UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant Toto Section 13 or 15(d) of the Securities Exchange Act Of 1934

For the quarterly period ended ~~April 30, 2016~~ October 31, 2018

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

For the transition period from ~~______________~~__________ to ~~______________~~__________

Commission file number: 000-52825

STWC HOLDINGS, INC

(Exact name of registrant as specified in its charter)

~~Colorado~~		~~20-8980078~~
~~(State or other jurisdiction~~ ~~of incorporation or organization)~~		~~(I.R.S Employer~~ Colorado 20-8980078 _ (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

1350 Independence St., Suite 300,

Lakewood, CO 80215

~~(Address~~ (Address of principal executive offices, including Zip Code)

(303) 736-2442

(Issuer's telephone number, including area code)

(Former name or former address if changed since last report)

Check whether the issuer (1) has filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," and "smaller reporting ~~company"~~company," and "emerging growth company in Rule 12b-2 of the Exchange Act.

Large ~~accelerated~~acclerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐ ☒	Smaller reporting company	☒

		Emerging growth company	☒

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: ~~27,147,217~~33,350,089 shares of common stock as of ~~April~~November 30, ~~2016.~~

2018.

~~STWC HOLDINGS, INC.~~

~~INTERIM FINANCIAL STAEMENTS~~

~~For the Three Months Ended April 30, 2016 and 2015~~

~~(UNAUDITED)~~

Table of Contents

	Page
Part I - Financial Information

Item 1 - Financial Statements	3

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	15

Part II - Other Information

Item 1 - Legal Proceedings	19

Item 1A - Risk Factors	19

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3 - Defaults Upon Senior Securities	19

Item 4 - Mine Safety Disclosures	19

Item 5 - Other Information	19

Item 6 – Exhibits	20

Signatures	21

STWC HOLDINGS, INC.

~~CONDENSED BALANCE SHEETS~~

INTERIM FINANCIAL STATEMENTS

As of October 31, 2018 and January 31, 2018 and for the Three and Nine month periods Ended October 31, 2018 and 2017

(UNAUDITED)

(Unaudited)
April 30,
2016

(Audited)
January 31,
2016

ASSETS
Current assets:
Cash and cash equivalents $ 25,348 $ 151,311
Due from affiliated entities, net of collection allowance reserve of $3,168,009 and $3,222,535 at April 30 and January 31, 2016, respectively
-
-
Total current assets 25,348 151,311
Commercial operating property, net of accumulated depreciation of $26,666 and $22,667 at April 30 and January 31, 2016, respectively
633,333
637,333
Tenant improvements and office equipment, net of accumulated amortization and depreciation of $120,037 and $77,308 at April 30 and January 31, 2016, respectively
596,824
639,553
Security deposits 150,000 150,000
Equity method investment in unconsolidated subsidiary 11,659 11,659
Trademark, net of accumulated amortization of $1,708 and $1,525 at April 30 and January 31, 2016, respectively
9,302
9,485
Total assets $ 1,426,466 $ 1,599,341

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
LIABILITIES
Current liabilities:
Accounts payable $ 378,163 $ 340 605
Accrued interest 240,205 138 458
Convertible notes payable, net of discount of $0.0 and $336,117 at April 30 and January 31, 2016, respectively
2,465,000
2,073,883
Settlement and equipment advance payable 100,100 150,100
Current portion of mortgage note payable 222,760 211,273
Total current liabilities 3,406,228 2,914,319
Mortgage payable 85,369 145,737
Deferred rent and interest payable discount 1,006,857 965,319
Total liabilities 4,498,454 4,025,375
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, no par value, 100,000,000 shares authorized, 27,147,217 issued and outstanding at April 30, and January 31, 2016, respectively
-
-
Additional paid in capital 3,152,658 3,152,658
Retained (deficit) (6,224,646 ) (5,578,692
Total stockholders' equity (3,071,988 ) (2,426,034 )
Total liabilities and stockholders' (deficit) equity $ 1,426,466 $ 1,599,341

~~See accompanying notes.~~

STWC HOLDINGS, INC.
CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)
Three Months
Ended
April 30,

2016 2015

Rental income from Regulated Entities $ 973,798 $ 1,223,386
Consulting services - 2,000
Total revenues 973,798 1,225,386
Operating costs and expenses
Collection reserve for amounts due from Regulated Entities (54,526 )
943,649

Rents and other occupancy 838,183 1,156,406
Compensation 163,231 134,874
Professional, legal and consulting 96,267 60,428
Depreciation and amortization 46,911 79,031
General and administrative 35,653 13,618
Total operating costs and expenses 1,134,406 2,388,006
Loss from continuing operations (160,608 ) (1,162,620 )
Other costs and expenses
Interest expense (485,346 ) (180,225 )
Loss from continuing operations, before provision for taxes on income (645,954 ) (1,342,845 )
Provision for taxes on income - -
Loss from continuing operations, net of tax (645,954 ) (1,342,845 )
Loss from discontinued operations, net of tax -- (171,329 )
Net loss $ (645,954 ) $ (1,514,174 )

Basic loss and fully diluted loss per common share
Continuing operations $ (0.02 ) $ (0.056 )
Discontinued operations $ - $ (0.006 )

Weighted average number of shares outstanding, basic and fully diluted 27,147,217 27,147,217
STWC HOLDINGS, INC.

CONDENSED BALANCE SHEETS

	October 31, 2018			January 31, 2018
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash	$	30,243		$	27,925
Accounts Receivable, net		48,998			5,000
Inventory		29,786			11,888
Prepaid expenses and other assets		28,881			17,592
Total current assets		137,908			62,405
Tenant improvements and office equipment, net of accumulated amortization and depreciation of $25,458 and $24,703 at October 31, 2018 and January 31, 2018, respectively		3,018			3,773
Notes receivable		503,333			94,061
Equity method investment in unconsolidated subsidiary		339,292			—
Trademarks, net of accumulated amortization of $3,538 and $2,989 at October 31, 2018 and January 31, 2018, respectively		9,722			8,021
Total assets	$	993,273		$	168,260

LIABILITIES AND STOCKHOLERS' EQUITY (DEFICIT)
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses	$	909,590		$	366,438
Due to related party		218,526			490,970
Deferred revenue		176,000			150,000
Total current liabilities		1,304,116			1,007,408
Notes payable, net of discount		27,273			—
Total liabilities		1,331,389			1,007,408
Commitments and contingencies		—			—
Stockholders' deficit
Common stock, no par value, 100,000,000 shares authorized, 33,350,089 issued and outstanding		—			—
Additional Paid in Capital		6,950,980			5,325,684
Retained deficit		(7,289,096	)		(6,164,832	)
Total stockholders' deficit		(338,116	)		(839,148	)
Total liabilities and stockholders' deficit	$	993,273		$	168,260

See accompanying notes.

	For the Three Months Ended October 31,					For the Nine Months Ended October 31,
	2018		2017				2018		2017


Consulting services	$	12,500	$	20,000	$		143,749	$	173,500
Cost of consulting services		(12,500)		(55,121)			(24,943)		(172,473)
Gross profit		—		(35,121)			118,806		1,027
Operating costs and expenses
Rents and other occupancy		13,500		28,143			39,516		56,445
Compensation		148,856		137,206			433,341		389,734
Professional, legal and consulting		335,429		33,150			420,518		84,283
Depreciation and amortization		435		183			1,304		1,874
General and administrative		79,895		97,202			221,536		238,328
Total operating costs and expenses		578,115		295,884			1,116,215		770,664
Loss from continuing operations		(578,115)		(331,005)			(997,409)		(769,637)
Loss on equity investment in unconsolidated subsidiary		(10,129)		—			(10,129)		—
Other		(114,986)		(115)			(116,726)		(1,016)
Loss from continuing operations, before provision for taxes on income		(703,230)		(331,120)			(1,124,264)		(770,653)
Provision for taxes on income		—		—			—		—
Loss from continuing operations, net of tax		(703,230)		(331,120)			(1,124,264)		(770,653)
Income from discontinued operations, net of tax		—		1,974,363			—		1,144,976
Net income/(loss)	$	(703,230)	$	1,643,243	$		(1,124,264)	$	374,323
Basic earnings and fully diluted income (loss) per common share
Continuing operations	$	(.02)	$	(0.01)	$		(0.04)	$	(0.03)
Discontinued operations	$	—	$	0.07	$		—	$	0.04

Basic and fully diluted weighted average number of shares outstanding
	29,437,372			27,140,550	27,914,571			27,140,550

STWC HOLDINGS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

See accompanying notes.

~~STWC HOLDINGS, INC.~~

~~CONDENSED STATEMENTS OF CASH FLOWS~~

(Unaudited)
Three Months Ended
April 30,

2015 2014
Cash flows from operating activities:
Net (loss) $ (645,954 ) $ (1,514,174 )
Adjustments to reconcile net loss to net cash used in operating activities:
Increase (decrease) in amounts due to/from Regulated Entities 54,526 (943,648 )
Increase (decrease) in collection allowance reserve for amounts due from Regulated Entities (54,526 )
943,648

Increase in accrued interest payable 101,747 26,712
Increase in prepaid expenses and other assets - (43,343 )
Depreciation and amortization 46,728 78,848
Increase (decrease) in accounts payable 37,559 (57,473 )
Decrease in discount on convertible notes 336,117 -
Increase in deferred rent and interest discount 41,538 171,119
Decrease in trademark 183 183
Net cash flow used in operating activities (82,082 ) (1,338,128 )

Cash flows from investing activities:
Investment in tenant improvements and office equipment - (235,579 )
Net cash flow used in investing activities - (235,579 )

Cash flows from financing activities:
Proceeds from convertible notes
55,000 1,250,000
Payments on tenant allowances note and mortgage (48,881 ) (79,057 )
Payment on settlement of lease termination (50,000 ) -
Net cash flows from financing activities (43,881 ) 1,170,943

Net cash flows (125,963 ) (167,185 )
Cash and cash equivalents, beginning of period 151,311 674,495
Cash and cash equivalents, end of period $ 25,348 $ 507,310

Supplemental cash flow disclosures:

Cash paid for interest $ 47,482 $ 153,513
Cash paid for income taxes $ - $ -

~~See accompanying notes.~~

STWC HOLDINGS, INC.

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)

	For the Nine months Ended October 31,
	2018			2017
Cash flows from operating activities:
Net (loss)/Income	$	(1,124,264	)	$	374,323
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		755			1,325
Decrease in trademark		549			549
Loss from equity investment in unconsolidated subsidiary		10,129			15,000
Bad debt expense		—			3,000
Stock-based compensation and conversion of debt		183,775			—
Increase in accounts receivable		(43,998	)		(8,000	)
Increase in inventory		(17,898	)		—
Increase in prepaid expenses and other assets		(11,289	)		—
Increase in deferred revenue		26,000			135,000
Increase in accounts payable and accrued expenses		543,152			418,420
Net cash flow (used in)/provided by operating activities from continuing operations		(433,089	)		939,617
Net cash flow used in operating activities from discontinued operations		—			(1,013,193	)
Net cash flow used in operating activities		(433,089	)		(73,576	)
Cash flows from investing activities:
Investment in trademark		(2,250	)		—
Purchase of equipment		—			(4,024	)
Investment in unconsolidated subsidiary		(152,983	)		—
Net cash flow used in investing activities from continuing operations		(155,233	)		(4,024	)
Net cash flow used in investing activities from discontinued activities		—			—
Net cash flow used in investing activities		(155,233	)		(4,024	)
Cash flows from financing activities:
Proceeds from issuance of stock		683,200			—
Proceeds from conversion of warrants		42,150			—
Cash advances for notes receivable		(409,272	)		(58,766	)
Proceeds from notes payable		225,000			—
Cash (payments)/advances from related parties		49,562			68,629
Net cash flows from financing activities from continuing operations		590,640			9,863
Net cash flow from financing activities from discontinued activities		—			—
Net cash flows from financing activities		590,640			9,863
Net cash flows		2,318			(67,737	)
Cash and equivalent, beginning of period		27,925			133,189
Cash and equivalent, end of period	$	30,243		$	65,452
Supplemental cash flow disclosures:
Cash paid for interest	$	6,477		$	92,861
Cash paid for income taxes	$	—		$	—

Supplemental disclosure of non-cash activities:
Conversion of related party advances	$	402,508		$	—
Acquisition of interest in unconsolidated subsidiary	$	196,438		$	—

See accompanying notes.

