		$	(4,363,739	)
Net income (loss)																																							(22,344	)			(22,344	)
Balance June 30, 2019			-			$	-				-			$	-				-			$	-				12,733,306			$	12,733			$	8,677,939			$	(13,076,755	)		$	(4,386,083	)

AQUALIV TECHNOLOGIES, INC.

AND ITS’ SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                     

See auditors report and notes to the consolidated financial statements.

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Healthcare Solutions Management Group, Inc.

Consolidated Statements of Cash Flows

		June 30,				June 30,
		2019				2018
Cash flows from operating activities of continuing operations:
Net income (loss)			(22,344	)		$	1,088,979
Changes in operating assets and liabilities:
Accounts receivable			-				9,567
Accounts payable			11,017				(1,101,809	)
Credit card payables			-				(61,182	)
Accrued interest			6,481				2,280
Net cash provided by (used in) operating activities			(4,846	)			(62,165	)
Cash flows from financing activities:
Loan proceeds from receiver notes			-				65,000
Net cash provided by (used in) financing activities			-				65,000
Net increase (decrease) in cash and cash equivalents			(4,846	)			2,835
Cash and cash equivalents at beginning of period			5,084				2,249
Cash and cash equivalents at end of period		$	238			$	5,084
Supplemental disclosure of cash flow information:
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-

See auditors report and notes to the consolidated financial statements. 

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Healthcare Solutions Management Group, Inc.

Notes To Financial Statements

as of June 30, 2019, and 2018

NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND

Healthcare Solutions Management Group, Inc. (“the “Company”) f/k/a Verity Corporation is the parent of Verity Farms II, Inc. (“Verity Farms II”) and Aistiva Corporation (“Aistiva”) (f/k/a AquaLiv, Inc.). Verity Farms II was dedicated to providing consumers with safe, high-quality and nutritious food sources through sustainable crop and livestock production. Aistiva has released products in the industries of water treatment, skincare, and agriculture. Aistiva was primarily known for the AquaLiv Water System product which also produces the majority of its revenue and blends well with the Verity Water systems.

In February 2016, all the Company’s officers resigned, and Company stopped substantially all operating activities. On May 16, 2016, pursuant to Case Number A-16-733815-B, Nevada’s 8^th Judicial District, Business Court, appointed Robert Stevens as Receiver (“Receiver”) for Verity Corp. on May 3, 2016. Creditors were required to provide claims in writing under oath on or before November 3, 2016, or they will be barred under NRS §78.675”. Since May 16, 2016, through the date of this report, the Company has been operating under the direction of the Receiver

On March 22, 2018, the Nevada Court approved a plan of reorganization that involved authorizing the cancellation of all preferred shares of Verity Corp, the cancellation of certain insider shares, a reverse stock split up to a maximum of 200-1, and a reorganization that would place the liquidation of Verity Corp’s assets under a liquidating trustee while maintaining the public, purchasers for value with equity in the surviving entity. Once the reorganization is completed the Receiver will be discharged.

On June 14, 2019, Healthcare Solutions Management Group, Inc., a Delaware corporation and successor in interest to Verity Delaware Inc., a Delaware corporation which was previously a Nevada corporation named Verity Corp. (the “Company”) entered into a Merger Agreement (the “Merger Agreement”) by and between the Company, Verity Merger Corp., a wholly-owned subsidiary of the Company (“Merger Sub”), and Healthcare Solutions Holdings, Inc. (“HSH”). Pursuant to the terms of the Merger Agreement, the parties agreed that Merger Sub would merge with and into HSH, with HSH being the surviving entity (the “Merger”). The closing of the Merger will take place on the third business day following the satisfaction or waiver (by the party for whose benefit the condition exists) of the closing conditions in the Merger Agreement or on such other date and at such other time and place as the parties agree in writing.

Upon effectiveness of the Merger, (i) HSH’s certificate of incorporation will be the certificate of incorporation of the surviving company, and (ii) HSH’s bylaws will be the bylaws of the surviving company. In addition, upon the effectiveness of the Merger, HSH’s directors immediately prior to effectiveness of the Merger will be the directors of the surviving corporation. Accordingly, at the Closing, the Company’s current sole director will elect Justin Smith, Jonathan Loutzenhiser and Dr. Charles Balaban as members of the Company’s board of directors, and then the current sole director shall resign. Also, upon effectiveness of the Merger, HSH’s officers immediately prior to effectiveness of the Merger will be the directors of the surviving company.

The aggregate merger consideration to be paid to the holders of the HSH common stock in the merger will be an aggregate number of shares of the Company’s common stock constituting 90% of the issued and outstanding shares of Company common stock immediately following the Closing, assuming issuance of the Receiver Shares (as hereinafter defined). At the effective time of the Merger, each share of HSH common stock issued and outstanding immediately prior to the effective time (other than shares canceled as provided in the Merger Agreement, if any), will be converted into shares of Company common stock, at an exchange rate as required to cause the number of shares of Company common stock issued to the holders of the HSH common stock to be 90% of the issued and outstanding shares of the Company common stock immediately following the Closing, assuming issuance of the Receiver Shares, which is currently expected to result in an exchange ratio of 127.33306 shares of Company common stock per share of HSH common stock (as ultimately so determined, the “Exchange Ratio”), with any fractional shares of Company common stock being rounded to the nearest whole share of Company common stock. The Exchange Ratio will be finally determined by the parties to the Merger Agreement prior to the Closing.

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As consideration for the services of Robert Stevens and his team, who has acted as the court-appointed receiver for the Company and its predecessor and affiliated entities, in the Merger Agreement the Company agreed that, immediately prior to the Closing, the Company will issue to certain parties as directed by Mr. Stevens a total number of shares of Company common stock equal to 90% of the issued and outstanding shares of Company common stock immediately prior to the Closing, which will therefore constitute 9% of the issued and outstanding shares of Company common stock immediately following the Closing (the “Receiver Shares”). The Receiver Shares are currently expected to be a total of 114,599,754 shares of Company common stock,

The completion of the Merger is subject to certain customary closing conditions, including that HSH will have provided to the Company HSH’s audited and unaudited financial statements as required to be included in the Company’s filings with the Securities and Exchange Commission.

