UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x ☒	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, ~~2019~~2020

¨ ☐	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission File Number: 000-55704

Right On Brands, Inc.

(Exact name of registrant as specified in its charter)

Nevada		45-1994478
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

~~3235 Skyline Dr,~~6501 Dalrock Road, Suite ~~127, Carrollton,~~100, Rowlett, TX ~~75006~~75089

(Address of principal executive offices)

(214) 736-7252

(Registrant’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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). x☒ Yes ¨☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

☐	Large accelerated filer	¨ ☐	Accelerated filer	¨
☐	Non-accelerated filer	¨ ☒	Smaller reporting company	x
		☒	Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

☐

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

As of ~~February 14, 2020,~~June 23, 2021, there were ~~777,040,806~~5,726,759,527 shares of common stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.Consolidated Financial Statements

Our financial statements included in this Form 10-Q are as follows:

F-1	Condensed Consolidated Balance Sheets as of December 31, ~~2019~~2020 (unaudited) and March 31, ~~2019;~~2020;
F-2	Condensed Consolidated Statements of Operations for the three and nine months ended December 31, ~~2019~~2020 and ~~2018~~2019 (unaudited);
F-3	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended December 31, ~~2019~~2020 and ~~2018~~2019 (unaudited);
F-4	Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, ~~2019~~2020 and ~~2018~~2019 (unaudited);
F-5	Notes to Condensed Consolidated Financial Statements (unaudited).

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, ~~2019~~2020, are not necessarily indicative of the results that can be expected for the full year.

~~Tables~~Table of Contents

RIGHT ON BRANDS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

~~(unaudited)~~

December 31,

March 31,

2019

2019

ASSETS

Current assets

Cash

$ 15,616

$ 90,883

Accounts receivable, net of allowance

26,879

24,184

Prepaid expenses

15,575

-

Inventory

258,163

213,957

Total current assets

316,233

329,024

Non-current assets

Property and equipment, net of depreciation

22,712

27,451

Intangible assets, net of amortization

358

768

Right of use asset (Note 8)

102,600

-

Total non-current assets

125,670

28,219

Total assets

$ 441,903

$ 357,243

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

Accounts payable

$ 199,772

$ 66,689

Accrued interest payable

48,922

30,337

Lease liability, current (Note 8)

45,600

-

Notes payable, net of discount

754,164

609,000

Convertible debt, net of discount

240,942

347,473

Derivative liability

484,358

1,034,939

Total current liabilities

1,773,758

2,088,438

Lease liability, non-current (Note 8)

57,000

-

Total liabilities

1,830,758

2,088,438

Commitments and contingencies (Note 8)

Stockholders’ deficit

Series A Preferred stock; 10,000,000 shares authorized of $.001 par value; 5,000,000 and 5,000,000 shares issued December 31, 2019 and March 31, 2019, respectively

5,000

5,000

Common stock; par value $.001; 8,000,000,000 shares authorized 453,040,546 and 73,652,594 shares issued December 31, 2019 and March 31, 2019, respectively

453,041

73,653

Additional paid-in capital

9,964,477

8,295,767

Common stock issuable

56,050

56,050

Accumulated deficit

(11,891,860 )

(10,186,102 )
Total Right On Brands stockholders’ deficit

(1,413,292 )

(1,755,632 )
Noncontrolling interest

24,437

24,437

Total stockholders’ deficit

(1,388,855 )

(1,731,195 )

Total liabilities and stockholders’ deficit

$ 441,903

$ 357,243

UNAUDITED

	December 31,			March 31,
	2020			2020

Assets
Current assets
Cash	$	248		$	67,153
Accounts receivable, net of allowance		7,169			7,169
Prepaid expenses		-			34,862
Inventory		15,536			15,536
Total current assets		22,953			124,720

Non-current assets
Property and equipment, net of depreciation		16,632			21,132
Intangible assets, net of amortization		-			307
Right of use asset		-			91,200
Total non-current assets		16,632			112,639

Total assets	$	39,585		$	237,359

Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable	$	96,881		$	109,243
Accrued interest payable		101,904			71,318
Accrued expenses		30,807			-
Lease liability, current portion		45,600			45,600
Notes payable		367,000			299,000
Convertible debt, net of discount		376,025			275,941
Derivative liability		931,886			1,574,097
Total current liabilities		1,950,103			2,375,199

Lease liability, non-current		11,400			45,600

Total liabilities		1,961,503			2,420,799

Commitments and contingencies (Note 11)

Stockholders’ deficit
Series A Preferred stock; 10,000,000 shares authorized of $.001 par value; 5,000,000 shares issued, respectively		5,000			5,000
Common stock; par value $.001; 12,000,000,000 and 500,000,000 shares authorized, 4,798,340,367 and 999,515,530 shares issued, respectively		4,798,340			999,516
Additional paid-in capital		7,746,787			10,382,366
Common stock payable		66,820			66,820
Accumulated deficit		(14,563,302	)		(13,661,579	)
Total Right On Brands stockholders’ deficit		(1,946,355	)		(2,207,877	)
Noncontrolling interest		24,437			24,437
Total stockholders’ deficit		(1,921,918	)		(2,183,440	)

Total liabilities and stockholders’ deficit	$	39,585		$	237,359

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

F-1

~~Tables~~Table of Contents

RIGHT ON BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~(unaudited)~~

Three Months
Ended

Three Months
Ended

Nine Months
Ended

Nine Months
Ended

December 31,

December 31,

December 31,

December 31,

2019

2018

2019

2018

Revenue

$ 106,434

$ 57,476

$ 315,091

$ 153,087

Cost of goods sold

83,357

41,293

221,277

140,480

Gross profit

23,077

16,183

93,814

12,607

Operating expenses

Depreciation and amortization

1,836

679

5,149

2,822

General and administrative

101,518

46,627

336,657

141,838

Advertising and promotion

5,818

33,351

54,749

58,737

Legal and professional

37,306

25,061

169,233

51,639

Executive compensation

39,000

-

62,000

18,000

Consulting

36,555

374,977

68,410

1,054,813

Research and development

-

-

-

337

Total operating expenses

222,033

480,695

696,198

1,328,186

Other income (expense)

Interest expense

(116,783 )

(784,892 )

(606,687 )

(981,383 )
Loss on interest settlement

-

-

(8,693 )

-

Change in fair value of derivative

145,868

(534,387 )

49,230

(509,686 )
Financing costs

(12,623 )

-

(335,102 )

-

Default penalty

-

-

(202,234 )

-

Other income

112

-

112

-

Total other income (expense)

16,574

(1,319,279 )

(1,103,374 )

(1,491,069 )

Net loss including noncontrolling interest

(182,382 )

(1,783,791 )

(1,705,758 )

(2,806,648 )

Net income attributable to noncontrolling interest

-

-

-

253

Net loss attributable to Right On Brands, Inc.

$ (182,382 )

$ (1,783,791 )

$ (1,705,758 )

$ (2,806,395 )

Loss per share

Basic loss per share

$ (0.00 )

$ (0.03 )

$ (0.01 )

$ (0.04 )

Basic weighted average shares outstanding

387,273,071

66,366,478

230,093,250

64,930,832

UNAUDITED

	For the three months ended						For the nine months ended
	December 31,						December 31,
	2020			2019			2020			2019

Revenues	$	2,767		$	106,434		$	23,348		$	315,091
Cost of goods sold		1,260			83,357			11,951			221,277
Gross profit		1,507			23,077			11,397			93,814

Operating expenses
General and administrative		40,277			98,827			185,646			336,657
Advertising and promotion		-			5,818			972			54,749
Legal and professional		-			37,306			10,818			169,233
Executive compensation		40,000			39,000			40,000			62,000
Consulting		-			36,555			-			68,410
Depreciation and amortization		1,500			1,836			4,807			5,149
Impairment expense		-			-			91,200			-
Total operating expenses		81,777			219,342			333,443			696,198

Loss from operations		(80,270	)		(196,265	)		(322,046	)		(602,384	)

Other income and (expense)
Interest expense		(21,082	)		(116,783	)		(61,883	)		(606,687	)
Loss on interest settlement		-			-			-			(8,693	)
Amortization of debt discount		(55,187	)		-			(295,934	)		-
Change in fair value of derivative liability		101,055			145,868			(72,185	)		49,230
Financing costs		-			(15,314	)		(96,958	)		(335,102	)
Default penalty		(36,571	)		-			(52,717	)		(202,234	)
Other income		-			112			-			112
Total other income (expense)		(11,785	)		13,883			(579,677	)		(1,103,374	)

Net loss including noncontrolling interest	$	(92,055	)	$	(182,382	)	$	(901,723	)	$	(1,705,758	)
Net loss attributable to noncontrolling interest		-			-			-			-
Net loss attributable to Right on Brands, Inc.	$	(92,055	)	$	(182,382	)	$	(901,723	)	$	(1,705,758	)

Loss per share	$	-		$	-		$	-		$	(0.01	)

Weighted average shares outstanding - basic		3,940,218,861			387,273,071			2,803,052,219			230,093,250

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

F-2

~~Tables~~Table of Contents

RIGHT ON BRANDS, INC.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS’ ~~EQUITY (DEFICIT)~~

~~(unaudited)~~

Total

Preferred Shares

Common Shares

Additional
Paid In

Common
Stock

Accumulated

Noncontrolling

Stockholders’
Equity

Shares

Amount

Shares

Amount

Capital

Issuable

Deficit

Interest

(Deficit)

Balance, March 31, 2018

5,000,000

$ 5,000

63,543,869

$ 63,544

$ 6,513,979

$ 474,000

$ (4,100,945 )

$ 24,437

$ 2,980,015

Issuance of common stock for cash

-

-

3,000,000

3,000

3,000

38,950

-

-

44,950

Issuance of common stock for cash and warrants

-

-

40,000

40

9,960

-

-

-

10,000

Issuance of common stock for consulting services

-

-

-

-

-

36,050

-

-

36,050

Net loss

-

-

-

-

-

-

(2,806,395 )

(252 )

(2,806,647 )
Balance, December 31, 2018

5,000,000

$ 5,000

66,583,869

$ 66,584

$ 6,526,939

$ 549,000

$ (6,907,340 )