~~Notes to the Unaudited Financial Statements~~

~~April 30, 2016~~

STWC HOLDINGS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)

(Unaudited)

	Common Stock
	Shares		Amount		Additional Capital In Excess of Par Value		Deficit Accumulated			Total
Balance, January 31, 2018		27,140,550		—	$	5,325,684	$	(6,164,832	)	$	(839,148	)
Issuance of common stock for:
Regulation D offering		3,416,000				683,200					683,200
Warrant conversions		281,000		—		42,150		—			42,150
Conversion of debt		2,012,539		—		402,508		—			402,508
Stock-based compensation		—		—		76,000		—			76,000
Common stock issued
for Volume 2, LLC		500,000		—		100,000		—			100,000
Warrants issued for
Volume 2, LLC		—		—		96,438		—			96,438
Beneficial conversion feature
Related to convertible note		—		—		225,000		—			225,000
Net Loss		—		—		—		(1,124,264	)		(1,124,264	)
Balance, October 31, 2018		33,350,089		—	$	6,950,980	$	(7,289,096	)	$	(338,116	)

Note 1 –- Organization ~~and summary of significant accounting policies:~~

~~Following is a summary of our organization and significant accounting policies:~~

~~Organization and nature of business –~~ STWC HOLDINGS, INC., formerly known as Strainwise, Inc., (identified in these footnotes as "STWC" "we" ~~"us"~~"us or the "Company") provides branding marketing, administrative, accounting, financial and compliance services ("Fulfillment Services") to entities in the cannabis retail, cultivation, and manufacturing industry (the "Regulated Entities"). The Company was incorporated in the state of Colorado as a limited liability company on June 8, 2012, and subsequently converted to a Colorado corporation on January 16, 2014.

The Company was established to provide ~~branding marketing, administrative, accounting, financial and compliance services ("~~sophisticated Fulfillment ~~Services")~~Services to medical and retail stores, cultivation, and ~~cultivation~~manufacturing facilities in the regulated cannabis industry throughout the United States. Such Fulfillment Services would only be provided to stores and facilities located in geographical areas where the governing state and local ordinances allow for the unfettered ~~provisions~~provision of such services.

The Fulfillment Services that wethe Company is currently ~~are~~ able to provide are summarized, as follows:

Opportunity Assessment: For a standard fee, we will complete an Opportunity Assessment for a client, which would include financial modeling, completed with our proprietary assessment software.

●

~~Opportunity Assessment:~~●Application Filing Assistance: Based upon our knowledge of the various rules and regulations of respective state and local jurisdictions, the Company will ~~For a standard fee, we will complete an Opportunity Assessment for a client, which would include financial modeling, completed with our proprietary assessment software.~~

provide turn-key application preparation and submission services for a client, and/or provide consulting assistance to a client who is self-preparing their

●

Application Filing Assistance: Based upon our knowledge of the various rules and regulations of respective state and local jurisdictions, we will provide turn-key application preparation and submission services for a client, and/or provide consulting assistance to a client who is self-preparing their application.

●

Branding, Marketing and Administrative Consulting Services: Customers may contract with us to use the Strainwise name, logo and affinity images in their retail store locations. A monthly fee will permit a branding customer to use the Strainwise brand at a specific location. In addition, we will assist operators in marketing and managing their businesses, setting up new retail locations and general business planning and execution at an hourly rate. This includes services to establish an efficient, predictable production process, as well as, nutrient recipes for consistent and appealing marijuana strains.

●Branding, Marketing and Administrative Consulting Services: Customers may contract with the Company to use the Strainwise® name, logo and affinity

images in their retail store locations. A monthly fee will permit a branding customer to use the Strainwise® brand at a specific location. In addition, the

●

Accounting and Financial Services: For a monthly fee, we will provide customers with a fully implemented general ledger system, with an industry centric chart of accounts, which enables management to readily monitor and manage all facets of a marijuana medical dispensary and cultivation facility. We will provide bookkeeping, accounts payable processing, cash management, general ledger processing, financial statement preparation, state and municipal sales tax filings, and state and federal income tax compilation and filings.

Company will assist operators in marketing and managing their businesses, setting up new retail locations and general business planning and execution at an

hourly rate.This includes services to establish an efficient, predictable production process, as well as, nutrient recipes for consistent and appealing marijuana

●

Compliance Services: The rules, regulations and state laws governing the production, distribution and retail sale of marijuana can be complex, and compliance may prove cumbersome. Thus, customers may contract with us to implement a compliance process, based upon the number and type of licenses and permits for their specific business. We will provide this service on an hourly rate or stipulated monthly fee.

strains.

~~We do~~ ●Accounting and Financial Services: For a monthly fee, the Company will provide a customer with a fully implemented general ledger system, with an industry

centric chart of accounts, which enables management to readily monitor and manage all facets of a marijuana medical dispensary and cultivation facility. The

Company will provide bookkeeping, accounts payable processing, cash management, general ledger processing, financial statement preparation, state and

municipal sales tax filings, and state and federal income tax compilation and filings.

●Compliance Services: The rules, regulations and state laws governing the production, distribution and retail sale of marijuana can be complex, and compliance

may prove cumbersome. Thus, customers may contract with the Company to implement a compliance process, based upon the number and type of licenses and

permits for their specific business. The Company will provide this service on both an hourly rate and stipulated monthly fee.

●Lending: The Company will provide loans to individuals and businesses in the cannabis industry.

The Company does NOT grow marijuana plants, produce marijuana infused products, sell marijuana plants and/or sell marijuana infused products of any nature in any ~~jurisdiction~~state were such activity has not been legalized. Growing marijuana plants, producing marijuana infused products, selling marijuana plants and/or selling marijuana infused products of any nature is federally illegal under the Controlled Substances Act.

~~Basis of presentation -~~ The ~~unaudited interim~~accompanying condensed consolidated financial statements ~~of STWC Holdings, Inc. (the "Company")~~ have been prepared in ~~accordance~~conformity with ~~United States~~U.S. generally accepted accounting principles ~~("GAAP") for interim financial information and~~pursuant to the rules and regulations of the ~~U.S.~~ Securities and Exchange Commission ~~("SEC"). They~~(SEC) for interim financial information. Accordingly they do not include all of the information and ~~footnotes~~notes required by U.S. GAAP for complete financial statements. ~~However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the~~The accompanying condensed consolidated financial statements include all adjustments, which consist of normal recurring adjustments and transactions or events discretely impacting the interim periods, considered necessary by management to fairly state our results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the ~~year ended January 31, 2016 included in the Company's Annual Report on Form 10-K filed with the SEC. The unaudited interim~~full year. These condensed consolidated financial statements should be read in conjunction with ~~those~~the audited consolidated financial statements and ~~footnotes~~notes thereto included in ~~the~~our 2018 Form ~~10-K. In the opinion~~10K.

Note 2 – Summary of ~~management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made.~~significant accounting policies

~~Share exchange -~~ On August 19, 2014, we entered into an Agreement to Exchange Securities ("Share Exchange"), pursuant to which we acquired approximately 90% of the outstanding shares of a privately held Colorado corporation ("Strainwise Colorado") in exchange for 23,124,184 shares of our common stock.

As part of the Share Exchange, Strainwise Colorado paid $134,700 of our liabilities and purchased 1,038,000 shares of our common stock for $120,300 from two of our shareholders. The 1,038,000 shares were returned to treasury and cancelled. We also agreed to sell our rights to a motion picture, together with all related domestic and international distribution agreements, and all pre-production and other rights to the film, to a former officer and director in consideration for the assumption by one of our shareholders of all of our liabilities (net of the $134,700 paid by Strainwise Colorado) which were outstanding immediately prior to the closing of the transaction.

~~On September 12, 2014 we acquired the remaining outstanding shares of Strainwise Colorado in exchange for the issuance of 2,517,000 shares of our common stock.~~

The resulting business combination has been accounted for as a reverse acquisition and recapitalization, using accounting principles applicable to reverse acquisitions whereby the financial statements are presented as a continuation of the Company. Under reverse acquisition accounting, Strainwise Colorado is treated as the accounting parent (acquirer) and we (parent) are treated as the accounting Subsidiary (acquiree).

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

Cash and cash equivalents -– For purposes of the statement of cash flows, we consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents. Under current banking regulations, not all marijuana centric entities are afforded normal banking privileges. And thus, because of our perceived association with the Regulated Entities, we have not been able to maintain a corporate bank account at any federally or state charted banking institution.

~~Security Deposits -~~ ~~Security deposits consists of amounts paid to the independent third party lessor of the 51~~^st ~~Avenue cultivation facility, and it is expected that such deposit will be returned to the Company at the end of the lease term. Security deposits consisted of the following:~~

April 30,
2016

January 31,
2016

Security deposits $ 150,000 $ 150,000

~~Fair value of financial instruments and derivative financial instruments~~ - The carrying amounts of cash and current liabilities approximate fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

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

~~Level 1:~~	~~Quoted prices in active markets for identical assets or liabilities.~~
~~Level 2:~~	~~Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.~~
~~Level 3:~~	~~Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.~~

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

We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments in the management of our foreign exchange, commodity price or interest rate market risks. All assets and liabilities are based upon Level 1 inputs.

~~Commercial Operating Property -~~ On July 26, 2014 we purchased a commercial property that was previously leased by one of our affiliates, which we have leased back to the affiliate. The commercial property consists of land and a building that contains both a retail store and a cultivation facility. We have allocated $220,000 and $440,000 of the purchase price to the cost of land and to the cost of the improvements to the building, respectively, based upon management's best estimate and belief. Management's estimate and belief was based upon consideration of (i) replacement cost, (ii) limited knowledge of comparable sales, (iii) anticipated future income generation, and (iv) single use, internally. No intangible asset value was assigned to the existing lease on the property, because the existing lease was immediately cancelled upon the completion of the purchase of the commercial property. The cost of the improvements to the building is being depreciated on a straight line method over 27.5 years, which we believe is the useful life of this asset.

Tenant improvements and office equipment -– Tenant improvements ~~are recorded at cost,~~ and are amortized over the lesser of the economic life of the asset or the term of the applicable lease period. We determined that the term of the leases applicable to our tenant improvements are less than the economic life of the respective assets that comprise our tenant improvements. Officeoffice equipment isare recorded at cost and is depreciated under straight line methods over each item's estimated useful life. We review our tenant improvements and office equipment for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Maintenance and repairs of property and equipment are charged to operations. Major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and any gain or loss is included in operations.

Tenant improvements and office equipment, net of accumulated amortization and depreciation are comprised of the following:

	October 31, 2018		January 31, 2018
Leasehold improvements	$	2,200		$	2,200
Office equipment, furniture and fixtures		26,276			26,276
		28,476			28,476
Accumulated amortization and depreciation		(25,458)			(24,703)
	$	3,018		$	3,773

April 30,
2016

January 31,
2016

Tenant improvements:
Grow lights for cultivation purposes $ 452,700 $ 452,700
Structural improvements 48,511 48,511
Office equipment:
Computer equipment 41,200 41,200
Office furniture and fixtures 24,450 24,450
Cultivation equipment 150,000 150,000
716,861 716,861
Accumulated amortization and depreciation (120,037 ) (77,308 )
$ 596,824 $ 639,553

Tenant improvements are amortized over the term of the lease, and office equipment is depreciated over its useful lives, which has been deemed by management to be three years. Amortization and depreciation expense related to tenant improvements and office equipment for the three months ~~and twelve~~ended October 31, 2018 was $252. For the three months ended ~~April 30~~October 31, 2017 there was no amortization or depreciation expense. Amortization and ~~January~~depreciation expense related to tenant improvements and office equipment for the nine months ended October 31, ~~2016~~2018 and 2017 was ~~$42,730~~$755 and ~~$73,827,~~$1,325, respectively.

