STWC (STWC) 10-K/A 2019 FY Annual report (amended)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(AMENDMENT NO. 1)

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

For the fiscal year ended January 31, 2019

OR

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

Commission file number: 000-52825

                                                                       STWC HOLDINGS, INC

(Exact name of registrant as specified in its charter)

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

1350 Independence Street, Suite 300

Lakewood, CO  80215

(Address of Principal Executive Office, including Zip Code)

(303) 736-2442

(Registrant's telephone number, including area code)

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

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

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐

Indicate by check mark whether the registrant (1) has filed all reports 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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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

The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of the registrant’s common stock on July 31, 2018 was $7,324,949.

As of April 23, 2019, the Registrant had 34,220,089 issued and outstanding shares of common stock.

Documents Incorporated by Reference: None

1

EXPLANATORY NOTE

This Amendment No. 1 to the Annual Report on Form 10-K/A (this “Amendment”) is being filed by STWC Holdings, Inc. (the “Company”) to amend the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was originally filed with the Securities and Exchange Commission (the “SEC”) on April 30, 2019 (the “Annual Report”).

The Company is filing this Amendment for the following purposes: (i) amending Item 3 of Part I to disclose an additional legal matter,  (ii) amending Item 8 of Part III to correct a typographical error in the outstanding number of shares at January 31, 2019, in Note 2 to the financial statments under the heading "Net income per share of common stock" and to correct typographical errors to the exercise price and weighted average calculation in the warrants table in Note 9 of the financial statements, and (iii) amending Item 10 of Part III to correct a typographical error incorrectly designating Mr. Willer as a director in the management table, and (iv) including exhibits 3.1 (Articles of Incorporation), 10.31 (Advisor Agreement), and 21 (Subsidiaries), which were inadvertently omitted from the original filing of the Annual Report.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Part I, Item 3 and Part III, Item 10 of the Annual Report are hereby amended and restated in their entirety. In addition, as required by Rule 12b-15 promulgated under the Exchange Act, new certifications pursuant to Rule 13(a)-14(a) and (b) by the Company’s principal executive officer and principal financial officer are filed herewith as exhibits to this Amendment.

Except as described above, no attempt has been made in this Amendment to modify or update the other disclosures in the Annual Report. Other than as specifically stated herein, this Amendment continues to speak as of the date of the Annual Report, and the Company has not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Annual Report. Accordingly, this Amendment should be read in conjunction with the Annual Report.

2

PART I

ITEM 3. fLEGAL PROCEEDINGS

On November 15, 2018, we and co-defendants Shawn Philips and Erin Phillips entered into a Confidential Settlement Agreement and Release of Claims (the "Settlement Agreement") with Headgate II, LLC, William A. Shopneck, and Christopher Shopneck (collectively, the "Plaintiffs"). Pursuant to the Settlement Agreement, we and the other defendants collectively agreed to pay Plaintiffs a total of $85,000, to be paid in monthly installments beginning on November 15, 2018 and ending July 15, 2019, and to execute a Confession of Judgment to be held by Plaintiffs guaranteeing the defendants' settlement obligations for the same. In consideration for the foregoing, the Plaintiffs agreed to dismiss its lawsuit against the defendants originally filed in the District Court of the City and County of Denver, Case No. 2018CV30778 and to release, waive, and forever discharge the defendants from any and all claims and actions that could have been brought in the lawsuit. The defendants also agreed to release, waive, and forever discharge the Plaintiffs from any and all claims and actions. On November 26, 2018, the parties to the lawsuit filed a Stipulation of Dismissal with Prejudice with the court. Pursuant to the dismissal, each party formally dismissed all claims it had against the other party. We are current in our payments under the Settlement Agreement.

On January 11, 2019, a complaint was filed in the District Court for Jefferson County, Colorado (Case No. 2019CV30060) by Colorado Medical Finance Services, LLC, dba Gold Cross Capital LLC, a Colorado limited liability company, against STWC and our subsidiary, Strainwise, Inc. for an alleged breach of contract in the amount of $380,761.  The dispute involves a Line of Credit Agreement allegedly between Strainwise, LLC and the Plaintiff.  In 2017 the Plaintiff filed a similar action against STWC and Shawn Phillips for the same debt.  Mr. Phillips and the Plaintiff entered into a settlement agreement, but after Mr. Phillips' failure to make timely payments under the settlement agreement, Plaintiff obtained a judgment against him in the amount of $306,166.68.  The action against STWC was dismissed without prejudice.  In the new action Plaintiff is attempting to join STWC and our subsidiary, Strainwise, in the obligation.  We filed our answer to the complaint on March 7, 2019, generally denying each of the allegations in the complaint.  We intend to vigorously defend against this lawsuit.

PART II

ITEM 8.                         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the stockholders and the board of directors of STWC Holdings, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of STWC Holdings, Inc. (the "Company") as of January 31, 2019 and 2018, the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2019 and 2018 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Going Concern Uncertainty

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred significant operating losses since inception and has a working capital deficit which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting.  Accordingly, we express no such opinion.