$ 24,185

$ 264,368

Balance, March 31, 2019

5,000,000

$ 5,000

73,652,594

$ 73,653

$ 8,295,767

$ 56,050

$ (10,186,102 )

$ 24,437

$ (1,731,195 )
Issuance of common stock for cash

-

-

24,416,666

24,417

80,583

20,000

-

-

125,000

Conversion of debt and interest to common stock

-

-

354,971,286

354,971

1,555,014

(20,000 )

-

-

1,889,985

Warrants issued as financing costs

-

-

-

-

33,113

-

-

-

33,113

Net loss

-

-

-

-

-

-

(1,705,758 )

-

(1,705,758 )

Balance, December 31, 2019

5,000,000

$ 5,000

453,040,546

$ 453,041

$ 9,964,477

$ 56,050

$ (11,891,860 )

$ 24,437

$ (1,388,855 )

DEFICIT

FOR THE NINE MONTHS ENDED DECEMBER 31, 2020 AND 2019

UNAUDITED

	Preferred Stock				Common Stock					Additional Paid in			Common Stock			Accumulated			Noncontrolling
	Shares		Amount		Shares			Amount		Capital			Payable			Deficit			Interest		Total

Balances, March 31, 2019		5,000,000	$	5,000		73,652,594		$	73,653	$	8,295,767		$	56,050		$	(10,186,102	)	$	24,437	$	(1,731,195	)

Issuance of common stock for cash		-		-		1,250,000			1,250		23,750			45,000			-			-		70,000

Conversion of debt and interest		-		-		67,054,397			67,054		504,450			-			-			-		571,504

Net loss		-		-		-			-		-			-			(771,977	)		-		(771,977	)
							��
Balances, June 30, 2019		5,000,000		5,000		141,956,991			141,957		8,823,967			101,050			(10,958,079	)		24,437		(1,861,668	)

Issuance of common stock for cash		-		-		-			-		-			25,000			-			-		25,000

Conversion of debt and interest		-		-		178,146,772			178,147		1,011,233			-			-			-		1,189,380

Warrants issued as financing costs		-		-		-			-		24,100			-			-			-		24,100

Net loss		-		-		-			-		-			-			(751,399	)		-		(751,399	)

Balances, September 30, 2019		5,000,000		5,000		320,103,763			320,104		9,859,300			126,050			(11,709,478	)		24,437		(1,374,587	)

Issuance of common stock for cash		-		-		23,166,666			23,167		56,833			(50,000	)		-			-		30,000

Conversion of debt and interest		-		-		109,770,117			109,770		39,331			(20,000	)		-			-		129,101

Warrants issued as financing costs		-		-		-			-		9,013			-			-			-		9,013

Net loss		-		-		-			-		-			-			(182,382	)		-		(182,382	)

Balances, December 31, 2019		5,000,000	$	5,000		453,040,546		$	453,041	$	9,964,477		$	56,050		$	(11,891,860	)	$	24,437	$	(1,388,855	)

Balances, March 31, 2020		5,000,000	$	5,000		999,515,530		$	999,516	$	10,382,366		$	66,820		$	(13,661,579	)		24,437	$	(2,183,440	)

Conversion of debt and interest		-		-		1,505,618,794			1,505,619		(995,555	)		-			-			-		510,064

Net loss		-		-		-			-		-			-			(206,624	)		-		(206,624	)

Balances, June 30, 2020		5,000,000		5,000		2,505,134,324			2,505,135		9,386,811			66,820			(13,868,203	)		24,437		(1,880,000	)

Conversion of debt and interest		-		-		651,813,187			651,813		(469,312	)		-			-			-		182,501

Net loss		-		-		-			-		-			-			(603,044	)		-		(603,044	)

Balances, September 30, 2020		5,000,000		5,000		3,156,947,511			3,156,948		8,917,499			66,820			(14,471,247	)		24,437		(2,300,543	)

Conversion of debt and interest		-		-		1,261,392,856			1,261,392		(866,712	)		-			-			-		394,680

Issuance of common stock for services		-		-		380,000,000			380,000		(304,000	)		-			-			-		76,000

Net loss		-		-		-			-		-			-			(92,055	)		-		(92,055	)

Balances, December 31, 2020		5,000,000	$	5,000		4,798,340,367		$	4,798,340	$	7,746,787		$	66,820		$	(14,563,302	)	$	24,437	$	(1,921,918	)

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

F-3

~~Tables~~Table of Contents

RIGHT ON BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(unaudited)~~

Nine Months
Ended

Nine Months
Ended

December 31,

December 31,

2019

2018

Cash flows provided by (used in) operating activities

Net loss

$ (1,705,758 )

$ (2,806,395 )
Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

5,149

2,822

Inventory impairment

21,137

35,387

Amortization of prepaid stock compensation

-

962,585

Change in fair value of derivative

(49,230 )

509,686

Amortization of debt discount

533,592

192,704

Financing costs for debt issuances

335,102

782,889

Loss on interest settlement

8,693

-

Default penalties

202,234

-

Common stock issuable

(20,000 )

-

(Increase) decrease in assets

Accounts receivable

(2,695 )

(92,835 )
Prepaid expense

(15,575 )

6,649

Inventory

(65,343 )

(91,350 )
Increase (decrease) in liabilities

Accounts payable

133,083

34,426

Accrued interest payable

73,094

16,037

Net cash used in operating activities

(546,517 )

(447,395 )

Cash flows from investing activities

Deposits

-

2,000

Net cash from investing activities

-

2,000

Cash flows from financing activities

Proceeds from convertible debt

321,250

514,500

Proceeds from notes payable

25,000

-

Proceeds from issuances of common stock

125,000

91,000

Net cash provided by financing activities

471,250

605,500

Decrease in cash

(75,267 )

160,105

Cash-beginning of period

90,883

47,506

Cash-end of period

$ 15,616

$ 207,611

Non-cash investing and financing activities:

Right of use asset and liability, office lease (Note 8)

$ 136,800

$ -

Recognition of right of use asset and lease liability

$ 34,200

$ -

Convertible debt converted into common stock

$ 810,573

$ -

Penalty accrued as note payable

$ 121,091

$ -

Debt discount at note payable origination

$ 25,000

$ -

Debt discount at convertible note origination

$ 327,945

$ -

Derivative at convertible note origination

$ 608,211

$ -

Accrued interest converted to common stock

$ 54,509

$ -

UNAUDITED

	For the nine months ended
	December 31,
	2020			2019
OPERATING ACTIVITIES
Net loss	$	(901,723	)	$	(1,705,758	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,807			5,149
Inventory impairment		-			21,137
Right of use asset impairment		91,200			-
Amortization of debt discount		295,934			533,592
Fees for debt conversion		-
Financing costs		96,958			335,102
Change in fair value of derivative liability		72,185			(49,230	)
Loss on settlement of liabilities		-			8,693
Stock based compensation		76,000			-
Default penalty		50,271			202,234
Common stock issuable		-			(20,000	)
Changes in operating assets and liabilities:
Accounts receivable		-			(2,695	)
Prepaid expenses		34,862			(15,575	)
Inventory		-			(65,343	)
Accounts payable		(12,362	)		133,083
Accrued interest payable		61,736			73,094
Accrued expenses		(3,394	)		-
NET CASH USED IN OPERATING ACTIVITIES		(133,526	)		(546,517	)

INVESTING ACTIVITIES
NET CASH PROVIDED BY INVESTING ACTIVITIES		-			-

FINANCING ACTIVITIES
Proceeds from notes payable		68,000			25,000
Proceeds from convertible debt		-			321,250
Repayment of convertible debt		(1,379	)		-
Proceeds from issuance of common stock		-			125,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		66,621			471,250

NET DECREASE IN CASH	$	(66,905	)	$	(75,267	)
CASH, BEGINNING OF PERIOD		67,153			90,883
CASH, END OF PERIOD	$	248		$	15,616

CASH PAID FOR INCOME TAXES	$	-		$	-
CASH PAID FOR INTEREST	$	3,179		$	-

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Right of use asset and liability, office lease	$	-		$	136,800
Recognition of right of use asset and lease liability	$	34,200		$	34,200
Common stock issued for conversion of debt and interest	$	3,418,825		$	865,082
Penalty accrued as note payable	$	-		$	121,091
Debt discount at note payable origination	$	-		$	25,000
Debt discount at convertible note origination	$	-		$	327,945
Derivative at convertible note origination	$	-		$	608,211

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

F-4

~~Tables~~Table of Contents

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~(unaudited)~~

~~NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

The interim unaudited condensed financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) on the same basis as the annual financial statements; and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these condensed financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended March 31, 2019 filed with the SEC on form 10-K/A on July 29, 2019.

Certain amounts in the prior period financial statements regarding inventory impairment have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net loss.

(UNAUDITED)

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Formation and Business Activity

Right on Brands, Inc. (“we” or ~~“our” or~~ “the Company” or “Right Onon Brands”) was incorporated under the laws of the State of Nevada on April 1, 2011, as HealthTalk Live, Inc. On August 10, 2017, the Company amended is articles of incorporation and changed its name to Right On Brands, Inc. On August 31, 2017 the Company common shares commenced trading under the new stock symbol ~~OTC Pink:~~ RTON. ~~Right On Brands~~The Company’s primary business is athe sale of health and wellness ~~focused company developing and marketing our brands.~~

~~Cash and Cash Equivalents~~

products.

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

~~Property and Equipment~~

~~Property and equipment are stated at cost. Depreciation is provided by~~has the ~~straight-line method over~~following wholly owned subsidiaries:

	·	Humbly Hemp, Inc.
	·	Endo Brands, Inc.
	·	Humble Water Company

The Company has the ~~useful lives of~~following majority owned subsidiaries:

Endo & Centre Venture LLC (51% owner)

As disclosed in our 10-K for the ~~related assets, from one to five years.~~

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

~~Inventory~~

~~Inventories are stated at the lower of cost (average cost) or market (net realizable value). As of December 31, 2019, and~~year ended March 31, ~~2019, inventory consisted~~2020, the Company, through its subsidiaries Humble Water Company and Endo & Centre Venture LLC, had joint ventures with no activity. The Company has discontinued these joint ventures and Humble Water Company and Endo & Centre Venture LLC contain no assets, liabilities, or operations.