Income taxes -– The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Investment in Unconsolidated Entity

– The Company ~~acquired~~entered into an agreement in September 2018, whereby the Company owns a ~~50%~~51% interest in ~~SentinelStrainwise,~~Volume 2, LLC ("~~SSL"~~V2L"), which the Company has agreed to invest $120,000 in ~~June 2015~~cash, issue 500,000 shares of the Company"s stock, and grant 500,000 warrants for ~~$25,000. We account~~a total capital contribution of $185,000. The Company accounts for ~~our~~its investment ~~SSL~~V2L using the equity method based on the ~~ownership interest.~~inability of the Company to control the acquired entity based on the terms of the Letter of Intent. Additionally, the Company has advanced $30,538 to fund operations. Accordingly, the investment was recorded at cost, and adjustments to the carrying amount of the investment to recognize ~~our~~the Company's share of the earnings or losses of ~~SSL~~V2L are made in each reporting period. ~~In accordance with~~ ~~Accounting Standard Codification 810-10, Consolidation-Overall, we evaluated the fair value of our investment in SLL, and determined that there no adjustment required to the carrying amount of our original investment.~~

Long-Lived Assets -– In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

Trademarks - – Trademarks and other intangible assets are stated at cost and are amortized using the straight-line method over fifteen years. Accumulated amortization was ~~$1,708~~$3,538 and ~~$1,525at April 30~~$2,989 at October 31, 2018 and January 31, ~~2016,~~2018, respectively, and consisted of the following at ~~April 30, 2015:~~

Gross Carrying Amount Accumulated Amortization Net

Trademarks $ 11,010 $ 1,708 $ 9,302

October 31, 2018:

		Gross Carrying Amount			Accumulated Amortization			Net
Trademarks	$	13,260		$	3,538		$	9,722

Deferred ~~Rent -~~Revenue – The Company ~~recognizes rent expense~~periodically collects advances from ~~operating leases on the straight-line basis. Differences between the expense recognized and actual payments~~customers related to consulting services. These advances are recorded as deferred ~~rent.~~

revenue until the contracted services are completed. The Company has recorded deferred revenue of $176,000 and $150,000 as of October 31, 2018 and January 31, 2018, respectively.

~~Revenue Recognition~~Share-Based Payments and Stock-Based Compensation ~~- Until June 30, 2015, revenue had been recognized~~– Share-based compensation awards, including warrants and restricted stock awards, are recorded at estimated fair value of the awards' grant date, based on ~~an accrual basis as earned under terms~~estimated number of Fulfillment Services contracts ("Master Service Agreements") that we entered into with two cultivation facilities and nine retail stores (five of which sell both recreation and medical marijuana to the public, three of which on sell medical marijuana to the public, and one of which only sells recreation marijuana to the public) ("Regulated Entities")awards that are ~~owned by Shawn Phillips, the former Chief Executive Office, former director of the Company, and who~~ expected to vest. The grant date fair value is ~~also the husband of our majority owner and present Chief Executive Officer and President~~. Subsequent to June 30, 2015, Shawn Phillips made the decision, with the concurrence of the management of the Company, to cancel all of the above referenced Master Service Agreements. Such cancellation was deemed advisable by Mr. Phillips and management of the Company in light of the uncertainty of the right of the Company to supply such Fulfillment Services in Colorado.

~~Thus, up until June 30, 2015, revenues from the Regulated Entities had been recognized based upon~~ ~~(i)~~amortized on a monthly fee of approximately $4,500 a month for branding, marketing and administrative services for each individual dispensary and retail store, plus $4,500 to $20,000 for such services provided to their cultivation facilities, (ii) a monthly fee of $3,000 for accounting and financial services, (iii) a monthly fee of $2,500 for compliance services, and (iv) the cost of nutrient supplies provided to the cultivation facilities at a premium to our bulk purchasing amounts. Since there was no additional milestone that needed to be met, other than actually buying and delivering the nutrients to the Regulated Entities, in accordance with ASC 605, the revenue was recognized in the monthstraight-line basis over te time in which the ~~nutrients were actually delivered~~awards are expected to vest, or immediately if no vesting is required. Share-based compensation awards issued to non-employees for services are recorded at either the fair value of the services rendered or the fair value of the share-based payments, whichever is more readily determinable. The fair value of restricted stock awards is based on the fair value of the stock underlying the awards on the grant date as there is no exercise price.

The fair value of warrants is estimated using the Black-Scholes option-pricing model. The determination of the fair value of each stock award using this option-pricing model is affected by the Company's assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the ~~Regulated Entities. Additionally, we leased grow facilities and equipment to the Regulated Entities for a period equal to~~expected stock price volatility over the term of the ~~underlying lease~~awards and the expected term of the awards based on an analysis of the actual and projected employee stock option exercise behaviors and the contractual term of the awards. The Company recognizes stock-based compensation expense over the requisite service period, which is generally consistent with ~~an independent, third party lessor in an amount equal~~the vesting of the awards, based on the estimated fair value of all stock-based payments issued to employees and directors that are expected to vest.

Discontinued Operations – During November 2017, the ~~sum~~Company settled all remaining operations related to its rental activities with regulated entities. As a consequence of ~~(i)~~ the ~~monthly lease payment, (ii) plus~~sale, the ~~cost~~operating results and the assets and liabilities of ~~reimbursed operating expenses paid to~~ the ~~lessor each month, (iii) plus~~discontinued operations, which formerly comprised the amount of monthly amortization of tenant improvements, and (iv) plus a premium of forty percent. Since there was no additional milestone that needed to be met with respect to providing the above enumerated services, in accordance with ASC 605, the revenue was recognizedrental operations, are presented separately in the ~~month in which~~Company's financial statements. There were no components of major assets and liabilities associated with the ~~services were provided. For the period from July 1, 2015 through~~discontinued operations at October 31, 2018 and at January 31, ~~2016, revenues from~~2018. Summarized financial information for the ~~Regulated Entities consisted solely of subleases with mark-ups from ten~~discontinued rental business is shown below. Prior period balances have been reclassified to ~~forty percent from~~present the ~~amounts we pay the landlords~~operations of the properties. And, since there are no additional milestones that need to be met, other than actually leasing the facilities and equipment to the Regulated Entities, in accordance with ASC 605, such revenue is recognized in the month in which the lease payments were made by us to the respective independent, third party lessorsrental business as a discontinued operation.

	Three Months Ended October 31, 2017			Nine months Ended October 31, 2017

Rental income from the Regulated Entities (Affiliates)	$	397,198	$	2,254,793
Total revenues		397,198		2,254,793
Operating costs and expenses
Reserve for amounts due from Regulated Entities (Affiliates)		99,698		984,428
Rents and other occupancy		(1,719,769)		(87,212)
Depreciation and amortization		38,831		120,756
Total operating costs and expenses		(1,581,240)		1,017,972
Operating (loss)/income from discontinued operations		1,978,438		1,236,821
Other income and (expenses)
Interest expense		(4,075)		(91,845)
Loss from discontinued operations	$	1,974,363	$	1,144,976

Comprehensive Income (Loss) -Comprehensive income is defined as all changes in stockholders' equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign ~~subsidiaries and unrealized gains (losses) on available-for-sale securities. From~~subsidiaries. Since our inception there have been no differences between our comprehensive loss and net loss.

Net income per share of common stock - We have adopted applicable FASB Codification regarding Earnings per Share, which require presentation of basic and diluted ~~earnings per share~~EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic ~~earnings per share~~EPS computation to the numerator and denominator of the diluted ~~earnings per share~~EPS computation. In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. ~~Diluted earnings per share gives effect~~

Recently Issued Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to ~~all potential dilutive securities outstanding during~~determine their applicability. When it is determined that a new accounting pronouncement affects the period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted earnings per share excludes all potential dilutive shares if their effect is anti-dilutive or would reduce net loss per share amounts. Diluted earnings per share figures are equal to those of basic earnings per share for each period, sinceCompany's financial reporting, the Company ~~had~~undertakes a ~~net loss for~~study to determine the ~~periods presented.~~

~~Potentially dilutive securities outlined~~consequence of the change to its financial statements and ensure that there are proper controls in place to ascertain that the ~~table below have been excluded from~~Company's financial statements properly reflect the ~~computation of diluted net loss per share, because~~change. The Company evaluated all new accounting pronouncements and deemed none resulted in changes to the ~~effect of their inclusion would have been anti-dilutive.~~

Three Months Ended
April 30,

2016 2015
Warrants issued to consultant 500,000 500,000
Warrants attached to common stock subscriptions 1,112,350 1,112,350
Warrants granted to holders of convertible debt 2,465,000 1,800,000
4,077,350 3,412,350

financial statements

Note 23 – Going concern:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. ~~We have incurred net losses of $6,224,646 since~~Since inception, ~~and~~we have not achieved profitable operations, ~~raising~~and have cumulative losses through October 31, 2018 of $7.1 million. Our losses to date raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our achieving a sustainable level of profitability. The Company intends to continue financing its future development activities and its working capital needs largely from the private sale of our securities, with additional funding from other traditional financing sources, including convertible term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. ~~The~~However, the financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

The carrying amounts of cash and ~~Collection Reserve for Amounts Due from Affiliated Entities:~~

Substantially all of our revenues to date have been derived from long term contracts with the Regulated Entities that are majority owned by our former Chief Executive Officer, who is also the husband of our majority owner and President. Note that all terms and contracts between the Company and the Regulated Entities are determined by related parties and these terms can change at any time. Related party revenue was $973,798 and $1,699,298, including $~~0.0~~ ~~and $475,912~~ ~~of revenues from discontinued operations, respectively, for the three months ended April 30, 2016 and 2015. Although the Regulated Entities have been able to pay us approximately $8,641,258~~current liabilities approximate fair value because of the ~~$11,809,267 billed to them from inception through April 30, 2016, there is no assurance that they will~~short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be ~~able to generate enough positive cash flow to repay the full amount they presently owe to us. Thus, a reserve~~determined with precision. Changes in the amount of $3,168,009 and $3,222,535 as of April 30, 2016 and January 31, 2016, respectively, has been recorded to recognize the uncertainty of collecting the full amount owed to us from the Regulated Entities.

~~On June 30, 2015, Shawn Phillips made the decision, with concurrence of~~assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments in the management of our foreign exchange, commodity price or interest rate market risks.

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

Level 1:

Quoted prices in active markets for identical assets or liabilities.

Level 2:

Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

Level 3:

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the ~~above referenced Master Service Agreements. Such cancellation was deem advisable by Mr. Phillips and management~~lowest level of the Company in light of the uncertainty of the right of the Company to supply such Fulfillment Services in the state of Colorado. Concurrent with the cancellation of the Master Service Agreements, the Company laid off substantially all of its employees.

~~We made an investment in cultivation facilities~~input that ~~we sublease~~is significant to the Regulated Entities. Through September 30, 2015, the Company leased to the Regulated Entities approximately 123,000 square feet of cultivation facilities. It was estimated that the cultivation facilities had the capacity to provide enough product to supply approximately 15 to 20 marijuana dispensaries. However, as a result of the Grounds for Denial described in Note 8, one of the cultivation facilities, the Nome facility, with approximately 38,000 square feet, fully built-out, was not granted a license to operate, and thus, was never occupied. Plus, because of the Grounds for Denial, the Regulated Entities have not been able to obtain licenses to operate any new dispensaries, in addition to the nine that the Regulated Entities presently operate. As a result, the cultivation facilities are operating at a loss, and are unable to pay the Company the amounts owed pursuant to their subleases with the Company. Although the marijuana dispensaries owned by the Regulated Entities are operating at a profit, the dispensaries are not able to currently pay all of the amounts billed to them by the Company, since the profits from the dispensaries are being used to fund the operating losses of the cultivation facilities.