By: /s/ BF Borgers CPA PC                    

We have served as the Company's auditor since 2014.

Lakewood, CO

April 30, 2019

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STWC HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JANUARY 31, 2019 and 2018

	2019			2018
ASSETS
Current assets
Cash	$	2,965		$	27,925
Accounts Receivable, net		56,459			5,000
Inventory		29,786			11,888
Prepaid expenses and other assets		19,675			17,592
Total current assets		108,885			62,405
Property and equipment, net		2,767			3,773
Intangible assets, net		9,452			8,021
Notes receivable, related party		452,709			94,061
Total assets	$	573,813		$	168,260
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current liabilities
Accounts payable	$	665,791		$	284,394
Accrued expenses		437,388			82,044
Loans from related parties		32,021			490,970
Deferred revenue		192,500			150,000
Notes payable current, net of discount		274,282			-
Total current liabilities		1,601,982			1,007,408
Long-term loan from related party		48,240			-
Long-term notes payable		125,000			-
Total liabilities		1,775,222			1,007,408
STOCKHOLDERS' DEFICIT
Common stock, no par value, 100,000,000 shares authorized, 33,792,589 and 27,140,550 issued and outstanding,  respectively, at January 31, 2019 and 2018		-			-
Additional Paid in Capital		7,238,699			5,325,684
Retained deficit		(8,440,108	)		(6,164,832	)
Total Stockholders' deficit		(1,201,409	)		(839,148	)
Total liabilities and stockholders' deficit	$	573,813		$	168,260

See accompanying notes to the financial statements

4

STWC HOLDINGS, INC.

CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED JANUARY 31, 2019 and 2018

	2019			2018
Consulting Services	$	136,537		$	263,500
Cost of consulting services		(110,761	)		(233,529	)
Gross profit		25,776			29,971
Operating costs and expenses
Rents and other occupancy		59,450			67,927
Compensation		744,128			523,805
Professional, legal and consulting		597,099			193,950
General and administrative		355,814			307,023
Depreciation and amortization		1,826			2,308
Total operating costs and expenses		1,758,317			1,095,013
Other income (expense)
Interest expense		(104,783	)		(1,016	)
Other expenses		6,666			-
Loss on impairment of investment		(345,394	)		-
Loss on debt conversion		(80,502	)		-
Loss on investment in affiliate		(18,722	)		(24,159	)
Total other income (expense)		(542,735	)		(25,175	)
Loss from continuing operations, before provision for taxes on income		(2,275,276	)		(1,090,217	)
Provision for taxes on income		-			-
Loss from continuing operations, net of tax		(2,275,276	)		(1,090,217	)
Income from discontinued operations		-			1,479,497
Net income (loss)	$	(2,275,276	)	$	389,280
Basic earnings and fully diluted income (loss) per common share
Continuing operations	$	(0.08	)	$	(0.04	)
Discontinued operations	$	-		$	0.05
Basic and fully diluted weighted average number of shares outstanding		29,222,516			27,140,550

                                                                                                                       See accompanying notes to the financial statements

5

STWC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JANUARY 31, 2019 and 2018

	2019			2018
Cash flows from operating activities:
Net Loss	$	(2,275,276	)	$	389,280
Depreciation and Amortization		1,826			2,308
Accretion of debt discount		68,182			-
Loss on debt conversion		80,502			-
Loss on impairment of investment		345,394			-
Loss on investment in affiliates		18,722			24,159
Stock compensation		197,720			-
Shares and warrants issued for services		272,438			-
Changes in assets and liabilities:
Accounts receivable		(51,459	)		(5,000	)
Inventory		(17,898	)		(11,888	)
Investments in affiliates		(364,116	)		15,000
Notes receivable, related party		(358,648	)		(94,061	)
Deposits, prepaids and other		(2,083	)		(17,592	)
Accounts payable		386,397			36,324
Accrued expenses		295,042			139,156
Deferred revenue		42,500			150,000
Net cash (used in) operating activities from continuing operations		(1,360,757	)		627,686
Net cash (used in) operating activities from discontinued operations		-			(1,047,215	)
Cash flows from investing activities:
Purchase of fixed assets		-			(4,024	)
Investment in Intangible assets		(2,250	)		-
Net cash provided (used) by investing from continuing operations		(2,250	)		(4,024	)
Net cash provided (used) by investing from discontinued operations		-			2,137,026
Cash flow from financing:
Proceeds from stock issuance		765,700			-
Proceeds from warrant exchange		49,650			-
Proceeds from debt		551,100			-
Proceeds from related party loans		171,597			181,263
Payment to related party loans		(200,000	)		-
Net cash from (used) by  financing from continuing operations		1,338,047			181,263
Net cash from (used) by  financing from discontinued operations		-			(2,000,000	)
Net cash flows		(24,960	)		(105,264	)
Cash, beginning of period		27,925			133,189
Cash, end of period	$	2,965		$	27,925
Supplemental cash flow
Cash paid for interest	$	20,079		$	171,736
Non-cash transactions
Shares issued in exchange for debt		402,508			-
Shares and warrants issued for services		272,438			-
Debt Discount		225,000			-
	$	899,946		$	-