The Company continues to sell health and wellness products focused in the hemp marketplace through online and in-person retail sales.

NOTE 2 – GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ~~following:~~

As of
December 31,
2019

As of
March 31,
2019

Raw materials

$ 6,843

$ 43,796

Work-in-process

30,611

30,611

Finished Goods

220,709

139,550

Ending Balance

$ 258,163

$ 213,957

~~During~~normal course of business. For the ~~nine months~~period ended December 31, ~~2019~~2020, the Company had an accumulated deficit of approximately $14,563,000, had a net loss of approximately $902,000, and ~~2018, inventory impairments~~ net cash used in operating activities of approximately $134,000, with approximately $23,000 revenue earned, and a lack of profitable operational history. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

While the Company is attempting to generate greater revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of additional public and/or ~~$21,137~~private offerings of its stock. Management believes that the actions presently being taken to further implement its business plan and ~~$35,387 were recognized due~~generate revenues provide the opportunity for the Company to ~~expired products. These are included in Cost of Goods Sold~~continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

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

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated ~~statement~~financial statements of ~~operations.~~

the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

F-5

~~Tables~~Table of Contents

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of Right On Brands, Inc. and its wholly owned subsidiaries and majority owned business (Humbly Hemp, Inc., Endo Brands, Inc., Humble Water Company, Springhill Water Co, and Endo & Centre Venture LLC). Intercompany accounts and transactions have been eliminated upon consolidation.

Use of Estimates

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

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company has defined cash and cash equivalents as all cash in banks and highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. The Company had no cash equivalents at December 31, 2020 or March 31, 2020.

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $250,000 per depositor, per financial institution, for the aggregate total of depositors’ interest and non-interest-bearing accounts. At December 31, 2020, none of the Company’s cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.

Accounts Receivable

The Company performs periodic credit evaluations of its customers’ financial condition and extends credit to virtually all of its customers on an uncollateralized basis. Credit losses to date have been insignificant and within management’s expectations. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Normal accounts receivable are due 30 to 45 days after the issuance of the invoice. Receivables past due more than 60 days are considered delinquent. Delinquent receivables are evaluated for collectability based on individual credit evaluation and specific circumstances of the customer. As of December 31, 2020, and March 31, 2020, the Company’s allowance for doubtful accounts was $0, respectively. The Company did not write off any accounts receivable against the allowance for doubtful accounts during the periods ended December 31, 2020, and 2019, respectively.

Inventory

Inventories are stated at the lower of cost (average cost) or market (net realizable value). Cost includes materials related to the purchase and production of inventories. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue.

Property and Equipment

Property and equipment are stated at cost, using a capitalization threshold of $2,500. Depreciation is provided by the straight-line method over the useful lives of the related assets, ranging from one to five years.

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

F-6

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RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Recoverability of Long-Lived Assets

The Company’s long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360, “Property, Plant, and Equipment,” and FASB ASC Topic 205 “Presentation of Financial Statements”. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through December 31, 2020 and 2019, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probably that a liability has been incurred and the amount can be reasonable estimated.

Income Taxes

In accordance with FASB ASC Topic 740, “Income Taxes,” the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense.

Revenue Recognition

We recognize revenue when our performance obligation is satisfied. Our primary performance obligation (the distribution and sales of hemp products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred. The transfer of control of products to our customers is typically based on written sales terms that do not allow for a right of return after 30 days from the date of purchase.

Our products are sold for cash or on credit terms. Our credit terms, which are established in accordance with local and industry practices, typically require payment within 30 days of delivery, and may allow discounts for early payment. We estimate and reserve for our bad debt exposure based on our experience with past due accounts and collectability, the aging of accounts receivable and our analysis of customer data.

~~Income Taxes~~

The Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In accordance with the Financial Accounting Standards Board (FASB) ASC Topic 740, “Income Taxes,” the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not.

Share Based Compensation

The Company accounts for ~~income tax under~~equity instruments issued in exchange for the ~~provisions~~receipt of goods or services from other than employees in accordance with FASB ASC ~~Topic 740, “Income Taxes”, which requires recognition of deferred tax assets and liabilities for~~505-50. Costs are measured at the ~~expected future tax consequences~~estimated fair market value of the ~~events that have been included in~~consideration received or the ~~financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases~~estimated fair value of ~~assets and liabilities. Valuation allowances are established against net deferred tax assets when it~~the equity instruments issued, whichever is more ~~likely~~reliably measurable. The value of equity instruments issued for consideration other than ~~not that some portion~~employee services is determined on the earliest of a performance commitment or ~~all~~completion of performance by the ~~deferred tax asset will not be realized.~~

provider of goods or services as defined by FASB ASC 505-50.

~~F-6~~F-7

~~Tables~~Table of Contents

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Fair Value ~~of Financial Instruments~~

~~In accordance with the reporting requirements of~~ Measurement

ASC Topic ~~825,~~ ~~Financial Instruments~~820, “Fair Value Measurement”, requires that certain financial instruments be recognized at their fair values at our balance sheet dates. However, other financial instruments, such as debt obligations, are not required to be recognized at their fair values, but Generally Accepted Accounting Principles in the ~~Company calculates~~United States (“GAAP”) provides an option to elect fair value accounting for these instruments. GAAP requires the disclosure of the fair values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our balance sheets. For financial instruments recognized at fair value, GAAP requires the disclosure of their fair values by type of instrument, along with other information, including changes in the fair values of certain financial instruments recognized in income or other comprehensive income. For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of ~~its assets and liabilities which qualify as financial instruments under this standard and includes this additional~~the asset or liability along with other information, including the gain or loss recognized in income in the ~~notes~~period the remeasurement occurred.

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3 - Prices or valuation techniques that require inputs that are both significant to ~~the financial statements when~~ the fair value ~~is different than the carrying value of those financial instruments. The Company does not have assets~~measurement and unobservable (supported by little or ~~liabilities measured at fair value on a recurring basis except its derivative liability.~~

Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held during the three months ended December 31, 2019 and 2018, except as disclosed.

~~Fair Value Measurement~~

no market activity).

The Company did not have any Level 1 or Level 2 assets and liabilities at December31, ~~2019 and 2018.~~2020 or March 31, 2020. The ~~derivative~~Derivative liabilities are Level 3 fair value measurements.

The following is a summary of activity of Level 3 liabilities during the nine months ended December31, ~~2019:~~

Balance at March 31, 2019

$ 1,034,939
Additions to derivative liability for new debt

608,211

Additions to derivative liability for penalty

81,143

Reclass to equity upon conversion/cancellation

(1,190,705 )
Change in fair value

(49,230 )
Balance at December 31, 2019

$ 484,358

~~From time to time,~~2020:

Balance at March 31, 2020	$	1,574,097
Additions		96,958
Conversions of debt to equity		(811,354	)
Change in fair value		72,185
Balance at December 31, 2020	$	931,886

During prior years, the Company ~~enters~~entered into several convertible ~~promissory~~ note agreements (Note 5)6). These notes are convertible at a fraction of the stock closing price near the conversion date. Additionally, the conversion price, as well as other terms including interest rates, adjust if any future financings have more favorable terms. The conversion features of these notes meet the definition of a derivative which therefore requires bifurcation and are accounted for as a derivative liability.

The Company estimated the fair value of the conversion feature derivatives embedded in the convertible ~~promissory notes~~debentures based on weighted probabilities of assumptions used in the Black Scholes pricing model. At ~~December31, 2019 and~~ March 31, ~~2019,~~2020, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of ~~$0.001 and $0.045, respectively;~~$0.0002; a risk-free interest rate ranging from ~~1.66%~~0.15% to ~~2.62%~~0.17%, and expected volatility of the Company’s common stock ~~ranging from 158% to 635%~~of 364%, various estimated exercise prices, and terms under one year.

Beginning on April 1, 2020, the Company began estimating the fair value of the conversion feature derivatives embedded in the convertible promissory notes based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model. The change in method used to value the derivative resulted in a trivial difference in valuation.

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Table of Contents

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

At December 31, 2020, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible promissory notes based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.0003; a risk-free interest rate of 0.09%, and expected volatility of the Company’s common stock of 461%, various estimated exercise prices, and terms under one year.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the consolidated balance sheets approximates fair value.

Convertible Instruments

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

~~F-7~~

~~Tables of Contents~~

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

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

~~Earnings (Loss)~~ Proceeds from these convertible notes are reported under the financing section of the statements of cash flows. Changes to the fair value of the derivative liability are reported as adjustments to reconcile net loss to net cash used in operating activities in the accompanying statement of cash flows.

Basic and Diluted Loss Per Share

Basic ~~earnings (loss)~~net loss/income per common share ~~are~~is computed ~~by dividing income available to common shareholders by~~using the ~~weighted-average~~weighted average number of common shares ~~outstanding during the period.~~outstanding. Diluted ~~earnings (loss) per share is computed similar to basic~~ earnings per share ~~except that~~(EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the ~~denominator is increased to include~~exercise of stock options, warrants and convertible notes. Common stock equivalents are not included in the ~~number~~computation of ~~additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.~~

~~The Company had no potential additional dilutive securities outstanding at December31, 2019, except as follows. These were excluded from the~~diluted earnings per share ~~computation since their effect~~when the Company reports a loss because to do so would be ~~anti-dilutive.~~

	~~Potential additional~~
	~~common stock~~
	~~shares~~
~~Potentially dilutive security:~~
~~Preferred stock~~		~~25,000,000~~
~~Warrants~~		~~19,230,000~~
~~Options~~		~~8,000,000~~
~~Convertible debt~~		~~613,058,462~~
~~Potentially dilutive securities~~		~~665,288,462~~

anti-dilutive for periods presented.

Recently Issued Accounting Standards

During the ~~nine months~~period ended December31, 2019 stock warrants for 11,250,000 shares were issued in connection with financing received. An additional warrant to purchase 500,000 shares was issued with a subscription agreement September 16, 2019. In connection with the appointment of Advisory Board members, warrants for 3,000,000 shares were issued during October 2019.