Therefore, in order to reduce costs, the Nome facility was closed on May 12, 2015, and the employees that had been hired by the Regulated Entities to operate the facility were terminated. On September 30, 2015, with the consent of the owner of the Nome property, the Company's lease for this property was terminated, and the associated tenant improvement loan was cancelled. We wrote off assets comprised of tenant improvements, security deposits and prepaid lease amounts in the aggregate of $1,792,910 and wrote off related balances comprised of a tenant improvement loan, deferred lease payments and accumulated amortization of leasehold improvements in the aggregate amount of $1,576,374. We received cash back from the lessor in the amount of $59,558, as the net return of certain deposits, after $94,475 was retained by the lessor as payment of the lease for the month in which the lease was cancelled. We recognized a loss on the cancellation of this lease in the amount of $62,503.

fair value measurement.

Note ~~4 –~~5 - Operating ~~Leases:~~Leases

The Company entered into a lease agreement with an affiliate for ~~our~~the Company's corporate office ~~needs.~~needs, consisting of 6,176 square feet of office space. The lease isoriginally provided for a ~~31 month~~31-month period, that commenced in January 2014 ~~for 6,176 square feet at an annual rate of $64,848 for the first twelve months, $67,936 for the subsequent 12 months, and $41,431 for the subsequent 7 months paid monthly,~~ through October 31, 2016. The lease was extended in November 2016 for a 5-year period ending October 31, 2021. This lease to the Company is on the same terms and conditions as is the direct lease between the affiliate and the independent lessor. Consequently, ~~we believe~~the Company believes that the lease terms to the Company are comparable to lease terms wethe Company would receive directly from third party lessors in ~~our~~the Company's market, because the related party terms mirror the terms of the direct lease between the independent, third party lessor and the affiliated entity.

During the three months ended October 31, 2018 and 2017, rent expense was $13,500 and $28,143, respectively. During the nine months ended October 31, 2018 and 2017, rent expense was $39,516 and $56,445, respectively.

As of October 31, 2018, future minimum lease payments are as follows:

For the Fiscal Year Ending January 31,


Remainder of 2019	$	13,750
2020		55,250
2021		56,250
2022		42,750
Thereafter
Total minimum lease payments	$	168,000

Note 6 – Note Receivable

The Company entered into management and licensing agreements with a private entity in Puerto Rico, COPR Enterprises, LLC, 49% owned by Erin Phillips to operate five dispensaries and two cultivation operations in Puerto Rico. In conjunction with these agreements, the Company has begun providing funds to operate the Puerto Rico operations, which is evidenced by a promissory note. The note provides for a 36-month payment schedule bearing interest at 12%. The principal amount of the loan has not been determined. Through October 31, 2018 the Company has advanced $275,107 related to the note.

The Company entered into management and licensing agreements with a private entity to establish a joint venture in Oklahoma, 2600 Meridian, LLC, that is owned 25% by the Company. In conjunction with this joint venture the Company has agreed to provide funds to operate the operations. The note provides for a 36-month payment schedule bearing interest at 12%. The principal amount of the loan has not been determined. Through October 31, 2018 the Company has advanced $228,227 related to the note.

Note 7 – Due to Related Party

The Company borrowed $49,562 from related parties to fund operations during the nine months ended October 31, 2018. One of the related parties converted $322,006 in loans to common stock during the nine months ended October 31, 2018. The loans do not carry an interest rate and do not have a maturity date. As of October 31, 2018 and January 31, 2018, the Company owed related parties $218,526 and $490,970, respectively.

Note 8 – Notes Payable

Richland Note

On August 29, 2018, the Company entered into a ~~lease agreement on April 1, 2014~~Note Purchase and Security Agreement (the "Purchase Agreement") with Richland Fund, LLC., a Delaware limited liability company ("Richland"). Pursuant to ~~lease from an independent third party a cultivation facility of approximately 65,000 square feet ("51~~^st ~~Ave Lease") for a term of five years and nine months. The terms~~the Agreement, Richland agreed to purchase Convertible Promissory Notes of the 51^st ~~Ave Lease stipulates~~Company (collectively, the payment of $15,000 per month, prorated if necessary, until such time that the Lessor is able to deliver a Certificate of Occupancy, which occurred on August 1, 2014. Thereafter, lease payments are scheduled to be $176,456 per month for the first six months of the lease, and then are scheduled to be $221,833 per month for the subsequent 24 months, $231,917 per month for the subsequent 12 months, $242,000 per month for the subsequent 12 months and $247,041 per month for the final 12 months of the lease. Under the terms of the 51^st ~~Ave Lease, we are obligated to reimburse the lessor for operating expenses applicable to the leased property and we paid the lessor a security deposit of $150,000 We have the option to renew the 51~~^st ~~Ave Lease at the end of the term of the lease at a mutually agreed upon rate per square foot; there is no option to purchase the property underlying the 51~~^st ~~Avenue Lease. The Lessor provided all of the tenant improvements that enable the continuous cultivation of marijuana plants~~"Notes"), in the ~~facility. We account for this lease as an operating lease rather than as a capital lease, because~~aggregate principal amount of $225,000, funded in three tranches, (i) $100,000.00 (the "First Note"), (ii) $67,000.00 (the "Second Note"), and (iii) the ~~lease does not transfer ownership to us at~~balance of $58,000.00 (the "Third Note"). The Notes bear 12% interest per annum, with the end of the lease, there is no bargain purchase price for the cultivation facility as a component of the lease, the terms of the lease are less than 75% of the economic life of the cultivation facility, and the current present value of the minimum lease payments is less than 90% of the fair market value of the asset. We subleased this cultivation facility to a Regulated Entitylast payment under the ~~terms~~Notes due January 15, 2020. The Notes are secured by all assets of a Master Service Agreement up until June 30, 2015, at which time the Master Service Agreement with the Regulated Entity that operates the cultivation facility was terminated. The term of the Master Service Agreement was for five years and nine months in an amount equal to the sum of (i) the monthly lease payment, (ii) plus the cost of reimbursed operating expenses paid to the lessor each month, and (iii) plus the amount of monthly amortization of tenant improvements, and (iv) a premium of forty percent. Revenue from the sublease of the 51^st Avenue cultivation facility has been recognized on a monthly basis, as the user is charged for the amount of the sublease. On June 1, 2015, upon the cancellation of the related Master Service Agreement, we entered into a sublease with the Regulated Entity that holds the license to operate the 51^st Avenue cultivation facility. The term of the sublease is for the period of July 1, 2015 terminating May 1, 2017 on a triple net lease basis, payable in a monthly lease amount of $265,800. At the end of the term of the sublease, the Company will negotiate an extension period at a monthly rate mutually acceptable to the Company and ~~the subtenant.~~

~~We entered into a lease agreement on April 22, 2014~~guarantees from Shawn and Erin Phillips. The Notes may be prepaid without penalty with 30 days' advance notice to lease from an independent third party a cultivation facility of approximately 38,000 square feet ("Nome Lease") for a term of seven years. We entered into a modification of the Nome lease on December 1, 2014, wherein the lease was modified to extend the lease term through April 30, 2025; and, the lease payments were modified to be $88,616 per month for the five months ending April 30 2015, and then are scheduled to be $90,207, $91,799, $93,390, $94,981, $73,578, $75,169, $76,761, 78,352, and then $79,943 per month for the final 12 months of the lease. As more fully described in Note 8 herein, the modification of the lease included the cancellation of the $750,000 note payable to the lessor for the financing of tenant improvements, and the extension of an additional $800,000 to be used by us for future tenant improvements. The amount of tenant improvement financing provided by the lessor is to be amortized over the extended term of the modified lease as a component of the monthly lease payments. Under the terms of the Nome Lease, we are obligated to reimburse the lessor for operating expenses applicable to the leased

Richland.

~~property, and we~~

The Notes are ~~obligated~~convertible into common stock of the Company. The conversion price will be equal to ~~pay~~the lower of (i) $0.15 cents per share (ii) or the average of the closing bid price of the Company's common stock taken over the three trading days prior to conversion or (iii) upon any issuance by the Company of common stock, or a security ~~deposit~~that is convertible into

common stock, at a price lower than a net receipt to the Company of ~~$133,679 one half of which was due and paid upon~~$0.15 per share, at such price that shall be at the ~~execution~~same discount ratio as on the Funding Date. The conversion price of the ~~Nome Lease, the final half was due and payable 30 days after the commencement date. We are responsible~~Notes will be further subject to ~~provide all~~proportional adjustment for stock splits, reverse stock splits or combinations of the tenant improvements that will enable the continuous cultivation of marijuana plants at this cultivation facility. We accounted for this lease as an operating lease rather than as a capital lease, because the lease does not transfer ownership to us at the end of the lease, there is no bargain purchase price for the cultivation facility as a component of the lease, the terms of the lease are less than 75% of the economic life of the cultivation facility,shares, stock dividends, and the ~~current present value of~~like. There are penalties for failure to timely deliver conversion shares.

Green Acres Note

In order to continue to fund ongoing California operations, on or around April 6, 2018, the minimum lease payments is less than 90% of the fair market value of the asset. The Regulated Entities were not been able to obtain sufficient licenses from the state of Colorado to allow for sufficient production levels for the facility to be economically viable. As a result, the Nome facility was closed on May 12, 2015 and the employees that had been hired by the Regulated Entities to operate the facility were terminated. On September 30, 2015, with the consent of the owner of the Nome property, the Company's lease for this property was terminated and the associated tenant improvement loan was cancelled. We wrote off assets comprised of tenant improvements, security deposits and prepaid lease amounts in the aggregate of $1,792,910 and wrote off related balances comprised of a tenant improvement loan, deferred lease payments and accumulated amortization of leasehold improvements in the aggregate amount of $1,576,374. We received cash back from the lessor in the amount of $59,598, as the net return of certain deposits, after $94,475 was retained by the lessor as payment of the lease for the month in which the lease was cancelled. We recognized a loss on the cancellation of this lease in the amount of $62,503.

WeCompany entered into a ~~lease~~loan agreement ~~on September 11, 2014~~("Loan Agreement") with Green Acres Partners, LLC, a California limited liability company ("Green Acres") whereby Green Acres agreed to ~~lease a cultivation facility of approximately 20,000 square feet ("Bryant St. Lease")~~loan the Company $205,000 in exchange for a ~~term~~promissory note ("Note") issued by the company in the principal amount of ~~ten years.~~$205,000. The Note matures no later than September 1, 2020, with payments to begin no later than September 1, 2018; however, payments may begin sooner than such date in the event operations in San Diego begin sooner. The Note carries an interest rate of 12% per year, with an 18% default interest rate. The principal balance of the Note may be accelerated upon default or transfer. This note has not been funded and as of October 31, 2018 there was no balance due under this note.

Note 9 – Stockholders Equity

Common Stock

On August 29, 2018, in conjunction with the Richland Note, the Company issued Richland warrants to purchase 100,000 shares of the Company's common stock for $18,000. Richland exercised the warrants on October 3, 2018.

From approximately September 24, 2018 to October 16, 2018, the Company issued a total of 281,000 shares of its common stock for $42,150 resulting from the exercise of outstanding warrants with an exercise price of $0.15 per share. These shares were issued pursuant to Section 4(a)(2) of the Securities Act.

On October 15, 2018, the Company entered into an Exchange Agreement (the "Exchange Agreement") with Shawn Phillips ("Mr. Phillips"), pursuant to which the Company issued Mr. Phillips 2,012,539 shares of the Company's Common Stock in exchange for $322,006 of debt owed to Mr. Phillips (the "Exchange"). The Exchange agreement otherwise contains standard terms and conditions. During the ~~first 12~~three and nine months ended October 31, 2018 the Company recognized an expense of $80,502 related to the conversion of these notes as a result of the ~~lease, lease payments are scheduled~~stock being issued at a discount below the private offering price.