The Merger Agreement is not subject to a financing condition. The parties have made customary representations, warranties, and covenants in the Merger Agreement. The Merger Agreement also contains a customary “no-shop” covenant prohibiting the Company from soliciting proposals for alternative acquisition or providing information or participating in any discussions in connection with any such proposals.

The Merger is intended to be a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Merger Agreement is intended to be a “plan of reorganization” within the meaning of the regulations promulgated under Section 368(a) of the Code and for the purpose of qualifying as a tax-free transaction for federal income tax purposes.

The Merger is intended to be a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Merger Agreement is intended to be a “plan of reorganization” within the meaning of the regulations promulgated under Section 368(a) of the Code and for the purpose of qualifying as a tax-free transaction for federal income tax purposes.

The Merger Agreement contains certain termination rights that may be exercised by the Company or HSH, as applicable, including in the event that (i) both parties agree by mutual written consent to terminate the Merger Agreement, (ii) the Merger is not consummated by July 30, 2019, or (iii) any law or order permanently restraining, enjoining or otherwise prohibiting consummation of the Merger having become final and non-appealable.

As of the date of this Report the Merger has not been consummated; and neither HSH nor the Company has exercised its termination rights. The Company believes the Merger will be consummated, however, there can be no assurances.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

AquaLiv Technologies, Inc. (the “Company") is a corporation incorporated under the laws of the State of Nevada on April 11, 2006, originally under the name of Infrared Systems International, as a wholly-owned subsidiary of China SXAN Biotech, Inc. (formerly Advance Technologies, Inc.) ("CSBI"). CSBI was organized under the laws of the State of Delaware on June 16, 1969. In July 2007, CSBI transferred the needs a space before “as” assets, liabilities, and operations of its technology licensing business to the Company. Because CSBI's operations are considered to be the Company's predecessor business, the

The accompanying consolidated financial statements include CSBI's operations from the inception of the business. In December 2008,Company have been prepared in accordance with accounting principles generally accepted in the Company completed its spin-off by dividend to stockholdersUnited States of CSBI.  America (U.S. GAAP) under the accrual basis of accounting.

Use of Estimates

 

In March 2010, the Company transferred the assets, liabilities, and operations of its technology licensing business to a wholly-owned subsidiary, Infrared Applications, Inc (“IAI”).  IAI was incorporated under the laws of the State of Texas on March 26, 2010. On April 14, 2010, the Company sold a majority interest in its common stock to Take Flight Equities, Inc. (“TFE”), a corporation incorporated under the laws of the State of Washington, and control of the Company was transferred to William Wright, its current CEO. Under the terms of the agreement, IAI continued to operate as a wholly-owned subsidiary until June 22, 2011, when IAI was distributed to the Gary Ball, the companies former CEO, under a Management and Distribution Agreement dated March 24, 2010.  

Also in April 2010, the Company acquired 100% of the outstanding common stock of Focus Systems, Inc. (“Focus”), a corporation incorporated under the laws of the State of Washington on August 8, 2007, from ProPalms, Inc. (“ProPalms”), for 3,000,000 shares of common stock, 250,000 shares of preferred stock, and the assumption of $283,639 in liabilities.  Focus is operated as a wholly-owned subsidiary of the Company. In addition to this agreement, the Company agreed to issue ProPalms 500,000 preferred shares for an Investment Receivable of $250,000. Under the terms of the agreement, ProPalms was to make the investment over the course of 4 months or return the unvested stock within 1 year.  Over the course of the 4 months, ProPalms invested $17,809.  ProPalms returned the unvested portion of the stock (amounting to 464,382 preferred shares) and the Company has accounted for it on its Change in Stockholders’ Deficit.  On May 14, 2010, the Company completed a 10:1 forward split of its common stock.

On December 16, 2010, the Company purchased a 50% interest in AquaLiv, Inc. from Craig Hoffman for $400,000 paid in the form of 400,000 shares of preferred stock valued at $1.00 per share. We have concluded, pursuant to the guidance in FASB ASC 810-10-25-38 (previously FIN 46R) that AquaLiv, Inc. is a Variable Interest Entity, that we are the primary beneficiary with a controlling financial interest in AquaLiv, Inc. and we are required to consolidate its financials accordingly. The remaining 50% non-controlling interest is owned by Craig Hoffman, AquaLiv, Inc’s President and CEO. AquaLiv, Inc. is a life sciences research and development company creating novel products for numerous industries. The company's technology alters the behavior of organisms, including plants and humans, without chemical interaction. From increased crop yields to drug-free medicine, AquaLiv, Inc. is providing innovative, ingredient-free solutions to the world's largest problems.

On June 22, 2011, in accordance with Management and Distribution Agreement (“Agreement”), dated March 24, 2010, we completed the distribution of substantially all of the assets of IAI. All of the outstanding stock of IAI has been transferred to Gary Ball (“Ball”) in accordance with the Agreement. Subsequent to this event, Ball shall be responsible to make, if any, a Subsidiary Stock Distribution to the Company’s shareholders of record as of March 23, 2010, upon the earlier of the foregoing occurrence: (i) the net proceeds from the sale of substantially all of the assets of IAI or (ii) Ball elects to make a Subsidiary Stock Distribution. Any cost incurred in connection with a Subsidiary Distribution shall be the responsibility of Ball. There is no certainty as to when or if a Subsidiary Stock Distribution will occur.

On September 6, 2011, the Company filed its Articles of Amendment with the State of Nevada to effect a name change to AquaLiv Technologies, Inc. and to increase its authorized common shares to 1,000,000,000. FINRA declared the corporate action effective on September 19, 2011. The name change was effected to more closely align the name with the future direction of the company.

Nature of Operations - The Company’s subsidiary, AquaLiv, Inc.,is a life sciences research and development company based in Seattle, Washington. The company’s technology taps into a previously undiscovered natural phenomenon that gives us significant competitive advantages in the industries of agriculture and medicine. This technology represents an entirely new way to affect the health and behavior of plants and animals, including human beings.. The Company’s wholly-owned subsidiary, Focus, provides remote desktop and cloud computing solutions to small businesses.  Additionally, Focus provides Voice over Internet Protocol (VoIP) phone solutions to small businesses and can deliver the service to households as well.  The Company has not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.