~~A summary of the status of the Company’s option~~2020, and ~~warrant grants as of December31, 2019 and the changes during the fiscal quarter then ended is presented below:~~

Weighted-Average

Shares

Exercise Price

Outstanding, March 31, 2019

12,480,000

$ 0.17

Granted

14,750,000

.04

Exercised

-

-

Expired

-

-

Outstanding, December 31, 2019

27,230,000

$ 0.11

Options and warrants exercisable at December 31, 2019

27,230,000

$ 0.11

~~F-8~~

~~Tables of Contents~~

~~Recent Accounting Pronouncements~~

~~During the quarter ended December31, 2019,~~subsequently, there were several new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~. This is a comprehensive new leases standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the term of the lease. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard became effective beginning April 1, 2019 at the inception of the Company’s office and warehouse lease (Note 8). The Company believes adoption of the standard did not have a material impact on our results of operations and financial condition.

~~NOTE 2. GOING CONCERN~~

The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern, which is dependent upon the Company’s ability to obtain sufficient financing or establish itself as a profitable business. As of December~~31, 2019 and 2018, the Company had an accumulated deficit of $11,891,860 and $6,907,339, respectively. For the nine months ended December31, 2019 and 2018, the Company incurred net losses of $1,705,758 and $2,806,395, respectively.~~

Subsequent Events

The Company has ~~had minimal revenue earned since inception and a lack of operational history. These matters, among others, raise substantial doubt about~~evaluated all transactions through the ~~Company’s ability to continue as a going concern. While~~date the Company is attempting to generate greater revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of additional public and/or private offerings of its stock and/or debt and/or convertible debt. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

~~The~~consolidated financial statements ~~do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.~~

were issued for subsequent event disclosure consideration.

F-9

~~Tables~~Table of Contents

~~NOTE 3. PROPERTY AND EQUIPMENT~~

As of
December 31,
2019

As of
March 31,
2019

Website development

$ 88,965

$ 88,965

Automobile

31,596

31,596

Studio and office equipment

5,957

5,957

Tenant improvements

11,135

11,135

137,653

137,653

Less: accumulated depreciation

(114,941 )

(110,202 )

Ending Balance

$ 22,712

$ 27,451

~~Depreciation expense for the nine months ended~~

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 4 – INVENTORY

At December31, ~~2019 and 2018 was $4,739 and $2,822, respectively.~~

~~The Company also has capitalized intangible assets consisting of trademarks valued at a cost of $1,024 as of December31, 2019~~2020 and March 31, ~~2019. Amortization~~2020, inventory consisted of the following:

	December 31, 2020		March 31, 2020

Raw materials	$	3,921	$	3,921
Work-in-process		-		-
Finished goods		11,615		11,615
	$	15,536	$	15,536

NOTE 5 – PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

The Company’s property and equipment consisted of the following at the respective balance sheet dates:

	December 31, 2020			March 31, 2020

Website development	$	88,965		$	88,965
Automobile		31,596			31,596
Studio and office equipment		5,957			5,957
Tenant improvements		10,879			10,879
Intangible assets		1,024			1,024
		138,421			138,421
Accumulated depreciation and amortization		(121,789	)		(116,982	)
	$	16,632		$	21,439

Depreciation expense of property and equipment for the nine months ended December 31, 2020 and 2019 was $4,500 and ~~2018~~$4,739, respectively.

Intangible assets consist of a trademark acquired March 31, 2017 and is being amortized over five years. Amortization expense for the periods ended December 31, 2020 and 2019 was $307 and $410, respectively.

NOTE 6 – DEBT

Notes Payable

During October 2016, the Company extinguished $129,549 of debt in exchange for 5,000,000 shares of newly issued common stock. The original note had a maturity date of November 11, 2016, and ~~$256,~~no interest rate. A total of 4,200,000 shares were issued to three of the four noteholders. As of December 31, 2016, the remaining balance of 800,000 shares of common stock was pending issuance to one noteholder, so common stock payable of $474,000 was recorded in the accompanying consolidated statement of stockholders’ equity. As of July 2019, the shares were still pending issuance; accordingly, the Company reclassified the amount due to Noteholder 8 to notes payable at the fair value of the common stock. During February 2020, the Company issued 800,000 shares of the Company’s common stock pursuant to the October 2016 debt extinguishment. As a result, the note payable of $474,000 is no longer outstanding. On February 12, 2019, Noteholder 1 submitted a notice of conversion for $125,000 principal and $11,250 accrued interest after the note was in default. The note terms provided a $3,000 daily fee for failure to deliver common stock prior to a deadline of two days after the conversion notice. The shares due under the conversion were not issued until May 8, 2019. Accordingly, a note payable of $135,000 was recorded as a penalty at March 31, 2019. An additional $114,000 was accrued as a penalty during the year ended March 31, 2020. The $249,000 balance remains outstanding and in default at December 31, 2020.

On November 22, 2019, the Company issued a $50,000 promissory note to a third-party lender for a $25,000 cash borrowing. Accordingly, a $25,000 discount was recorded at issuance, all of which was amortized by March 31, 2020. The non-interest-bearing note is secured by inventory, matured February 20, 2020, and remains in default at December 31, 2020.

F-10

Table of Contents

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On May 9, 2020, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Company received a two-year loan for $68,000 from Noteholder 12. Interest is deferred for six months, then is at 1% until maturity in May 2022. The Company has applied for the loan to be forgiven by the Small Business Administration and expects to be granted forgiveness.

During the period ended December 31, 2020, the Company incurred interest expenses related to notes payable totaling $22,732.

Convertible Debt

At December 31, 2020, the Company’s convertible debt and derivative liability related to the notes which can be converted at variable discounted rates are summarized as follows:

Noteholder	Origination	Maturity	Interest rate			Variable conversion discount			Principal balance		Debt discount		Net amount of liabilities presented		Corresponding derivative balance
Noteholder 2	11/1/2018	8/1/2019		12.00	%		35.00	%	$	21,487	$	-	$	21,487	$	47,238
Noteholder 3	7/17/2019	12/4/2019		15.00	%		35.00	%		14,475		-		14,475		63,640
Noteholder 5	10/14/2019	10/14/2020		12.00	%		35.00	%		102,375		-		102,375		231,973
Noteholder 6	2/13/2020	12/13/2020		12.00	%		40.00	%		100,000		-		100,000		246,516
Noteholder 8	11/21/2017	5/21/2018		6.00	%	See below				20,000		-		20,000		81,651
Noteholder 10	2/27/2020	2/26/2021		10.00	%		40.00	%		110,000		17,312		92,688		260,868
									$	368,337	$	17,312	$	351,025	$	931,886

Noteholder	Origination	Maturity	Interest rate			Fixed conversion rate		Principal balance		Debt discount		Net amount of liabilities presented
Noteholder 9	7/7/2016	9/30/2019		6.00	%	$	0.10/Share	$	25,000	$	-	$	25,000
								$	25,000	$	-	$	25,000

At March 31, 2020, the Company’s convertible debt and derivative liability related to the notes which can be converted at variable discounted rates are summarized as follows:

Noteholder	Origination	Maturity	Interest rate			Variable conversion discount			Principal balance		Debt discount		Net amount of liabilities presented		Corresponding derivative balance
Noteholder 2	11/1/2018	8/1/2019		12.00	%		35.00	%	$	21,487	$	-	$	21,487	$	59,069
Noteholder 3	2/20/2019	12/4/2019		15.00	%		35.00	%		6,950		-		6,950		18,990
Noteholder 3	7/17/2019	12/4/2019		15.00	%		35.00	%		22,500		-		22,500		61,970
Noteholder 5	8/5/2019	8/5/2020		12.00	%		35.00	%		102,750		48,208		54,542		280,745
Noteholder 5	9/13/2019	9/13/2020		12.00	%		35.00	%		110,250		49,839		60,411		301,237
Noteholder 5	10/14/2019	10/14/2020		12.00	%		35.00	%		68,250		29,827		38,423		192,915
Noteholder 6	2/13/2020	12/13/2020		12.00	%		40.00	%		100,000		84,539		15,461		308,481
Noteholder 10	2/27/2020	2/26/2021		10.00	%		40.00	%		110,000		100,833		9,167		350,690
									$	542,187	$	313,246	$	228,941	$	1,574,097

Noteholder	Origination	Maturity	Interest rate			Fixed conversion rate		Principal balance		Debt discount		Net amount of liabilities presented
Noteholder 8	11/21/2017	5/21/2018		6.00	%	$	0.20/Share	$	20,000	$	-	$	20,000
Noteholder 8	4/11/2016	9/30/2019		6.00	%	$	0.01/Share		2,000		-		2,000
Noteholder 9	7/7/2016	9/30/2019		6.00	%	$	0.10/Share		25,000		-		25,000
								$	47,000	$	-	$	47,000

During the period ended December 31, 2020, the Company incurred interest expenses related to convertible debt totaling $39,151.

F-11

Table of Contents

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On July 10, 2020, the Company and Noteholder 8 agreed to amend the conversion terms of the $20,000 convertible note payable so that the conversion price is equal to the lessor of $0.0002 or the lowest price the Company has issued stock to any other common stockholder or through the issuance of stock for the conversion of debt during the 90 days prior to the date of submission of a conversion notice by Noteholder 8. The change in conversion terms resulted in a derivative liability and financing costs incurred of $96,958.

The convertible debt held by noteholders 2, 3, 5, 6, 8 and 9 are in default at December 31, 2020. Subsequent to December 31, 2020, and prior to the issuance of these financial statements, the Company defaulted on convertible debt held by noteholder 10 resulting in a default penalty on the outstanding balance at the default date of 110%. The default penalty will be incurred and accrued upon maturity of the respective convertible debt.

Future Maturities

The Company’s future maturities of notes payable and convertible debt are as follows:

Years ending
March 31,	Amount
2021	$	710,937
2022		45,600
2023		3,800
	$	760,337

Amortization of Debt Discount

During the nine months ended December 31, 2020 and 2019, the Company recorded amortization of debt discounts totaling $295,934 and $533,592, respectively.

~~NOTE 4. NONCONTROLLING INTEREST~~

NOTE 7 – NONCONTROLLING INTEREST

Investments in partnerships, joint ventures and less-than-majority-owned subsidiaries in which we have significant influence are accounted for under the equity method.