On or around October 18, 2018, the Company completed a private offering to ~~be $23,984 for~~accredited investors (the "Offering") in accordance with Regulation D under the first four months and 24,531 for the next eight months, and then are scheduled to be $24,647, $25,140, $31,221, $31,845, $32,483, $33,132, $33,794, $34,470, and $35,160 for the second through the tenth yearSecurities Act of 1933 ("Securities Act"). The Offering consisted of 3,416,000 shares of the ~~lease, respectively. We are not required to provide any security deposits or first~~Company's Common Stock at a price per share of $0.20, for offering proceeds of $683,200. All securities sold in the Offering were sold in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and ~~last month's rental amounts. We have an option~~Regulation D promulgated thereunder.

Warrants

On October 15, 2018, the Company issued warrants to purchase 1,900,000 shares of its common stock to three individuals in exchange for services, respectively. The warrants all carry two-year terms and an exercise price of $0.16 per share. Forty percent of each warrant may be exercised pursuant to a cashless exercise formula. The warrants otherwise contain standard terms and conditions. During the ~~building for $2,400,000 at any time during~~three and nine months ended October 31, 2018 the ~~first 36 months~~Company recognized $76,000 in expense related to the issuance of these warrants. These warrants were issued pursuant to Section 4(a)(2) of the ~~lease, provided that we deliver~~Securities Act.

On October 26, 2018 the Company issued a ~~purchase option notice~~total of 25,000 shares to Tysadco Partners LLC as compensation for services.

The shares shall vest at a schedule of 10,000 shares at on November 1, 2018, 7,500 shares on the 120^th day from November 1, 2018, and 7,500 shares on the 180^th day from November 1, 2018, subject to the ~~Lessor prior to the end~~investor relations agreement being in effect as of ~~the 33~~^rd month of the lease. We are responsible to provide all of the tenant improvements that will enable the continuous cultivation of marijuana plants under approximately 370 grow lights. We account for this lease as an operating lease rather than as a capital lease, because the lease does not transfer ownership to us at the end of the lease, there is no bargain purchase price for the cultivation facility as a component of the lease, the terms of the lease are less than 75% of the economic life of the cultivation facility, and the current present value of the minimum lease payments is less than 90% of the fair market value of the asset. We subleased this cultivation facility to a Regulated Entity under the terms of a Master Services Agreement up until June 30, 2015, at which time the Master Service Agreement with a Regulated Entity that operates the cultivation facility was terminated. The term of the Maser Service Agreement was for a period of 10 years in an amount equal to the sum of (i) the monthly lease payment, (ii) plus the cost of reimbursed operating expenses paid to the lessor each month, (iii) plus the amount of monthly amortization of tenant improvements, and (iv) a premium of forty percent. Revenue from the sublease of the Bryant Street cultivation facility was recognized on a monthly basis as the user was charged for the amount of the sublease. On July 1, 2015, upon the cancellation of the related Master Service Agreement, we entered into a sublease with a Regulated Entity that holds the license to operate the Bryant Street cultivation facility. The term of the sublease is for the period of July 1, 2015 terminating September 1, 2017, payable in monthly lease amounts of $42,993, on a triple net lease basis. At the end of the term of the sublease, the Company will negotiate an extension period at a monthly rate mutually acceptable to the Company and the subtenant.

~~Future minimum payments for these leases are:~~

For the twelve Months Ending April 30,
2017 2018 2019 2020 2021 Thereafter
$ 3,047,600 $ 3,178,700 $ 3,325000 $ 2,889,500 $ 427,500 1,510,200

applicable vesting date.

Note 511 – ~~Income Taxes:~~

Subsequent Events

GAAP requires an entity to disclose events that occur after the balance sheet date but before financial statements are issued or are available to be issued ("subsequent events") as well as the date through which an entity has evaluated subsequent events. There are two types of subsequent events. The first type consists of events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, ("recognized subsequent events"). The second type consists of events that provide evidence about conditions that did not exist at the date of the balance sheet but arose subsequent to that date ("non-recognized subsequent events").

Recognized Subsequent Events

None

Unrecognized Subsequent Events

The Company ~~uses~~was named as a defendant in one civil suit filed with the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the accounting bases and the tax basesDistrict Court of the City and County of Denver, Colorado. This matter has been resolved.

On October 15, 2018, the Company entered into an Executive Employment Agreement (the "Phillips Employment Agreement") with Erin Phillips ("Ms. Phillips"). Pursuant to the Phillips Employment Agreement, Ms. Phillips agreed to continue to serve as the Company's ~~assets~~CEO for a term commencing on October 15, 2018 and ~~liabilities.~~continuing until terminated by either party. The Company acknowledged that Ms. Phillips had $165,000 deferred compensation as of July 31, 2018 and Ms. Phillips agreed to continue to defer payment until November 1, 2018. The deferred ~~tax assets~~compensation is recorded in accounts payable and ~~liabilities are computed using enacted tax rates in effect~~accrued expenses on the balance sheet. Ms. Phillips will receive a base salary of $180,000 per year. If the Agreement is terminated by Ms. Phillips with "good reason" or by the Company without "cause," Ms. Phillips will be entitled to severance pay equal to $500,000 plus her base salary for twelve months. The Phillips Employment Agreement otherwise contains standard terms and conditions.

On October 15, 2018, the ~~year in which~~Company entered into an Employment Agreement (the "Kotzker Employment Agreement") with Jay Kotzker ("Mr. Kotzker"). Pursuant to the ~~temporary differences are expected~~Employment Agreement, Mr. Kotzker agreed to ~~reverse.~~

Three Months Ended
April 30,

Year Ended
January 31,

2016 2015 2016

Income tax expense (benefit)
Current:
Federal $ (257,008 ) $ (579,936 ) $ (1,316,263 )
State (29,908 ) (70,106 ) (161,765 )
Deferred income tax expense benefit (286,916 ) (650,042 ) (1,478,028 )
Valuation allowance 286,916 650,042 1,478,028
Provision $ - $ - $ -

continue to serve as the Company's general counsel for a term commencing on October 15, 2018 and continuing until terminated by either party. The Company ~~adopted~~acknowledged that Mr. Kotzker had $43,750 deferred compensation as of September 15, 2018 and $1,571.27 in unpaid expenses. Mr. Kotzker will receive a base salary of $150,000 per year. If the ~~provisions~~Agreement is terminated by the Company without "cause," Mr. Kotzker shall be entitled to severance pay equal to four months' salary. The Kotzker Employment Agreement otherwise contains standard terms and conditions.

On October 18, 2018, the Company entered into an Employment Agreement (the "SPhillips Employment Agreement") with Shawn Phillips ("Mr. Phillips"). Pursuant to the Employment Agreement, Mr. Phillips agreed to serve as the Company's Senior Business Development Strategist for a term commencing on October 18, 2018 and continuing until terminated by either party. Mr. Phillips will receive a base salary of ~~ASC 740, "Income Taxes" on July1, 2007. FASB ASC 740 provides detailed guidance for~~$96,000 per year. If the ~~financial statement recognition, measurement and disclosure of uncertain tax positions recognized in~~Agreement is terminated by the ~~financial statements. Tax positions must meet a "more-likely-than-not" recognition threshold at~~Company without "cause," Mr. Phillips shall be entitled to severance pay equal to three months' salary. During the ~~effective date to be recognized upon the adoption of FASB ASC 740 and in subsequent periods. The components~~term of the ~~income tax provision are~~ ~~as follows:~~

~~We have~~Agreement, Mr. Phillips shall receive a ~~net operating loss carryforward for financial statement reporting purposes of $3,493,851 from the year ended January 31, 2016.~~

~~Note 6 – Notes Payable:~~

~~Notes payable consisted of the following:~~

April 30, 2016 January 31, 2016
Current
Long
Term
Total Current
Long
Term
Total

Convertible notes $ 2,465,000 $ - $ 2,465,000 $ 2,410,000 $ - $ 2,410,000
Mortgage 222,760 85,369 308,129 211,273 145,737 357,010
Settlement and Equipment Note 100,100 - 100,100 50,000 50,000
$ 2,787,860 $ 85,369 $ 2,873,229 $ 2,671,273 $ 145,737 $ 2,817,010

~~On March 20, 2014, the Company issued a convertible note~~vehicle stipend in the amount of ~~$850,000 (the "Note") to an individual. This Note was subsequently amended,~~$800 per month. The SPhillips Employment Agreement otherwise contains standard terms and the unpaid principal balance was converted into common stock, as more fully described below. The Note had an interest rate of 25%, payable monthly, and was scheduled to mature on September 21, 2014. The outstanding principal balance of the Note, plus any accrued but unpaid interest on the Note, was convertible at any time on or before the maturity date at $1 per common share. The Note was personally guaranteed by our majority shareholder and by an officer and director of the Company.

conditions.

On July 16, 2014, the terms of the Note were amended ("Amendment") wherein the holder of the Note elected to convert $200,000 of the principal of the Note into 293,000 of our common shares of stock at a price of $.6825 per share. As a component of the Amendment, we in turn elected to prepay the remaining principal balance of the Note, after the scheduled payment of the principal and accrued interest due the holder on June 24, 2014, and to pay a prepayment penalty of $11,250. The difference of $93,000 in the premium of the per-share price of $0.6825 per share per the Amendment and the $1 per share per the Note, plus the amount of the prepayment penalty was charged to the loss on the early extinguishment of debt and interest expense, respectively.

On January 31, 2015, the Company entered into three convertible notes totaling up to $2,500,000, of which $2,465,000 had been received by the Company at April 30, 2016. The convertible notes were funded by the noteholders in varying amounts from approximately $50,000 to $550,000 per month. The convertible notes are unsecured, have an interest rate of 25%, with the interest payable monthly. The principal amount of the convertible notes are due on January 1, 2017. At any time prior to the due date of the convertible notes, the unpaid principal amount of the convertible note, plus any accrued but unpaid interest, may be converted into common stock of the Company at a per-share price of $1 per share. The convertible loans are personally guaranteed by Shawn Phillips, a former officer of the Company and affiliate, and Erin Phillips, the majority shareholder of the Company.

The conversion feature associated with the convertible notes provided for a rate of conversion that is below market value, and thus, a beneficial conversion feature was recorded and classified as a debt discount on the balance sheet at the time of issuance of each convertible note with a corresponding credit to additional paid-in capital. During the year ended January 31, 2016, the Company recorded a beneficial conversion feature of $650,000 in connection with the issuance of the above convertible notes, and amortized to interest expense $336,117 and $313,883 during the three months ended April 30, 2016 and the year ended January 31, 2016, respectively.

~~As of January 31, 2016,~~ the Company was in default under the terms of the convertible notes in that it had not paid the full amount of the monthly accrued interest as it became due. As a result, all principal, plus accrued and unpaid interest owing under the terms of the convertible notes, are classified as current liabilities as of January 31, 2016. However, effective June 30, 2016, the Company entered into a debt modification agreement with the lenders. Pursuant to the agreement, the Company will pay the lenders $84,482 each month for ten months, with the first payment due on August 15, 2016. The $84,482 consists of past due interest of $32,482 plus current monthly interest of $52,000. Beginning June 15, 2017 only current monthly interest of $52,000 will be due the lenders. In addition to the above:

●

~~the maturity date of the loans was extended to February 2018;~~

●

any proceeds from any sale of the marijuana dispensaries and/or cultivation facilities owned by Shawn Phillips will be paid to the Company until the amount paid to the Company equals all principal and interest due the lenders; and

●

the proceeds from any sale of the marijuana dispensaries and/or cultivation facilities received by the Company will be paid to the lenders until all principal and interest due the lenders has been paid.