Use of Estimates - The preparation ofpreparing consolidated financial statements in conformity with U.S.accounting principles generally accepted accounting principles requiresin the United States of America, management to makemakes estimates and assumptions that affect certainthe reported amounts of assets and disclosures. Accordingly, actualliabilities at the dates of the consolidated financial statements, as well as the reported amounts of expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivables, and liabilities and the estimation on useful lives of property, and plant and equipment. Actual results could differ from thosethese estimates.

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Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries. 

All significant inter-company balances and transactions within the Company and subsidiaries have been eliminated upon consolidation.

Cash and Cash Equivalents

 

Cash and Cash Equivalents - The Company considerscash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly-liquid debthighly liquid investments purchased with aan original maturity of three months or less to be cash equivalents.as of the purchase date of such investments.

Accounts Receivable

 

Accounts Receivable -receivable are recorded at the invoiced amount and do not bear interest. The Company records accounts receivable at cost lessextends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by actively pursuing past due accounts. An allowance for doubtful accounts.accounts is established and determined based on managements’ assessment of the accounts receivables collectibles. Judgment is required in assessing the amount of the allowance. The Company estimates allowances for doubtful accountsconsiders the historical level of credit losses and applies percentages to different receivables categories. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the aged receivable balances and historical losses.  Management has estimated that $0 is necessary for doubtful accounts after reviewinglevel of credit losses in the accounts receivable at September 30, 2012.future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a larger allowance may be required.

 

Property and Equipment - The Company records property and equipment at cost and uses straight-line depreciation methods over three to ten years. Maintenance, repairs, and expenditures for renewals and betterments not determined to extend the useful lives or to materially increase the productivity of the assets are expensed as incurred. Other renewals and betterments are capitalized.   Property and Equipment is that of our subsidiaries, AquaLiv, Inc. and Focus Systems, Inc., which we have been recorded at actual cost and estimated net book value, less depreciation, which was recorded under Other Expenses on our Consolidated Statements of Operations.  

Revenue Recognition

 

Revenue Recognition - The Company's revenue is derived through its subsidiaries. AquaLiv, Inc.’s revenue comes primarilyCompany derives revenues from the sale of agricultural products, animal feeds, consulting services, and various water units. The Company’s sales of AquaLiv Water Systems and Infotone Hydrafting Mist.arrangements are not subject to warranty. On July 1, 2018, we adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after July 1, 2018, are presented under ASC 606, while prior period amounts were reported in accordance with our historic accounting under ASC 605. The products are sold thoughCompany has not recorded any revenue since 2016 so the subsidiary’s website portal, www.aqualiv.com. Revenue is derived from AquaLiv, Inc. from several smaller purchases ranging from $35transition to $1,695. Revenue derived from Focus comes from several smaller accounts and is billedASC 606 had no impact on a monthly basis.  The monthly billing for these accounts range from $72 to $1,087. IAI’s revenue came from royalties derived through licensing its technology to a single customer. The licensing agreement allowed the customer exclusively to use the subsidiary’s technology in aircraft systems manufactured by the customer in exchange for a royalty fee for each system that includes the Company's technology sold by the customer for commercial sales. The royalty fee was payable quarterly and amounts to $800 per aircraft system. As of June 22, 2011, royalty revenue has been discontinued along with the distribution of the IAI assets per the Management and Distribution Agreement.  our financial statements.

 

Research and Development - The Company expenses research and development costs as incurred.Cost of Goods Sold

 

Cost of goods sold consists primarily of material costs which are directly attributable to the manufacture of products, to the products held for resale and to the provision of services.

Income taxes - Taxes

The Company adopts the ASC Topic 740, “Income Taxes “Income Taxes” regarding accounting for uncertainty in income taxes which prescribes the recognition threshold and measurement attributes for financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. In addition, the guidance requires the determination of whether the benefits of tax positions will be more likely than not sustained upon audit based upon the technical merits of the tax position. For tax positions that are determined to be more likely than not sustained upon audit, a company recognizes the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement in the financial statements. For tax positions that are not determined to be more likely than not sustained upon audit, a company does not recognize any portion of the benefit in the financial statements. The guidance provides for de-recognition, classification, penalties, and interest, accounting in interim periods and disclosure.

For the years ended SeptemberJune 30, 20122019, and 2011,2018, the Company did not have any interest and penalties associated with tax positions. As of SeptemberJune 30, 20122019, and 2011,2018, the Company did not have any significant unrecognized uncertain tax positions.

 

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits or that future deductibility is uncertain.

 

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Comprehensive income - The Company adopted FASB Accounting Standards Codification 220 “Comprehensive Income” (formerly SFAS No. 130, “Reporting Comprehensive income”, which establishes standards for reporting and display of comprehensive income, and its components in the consolidated financial statements. Components of comprehensive income include net income and foreign currency translation adjustments. The Company has presented consolidated statements of income which includes other comprehensive income or loss.

 

Fair valueProfessional Fees

With the exception of financial instruments - legal fees, substantially all professional fees expensed by the Company subsequent to the appointment of the court-appointed Receiver, represent hours of work performed by him to help the Company emerge from receivership by obtaining external financing. The fees are a liability of the Company and are expensed as incurred.

Related Parties

The Company follows paragraph 825-10-50-10subtopic 850-10 of the FASB Accounting Standards Codification for disclosures aboutthe identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20, the Related parties include a). affiliates of the Company; b). entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c). trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d). principal owners of the Company; e). management of the Company; f). other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g). other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial instrumentsstatements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and paragraph 820-10-35-37other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include a). the nature of the relationship(s) involved; b). a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c). the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d). amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a frameworkreport accounting for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilitiescontingencies. Certain conditions may exist as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amounts of the Company’sdate the consolidated financial assets and liabilities, such as cash and cash equivalents, trade accounts and other receivables, inventories, prepaid expenses, accounts payable, other payables and accrued liabilities, deposits receivedstatements are issued, which may result in advance, taxes payable, deferred tax liabilities, and short term borrowings approximate their fair values because of the short maturity of these instruments. The Company’s short term borrowings approximate the fair value of such instrument based upon management’s best estimate of interest rates that would be availablea loss to the Company, for similar financial arrangement at September 30, 2011but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and 2010.such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

The Company does not have any assets or liabilities measured at fair value onIf the assessment of a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value atSeptember 30, 2012 and 2011, nor gains or losses are reported in the statement of operationscontingency indicates that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the year endedSeptember 30, 2012 and 2011.