As of March 31, 2018, the Company’s consolidated financial statements includes a venture for the development of a commercial bottled water operation near Browning, Montana. The new venture iswill be operated through Spring Hill Water Company, LLC, a Nevada limited liability company (“Spring Hill”). Spring Hill is 49% owned by our newly-formed subsidiary corporation, Humble Water Company, and 51% owned by Doore, LLC. Doore, LLC, which serves as the manager of Spring Hill, has contributed the land and water source to be used in the new operation through a Land & Water Lease Agreement under which Spring Hill will have the use of 2 acres of land and no less than 5 acre-feet of water for an initial term of 25 years and at a lease rate of $1 per year. Through Humble Water Company, our initial capital contribution to Spring Hill was approximately $100,000 to be used in commencing operations. In addition, we have committed to provide additional capital to be used for a bottling facility and equipment, in an amount up to $530,000, ~~by January 1, 2020.~~within the next 2 years. Should we fail to provide this additional capital within the next 2 years, our ownership percentage in Spring Hill will be reduced from 49% to 20%. Although we hold a minority ownership percentage in Spring Hill, we will have voting control over the company with 75% of the voting membership units. Further, 100% of the losses, expenditures, and deductions from Spring Hill will be allocated to our subsidiary, Humble Water Company. The activity of Spring Hill is accounted for under the voting interest method, and we consolidate 100% of the business activity and record 25% of noncontrolling interest on the balance sheet and 0% of the net losses based on the terms of the agreement.

As of December 31, ~~2019,~~2020 and March 31, 2020, the noncontrolling interest was $24,437 in the accompanying consolidated financial statements.

As of December 31, ~~2019,~~2020 and March 31, 2020, our total investment into Spring Hill to date was $101,470. ~~Since entering into~~During the ~~venture,~~periods ended December 31, 2020 and 2019, there have been no significant operations or expenditures in the joint ~~venture except for expensing the remainder of the prepaid lease due to the low likelihood of utilization.~~

venture.

~~F-10~~F-12

~~Tables~~Table of Contents

~~NOTE 5. CONVERTIBLE DEBT~~

~~During October 2016,~~

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 8 – EARNINGS PER SHARE

FASB ASC Topic 260, “Earnings Per Share,” requires a reconciliation of the ~~Company extinguished $129,549~~numerator and denominator of ~~debt in exchange for 5,000,000~~the basic and diluted earnings (loss) per share (EPS) computations.

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of ~~newly~~additional common shares that would have been outstanding if the potential common shares had been issued ~~common stock. The original note had a maturity date of November 11, 2016~~ and ~~no interest rate. A total of 4,200,000~~if the additional common shares were issued to three of the four noteholders. As of December 31, 2016, the remaining balance of 800,000 shares of common stock was pending issuance to one noteholder, so common stock payable of $474,000 was recorded in the accompanying consolidated statement of stockholders’ equity. As of early 2019 the shares were still pending issuance; accordingly, the Company reclassified the amount due to the noteholder to notes payable at the fair value of the common stock. See Note 9, ~~Subsequent Events~~.

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

The Company ~~and lender mutually agreed to extend the maturity date of the note to March 30, 2020.~~

On November 21, 2017, the Company issued a convertible promissory note with an entity for $20,000. The unsecured note bears interest at 6% per annum and was due on May 21, 2018 but was extended to March 30, 2020. This note is convertible at $0.20 per share and can be converted on or before the maturity date. See note 7.

On February 12, 2019, Noteholder 1 submitted a notice of conversion for $125,000 principal and $11,250 accrued interest after the note was in default. The note terms provided a $3,000 daily fee for failure to deliver common stock prior to a deadline of two days after the conversion notice. The shares due under the conversion were not issued until May 8, 2019. Accordingly, anhad no potential additional ~~note payable of $135,000 was recorded as a penalty at March 31, 2019. An additional $114,000 was accrued as a penalty during the quarter ended June 30, 2019 and remains outstanding.~~

On November 22, 2019, the Company issued a $50,000 promissory note to an individual for a $25,000 cash borrowing. Accordingly, a $25,000 discount was recorded at issuance, $6,164 of which was amortized by December 31, 2019. The non-interest bearing note is due February 20, 2020.

~~At December 31, 2019, the Company’s short-term convertible promissory notes carrying a 12% interest rate and related debt discount and derivative liability are summarized as follows:~~

Gross amount

Net amounts

Corresponding

Gross amount

offset by

of liabilities

Derivative

Note holder

of liability

debt discount

presented

Balance

Noteholder 2

$ 21,487

$ -

$ 21,487

$ 14,350

Noteholder 3

37,125

-

37,125

21,470

Noteholder 5

318,150

204,026

114,124

437,118

Noteholder 6

21,206

-

21,206

11,420

Other notes

47,000

-

47,000

-

$ 444,968

$ 204,026

$ 240,942

$ 484,358

During the nine months ended December 31, 2019, six convertible note holders submitted notices of conversion for a portion of the principal and interest owing to them totaling $865,082. The conversions resulted in the settlement of $1,190,705 of the derivative liability, an $8,693 loss on settlement of interest payable, and the issuance of 354,971,286 shares of common stock.

~~The convertible debt held by noteholders 3 and 6 is in default~~dilutive securities outstanding at December 31, ~~2019. At the noteholder’s discretion, if notice is given to the Company, additional penalties would be due. During January~~ 2020 ~~the penalties assessed totaled $12,500 and penalties of $5,551 and the remainder of the principal and interest due under the note was settled through the issuance of common stock. See Note 9.~~

~~These fiscal 2019 note agreements require a certain number of shares be reserved so that they are readily available for note conversion. As of December 31, 2019 and~~or March 31, 2019, we had approximately 5.3 billion shares and 398 million shares, respectively, of our common stock reserved or designated for future issuance upon conversion of outstanding convertible promissory notes. As of December 31, 2019, one note had fewer shares reserved than required under the terms of the note agreements.

During the nine months ended December 31, 2019 and 2018, respectively, interest expense was $73,094 and $11,435. During the nine months ended December 31, 2019 and 2018, respectively, amortization of debt discount was $533,592 and $192,704.

2020, except as follows:

	December 31, 2020		March 31, 2020
Preferred stock		25,000,000		25,000,000
Warrants		19,230,000		19,230,000
Options		8,000,000		8,000,000
Convertible debt		3,316,398,016		8,611,119,231
Total		3,368,628,016		8,663,349,231

~~F-11~~

~~Tables of Contents~~

NOTE 9 – STOCKHOLDERS’ EQUITY

~~NOTE 6. STOCKHOLDERS’ EQUITY~~

Series A Preferred Stock

The Series A Preferred Stock is convertible to common stock at a rate of five shares for every share held and the holder(s) have the right to cast a total of fifty-percent (50%) plus one votes on all matters submitted to a vote of holder of the Company’s common stock. Our Series A Preferred Stock ranks equally, on an as-converted basis, to our common stock with respect to rights upon winding up, dissolution, or liquidation.

On June 6, 2019 the Board of Directors agreed to amend the certificate of designation for the Series A Preferred stock to have the right to cast a total of fifty-percent (50%) plus one votes on all matters submitted to a vote of holder of the Company’s common stock, including the election of directors, and all other matters as required by law. There is no right to cumulative voting in the election of directors. The holders of Series A Preferred Stock shall vote together with all other classes and series of common stock of the Company as a single class on all actions to be taken by the common stock holders of the Company except to the extent that voting as a separate class or series is required by law. Our Series A Preferred Stock does not have any special dividend rights.

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

Common Stock

During the nine months ended December 31, 2019, the Company issued a total of 354,971,286 shares of common stock to six noteholders in connection with the settlement of principal and interest totaling $865,082.

During the nine months ending December 31, 2019, the Company issued several subscription agreements for the purchase of common stock by various investors at a price ranging from $.0025 to $.03. A total of 24,416,666 shares of common stock were issued during the nine months ended December 31, 2019 for cash proceeds received totaling $125,000.

~~NOTE 7. RELATED PARTY~~

During the nine months ended December 31, 2020, the Company received conversion notices related to $275,982 in convertible debt and accrued interest resulting in the issuance of 3,418,824,837 shares of common stock. As a result of the conversions, the derivative liability related to convertible debt was reduced by $811,354.

F-13

Table of Contents

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On July 20, 2020, the Company issued 3,000,000 shares of common stock related to $15,000 cash received when the investor purchased the shares in June 2019. As a result of the issuance, common stock payable was reduced by $15,000.

On October 1, 2020, the Company issued a total of 380,000,000 shares of common stock valued at $76,000 to five individuals for services performed on behalf of the Company. Included in the shares issued were 100,000,000 shares to Director A. David Youssefyeh, 100,000,000 shares to Director and CEO Jerry Grisaffi, and 50,000,000 shares to Director David Lewis.

Stock Options and Warrants

On November 19, 2018, the Company issued options to its Chief Executive Officer and Chief Financial Officer to purchase 6,000,000 and 2,000,000 shares of common stock, respectively, at $0.05 per share. The options were immediately vested and expire November 19, 2021.

During January 2019, the Company issued 4,400,000 warrants to consultants. The warrants are convertible one-for-one into common stock at an exercise price of $0.05. The warrants were immediately exercisable and expired January 14, 2021.

During the nine months ended December 31, 2019 stock warrants for 750,000 shares were issued in connection with financing from Noteholder 3. An additional warrant to purchase 500,000 shares was issued with a subscription agreement September 16, 2019.

During the year ended March 31, 2020, stock warrants for 11,250,000 common shares were issued in connection with financing received. An additional warrant to purchase 500,000 common shares was issued with a subscription agreement dated September 16, 2019. The warrants are convertible one-for-one into common stock at an exercise price of $.05. The warrants were immediately exercisable and expire between July and November 2021.

Additionally, in connection with the appointment of Advisory Board members, warrants for 3,000,000 common shares were issued during October 2019. The warrants are convertible one-for-one into common stock at an exercise price of $.01. The warrants were immediately exercisable and expire September 30, 2021.