On July 26, 2014 the company entered into a mortgage payable for the purpose of purchasing a commercial operating property that contains a cultivation facility and retail store, which we lease to one of the Regulated Entities. The amount of the mortgage is $595,000, has a three year term, and has no stated rate of interest. In accordance with ASC 835-30, we imputed an interest rate for the mortgage payable of 21.36%. The mortgage is payable in varying amounts from $11,000 to $36,000 per month, which includes interest at a stated amount of $6,000 per month, with a balloon payment of $126,000 due in the thirty-sixth month of the term. We account for the mortgage on a straight line basis with an imputed monthly payment of principal and interests in the amount of $22,301 per month. The difference between the imputed monthly payment amount and actual payment amounts is recorded as an increase or decrease to deferred interest expense, at the time a monthly payment is made. The amount of principal and interest payments on the notes for the five year period ending January 31, 2021 are, as follows:

~~The amount of principal and interest payments on the notes for the five year period ending April 30, 2021 are, as follows:~~

April 30,
2017 2018 2019 2020 2021

Convertible notes - interest only $ 618,900 $ - $ - $ - $ -
Convertible notes - principal 2,465,000 - - - -
Mortgage – principal plus interest 232,000 184,000 - - -
Settlement and Equipment advance 100,100 -
$ 3,416,000 $ 184,000 $ - $ - $ -

~~Note 7 – New Accounting Pronouncements:~~

The Financial Accounting Standards Board ("FASB") periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. The Company has reviewed the recently issued pronouncements and concluded that there are no new accounting standards are applicable to the Company. The Company elected to adopt ASU 2014-10, Development Stage Entities: Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage. The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

~~Note 8 – Contingencies:~~

In anticipation of fully implementing the Company's business plan, management of the Company met with representatives of the Colorado Marijuana Enforcement Division (the "MED") in August 2014 and presented the structure of the Company and its business plan for providing services to the Regulated Entities. Subsequent to the meeting, over 60 license applications for the cultivation and sale of marijuana were approved and licenses were granted to Shawn Phillips, while he was also serving as the Company's Chief Executive Officer, and while his wife, Erin Phillips, maintained her position an officer and the principal shareholder of the Company.

~~Up until June 30, 2015, the Company provided Fulfillment Services to the Regulated Entities. Effective June 30, 2015,~~ the owner of and license holder for all of the Regulated Entities made the decision, with the concurrence of the management of the Company, to cancel all of the above referenced Master Service Agreements. The termination of the Agreements was considered advisable since, in June 2015, the Colorado State Licensing Authority issued a Grounds for Denial to one of the Regulated Entities owned by Mr. Phillips. The Grounds for Denial was based upon the belief of the Colorado Marijuana Enforcement Division (the "MED") that the Company and persons other than Mr. Phillips have a direct or indirect ownership or financial interest in the cultivation facility and dispensary owned by Mr. Phillips and should have been included on the application.

As a result of the denial of Mr. Phillips' application, all applications for the renewal of existing licenses owned by the Regulated Entities, have been placed in an "Administrative Continuation" status, pending the resolution of the license application. Administrative Continuation status enables a licensee to continue to operate, but the licensee operates without an actual current license. Mr. Phillips is working with the MED in order to resolve this situation. However, if a resolution of the denial of his application is not reached, Mr. Phillips has advised the Company that it is his intention to appeal the denial of his application.

If Mr. Phillips is not able to reach a mutually acceptable resolution with respect to his application, or if he is not successful in appealing the denial, the allegations of the MED could possibly affect all of the licenses under which the Regulated Entities operate and possibly result in the cancellation of all of the licenses held by the Regulated Entities. Although the ultimate outcome of this matter cannot be determined at this time, a failure to reach an acceptable resolution might negatively impact the ability of the Company to continue operating as a going concern.
16

~~Note 9 – Discontinued Operations:~~

As more fully described in Note 8 – Contingencies, we discontinued providing services under the Master Service agreements to the Regulated Entities on June 30, 2015. There were no components of major assets and liabilities associated with the discontinued operations at April 30, 2016 and 2015 and at January 31, 2016. The summarized discontinued operating results for the three months ended April 30, 2016 and 2015 and the year ended January 31, 2016 respectively, are, as follows:

Three Months Ended
April 30,

Year Ended
January 31,

2016 2015 2016

Revenues $ - $ 475,912 $ 764,071
Expenses - (647,241 (1,146,758 )
$ - $ (171,329 ) $ (382,687
~~Note 10 – Subsequent Events:~~

In accordance with ASC 855-10 we have analyzed our operations subsequent to April 30, 2016, to the date these condensed financial statements were issued, and have determined that, other than as disclosed above, we do not have any material subsequent events to disclose in these condensed financial statements.

17
ITEM 2.7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

~~In anticipation~~

Overview

We were established to provide sophisticated Fulfillment Services to medical and retail stores and cultivation facilities in the regulated cannabis industry throughout the United States. Such Fulfillment Services are only be provided to stores and facilities located in geographical areas where the governing state and local ordinances allow for the provision of ~~fully implementing the Company's business plan, management~~such services.

The Fulfillment Services that we currently are able to provide are summarized, as follows:

Opportunity Assessment: For a standard fee, we will complete an Opportunity Assessment for a client, which would include financial modeling, completed with our proprietary assessment software.

●Application Filing Assistance: Based upon our knowledge of the ~~Company met with representatives~~various rules and regulations of ~~the Colorado Marijuana Enforcement Division (the "MED") in August 2014~~respective state and ~~presented the structure of the Company~~local jurisdictions, we will provide

turn-key application preparation and ~~its business plan for providing~~submission services to the retail marijuana outlets and marijuana cultivation facilities (the "Regulated Entities") owned by Shawn Phillips, a former officer and director. Subsequent to the meeting, over 60 license applications for the cultivation and sale of marijuana were approved and licenses were granted to Shawn Phillips, while he was also serving as the Company's Chief Executive Officer, and while his wife, Erin Phillips, maintained her position as an officer and the principal shareholder of the Company.

Mr. Phillips, is the sole owner of Rocky Mountain Farmacy, Inc. ("RMF"), one of the Regulated Entities, which operates The Retreat and the Shelter marijuana dispensaries. In November 2014, Mr. Phillips submitted an application to the MED for a ~~retail license for RMF~~client, and/or provide consulting assistance to ~~permit~~a client who is self-preparing their application.

●Branding, Marketing and Administrative Consulting Services: Customers may contract with us to use the 51^st ~~Avenue~~Strainwise® name, logo and affinity images in their retail store locations. A monthly fee will permit a branding customer to use the Strainwise® brand at a specific location. In addition, we will assist operators in marketing and managing their businesses, setting up new retail locations and general business planning and execution at an hourly rate. This includes services to establish an efficient, predictable production process, as well as, nutrient recipes for consistent and appealing marijuana strains.

●Accounting and Financial Services: For a monthly fee, we will provide customers with a fully implemented general ledger system, with an industry centric chart of accounts, which enables management to readily monitor and manage all facets of a marijuana medical dispensary and cultivation ~~facility~~facility. We will provide bookkeeping, accounts payable processing, cash management, general ledger processing, financial statement preparation, state and municipal sales tax filings, and state and federal income tax compilation and filings.

●Compliance Services: The rules, regulations and state laws governing the production, distribution and retail sale of marijuana can be complex, and compliance may prove cumbersome. Thus, customers may contract with us to ~~supply recreational marijuana. On June 11, 2015, the State Licensing Authority issued~~implement a ~~"Notice of Grounds for Denial of Retail Marijuana License Application and Notice of Duty to Respond" ("Grounds for Denial").The Grounds for Denial were~~compliance process, based upon the ~~belief~~number and type of licenses and permits for their specific business. We will provide this service on both an hourly rate and stipulated monthly fee.

●Lending: We will provide loans to individuals and businesses in the cannabis industry.

We do NOT grow marijuana plants, produce marijuana infused products, sell marijuana plants and/or sell marijuana infused products of any nature in any jurisdiction were such activity has not been legalized.

Prior to December 2017, we provided rental and operational support-related activities to regulated entities, that have been discontinued.

Results of Operations

Comparison of the ~~MED that the Company and persons other than Mr. Phillips have a direct or indirect ownership or financial interest in RMF, and such should have been included on the application.~~

~~Prior to June 30, 2015, the Company provided the following services~~three months ended October 31, 2018 to the ~~Regulated Entities pursuant to separate Master Service Agreements:~~

three months ended October 31, 2017

●

~~Branding, Marketing and Administrative Consulting Services~~

●

~~Accounting and Financial Services~~

●

~~Compliance Services~~

●

~~Nutrient Supplier~~

~~Subsequent to June 30, 2015, Shawn Phillips, the owner of and license holder for all~~

	For the Three Months Ended October 31,					Change
	2018		2017				$	%


Consulting services	$	12,500	$	20,000	$		(7,500)	(38)
Cost of consulting services		(12,500)		(55,121)			42,621	(77)
Gross profit		—		(35,121)			35,121	100
Operating costs and expenses
Rents and other occupancy		13,500		28,143			(14,643)	(52)
Compensation		148,856		137,206			11,650	8
Professional, legal and consulting		335,429		33,150			302,279	912
Depreciation and amortization		435		183			252	137
General and administrative		79,895		97,202			(17,307)	(18)
Total operating costs and expenses		578,115		295,884			282,231	95
Loss from continuing operations		(578,115)		(331,005)			(247,110)	75
Loss on equity investment in unconsolidated subsidiary		(10,129)		—			(10,129)	100
Other		(114,986)		(115)			(114,871)	100
Loss from continuing operations, before provision for taxes on income		(703,230)		(331,120)			372,110	112
Provision for taxes on income		—		—			—	—
Loss from continuing operations, net of tax		(703,230)		(331,120)			372,110	112
Income (loss) from discontinued operations, net of tax		—		1,974,363			(1,974,363)	(100)
Net income/(loss)	$	(703,230)	$	1,643,243	$		(2,346,473)	(143)

Comparison of the ~~Regulated Entities, made~~nine months ended October 31, 2018 to the decision, with concurrence of the management of the Company, to cancel all of the above referenced Master Service Agreements. The cancellation was deem advisable by Mr. Phillips and management of the Company in light of the uncertainty of the right of the Company to supply such Fulfillment Services in Colorado. The uncertainty was created by allegations contained in the ~~Grounds for Denial~~ nine months ended October 31, 2017

	For the Nine Months Ended October 31,				Change
	2018		2017			$	%


Consulting services	$	143,749	$	173,500	$	(29,751)	(17)
Cost of consulting services		(24,943)		(172,473)		147,530	(86)
Gross profit		118,806		1,027		117,779	11,468
Operating costs and expenses
Rents and other occupancy		39,516		56,445		(16,929)	(30)
Compensation		433,341		389,734		43,607	11
Professional, legal and consulting		420,518		84,283		336,235	399
Depreciation and amortization		1,304		1,874		(570)	(30)
General and administrative		221,536		238,328		(16,792)	(7)
Total operating costs and expenses		1,116,215		770,664		334,551	45
Loss from continuing operations		(997,409)		(769,637)		(227,772)	30
Loss on equity investment in unconsolidated subsidiary		(10,129)		—		(10,129)	100
Other		(116,726)		(1,016)		(115,710)	11,389
Loss from continuing operations, before provision for taxes on income		(1,124,264)		(770,653)		(353,611)	(46)
Provision for taxes on income		—	—			—	—
Loss from continuing operations, net of tax		(1,124,264)		(770,653)		(353,611)	(46)
Income (loss) from discontinued operations, net of tax		—		1,144,976		1,144,976	(100)
Net income/(loss)	$	(1,124,264)	$	374,323	$	(1,498,587)	(400)

~~issued on June 11, 2015. As a result of the cancellation of the Master Service Agreements, the Company terminated approximately 80% of its employees.~~16

~~As of July 31, 2016 the Company was not providing the services listed above to any person or entity.~~

The Company will continue to provide real property to two cultivation facilities and to one retail store, which also contains a small cultivation facility, owned by Mr. Phillips under two subleases and one lease. Revenue from the two subleases and the one lease is recognized on a straight line basis over the term of the sublease.

~~Results of Operations~~

Material changes in line items in our Statement of Operations for the three and nine months ended ~~April 30, 2016~~October 31, 2018 as compared to the same period last year, are discussed below:

	~~Increase (I) or~~
~~Item~~	~~Decrease (D)~~	~~Reason~~

~~Rental income~~	D	~~We subleased cultivation space to the Regulated Entities at lower rates during the three months ended April 30, 2016 as compared to the same period~~ � *● Rent and other occupancy*– During 2017 rent included various back charges that resulted in higher rent. As a result of not having similar charges during 2018, rent decreased for ~~the prior year.~~

~~Reserve for amounts due from Regulated Entities~~	D	The cash flow generated by the Regulated Entities improved during the three months ended April 30, 2016, plus the amounts billed to the Regulated Entities does not include any amounts billed for charges under the terms of the Master Services Agreements, which were cancelled June 30, 2015, as compared to the same period for the prior year.