Commitments and contingencies - Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources, if applicable, are recorded when it is probable that a liabilitymaterial loss has been incurred and the amount of the assessmentliability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably estimated.possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

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Off-balance sheet arrangements - The CompanyLoss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have any off-balance sheet arrangements.a material adverse effect on the Company’s consolidated financial position, consolidated results of operations or consolidated cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows.

 

RecentSubsequent Events

The Company adopted FASB Accounting Pronouncements - Standards Codification 855 “Subsequent Events” (“ASC 855”) to establish general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the financial statements are issued or available to be issued.

Recently issued accounting standards

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its consolidated financial condition or the consolidated results of its operations.

Fair Value Measurements and Disclosures

In January 2010, the Financial Accounting Standards Board (“FASB”)  issued authoritative guidance regarding fair value measures and disclosures. The guidance requires disclosure of significant transfers between level 1 and level 2 fair value measurements along with the reason for the transfer. An entity must also separately report purchases, sales, issuances and settlements within the level 3 fair value roll forward. The guidance further provides clarification of the level of disaggregation to be used within the fair value measurement disclosures for each class of assets and liabilities and clarified the disclosures required for the valuation techniques and inputs used to measure level 2 or level 3 fair value measurements. This new authoritative guidance is effective for the Company in fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this guidance will not impact the Company’s consolidated results of operations or financial position.

Variable Interest Entities (VIEs)

 

In June 2009, the FASB issued authoritative guidance changing the approach to determine a VIE’s primary beneficiary and requiring ongoing assessments of whether an enterprise is the primary beneficiary of a VIE. This guidance also requires additional disclosures about a company’s involvement with VIEs and any significant changes in risk exposure due to that involvement. This guidance was adopted January 1, 2010, and did not have an impact on the Company’s consolidated financial position, results of operations or cash flows. 

Basis of presentation - The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America under the accrual basis of accounting. All intercompany accounts and transactions have been eliminated.

Inventories – The Company’s inventories (finished goods, work in process, raw materials and packaging materials) are stated at the lower of cost or market. Cost is determined on a first in first out basis. In addition, the Company estimates net realizable value based on intended use, current market value and contract terms. The Company writes down the inventories for estimated obsolescence, slow moving or unmarketable inventories equal to the difference between the cost of inventories and the estimated market value based upon assumptions about future demand and market conditions.

Impairment of long-lived assets-The Company evaluated the recoverability of its property, plant, equipment, and other long-lived assets in accordance with FASB Accounting Standards Codification 360 “Property, Plant and Equipment” (formerly SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”), which requires recognition of impairment of long-lived assets in the event the net book value of such assets exceed the estimated future undiscounted cash flows attributable to such assets or the business to which such intangible assets relate. Impairments of these types of assets were recognized during the years ended September 30, 2011 and 2010.

Loss per share-The Company reports loss per share in accordance with FASB Accounting Standards Codification 260 “Earnings per Share” (formerly SFAS 128, “Earnings per Share”). This statement requires dual presentation of basic and diluted earnings (loss) with a reconciliation of the numerator and denominator of the loss per share computations. Basic earnings per share amounts are based on the weighted average shares of common outstanding. If applicable, diluted earnings per share assume the conversion, exercise or issuance of all common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Accordingly, this presentation has been adopted for the periods presented. There were no adjustments required to net income for the period presented in the computation of diluted earnings per share. There were no common stock equivalents (CSE) necessary for the computation of diluted loss per share.

NOTE 23 - GOING CONCERN

 

The Company'sCompany is currently in receivership. The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At SeptemberOn June 30, 2012,2019, the Company had a retained deficit of $3,235,468$13,076,755 and current liabilities in excess of current assets by $462,559. During the year ended September 30, 2012, the Company incurred a net loss of $623,079 and negative cash flows from operations of $405,711. These factors create an uncertainty about the Company's ability to continue as a going concern.$4,386,083. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

  

The Company'sCompany’s continuation as a going concern is solely dependent upon itsthe Receiver’s ability to increase revenues, decrease or contain costs, and achieve profitable operations. In this regard, our ability to continue as a going concern has caused the board of directors (the “Board”) to continue investigating merger and acquisition opportunities.  We will look to further diversify our holdings and sources of cash flow. Should the Company's financial resources prove inadequate to meet the Company's needs before additional revenue sources can be realized, the Company may raise additional funds through loans or through sales of common or preferred stock.financing from third parties. There is no assurance that the Company will be successful in achieving profitable operations or in raising any additional capital.doing so.

 

NOTE 3 - RELATED PARTY TRANSACTIONS

Revenues - Service – The Company, through its wholly owned subsidiary, Focus, received $1,303 in service revenues from parties related to our CEO during the fiscal year ended September 30, 2011. The revenue was booked at the same rate as that of non-affiliated customers.

Management compensation - During the years ended September 30, 2012 and 2011, respectively, the Company paid management fees of $120,000 and $105,900 to its officers.

Consulting - During the years ended September 30, 2012 and 2011, respectively, the Company paid $10,462 and $30,000 for consulting services to officers and directors or entities related to or under the control of an officer or director of the Company.

Credit cards payable – During the years ended September 30, 2012 and 2011, the Company’s current and former officers extended credit to the Company and/or its subsidiaries in the form of personal credit card usage in the amount of $19,367 and $17,187, respectively, of which $17,187 was unpaid at September 30, 2011.

Notes payable – During the fiscal year ended September 30, 2012 and 2011, a company closely held by an officer of the company, loaned the Company $28,456 and $23,388, respectively. The loan is due on demand and carries no interest.  Imputed interest is included in the accompanying Consolidated Statements of Operations.