NOTE 10 – RELATED PARTY TRANSACTIONS

During December 2017, the Company entered into a consulting agreement with Dr. Ashok Patel, ~~our current President,~~who served as CEO until September 2019, to serve as Director of Product Development. Consideration for services under the agreement provided for the issuance of 700,000 shares of common stock of the Company at the time of execution of the agreement, and the following two anniversaries of the agreement. At December 31, ~~2018,~~2020 and March 31, 2020, the ~~first~~ anniversary shares ~~had~~have yet to be issued. Accordingly, they are reported in the accompanying consolidated statement of stockholders’ equity (deficit) as common stock ~~issuable.~~

payable.

The trustee of La Dulce Vita Trust, ~~(LDVT)~~Noteholder 8, is the aunt of Daniel Crawford, a related party. The trust is a noteholder as detailed in Note 6 and was issued 25,910,000 shares of common stock for the ~~Company’s majority voting holder and the sister~~conversion of ~~Jerry Grisaffi, the Company’s CEO and Board of Directors Chairman. At December 31, 2019 and March 31, 2019, $474,000 is owed to LDVT reported in notes payable, and $22,000 is included~~$2,000 in convertible ~~debt on the accompanying consolidated balance sheets. See Note 9,~~ ~~Subsequent Events~~.

debt.

On April 16, 2018, the Company entered into an operating agreement with Centre Manufacturing, Inc. (“Centre”) and ~~formed~~agreed to form an LLC. The LLC is owned 51% by the Company and 49% owned by Centre, but all income and losses will be split evenly. The owner of Centre is the ~~President~~former CEO of the Company. On June 19, 2018, the Company formed a majority owned subsidiary, Endo & Centre Venture LLC. No significant activity has occurred ~~during the nine months ended December 31, 2019 and 2018, respectively.~~

to date.

During the nine months ended December 31, ~~2019~~2020 and ~~2018,~~2019, the Company purchased inventory totaling $-0- and $12,400, respectively, from Centre. At December 31, 2020 and ~~$76,946 from Centre, respectively. The~~March 31, 2020, the Company owed Centre ~~$0 and $26,791,~~$14,154, respectively, ~~at December 31, 2019 and March 31, 2019~~ which is included in accounts payable on the accompanying consolidated balance sheets.

~~On October 1, 2019~~

At December 31, 2020 and March 31, 2020, the Company ~~appointed three members~~had accounts payable totaling $74,200 and $22,760 due to ~~an advisory board~~the Company’s CEO and ~~issued each member a warrant convertible into 1,000,000 shares of common stock at $.01 per share.~~

CFO, respectively.

~~F-12~~F-14

~~Tables~~Table of Contents

~~NOTE 8. COMMITMENTS AND CONTINGENCIES~~

RIGHT ON BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 11 – COMMITMENTS AND CONTINGENCIES

On April 1, 2019 the Company entered into ~~a three-year~~an office and warehouse lease of approximately 5,700 square feet in Carrollton, Texas. At the inception of the lease, the Company adopted ASC 842 requiring the recording of assets and liabilities related to leases on the balance sheet. The Company records rent on straight-line basis over the terms of the underlying lease. ~~Rent~~As a result of the ongoing COVID-10 pandemic, the lease was abandoned during May 2020. The Company impaired the right-of-use asset related to the lease, resulting in a $91,200 impairment expense for the nine months ended December 31, ~~2019~~2020. The lease states the Company is responsible for the remaining payments through March 31, 2022, totaling approximately $83,659. Through December 31, 2020, the Company has accrued $30,341 of the remaining payments as accrued expenses and ~~2018 was $34,200 and $0, respectively.~~

~~Aggregate future~~will amortize the remaining lease liability ~~expense~~to accrued expenses over the remaining life of the lease. To date, the lessor has not demanded payment from the Company for the any unpaid amounts due under ~~ASC 842 are as follows:~~

Years Ending

March 31,

Amount

2020

$ 11,400

2021

45,600

2022

45,600

$ 102,600

the lease.

There is a dispute between the Company and ~~the holder of a convertible note~~Noteholder 1 regarding the timing of the conversion. As of December 31, ~~2019,~~2020, the full amount of the penalty totaling ~~$114,000~~$249,000 has been recorded within notes payable on the accompanying consolidated balance sheet, and neither side has filed formal legal proceedings against the other side and negotiations are ongoing to resolve the matter.

~~NOTE 9. SUBSEQUENT EVENTS~~

During January 2020, the $22,000 notes payable with LDVT (Note 7) were sold to another party and amended to a total principal amount of $22,580 with a conversion price similar to that of other convertible note holders.

During February 2020, the Company issued 800,000 common stock shares to LDVT pursuant to the October 2016 debt extinguishment (see Notes 5 and 7). As a result, the note payable of $474,000 is no longer outstanding.

On February 12, 2020, the Company entered into a Letter of Intent with Choice Wellness Brands, Inc., Wyoming corporation (“Choice”). Under the terms of the Letter of Intent, the Company will acquire 100% of the ownership of Choice in exchange for the issuance of a new class of preferred stock that will have the effect of giving the shareholders of Choice a 30% equity interest in the Company. This transaction will not result in a change in control of the Company. The Company anticipates that the acquisition of Choice will be completed by February 28, 2020.

On February 13, 2020, the Company issued a $100,000 convertible promissory note to Noteholder 6. The note bears interest at 12%, matures December 13, 2020, and is convertible into shares of the Company’s common stock at a 40% discount. Upon note issuance, 40,700,000 shares were authorized for issuance as a commitment fee.

NOTE 12 – SUBSEQUENT EVENTS

Subsequent to December 31, ~~2019~~2020, the Company issued common stock for settlement of convertible debt and accrued interest as summarized below:

Shares

Penalty

Principal

Noteholder

Issued

Settled

Converted

Noteholder 6

90,500,260

$ -

$ 21,206

Noteholder 3

232,700,000

$ 5,551

25,000

323,200,260

$ 5,551

$ 46,206

	Debt and interest converted		Shares issued
Noteholder 5		20,000		60,606,061
Noteholder 6		120,749		160,999,066
Total	$	140,749		221,605,127

On February 1, 2021, the Company issued 249,999,999 shares of common stock to investors under three subscription agreements. As part of the subscription agreements, the Company received cash proceeds totaling $75,000.

From February 2, 2021, to February 16, 2021, the Company issued 200,333,333 shares of common stock to an investor under three subscription agreements. As part of the subscription agreements, the Company received proceeds totaling $60,100, of which $35,100 was received in cash and $25,000 was paid directly to a vendor for the purchase of inventory.

On February 16, 2021, the Company issued a $140,000 convertible note payable to an investor. As part of the convertible note agreement, the Company received proceeds totaling $140,000, of which $100,000 was paid directly to Noteholder 5 to pay in full the principal and interest due under the October 14, 2019, convertible note payable (Note 6) and $40,000 was paid directly to Noteholder 3 to pay in full the principal and interest due under the July 17, 2019, convertible note payable (Note 6). The $140,000 convertible note bears interest at 6% per annum, is convertible at $0.015, and matures on August 16, 2021.

On March 21, 2021, the Company issued a total of 1,700,000 shares of common stock valued at $7,990 to three individuals for services performed on behalf of the Company.

On April 5, 2021, the Company issued 50,000,000 shares of common stock to an investor under a subscription agreement. As part of the subscription agreement, the Company received cash proceeds totaling $25,000.

On May 20, 2021, the Company and Noteholder 3 entered into a settlement and mutual release agreement to settle a dispute over the dilution of 750,000 warrants issued during the year ended March 31, 2020, and the convertible debt held by Noteholder 3 (Note 6). As part of the agreement, the Company agreed to issued Noteholder 3 38,114,035 shares of common stock to settle the convertible debt and outstanding warrants.

On June 21, 2021, the Company issued a total of 166,666,666 shares of common stock to two investors under subscription agreements. As part of the subscription agreements, the Company received cash proceeds totaling $50,000.

~~F-13~~F-15

~~Tables~~Table of Contents

Item 2. Management’s Discussion and Analysis ~~or Plan~~ of ~~Operation~~Financial Condition and Results of Operations

~~We urge you to read the~~

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with ~~management’s discussion and analysis contained in our Annual Report on Form 10-K for~~ the ~~year ended March 31, 2019, as well as with our condensed~~ financial statements and ~~the~~related notes thereto included elsewhere ~~herein.~~

~~Company~~ in this report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions, such as our plans, objectives, expectations, and intentions. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results, or other developments. Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic, and competitive uncertainties, and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. We disclose any obligation to update forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

Our business is conducted through our wholly owned subsidiaries, Humbly Hemp, Endo Brands, and Humble Water Company. Humbly Hemp sells and markets a line of hemp enhanced snack foods. Humble Water Company is in a partnership with Springhill Water Co. to develop a line of High Alkaline, Natural Mineral Water, and a bottling and packaging facility. Endo Brands creates and markets a line of ~~CBD~~cannabinoid-based consumer ~~products and through ENDO Labs, a joint venture with Centre Manufacturing, creates white label products and formulations for CBD brands.~~products. Right On Brands is at the focus of health and wellness. We create lasting brands with emerging functional ingredients, and our focus right now is industrial hemp and hemp derived ~~CBD, and high alkaline water. As~~products.

Results of ~~September 30, 2019,~~Operations

Three Months Ended December 31, 2020, Compared to the ~~Board of Directors of~~Three Months Ended December 31, 2019:

Revenues

Revenues for the ~~Company voted~~three months ended December 31, 2020, were $3,000, as compared to ~~merge Humbly Hemp, Inc. into~~$106,000 for the ~~Company in order to have a more efficient and less costly corporate structure.~~

~~Basis of Presentation of Financial Information~~

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern, which is dependent upon the Company’s ability to establish itself as a profitable business. Atthree months ended December 31, 2019, a decrease of $103,000.

This decrease in revenues can be attributed to the ~~Company had~~decrease in consumer spending arising from the COVID-19 pandemic, where we saw a noticeable decrease in both retail and online sales. We expect our revenues to improve in future periods as global economic conditions rebound, and consumer spending increases.