~~Rent and other occupancy~~	D	~~The monthly rates for the sublease of the 51~~^st ~~Avenue and Bryant Street cultivation facilities were reduced $62,000 per month in the aggregate for the three months ended April 30, 2016, as compared to the same period for the prior year.~~

~~Compensation~~	I	~~The Company had more employees at higher levels of income for the three months ended April 30, 2016, as compared to the same period for the prior year.~~

~~Professional, legal and consulting~~	I	~~The Company utilized the services of consultants in a greater amount during the three months ended April 30, 2016, as compared to the same period for the prior year.~~

~~Interest expense~~	I	The Company had convertible debt in the amount of $2,410,000 outstanding at the beginning of the three months ended April 30, 2016, as compared to only $500,000 of such convertible debt at the beginning of the same period of the prior year.

~~The Regulated Entities have paid~~ the ~~Company approximately $8,641,000~~three and nine months during 2018.
�         ●   Compensation – Compensation increased as a result of ~~the $11,809,267 billed~~additional headcount for operations and to ~~them between January 16, 2014~~expand our consulting services.
� ●   Professional, legal, and ~~April 30, 2016~~consulting, ~~including $973,798 and $5,306,286 billed~~ – Professional fees increased due to significantly higher fees during the three months ~~ended April 30, 2016~~due to our efforts to bring our SEC      filings into compliance and the ~~year ended January 31, 2016, respectively. However, there is no assurance that the Regulated Entities will be able~~issuance of stock-based compensation related to ~~generate enough cash~~professional services provided to ~~pay the $3,168,009 presently owed~~us.
   ●General and administrative – General and administrative expenses include marketing, travel, and office expenses. These expenses fluctuate from period to               period but have been driven by our shift in focus of our operations to consulting services.
� ●    Other – Other includes costs related to financing, expense related to the ~~Company at April 30, 2016,~~conversion of payables, and ~~as a result,~~ the ~~receivable from~~amortization of debt discount related to the               ~~Regulated Entities at April 30, 2016 ($3,168,009) has been fully reserved and charged to expense.~~

beneficial conversion feature.
Liquidity and Capital Resources

~~Between March 15, 2014~~
Our net cash flows are as follows:

For the Nine months
Ended October 31,

2018

2017

Consolidated Statements of Cash Flows Data:

Net cash used in operating activities

$
(433,089
)

$
(73,756)

Net cash used in investing activities

(155,233
)

( 4,024)

Net cash provided by financing activities

590,640

9,863

Net change in cash

$
2,318

$
(67,737)

Operating Activities
Our cash used in operating activities is driven primarily by consulting revenue and ~~August 19, 2014,~~vendor provided credit. Our primary uses of cash from operating activities have been for inventory purchases, compensation expenditures, professional fees, rent expense, and general and administrative expenses. Our cash flows from operating activities will continue to be affected principally by the ~~Company sold 2,224,700 units, at~~results of operations and the extent to which we increase spending on personnel expenditures and our working capital requirements.
Investing Activities
During the period we acquired a ~~price~~trademark for $2,250 and made total cash investments of ~~$1.00 per unit, to~~$152,983 into a ~~group~~equity investment in an unconsolidated subsidiary.
Financing Activities
Our cash provided by financing was primarily the result of ~~private investors. Each unit consisted~~advances made on the Puerto Rico and Oklahoma notes receivable, proceeds from the Richland convertible promissory notes, borrowings from related parties, proceeds from the issuance of ~~one share of the Company's~~ common stock, and ~~one warrant. Every two~~conversion of warrants ~~entitle the holder~~ to purchase ~~one share~~common stock.
Indebtedness Agreements
On August 29, 2018, we entered into a Note Purchase and Security Agreement (the "Purchase Agreement") with Richland Fund, LLC., a Delaware limited liability company ("Richland"). Pursuant to the Agreement, Richland agreed to purchase our Convertible Promissory Notes (collectively, the "Notes"), in the aggregate principal amount of $225,000, funded in three tranches, (i) $100,000.00 (the "First Note"), (ii) $67,000.00 (the "Second Note"), and (iii) the ~~Company's common stock at a price~~balance of ~~$5.00~~$58,000.00 (the "Third Note"). The Notes bear 12% interest per ~~share at any time prior~~annum, with the last payment under the Notes due January 15, 2020. The Notes are secured by all of our assets and guarantees from Shawn and Erin Phillips. The Notes may be prepaid without penalty with 30 days' advance notice to ~~January 31, 2019. When~~Richland. In conjunction with the ~~Company acquired the remaining shares of Strainwise, the Company exchanged its~~Richland Note, we issued Richland warrants ~~for the outstanding Strainwise warrants. The warrants issued by the Company had the same terms as the Strainwise warrants.~~

On March 20, 2014 the Company borrowed $850,000 from an unrelated third party.  The loan bears interest at 25% per year, payable monthly, and matured on September 21, 2014.  On October 16, 2014, the terms of the loan were amended such that $200,000 of the loan was converted into 293,000to purchase 100,000 shares of the Company's common stock ~~and~~for $18,000. Richland exercised the warrants on October 3, 2018.
17
The Notes are convertible into our common stock. The conversion price will be equal to the lower of (i) $0.15 cents per share (ii) or the average of the closing bid price of our common stock taken over the three trading days prior to conversion or (iii) upon any issuance by the Company ~~agreed to pay the remaining balance~~ of ~~the loan ($325,000), plus accrued interest and~~common stock, or a prepayment penalty of $11,250, prior to October 29, 2014. The $850,000 loan was used (i) to secure approximately $217,800 of deposits for the future rental and/or purchase of cultivation facilities to lease to growers in the industry, (ii) to acquire approximately $175,000 of cultivation equipment (iii) to make approximately $63,500 of tenant improvements to cultivation facilities under lease, (iv) to pay approximately $373,000 of principal and interest to the note holder, and (v) to pay other miscellaneous expenses
As of April 30, 2016, three unrelated third parties had collectively loaned the Company $2,410,000, of which $1,800,000 was outstanding at January 31, 2016. The loans bear interest at 25% per year, are unsecured, and become due and payable on January 31, 2017. Interest only payments are due each month, and at the option of the lenders, the loans can be convertedsecurity that is convertible into ~~shares of the Company's~~ common stock, at the rate of $1.00 per share. The loan proceeds were used to pay general and administrative expenses. As of As of April 30, 2016, the Company was in default under the terms of the notes in that the Company had not paid the full amount of the monthly interest as it became due. As a ~~result, all principal, plus accrued and unpaid interest owing under the terms of the notes are classified as current liabilities in the accompanying financial statements.~~
~~Effective June 30, 2016, the Company entered into~~price lower than a debt modification agreement with the lenders. Pursuant to the agreement, the Company will pay the lenders $84,482 each month for ten months, with the first payment due on August 15, 2016. The $84,482 consists of past due interest of $32,482 plus current monthly interest of $52,000. Beginning June 15, 2017 only current monthly interest of $52,000 will be due the lenders. In addition to the above:

● ~~the maturity date of the loans was extended to February 2018;~~
● net proceeds from the sale of any assets of the Regulated Entities owned by Shawn Phillips will be paid to the Company until the amount paid to the Company equals all principal and interest due the lenders;
● ~~any proceeds derived from the sale of any assets from the Regulated Entities owned by Shawn Phillips that are received by the Company will be paid to the lenders., and~~

● if the proceeds from the sale of any assets of the Regulated Entities owned by Shawn Phillips that are received by the Company are not sufficient to pay all principal and interest of the loans at the time of such sale, the Company has agreed to negotiate in good faith with the lenders mutually acceptable repayment terms.
As explained in Note 3 to the financial statements which are part of this report, in order to reduce costs, the Nome facility was closed on May 12, 2015 and on September 30, 2015, with the consent of the owner of the Nome property, the Company's lease for this property was terminated and the associated tenant improvement loan was cancelled. The Company wrote off assets comprised of tenant improvements, security deposits and prepaid lease amounts in the aggregate of $1,792,910 and wrote off related balances comprised of a tenant improvement loan, deferred lease payments and accumulated amortization of leasehold improvements in the aggregate amount of $1,576,373. The Company received cash back from the lessor in the amount of $59,598, as the net return of certain deposits, after $94,475 was retained by the lessor as payment of the lease for the month in which the lease was cancelled. The Company recognized a loss on the cancellation of this lease in the amount of $62,507.
~~The Company's material sources and (uses) of cash during the three months ended April 30, 2016 and 2015 were:~~
20

2016

2015

Cash used by operations $ (82,082 ) (1,338,128 )
Tenant improvements and equipment purchases - (235,579 )
Proceeds from convertible notes                                                           55,000 1,250,000
Loan payments (48,881 ) (79,057 )
Settlement on termination of lease                                                      (50,000 ) -
As of July 31, 2016, the Company was leasing two properties in the Denver Metropolitan area which are subleased to the Regulated Entities for their marijuana cultivation and growing operations. The subleases with the Regulated Entities expire on the same date (generally between December 2019 and December 2023) as the leases with the owners of these properties. The Company charges the Regulated Entities an amount that approximates a premium of from 36% to 50% of the amount the Company pays the lessors of these properties.
~~None of the persons leasing these facilities~~receipt to the Company ~~are affiliated with the Company in any way. The Company believes the terms~~ of ~~the subleases are comparable to those which the Company could have obtained from unrelated third parties.~~
~~See Note 4 to the financial statements, which are part of this report, the future minimum amounts the Company is required to pay under the terms of it Operating Leases.~~
~~See Note 6 to the financial statements which are part of this report, for the future minimum payments required under the terms of loans to the Company.~~
~~As of July 31, 2016, the Company's operating expenses, excluding payments required for our operating leases, were approximately $170,000~~$0.15 per month, the primary components of which are interest expense, compensation for Erin Phillips, the Company's Chief Executive Officer and President and compensation for the Company's employees and consultants.
The Company plans to fund its operations and contractual requirements through management and consulting services provided to independent third parties, and possibly through fees received for subleasing facilities to the Regulated Entities. See "Sale of Dispensaries and Cultivation Facilities" below.
The Company may need to raise enough capital to fund its operations until it is able to earn a profit. The Company does not know what the terms of any future capital raising may be but any future sales of the Company's equity securities will dilute the ownership of existing stockholders and couldshare, at such price that shall be at ~~prices below~~ the ~~market~~same discount ratio as on the Funding Date. The conversion price of the Company's common stock. The inability of the Company to obtain the capital which it requires may result in the failure of the Company. The Company does not have any commitments from any person to provide the Company with any capital.

~~Sale of Dispensaries and Cultivation Facilities~~
Shawn Phillips, the owner of the Regulated Entities, is attempting to sell his marijuana dispensaries and cultivation facilities, which comprise all of the Regulated Entities. It is expected that a portion of the sale proceedsNotes will be ~~used~~further subject to ~~pay~~proportional adjustment for stock splits, reverse stock splits or combinations of shares, stock dividends, and the ~~amounts owed~~like. There are penalties for failure to timely deliver conversion shares.
For additional information see our Current Report on Form 8-K filed with the ~~Company by the Regulated Entities ($3,168,009 as of April 30, 2016).~~

~~The Company is presently subleasing two cultivation facilities to the Regulated Entities.~~

If the Regulated Entities subleasing these facilities are sold, it is not known if these facilities will continue to be subleased. If they will continue to be subleased, it is not known what the terms of the subleases will be.

In July 2014 the Company purchased a 5,000 square foot commercial building, located at 5110 Race Street in Denver, Colorado, which is leased to a retail marijuana dispensary and a small cultivation facility operated by one of the Regulated Entities. If the Regulated Entity leasing this property is sold, it is not known if this property will continue to be leased. If it will continue to be leased, it is not known what the terms of the lease will be.