NOTE 4 - PROPERTY AND EQUIPMENT

		Estimated Useful Lives		September 30, 2012		September 30, 2011
Optical equipment		5 years		$      39,386		$          39,386
Office equipment		3 - 10 years		28,495		8,231
Computers and peripherals		5 years		16,000		16,000
Furniture and fixtures		5 years		6,873		6,873
				90,754		70,490
Less accumulated depreciation				(67,767)		(62,063)
Net property and equipment				$       22,987		$         8,427

Depreciation expense for the years ended September 30, 2012and 2011 was $5,704 and $2,800, respectively.

NOTE 5 - DEFINITE-LIFE INTANGIBLE ASSETS

AquaLiv, Inc. Acquisition

		September 30, 2011
Acquisition value
Preferred shares (per contract)		$	400,000
Total Acquisition value		$	400,000
Valuation classification
Physical assets		$	5,516
Cash			79,000
Goodwill			315,484
Impairment of Goodwill			(315,484)
Goodwill, net			—
Net value		$	84,516

We have concluded, pursuant to the guidance in FASB ASC 810-10-25-38 (previously FIN 4R) that AquaLiv, Inc. is a Variable Interest Entity, that we are the primary beneficiary with a controlling financial interest in AquaLiv, Inc. and we are required to consolidate its financials accordingly. Additionally, the acquisition was recorded at its fair market value in that the cash, computer equipment, and inventory were recorded at their fair market value on the date of the acquisition. Impairment of goodwill from the date of acquisition was written off to its net realizable value in the accompanying statements of operations.

NOTE 6 – INVENTORY

Inventories are comprised of the following amounts at the respective dates:
		September 30, 2012				September 30, 2011
Raw materials		$	5,201			$	4,340
Work in process			1,734				1,447
Finished goods			4,623				3,858
Provision for inventory liquidations			(10,403	)			(8,921	)
Inventory - end of period		$	1,156			$	723

NOTE 7 - NOTES PAYABLE AND DERIVATIVE LIABILITY

At fiscal year ended September 30, 2012, the Company had notes payable in the amount of $343,224, compared to $189,179, in the prior fiscal year. The notes included a note payable to an unaffiliated party in the amount of $93,769, which is not secured by collateral of the Company, carries accrued interest of 6%and is due on demand by the holder. The second note payable is to an affiliated company of our former President in the amount of $28,456, is not secured by collateral of the company, carries no interest, and is due on demand by the holder.

A third note payable was issued to an unaffiliated party on February 27, 2012 in the aggregate amount of $58,000. As of September 30, 2012, $11,000 remained outstanding on the principle amount of the note. The note carries an interest rate of 8%, is not secured by collateral of the company, and has a maturity date of November 29, 2012. The note has conversion rights beginning after month six (6). The variable conversion price is 58% of the market price, which is calculated by the average three (3) lowest closing bid prices as quoted on the applicable trading market (the “OTCBB”) during the previous ten (10) trading days. The note holder may not own any more than 4.99% of the company’s outstanding common stock. The Company recognizes the conversion option of the note (an embedded derivative) as a derivative liability.

Derivative Liability

ASC Topic 815 (“ASC 815”) requires that all derivative financial instruments be recorded on the balance sheet at fair value. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data and requiring judgment and estimates.DEBT

 

The Company issued convertible notes and has evaluatedfollowing tables set forth the terms and conditions of the conversion features contained in the notes to determine whether they represent embedded or freestanding derivative instruments under the provisions of ASC 815. The Company determined that the conversion features contained in the notes represent freestanding derivative instruments that meet the requirements for liability classification under ASC 815. As a result, the fair value of the derivative financial instruments in the notes is reflected in the Company’s balance sheet as a liability. The fair value of the derivative financial instruments of the convertible notes was measured at the inception date of the notes and warrants and each subsequent balance sheet date. Any changes in the fair value of the derivative financial instruments are recorded as non-operating, non-cash income or expense at each balance sheet date.

The Company valued the conversion features in its convertible notes using the Black-Scholes model. The Black-Scholes model values the embedded derivatives based on a risk-free rate of return ranging from 0.29% to 0.30%, grant dates at 8/1/2011, 10/6/2011 and 9/30/2012, the term of convertible note, conversion prices is 55% and 58% of stock bid price at date of note conversion, current stock prices on the measurement date ranging from $0.0013 to $0.0070, and the computed measurecomponents of the Company’s, stock volatility, ranging from 1,839.96% to 2,342.87%. debt as of June 30, 2019, and June 30, 2018:

 

Included in the September 30, 2012 financial statements is a derivative liability in the amount of $18,963to account for this transaction. It is revalued quarterly henceforth and adjusted as a gain or loss to the consolidated statements of operations depending on its value at that time.

Included in our Consolidated Statements of Operations for the years ended September 30, 2012 and 2011 are $68,907 in change of fair value of derivative and $131,945 of debt discount amortization in non-cash charges pertaining to the derivative liability as it pertains to the gain on derivative liability and debt discount, respectively.

Loss on goodwill impairment 

	September 30, 2012	September 30, 2011
Loss on goodwill impairment, AquaLiv	$ --	$ 315,484
	_________
Net loss on impairments	$ --	$ 315,484

NOTE 8 – STOCKHOLDERS’ DEFICIT

In October 2010 the Company issued 9,500,000 shares of Common stock to repay $5,000 in debt.

In December 2010 the Company issued 400,000 shares of Preferred stock for the purchase of 50% interests in AquaLiv, Inc.

In December 2010 the Company issued 3,750,000 shares of Common stock in exchange for 24,000 shares of Preferred stock valued at $24,000.

In January 2011, the Company issued 90,000 shares of Preferred stock for $45,000 in cash.

In January 2011, the Company issued 100,000 shares of Preferred stock for $50,000 in cash.

In April 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.

In May 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.

In May 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.

In June 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.

In June 2011 the Company issued 3,947,368 shares of Common stock to repay $15,000 in debt.