Gross Profit and Margins

Gross profit for the three months ended December 31, 2020, was $2,000, as compared to $23,000 for the three months ended December 31, 2019. The $21,000 decrease in gross profit is the result of the decrease in revenues due to reduced consumer demand as a result of the COVID-19 pandemic. Gross profit margin for the three months ended December 31, 2020, was 54%, as compared to 22% for the three months ended December 31, 2019. This change in gross margin loss resulted from a decrease in sales volume. We believe that, subject to factors outside of our control, our historical gross margins of approximately 20%-40% are likely to remain the norm.

Operating Expenses

Operating expenses for the three months ended December 31, 2020, were $82,000, as compared to $219,000 for the three months ended December 31, 2019. We expect that operating expenses will increase over the next 12 months as our long-term growth strategy will require increases in personnel and facilities, along with increased development expenses to ensure that products are brought to market quickly and effectively.

Table of Contents

Loss from Operations and Total Net Loss

Loss from operations for the three months ended December 31, 2020, was $80,000, as compared to a loss from operations of $196,000 for the three months ended December 31, 2019, a decrease in net loss from operations of $116,000. The decrease in loss from operations for the three months ended December, 2020, was as a result of (i) a reduction in gross revenues, resulting in a reduction in gross profit, and (ii) a decrease in operating expenses due to the decrease in revenues. Total net loss for the three months ended December 31, 2020, was $92,000, as compared to a total net loss of $182,000 for the three months ended December 31, 2019, a decrease in total net loss of $90,000. The decrease in net loss for the three months ended December, 2020, was as a result of (i) the change in operations discussed above, (ii) a $96,000 decrease in interest expenses offset by an ~~accumulated deficit~~increase in amortization of ~~$11,891,860~~debt discount of $55,000, (iii) default penalties and financing costs of $37,000 and $-0-, respectively, incurred during the three months ended December 31, 2020, compared to $-0- and $15,000, respectively, during the prior period, and (iv) non-cash gains of $101,000 related to the derivative liability compared to non-cash gains of $146,000 in the prior period. Derivative liabilities are associated with loans that are convertible and have variable pricing on the equivalent shares of Common Stock. At the end of each period, these derivative liabilities are valued, and the net change is recorded as a gain or loss in other expense and income.

We do not expect to realize net income in the near term as anticipated operational expenses are expected to increase as our long-term growth strategy will require increases in personnel and facilities, along with increased development expenses to ensure that products are brought to market quickly and effectively. Despite management’s focus on ensuring operating efficiencies, we expect to continue to operate at a loss through fiscal 2021.

Nine Months Ended December 31, 2020, Compared to the Nine Months Ended December 31, 2019:

Revenues

Revenues for the nine months ended December 31, 2020, were $23,000, as compared to $315,000 for the nine months ended December 31, 2019, ~~incurred net losses~~a decrease of ~~$1,705,758,~~$292,000.

This decrease in revenues can be attributed to the decrease in consumer spending arising from the COVID-19 pandemic, where we saw a noticeable decrease in both retail and online sales. We expect our revenues to improve in future periods as global economic conditions rebound, and consumer spending increases.

Gross Profit and Margins

Gross profit for the nine months ended December 31, 2020, was $11,000, as compared to ~~$2,806,395~~$94,000 for the ~~same~~nine months ended December 31, 2019. The $83,000 decrease in gross profit is the result of the decrease in revenues due to reduced consumer demand as a result of the COVID-19 pandemic. Gross profit margin for the nine months ended December 31, 2020, was 49%, as compared to 30% for the nine months ended December 31, 2019. This change in gross margin loss resulted from a decrease in sales volume. We believe that, subject to factors outside of our control, our historical gross margins of approximately 20%-40% are likely to remain the norm.

Operating Expenses

Operating expenses for the nine months ended December 31, 2020, were $333,000, as compared to $602,000 for the nine months ended December 31, 2019. We expect that operating expenses will increase over the next 12 months as our long-term growth strategy will require increases in personnel and facilities, along with increased development expenses to ensure that products are brought to market quickly and effectively.

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Loss from Operations and Total Net Loss

Loss from operations for the nine months ended December 31, 2020, was $322,000, as compared to a loss from operations of $602,000 for the nine months ended December 31, 2019, a decrease in net loss from operations of $280,000. The decrease in loss from operations for the nine months ended December 31, 2020, was as a result of (i) a reduction in gross revenues, resulting in a reduction in gross profit, and (ii) a decrease in operating expenses due to the decrease in revenues. Total net loss for the nine months ended December 31, 2020, was $902,000, as compared to a total net loss of $1,706,000 for the nine months ended December 31, 2019, a decrease in total net loss of $804,000. The decrease in net loss for the nine months ended December 31, 2020, was as a result of (i) the change in operations discussed above, (ii) a $545,000 decrease in interest expenses offset by an increase in amortization of debt discount of $296,000, (iii) default penalties and financing costs of $53,000 and $97,000, respectively, incurred during the nine months ended December 31, 2020, compared to $202,000 and $335,000, respectively, during the prior period, and (iv) non-cash losses of $72,000 related to the derivative liability compared to non-cash gains of $49,000 in ~~2018. Management expects~~the prior period. Derivative liabilities are associated with loans that are convertible and have variable pricing on the ~~Company~~equivalent shares of Common Stock. At the end of each period, these derivative liabilities are valued, and the net change is recorded as a gain or loss in other expense and income.

We do not expect to realize net income in the near term as anticipated operational expenses are expected to increase as our long-term growth strategy will ~~need~~require increases in personnel and facilities, along with increased development expenses to ~~raise~~ensure that products are brought to market quickly and effectively. Despite management’s focus on ensuring operating efficiencies, we expect to continue to operate at a loss through fiscal 2021.

Liquidity and Capital Resources

Going Concern

We have incurred operating losses since inception and have negative cash flow from operations. As of December 31, 2020, we had a stockholders’ deficit of $1,922,000, a working capital deficit of $1,927,000, and incurred a net loss of $902,000 for the nine months ended December 31, 2020. Additionally, our operations utilized $134,000 in cash during the nine months ended December 31, 2020, while we received $67,000 in cash from financing activities. As a result, our continuation as a going concern is dependent on our ability to obtain additional ~~capital~~financing until we can generate sufficient cash flows from operations to ~~sustain~~meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations, ~~until such time as the Company can achieve profitability. However,~~but there can be no assurance that ~~management~~such financing will be ~~successful~~available on terms acceptable to us, if at all.

Our condensed consolidated financial statements have been prepared on a going concern basis, which implies we may not continue to meet our obligations and continue our operations for the next fiscal year. The continuation of our Company as a going concern is dependent upon our ability to obtain necessary debt or equity financing to continue operations until we begin generating positive cash flow.

As of December 31, 2020 and March 31, 2020, we had cash of approximately $-0- and $67,000, respectively. We estimate our operating expenses for the near- and mid-term may continue to exceed the revenues that we may generate, and we may need to raise capital through either debt or equity offerings to continue operations. We are in ~~obtaining~~the early stages of our business. We are required to fund growth from financing activities, and we intend to rely on a combination of equity and debt financings. Due to market conditions and the early stage of our operations, there is considerable risk that we will not be able to raise such financings at all, or on terms that are not overly dilutive to our existing stockholders. We can offer no assurance that we will be able to raise such funds. If we are unable to raise the funds we require for all of our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and we may be forced to reduce or discontinue operations.

There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional ~~funding~~equity securities by us would result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business, as planned, and as a result may be required to scale back or ~~in attaining profitable operations.~~

cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment. The consolidated financial statements do not include any adjustments ~~relating~~ to reflect the possible future effects on the recoverability and ~~realization~~classification of assets or the amounts and ~~classification~~classifications of liabilities that ~~might be necessary~~may result should ~~the Company~~we be unable to continue as a going concern.

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Cash Flows – Operating Activities

For the nine months ended December 31, 2020, our cash used in ~~operation.~~

~~Significant~~operating activities amounted to an outflow of $134,000, compared to cash used during the nine months ended December 31, 2019, of $547,000. The decrease in cash used in our operating activities is due to the reduction in operating activities during the current period.
Cash Flows – Investing Activities
For the nine months ended December 31, 2020, and 2019, there was no cash used in investing activities.
Cash Flows – Financing Activities
For the nine months ended December 31, 2020, our cash provided by financing activities amounted to $67,000, which includes $68,000 in proceeds from the issuance of notes payable and repayments of notes payable of $1,000. Our cash provided by financing activities for the nine months ended December 31, 2019, amounted to $471,000, which includes $125,000 in proceeds received from the issuances of our Common Stock, $25,000 in proceeds from the issuance of notes payable, and $321,000 in proceeds from the issuance of convertible debt.
Off Balance Sheet Arrangements
As of December 31, 2020, and March 31, 2020, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to stockholders.

Critical Accounting Policies

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

There have been no changes from the Summary of Significant Accounting Policies described in our Annual Report on Form ~~10-K/A~~10-K for the year ended March 31, 2020, filed with the Securities and Exchange Commission on ~~July 29, 2019.~~

~~Note Conversions to Common Stock~~

~~During the nine months ended December 31, 2019 the Company received several notices of conversion from its noteholders as summarized here:~~

Average

Noteholder

Debt Converted

Conversion Price

Shares Issued

Noteholder 2

$ 210,663

$ 0.005

44,759,514

Noteholder 3

60,375

$ 0.002

38,415,000

Noteholder 4

104,341

$ 0.003

41,431,396

Noteholder 5

244,650

$ 0.003

75,316,850

Noteholder 6

108,794

$ 0.001

135,652,946

Noteholder 7

81,750

$ 0.004

19,395,570

April 1, 2021.

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~~Results of Operations~~

~~Comparison of Three Months Ended December 31, 2019 and 2018~~

During the three months ended December 31, 2019, we generated revenue of $106,434 and our cost of goods sold was $62,220, resulting in gross profit of $44,214. We incurred total operating expenses of $243,115, interest expense of $116,783, and a net loss of $182,382. By comparison, during the three months ended December 31, 2018, we generated revenue of $57,476 and our cost of goods sold was $41,293, resulting in gross profit of $16,183. We incurred operating expenses of $480,695, interest expense of $784,892 and we recorded a net loss of $1,783,791.

Our revenues increased significantly compared to the same period last year due to increased product distribution and sales. Our operating expenses decreased significantly due primarily to lower consulting fees. However, this was offset by higher general and administrative expenses related to contract labor, commissions, insurance, lease and travel expenses. Other expenses increased related to debt financing, including interest, financing costs, and default penalties.