SEC on October 19, 2018.
21

~~Trends~~

~~The factors that will most significantly affect the Company's future operating results, liquidity and capital resources will be:~~

●

~~The ability of the Company to find new sources of revenue;~~

●

~~Government regulation of the marijuana industry;~~

●

~~Revision of Federal banking regulations for the marijuana industry;~~

●

~~Legalization of recreational marijuana in more states; and~~

~~Other than the foregoing, the Company does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on:~~

●

~~revenues or expenses;~~

●

~~any material increase or decrease in liquidity; or~~

●

~~expected sources and uses of cash.~~

Critical Accounting Policies and New Accounting Pronouncements

See Note 12 to the financial statements included as part of this report for a description of the Company's significant accounting policies.

~~ITEM 4.CONTROLS AND PROCEDURES~~

Disclosure Controls and Procedures

Under the direction and with the participation of the Company's management, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of ~~April 30, 2016.~~October 31, 2018. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and regulations, and that such information is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based upon this evaluation, management concluded that the Company's disclosure controls and procedures were not effective as of ~~April 30, 2016 primarily~~October 31, 2018, primarily based on these criteria, due to material weaknesses resulting from our failure to 1) provide correct responsibilities to adequately segregate activity in the area of cash receipts and cash disbursements, 2) effectively implement comprehensive entity level internal controls, and 3) adequately segregate duties within the accounting department due to an insufficient number of staff.
Changes in Internal Controls

There were no changes in the Company's internal control over financial reporting during the quarter ended ~~April 30, 2016,~~October 31, 2018, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

2218

PART II

Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
There have been no material changes to the Risk Factors as disclosed in our 2018 Form 10-K for the year ended January 31, 2018 filed with the Securities and Exchange Commission on October 9, 2018.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
On or around October 18, 2018, 23 completed a private offering to accredited investors (the "Offering") in accordance with Regulation D under the Securities Act of 1933 ("Securities Act"). The Offering consisted of 3,416,000 shares of the Company's Common Stock at a price per share of $0.20, for offering proceeds of $683,200. All securities sold in the Offering were sold in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder.
From approximately September 24, 2018 to October 16, 2018, we issued a total of 281,000 shares of its common stock for $42,150 resulting from the exercise of outstanding warrants with an exercise price of $0.15 per share. These shares were issued pursuant to Section 4(a)(2) of the Securities Act.
Use of Proceeds
We utilized these funds for an equity investment in Volume 2, LLC, loans to fund joint ventures in Oklahoma and Puerto Rico, and to fund day to day operations.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information.
None.
19
Item 6. ~~Exhibits~~

Exhibit Index

~~Exhibits~~

Incorporated by Reference
Exhibit
No.
Description
Form
~~31.1~~SEC File
Number
Exhibit
Filing Date
31.1**
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2**
~~31.2~~
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32
32.1***
Certification of the Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101**
The following materials from STWC Holdings, Inc.'s quarterly report on Form 10-Q for the three months ended October 31, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Statement of Changes in Stockholders' Deficit; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) related notes to these financial statements.
*
Indicates management contract or compensatory plan or arrangement.
**
Filed herewith
***
Furnished herewith

2320
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
STWC HOLDINGS, INC.
December 14, 2018 By:/s/ Erin Phillips
Erin Phillips, President, Chief Financial and Accounting Officer
~~STRAINWISE, INC.~~
~~August 9, 2016~~ ~~By:~~ ~~/s/ Erin Phillips~~
~~Erin Phillips, President, Chief Financial and~~
~~Accounting Officer~~

2421

	(Unaudited) April 30, 2016			(Audited) January 31, 2016

ASSETS
Current assets:
Cash and cash equivalents	$	25,348		$	151,311
Due from affiliated entities, net of collection allowance reserve of $3,168,009 and $3,222,535 at April 30 and January 31, 2016, respectively		-			-
Total current assets		25,348			151,311
Commercial operating property, net of accumulated depreciation of $26,666 and $22,667 at April 30 and January 31, 2016, respectively		633,333			637,333
Tenant improvements and office equipment, net of accumulated amortization and depreciation of $120,037 and $77,308 at April 30 and January 31, 2016, respectively		596,824			639,553
Security deposits		150,000			150,000
Equity method investment in unconsolidated subsidiary		11,659			11,659
Trademark, net of accumulated amortization of $1,708 and $1,525 at April 30 and January 31, 2016, respectively		9,302			9,485
Total assets	$	1,426,466		$	1,599,341

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
LIABILITIES
Current liabilities:
Accounts payable	$	378,163		$	340 605
Accrued interest		240,205			138 458
Convertible notes payable, net of discount of $0.0 and $336,117 at April 30 and January 31, 2016, respectively		2,465,000			2,073,883
Settlement and equipment advance payable		100,100			150,100
Current portion of mortgage note payable		222,760			211,273
Total current liabilities		3,406,228			2,914,319
Mortgage payable		85,369			145,737
Deferred rent and interest payable discount		1,006,857			965,319
Total liabilities		4,498,454			4,025,375
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, no par value, 100,000,000 shares authorized, 27,147,217 issued and outstanding at April 30, and January 31, 2016, respectively		-			-
Additional paid in capital		3,152,658			3,152,658
Retained (deficit)		(6,224,646	)		(5,578,692
Total stockholders' equity		(3,071,988	)		(2,426,034	)
Total liabilities and stockholders' (deficit) equity	$	1,426,466		$	1,599,341

STWC HOLDINGS, INC.
CONDENSED STATEMENTS OF OPERATIONS

	(Unaudited) Three Months Ended April 30,
		2016			2015

Rental income from Regulated Entities	$	973,798		$	1,223,386
Consulting services		-			2,000
Total revenues		973,798			1,225,386
Operating costs and expenses
Collection reserve for amounts due from Regulated Entities		(54,526	)		943,649
Rents and other occupancy		838,183			1,156,406
Compensation		163,231			134,874
Professional, legal and consulting		96,267			60,428
Depreciation and amortization		46,911			79,031
General and administrative		35,653			13,618
Total operating costs and expenses		1,134,406			2,388,006
Loss from continuing operations		(160,608	)		(1,162,620	)
Other costs and expenses
Interest expense		(485,346	)		(180,225	)
Loss from continuing operations, before provision for taxes on income		(645,954	)		(1,342,845	)
Provision for taxes on income		-			-
Loss from continuing operations, net of tax		(645,954	)		(1,342,845	)
Loss from discontinued operations, net of tax		--			(171,329	)
Net loss	$	(645,954	)	$	(1,514,174	)

Basic loss and fully diluted loss per common share
Continuing operations	$	(0.02	)	$	(0.056	)
Discontinued operations	$	-		$	(0.006	)

Weighted average number of shares outstanding, basic and fully diluted		27,147,217			27,147,217

	(Unaudited) Three Months Ended April 30,
	2015			2014
Cash flows from operating activities:
Net (loss)	$	(645,954	)	$	(1,514,174	)
Adjustments to reconcile net loss to net cash used in operating activities:
Increase (decrease) in amounts due to/from Regulated Entities		54,526			(943,648	)
Increase (decrease) in collection allowance reserve for amounts due from Regulated Entities		(54,526	)		943,648
Increase in accrued interest payable		101,747			26,712
Increase in prepaid expenses and other assets		-			(43,343	)
Depreciation and amortization		46,728			78,848
Increase (decrease) in accounts payable		37,559			(57,473	)
Decrease in discount on convertible notes		336,117			-
Increase in deferred rent and interest discount		41,538			171,119
Decrease in trademark		183			183
Net cash flow used in operating activities		(82,082	)		(1,338,128	)

Cash flows from investing activities:
Investment in tenant improvements and office equipment		-			(235,579	)
Net cash flow used in investing activities		-			(235,579	)

Cash flows from financing activities:
Proceeds from convertible notes		55,000			1,250,000
Payments on tenant allowances note and mortgage		(48,881	)		(79,057	)
Payment on settlement of lease termination		(50,000	)		-
Net cash flows from financing activities		(43,881	)		1,170,943

Net cash flows		(125,963	)		(167,185	)
Cash and cash equivalents, beginning of period		151,311			674,495
Cash and cash equivalents, end of period	$	25,348		$	507,310

Supplemental cash flow disclosures:
Cash paid for interest	$	47,482		$	153,513
Cash paid for income taxes	$	-		$	-

	April 30, 2016		January 31, 2016

Security deposits	$	150,000	$	150,000

	April 30, 2016			January 31, 2016

Tenant improvements:
Grow lights for cultivation purposes	$	452,700		$	452,700
Structural improvements		48,511			48,511
Office equipment:
Computer equipment		41,200			41,200
Office furniture and fixtures		24,450			24,450
Cultivation equipment		150,000			150,000
		716,861			716,861
Accumulated amortization and depreciation		(120,037	)		(77,308	)
	$	596,824		$	639,553

	Three Months Ended April 30,
	2016		2015
Warrants issued to consultant		500,000		500,000
Warrants attached to common stock subscriptions		1,112,350		1,112,350
Warrants granted to holders of convertible debt		2,465,000		1,800,000
		4,077,350		3,412,350

For the twelve Months Ending April 30,
2017		2018		2019		2020		2021		Thereafter
$	3,047,600	$	3,178,700	$	3,325000	$	2,889,500	$	427,500		1,510,200

	Three Months Ended April 30,						Year Ended January 31,
	2016			2015			2016

Income tax expense (benefit)
Current:
Federal	$	(257,008	)	$	(579,936	)	$	(1,316,263	)
State		(29,908	)		(70,106	)		(161,765	)
Deferred income tax expense benefit		(286,916	)		(650,042	)		(1,478,028	)
Valuation allowance		286,916			650,042			1,478,028
Provision	$	-		$	-		$	-

	April 30, 2016						January 31, 2016
	Current		Long Term		Total		Current		Long Term		Total

Convertible notes	$	2,465,000	$	-	$	2,465,000	$	2,410,000	$	-	$	2,410,000
Mortgage		222,760		85,369		308,129		211,273		145,737		357,010
Settlement and Equipment Note		100,100		-		100,100		50,000				50,000
	$	2,787,860	$	85,369	$	2,873,229	$	2,671,273	$	145,737	$	2,817,010

	April 30,
	2017		2018		2019		2020		2021

Convertible notes - interest only	$	618,900	$	-	$	-	$	-	$	-
Convertible notes - principal		2,465,000		-		-		-		-
Mortgage – principal plus interest		232,000		184,000		-		-		-
Settlement and Equipment advance		100,100		-
	$	3,416,000	$	184,000	$	-	$	-	$	-

	For the Nine months Ended October 31,
	2018			2017
Consolidated Statements of Cash Flows Data:
Net cash used in operating activities	$	(433,089	)	$	(73,756)
Net cash used in investing activities		(155,233	)		( 4,024)
Net cash provided by financing activities		590,640			9,863
Net change in cash	$	2,318		$	(67,737)

	2016			2015

Cash used by operations	$	(82,082	)		(1,338,128	)
Tenant improvements and equipment purchases		-			(235,579	)
Proceeds from convertible notes		55,000			1,250,000
Loan payments		(48,881	)		(79,057	)
Settlement on termination of lease		(50,000	)		-

			Incorporated by Reference
Exhibit No.		Description	Form	~~31.1~~SEC File Number	Exhibit	Filing Date


31.1**		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2**
~~31.2~~	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 32.1***		Certification of the Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101**		The following materials from STWC Holdings, Inc.'s quarterly report on Form 10-Q for the three months ended October 31, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Statement of Changes in Stockholders' Deficit; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) related notes to these financial statements.

*	Indicates management contract or compensatory plan or arrangement.
**	Filed herewith
***	Furnished herewith

	~~STRAINWISE, INC.~~


~~August 9, 2016~~	~~By:~~	~~/s/ Erin Phillips~~
		~~Erin Phillips, President, Chief Financial and~~
		~~Accounting Officer~~