In June 2011 the Company issued 2,380,952 shares of Common stock to repay $10,000 in debt.

In July 2011 the Company issued 3,200,000 shares of Common stock to repay $8,000 in debt.

In July 2011 the Company issued 11,500,000 shares of Common stock to repay $5,750 in debt.

In July 2011 the Company issued 4,095,238 shares of Common stock to repay $8,600 in debt.

In August 2011 the Company issued 12,000,000 shares of Common stock to repay $6,000 in debt.

In September 2011 the Company issued 6,500,000 shares of Common stock to repay $3,250 in debt.

In September 2011 the Company issued 7,500,000 shares of Common stock to repay $3,750 in debt.

In September 2011 the Company issued 10,000 shares of Preferred stock for $5,000 in management fees.

In September 2011 the Company issued 50,000 shares of Preferred stock for $25,000 in cash.

In September 2011 the Company’s subsidiary received $5,414 in cash in exchange for previously issued Preferred stock related to the AquaLiv, Inc. acquisition.

In October 2011 the Company issued 14,500,000 shares of Common stock to repay $7,250 in debt.

In November 2011 the Company issued 15,000,000 shares of Common stock to repay $7,500 in debt.

In December 2011 the Company issued 5,000,000 shares of Common stock for $20,000 in cash.

In December 2011 the Company issued 16,000,000 shares of Common stock to repay $8,000 in debt.

In January 2012 the Company issued 14,000,000 shares of Common stock to repay $7,000 in debt.

In January 2012 the Company issued 5,250,000 shares of Common stock for $52,500 in cash.

In February 2012 the Company issued 27,823,864 shares of Common stock to repay $50,500 in debt.

In March 2012 the Company issued 22,333,333 shares of Common stock to repay $19,500 in debt.

In March 2012 the Company issued 2,500,000 shares of Common stock to pay for $15,000 in consulting services.

In April 2012 the Company issued 33,711,976 shares of Common stock to repay $47,500 in debt.

In April 2012 the Company issued 9,054,353 shares of Common stock in exchange for 64,000 shares of Preferred stock valued at $64,000.

In May 2012 the Company issued 625,000 shares of Common stock in exchange for 4,000 shares of Preferred stock valued at $4,000.

In May 2012 the Company issued 5,555,556 shares of Common stock as incentive shares in exchange for $25,000 in professional fees.

In May 2012 the Company issued 3,571,429 shares of Common stock as commitment shares in exchange for $12,500 in fees.

In May 2012 the Company issued 11,516,104 shares of Common stock into escrow as part of a financing agreement.

In June 2012 the Company issued 23,000,000 shares of Common stock to repay $11,500 in debt.

In July 2012 the Company issued 20,000,000 shares of Common stock to repay $10,000 in debt.

In August 2012 the Company issued 11,538,462 shares of Common stock to repay $15,500 in debt.

In September 2012 the Company issued 39,469,250 shares of Common stock to repay $32,000 in debt.

NOTE 9 - CONCENTRATIONS

At September 30, 2012, the Company’s accounts receivable total was $1,856, or less than 2% of the Company’s total revenue for the current quarter and less than 1% of the total annual revenue for the fiscal year ended September 30, 2012. Furthermore, no single customer represented more than 1% of the total annual revenue. Therefore, the Company no longer anticipates being dependent on any one or few major customers. The Company does not expect a high level of concentration related to our current products and services.

NOTE 10 - CONTINGENCIES

The Company had no contingencies existing as of September 30, 2012 and 2011.

NOTE 11 - LOSS PER SHARE 

The basic loss per share was calculated using the net loss and the weighted average number of shares outstanding during the reporting periods. All share and per share data have been adjusted to reflect the forward stock split. 

NOTE 12 - SEGMENTS

The Company determined that it do not operate in any material, separately reportable operating segments as of September 30, 2012 and 2011. 

NOTE 13 - INCOME TAXES

At September 30, 2012, the Company has federal net operating loss carryovers of approximately $1,795,000 available to offset future taxable income and expiring as follows:

$2,320 in 2026, $12,616 in 2027, $127,675 in 2028, $37,465 in 2029, and $428,000 in 2030, $564,000 in 2031 and $623,000 in 2032. The Company also has a federal contribution carryover of $150 that expires in 2029. At September 30, 2012, the Company had experienced losses since inception and had not yet generated any taxable income; therefore, the Company established a valuation allowance to offset the net deferred tax assets.

The income tax provision consists of the following components for the years ended September 30, 2012 and 2011:

			2012				2011
Current income tax expense (benefit)		$	—			$	—
Deferred income tax expense (benefit)			—				—
Net income tax expense (benefit) charged to operations		$	—			$	—

		June 30, 2019				June 30, 2018
Notes payable		$	215,323			$	215,323
Real estate loans		$	4,001,267			$	4,001,267
Receiver loan		$	65,000			$	65,000

 

The income tax provision differs fromNotes payable and the amounts that wouldreal estate loans are unsecured and due to a former director and officer of the Company. As a result of the court order in Nevada in March 2018, no interest can be obtained by applying the federal statutory income tax rate to loss before income tax provision as follows for the years ended September 30, 2012 and 2011:

		2012				2011
Loss before income tax provision		$	(623,079	)		$	(564,294	)
Expected federal income tax rate			15.0	%			15.0	%
Expected income tax expense (benefit at statutory rate		$	(934,462	)		$	(84,644	)
Tax effect of			-
Meals and entertainment			1,408				—
Change in valuation allowance			92,054				84,644
Net income tax expense (benefit)		$	—			$	—

The Company's deferred tax assets, deferred tax liabilities, and valuation allowance are as follows:

		September 30, 2012				September 30, 2011
Deferred tax assets:
Organization costs		$	—			$	—
Contribution carryover			—				—
Net operating loss carryovers			269,250				175,800
Total deferred tax assets		$	269,250			$	175,800
Deferred tax liabilities:
Book basis of patent application		$	—			$	—
Tax depreciation in excess of book			—				—
Total deferred tax liabilities		$	—			$	—
Total deferred tax assets		$	269,250			$	175,800
Total deferred tax liabilities			—				—
Valuation allowance			(269,250	)			(175,800	)
Net deferred tax asset (liability)		$	—			$	—

These amounts have been presented in the financial statements as follows: 

			September 30, 2012				September 30, 2011
Current deferred tax asset (liability)		$	—			$	—
Non-current deferred tax asset (liability)			—				—
		$	—			$	—

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NOTE 14 - SUBSEQUENT EVENTS

On November 21, 2012,accrued on this debt. In February 2018, the Company issued 25,548,888 shares of common stock to Auctus Private Equity Management , Inc. (“Auctus Management”)obtained a Receiver’s Note for $22,994 in commitment fees.