~~Comparison of Nine Months Ended December 31, 2019 and 2018~~

For the nine months ended December 31, 2019 and 2018, the Company’s revenue totaled $315,091 and $153,087, respectively, for which our respective costs of goods sold totaled $200,140 and $105,093. The $162,004 increase in revenue resulted from additional sales. During 2019 the Company also introduced its Humbly Hemp line of energy bars and sparkling teas.

For the nine months ended December 31, 2019, the Company had operating expenses totaling $719,970 compared to $1,363,573 for the same period in 2018, a decrease of $643,603. This change is primarily a result of lower consulting fees. General and administrative expenses increased by approximately $197,454, from $141,838 in the nine months ended December 31, 2018 to $339,292 over the same period in 2019 due to increased contract labor, commissions, insurance, lease and travel expenses. Other expenses increased related to debt financing, including interest, financing costs, loss on derivatives issued with debt, and default penalties. The Company also recorded depreciation and amortization expense of $5,149 for the nine months ended December 31, 2019 compared to $2,822 for the nine months ended December 31, 2018.

~~We expect that our expenses, as well as our revenues, will continue to increase over the current fiscal year as we work to expand sales and distribution of our products.~~

~~Table of Contents~~

~~Liquidity and Capital Resources~~

As of December 31, 2019, we had current assets in the amount of $316,233, consisting of cash in the amount of $15,616, accounts receivable of $26,879, and inventory of $258,163. As of December 31, 2019, we had current liabilities of $1,773,758. The current liabilities consisted of accounts payable of $199,772, accrued interest payable of $48,922, notes payable net of discount of $754,164, convertible debt net of discount in the amount of $240,942, and a derivative liability of $484,358.

~~We also entered into an office lease April 1, 2019 which resulted in a long-term asset and lease liabilities of $102,600 at December 31, 2019.~~

We have funded our operations to date through the issuance of common stock in offerings exempt under Rule 506, as well as through the issuance of convertible notes. During the nine months ended December 31, 2019:

~~We issued a total of 24,416,666 shares of common stock to an investor for total proceeds of $125,000.~~

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

~~Off Balance Sheet Arrangements~~

~~As of December 31, 2019, there were no off-balance sheet arrangements.~~

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, ~~2019.~~2020. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Jerry Grisaffi and our Chief Financial Officer, A. David Youssefyeh. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, ~~2019,~~2020, our disclosure controls and procedures are not effective. There have been no changes in our internal controls over financial reporting during the period ended December 31, ~~2019,~~2020, besides the addition of ~~two~~ Certified Public Accountants to assist with the bookkeeping and financial reporting.

Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There is a dispute between the Company and the holder of a convertible note regarding the timing of the conversion. As of December 31, ~~2019,~~2020, and through the issuance of this Form 10-Q, neither side has filed formal legal proceedings against the other side and negotiations are ongoing to resolve the matter.

Item 1A. Risk Factors

A smaller reporting company is not required to include this information. For a description of the risk factors applicable to our business and operations, please refer to our Annual Report on Form ~~10-K/A~~10-K for the year ended March 31, ~~2019,~~2020, filed with SEC on ~~July 29, 2019.~~

April 1, 2021.

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

During the nine months ended December 31, 2020, there were no shares of common stock sold. During the nine months ended December 31, 2019, we sold ~~24,416,666~~24,417,000 shares of common stock for proceeds of $125,000 used to fund operations.

Item 3. Defaults upon Senior Securities

~~None~~

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number		Description of Exhibit

31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101
~~101~~		Materials from the Company’s Quarterly Report on Form 10-Q for the period ended December 31, ~~2019~~2020 formatted in Extensible Business Reporting Language (XBRL)

910

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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.

	Right On Brands, Inc.

Date: ~~February 14, 2020~~ June 23, 2021	By:	/s/ Jerry Grisaffi
	Name:	Jerry Grisaffi
	Title:	Chief Executive Officer

Date: ~~February 14, 2020~~ June 23, 2021	By:	/s/ A. David Youssefyeh
	Name:	A. David Youssefyeh
	Title:	Chief Financial Officer

		Page

PART I - FINANCIAL INFORMATION

Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	7 8
Item 4:	Controls and Procedures	7 8

PART II - OTHER INFORMATION

Item 1:	Legal Proceedings	8 9
Item 1A:	Risk Factors	8 9
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	8 9
Item 3:	Defaults Upon Senior Securities	8 9
Item 4:	Mine Safety Disclosures	8 9
Item 5:	Other Information	8 9
Item 6:	Exhibits	9 10

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	December 31,			December 31,			December 31,			December 31,
	2019			2018			2019			2018

Revenue	$	106,434		$	57,476		$	315,091		$	153,087
Cost of goods sold		83,357			41,293			221,277			140,480
Gross profit		23,077			16,183			93,814			12,607

Operating expenses
Depreciation and amortization		1,836			679			5,149			2,822
General and administrative		101,518			46,627			336,657			141,838
Advertising and promotion		5,818			33,351			54,749			58,737
Legal and professional		37,306			25,061			169,233			51,639
Executive compensation		39,000			-			62,000			18,000
Consulting		36,555			374,977			68,410			1,054,813
Research and development		-			-			-			337
Total operating expenses		222,033			480,695			696,198			1,328,186

Other income (expense)
Interest expense		(116,783	)		(784,892	)		(606,687	)		(981,383	)
Loss on interest settlement		-			-			(8,693	)		-
Change in fair value of derivative		145,868			(534,387	)		49,230			(509,686	)
Financing costs		(12,623	)		-			(335,102	)		-
Default penalty		-			-			(202,234	)		-
Other income		112			-			112			-
Total other income (expense)		16,574			(1,319,279	)		(1,103,374	)		(1,491,069	)

Net loss including noncontrolling interest		(182,382	)		(1,783,791	)		(1,705,758	)		(2,806,648	)

Net income attributable to noncontrolling interest		-			-			-			253

Net loss attributable to Right On Brands, Inc.	$	(182,382	)	$	(1,783,791	)	$	(1,705,758	)	$	(2,806,395	)

Loss per share
Basic loss per share	$	(0.00	)	$	(0.03	)	$	(0.01	)	$	(0.04	)

Basic weighted average shares outstanding		387,273,071			66,366,478			230,093,250			64,930,832

																				Total
	Preferred Shares				Common Shares				Additional Paid In		Common Stock			Accumulated			Noncontrolling			Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital		Issuable			Deficit			Interest			(Deficit)
Balance, March 31, 2018		5,000,000	$	5,000		63,543,869	$	63,544	$	6,513,979	$	474,000		$	(4,100,945	)	$	24,437		$	2,980,015

Issuance of common stock for cash		-		-		3,000,000		3,000		3,000		38,950			-			-			44,950

Issuance of common stock for cash and warrants		-		-		40,000		40		9,960		-			-			-			10,000
Issuance of common stock for consulting services		-		-		-		-		-		36,050			-			-			36,050
Net loss		-		-		-		-		-		-			(2,806,395	)		(252	)		(2,806,647	)
Balance, December 31, 2018		5,000,000	$	5,000		66,583,869	$	66,584	$	6,526,939	$	549,000		$	(6,907,340	)	$	24,185		$	264,368

Balance, March 31, 2019		5,000,000	$	5,000		73,652,594	$	73,653	$	8,295,767	$	56,050		$	(10,186,102	)	$	24,437		$	(1,731,195	)
Issuance of common stock for cash		-		-		24,416,666		24,417		80,583		20,000			-			-			125,000

Conversion of debt and interest to common stock		-		-		354,971,286		354,971		1,555,014		(20,000	)		-			-			1,889,985

Warrants issued as financing costs		-		-		-		-		33,113		-			-			-			33,113

Net loss		-		-		-		-		-		-			(1,705,758	)		-			(1,705,758	)

Balance, December 31, 2019		5,000,000	$	5,000		453,040,546	$	453,041	$	9,964,477	$	56,050		$	(11,891,860	)	$	24,437		$	(1,388,855	)

	As of December 31, 2019		As of March 31, 2019

Raw materials	$	6,843	$	43,796
Work-in-process		30,611		30,611
Finished Goods		220,709		139,550
Ending Balance	$	258,163	$	213,957

Balance at March 31, 2019	$	1,034,939
Additions to derivative liability for new debt		608,211
Additions to derivative liability for penalty		81,143
Reclass to equity upon conversion/cancellation		(1,190,705	)
Change in fair value		(49,230	)
Balance at December 31, 2019	$	484,358

			Weighted-Average
	Shares		Exercise Price
Outstanding, March 31, 2019		12,480,000	$	0.17
Granted		14,750,000		.04
Exercised		-		-
Expired		-		-
Outstanding, December 31, 2019		27,230,000	$	0.11
Options and warrants exercisable at December 31, 2019		27,230,000	$	0.11

			Gross amount		Net amounts		Corresponding
	Gross amount		offset by		of liabilities		Derivative
Note holder	of liability		debt discount		presented		Balance

Noteholder 2	$	21,487	$	-	$	21,487	$	14,350
Noteholder 3		37,125		-		37,125		21,470
Noteholder 5		318,150		204,026		114,124		437,118
Noteholder 6		21,206		-		21,206		11,420
Other notes		47,000		-		47,000		-
	$	444,968	$	204,026	$	240,942	$	484,358

Years Ending
March 31,	Amount
2020	$	11,400
2021		45,600
2022		45,600
	$	102,600

	Shares		Penalty		Principal
Noteholder	Issued		Settled		Converted

Noteholder 6		90,500,260	$	-	$	21,206
Noteholder 3		232,700,000	$	5,551		25,000
		323,200,260	$	5,551	$	46,206

			Average
Noteholder	Debt Converted		Conversion Price		Shares Issued

Noteholder 2	$	210,663	$	0.005		44,759,514
Noteholder 3		60,375	$	0.002		38,415,000
Noteholder 4		104,341	$	0.003		41,431,396
Noteholder 5		244,650	$	0.003		75,316,850
Noteholder 6		108,794	$	0.001		135,652,946
Noteholder 7		81,750	$	0.004		19,395,570