On December 10, 2012, the Company issued at total of 120,000,000 shares of common stock to four (4) non-affiliated parties to pay off $95,182.16 in debt.

On December 28, 2012, the Company recorded the return of 5,555,556 shares of common stock to the treasury from TCA Global Master Fund, LP (“TCA”) in exchange for $25,000 paid in cash for prior commitment fees.

On December 31, 2012, the Company issued 25,000,000 shares of common stock to Trak Management Group, Inc. for $25,000 in consulting services.

On December 31, 2012, the Company issued 15,000,000 shares of common stock for $15,000 in rendered legal services.

On December 31, 2012, the Company issued 5,000,000 shares of common stock to Auctus Management for $4,000 in commitment fees.

On January 8, 2013, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission (“SEC”) disclosing that on December 28, 2012, the Company issued a Secured Promissory Note in favor of Mr. Duane Spader in the principal sum of $241,266.67 plus$65,000 which accrues interest at a rate of 6% per annum.10%. As of June 30, 2019, there was $8,761 in accrued interest due and payable on the Receiver Note. The maturity dateReceiver expects to discharge the Notes Payable and Real Estate Loans with no further liability to the Company, prior to consummating the Merger Agreement referenced throughout this Report. There can be no assurance the Receiver will be successful in discharging this debt.

NOTE 5 - RELATED PARTY TRANSACTIONS

The Company is December 28, 2013. Proceedsunder the control of the note were usedcourt-appointed Receiver who is considered a related party. During the year ended September 30, 2019, the Receiver incurred $8,838 in professional fees in managing the Company. Additionally the Receiver has extended a $65,000 loan to pay off the note held by TCA.Company which bears interest at 10%.The Company believes these services and loans are at market rate.

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NOTE 6 - SHAREHOLDERS’ EQUITY

The Company has 1,000,000,000 common shares authorized at a par value of $0.001.

 

On January 8, 2013,June 30, 2017, the Company had the following shares of Preferred Stock outstanding:

Series A	331,618 shares
Series B	4,300,000 shares
Series C	51 shares

Pursuant to a Court order in March 2018, all of these preferred shares were canceled, and the amount of outstanding common shares were reduced from 17,838,306 shares outstanding as of June 30, 2017, to 12,733,306 shares outstanding as of June 30, 2018, and June 30, 2019.

NOTE 7 - INCOME TAXES

Due to the historical operating losses, the inability to recognize an income tax benefit, and the failure to file tax returns for numerous years, there is no provision for current or deferred federal or state income taxes for the period from inception through the period ended June 30, 2019. As of June 30, 2019, the Company had a retained earnings deficit of $13,076,755, however, the amount of that loss that could be carried forward to offset future taxes is indeterminable.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

As of June 30, 2019, and 2018, the Company had no contractual commitments,

NOTE 9 - SUBSEQUENT EVENTS

In accordance with ASC 855-10 management has performed an evaluation of subsequent events from June 30, 2019, through the date the financial statements were available to be issued and noted in subsequent events requiring disclosure.

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(b) The following exhibits are filed as a Currentpart of this Annual Report on Form 8-K with the SEC disclosing that on December 31, 2012, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among the Company, Verity Farms II, Inc., a South Dakota corporation and parent company of Verity Farms, LLC (“Verity”), AquaLiv, Inc. and Focus. Pursuant to the Exchange Agreement, the Company acquired 100% of the authorized and issued shares of Verity in exchange (the “Exchange”) for 4,850,000 shares10-K:

Exhibit No.		Description
2.1		Merger Agreement dated June 14, 2019, by and among Healthcare Solutions Management Group, Inc., Verity Merger Corp. and Healthcare Solutions Holdings, Inc. (Incorporated by reference to Exhibit 2.1 of the Company’s Series B Convertible Preferred Stock, par value $0.001 (the “Series B Preferred”). As a result of the Exchange and the other transactions contemplated thereunder, Verity is now a wholly-owned subsidiary of the Company and the Company has acquired Verity’s current business operations, including the real estate holdings, and its subsidiaries. On January 8, 2013, the Company filed a Current Report on Form 8-K with the SEC disclosing that on December 31, 2012, Mr. William M. Wright (“Mr. Wright”) resigned as Chairman and Chief Executive Officer of the Company. Mr. Wright shall remain as Executive Vice President, Chief Financial Officer and a member of the Board. On January 8, 2013, the Company filed a Current Report on Form 8-K with the SEC disclosing that on December 31, 2012, Mr. Tracy Bushnell resigned from his position as a member of the Board. On January 8, 2013, the Company filed a Current Report on Form 8-K with the SEC disclosing that on December 31, 2012, Mr. Duane Spader was appointed as the Company’s Chief Executive Officer, President and Chairman of the Board. On January 8, 2013, the Company filed a Current Report on Form 8-K with the SEC disclosing that on January 7, 2013, the Company filed a Certificate of Designation with the Nevada Secretary of State to designate the rights and preferences of Series B Preferred. On January 8, 2013, the Company filed a Current Report on Form 8-K with the SEC disclosing that effective on the closing date, the Company shall issue 4,850,000 shares of the Company’s Series B Preferred to Verity, which shall carry voting rights equal to approximately 86% of the outstanding shares of the Company’s common stock. F-16 Exhibit No. Description 2.1 Form of Share Exchange Agreement, dated December 31, 2012, by and among AquaLiv Technologies, Inc., Verity Farms II, Inc., AquaLiv, Inc. and Focus Systems, Inc. (as filed as Exhibit 2.1 to the Company Current Report on Form 8-K filed with the SECSecurities and Exchange Commission on January 8, 2013, and incorporated herein by reference)June 20, 2019). 2.2 3.1 Articles of Incorporation (as filed as Exhibit 3.1 Amendment to the Company’s Registration Statement on Form SB-2, filed with the SEC on November 13, 2007, and incorporated herein by reference) 3.2 Bylaws (as filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on September 2, 2008, and incorporated herein by reference) 3.3 Series B Preferred Stock Certificate of Designation * 10.1 Infrared Systems International 2010 Incentive Compensation Plan (as filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 on July 9, 2010, and incorporated herein by reference) 10.2 Drawdown Equity FinancingMerger Agreement dated April 27, 2012, by and between AquaLiv Technologies, Inc. and Auctus Private Equity Fund, LLC (as filed as Exhibit 10.2 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 10.3 Registration Rights Agreement, dated April 27, 2012, by and between AquaLiv Technologies, Inc. and Auctus Private Equity Fund, LLC (as filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 10.4 Acquisition Agreement, dated November 30, 2010,25, 2020, by and among Infrared Systems International, AquaLiv,Healthcare Solutions Management Group, Inc., Verity Merger Corp. and Craig Hoffman, individually (as filed asHealthcare Solutions Holdings, Inc. (Incorporated by reference to Exhibit 10.1 to2.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 28, 2020). 3.1* Certificate of incorporation of the Company. 3.2* Bylaws of the Company. 3.3* Certificate of Conversion from NV to DE as filed with the SEC on December 20, 2010, and incorporated herein by reference)DE. 3.4* Certificate of Conversion as filed with NV. 10.5 3.5* Acquisition Agreement dated April 19, 2010,and Plan of Conversion. 3.6* Certificate of Merger for 251 Merger. 3.7* 251(g) Agreement and Plan of Merger. 3.8 Amended and Restated Certificate of Incorporation of the Company. (Incorporated by and among Infrared Systems International, Focus Systems, Inc. and Propalms, Inc. (as filed asreference to Exhibit 10.1 to2.1 of the Company’s Current Report on Form 8-K as filed with the SECSecurities and Exchange Commission on April 21, 2010, and incorporated herein by reference)February 18, 2020). 3.9 10.6 Share Purchase Agreement, dated March 24, 2010, Amended and Restated Bylaws of the Company. (Incorporated by and among Infrared Systems International, Take Flight Equities, Inc., Propalms, Inc., William M. Wright III, individually, and Gary E. Ball, individually (as filed asreference to Exhibit 10.1 to2.1 of the Company’s Current Report on Form 8-K as filed with the SECSecurities and Exchange Commission on March 30, 2010, and incorporated herein by reference)February 18, 2020). 21.1* Subsidiaries of the registrant. 10.7 23.1* Securities Purchase Agreement, dated April 27, 2012, by and between AquaLiv Technologies, Inc. and TCA Global Credit Master Fund, LP (as filed as Exhibit 10.7 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) Consent of Independent Registered Public Accounting Firm. 31.1* 10.8 Senior Secured, Convertible, Redeemable Debenture, dated as of April 27, 2012, issued by AquaLiv Technologies, Inc. in favor of TCA Global Credit Master Fund, LP (as filed as Exhibit 10.8 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 10.9 Security Agreement, dated April 27, 2012, by and between Focus Systems, Inc. and TCA Global Credit Master Fund, LP (as filed as Exhibit 10.9 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 10.10 Security Agreement, dated April 27, 2012, by and between AquaLiv Technologies, Inc. and TCA Global Credit Master Fund, LP (as filed as Exhibit 10.10 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 10.11 First Pledge and Escrow Agreement, dated April 27, 2012, by and between AquaLiv Technologies, Inc. and TCA Global Credit Master Fund, LP, with the joinder of David Kahan P.A., as escrow agent (as filed as Exhibit 10.11 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 10.12 Second Pledge and Escrow Agreement, dated April 27, 2012, by and between AquaLiv Technologies, Inc. and TCA Global Credit Master Fund, LP, with the joinder of David Kahan P.A., as escrow agent (as filed as Exhibit 10.12 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 10.13 Guaranty Agreement, dated April 27, 2012, made by Focus Systems, Inc. in favor of TCA Global Credit Master Fund, LP (as filed as Exhibit 10.13 to the Company’s Registration Statement on Form S-1/A, Amendment No. 1, filed with the SEC on October 10, 2012, and incorporated herein by reference) 31.1 Certification by the Principal Executive Officer of Registrantprincipal executive and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, (Rule 13a-14(a) or Rule 15d-14(a))*as amended. 32.1* 31.2 Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))* 32.1 Certification by the Principal Executive Officerprincipal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.* 99.1 Discharge Order. (Incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 23, 2018). 32.2 Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 101.INS* XBRL INSTANCE 101.SCH* XBRL TAXONOMY EXTENSION SCHEMA 101.CAL* XBRL TAXONOMY EXTENSION CALCULATION 101.DEF* XBRL TAXONOMY EXTENSION DEFINITION 101.LAB* XBRL TAXONOMY EXTENSION LABELS 101.PRE* XBRL TAXONOMY EXTENSION PRESENTATION   * Filed herewith. Item 16. Form 10-K Summary. None. (17) 29 Table of Contents      SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     HEALTHCARE SOLUTIONS MANAGEMENT GROUP, INC. AQUALIV TECHNOLOGIES, INC. Date: January 14, 2013 Dated: September 15, 2020 By: By: /s/ Robert Stevens  /s/ Duane Spader Robert Stevens Name: Duane Spader Title: Chief Executive Officer (Principal Executive Officer) Date: January 14, 2013 By:  /s/ William M. Wright Name: William M. Wright Receiver Title: Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.   Name Signature Position Title Date /s/ Robert Stevens Receiver September 15, 2020 Robert Stevens (principal executive officer and principal financials and accounting officer)   /s/ Duane Spader Chief Executive Officer, Chairman January 14, 2013 Duane Spader /s/ William M. Wright Chief Financial Officer, Director January 14, 2013 William M. Wright 30