See accompanying notes to the financial statements

6

STWC HOLDINGS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICT)

FOR THE YEARS ENDED JANUARY 31, 2019 and 2018

	Common Stock
	Shares		Amount		Additional Capital in excess of par value		Accumulated Deficit			Total
Balance, January 31, 2017		27,140,550	$	-	$	3,152,658	$	(5,578,692	)	$	(2,426,034	)
Gain from related party transaction		-		-		2,173,026		(975,420	)		1,197,606
Net income		-		-		-		389,280			389,280
Balance, January 31, 2018		27,140,550		-		5,325,684		(6,164,832	)		(839,148	)
Private share offering		3,828,500		-		765,700		-			765,700
Shares issued in exchange for debt		2,012,539		-		402,507		-			402,507
Warrants issued for services		-		-		172,438		-			172,438
Beneficial conversion feature on convertible debt		-		-		225,000		-			225,000
Stock based compensation		-		-		197,720		-			197,720
Shares issued for investment		500,000		-		100,000		-			100,000
Warrants exchange for shares		311,000		-		49,650		-			49,650
Net loss		-		-		-		(2,275,276	)		(2,275,276	)
Balance, January 31, 2019		33,792,589	$	-	$	7,238,699	$	(8,440,108	)	$	(1,201,409	)

See accompanying notes to the financial statements

7

STWC HOLDINGS, INC.

Notes to the Audited Consolidated Financial Statements

January 31, 2019 and 2018

Note 1 – Organization

STWC HOLDINGS, INC., through its wholly-owned subsidiary, Strainwise, Inc.,  (identified in these footnotes as “STWC” “we” “us” or the “Company”) provides branding marketing, administrative, accounting, financial and compliance services (“Fulfillment Services”) to entities in the cannabis retail and production industry. The Company originally incorporated in the State of Utah on April 25, 2007, and redomiciled to Colorado by merging into a Colorado corporation incorporated June 7, 2016. Strainwise, Inc, was originally incorporated in the State of Colorado as a limited liability company on June 8, 2012, and subsequently converted to a Colorado corporation on  January 16, 2014.

On December 13, 2018, the Company invested in Meridian A, LLC which owns a CBD retail store located in Oklahoma.  The company’s Chief executive office is the managing member of the entity and STWC Holdings, Inc. owns 75% of the legal entity.  In accordance with Accounting Standards Codification 810 Consolidation, the Company has consolidated the entity.

Note 2 – Summary of significant accounting policies

Basis of presentation - The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Company has elected a fiscal year ending on January 31.  All intercompany balances and transactions have been eliminated in the consolidated financial statements.

Going Concern and Management’s Plan - Our Consolidated Financial Statements as of and for the year ended January 31, 2019 were prepared on the basis of a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. Accordingly, they do not give effect to adjustments that could be necessary should we be required to liquidate assets.

Our ability to continue as a going concern and raise capital for specific strategic initiatives could also depend on obtaining adequate capital to fund operating losses until it becomes profitable. We can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such financing will be obtainable on acceptable terms.

Use of estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period they are deemed to be necessary. Significant estimates made in the accompanying financial statements include but are not limited to following: those related to revenue recognition, allowance for doubtful accounts and notes receivable and unbilled services, lives and recoverability of equipment and other long-lived assets, realization of deferred tax assets, valuation of equity-based transactions, contingencies and litigation. The Company is subject to uncertainties, such as the impact of future events, economic, environmental and political factors, and changes in the business climate; therefore, actual results may differ from those estimates. When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, the low end of the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company's financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements.

Cash and cash equivalents – the company considers all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents. During the year-ended January 31, 2019 the Company was able to obtain a corporate bank account at a major financial institution. Cash balances may exceed federally insured limits. Management believes the financial risk associated with these balances is minimal and has not experienced any losses to date. For the years presented no balances exceeded the federally insured limits.

Prepaid expenses and other assets – Prepaid expenses and other current assets consist of various payments the Company has made in advance for goods or services to be received in the future. As of January 31, 2019, prepaid expenses was comprised of advance payments made to third parties for general expenses.  Prepaid general expenses are amortized over the applicable periods which approximate the life of the contract or service period.

8

Tenant improvements and office equipment – Tenant improvements and office equipment are recorded at cost and are depreciated under straight line methods over each item's estimated useful life. Management reviews the Company’s tenant improvements and office equipment for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Maintenance and repairs of property and equipment are charged to operations. Major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and any gain or loss is included in operations.

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

	January 31,
	2019			2018
Leasehold improvements	$	2,200		$	2,200
Office equipment, furniture and fixtures		26,276			26,276
		28,476			28,476
Accumulated amortization and depreciation		(25,709	)		(24,703	)
	$	2,767		$	3,773

Tenant improvements are amortized over the term of the lease, and office equipment is depreciated over its useful lives, which has been deemed by management to be three years. Amortization and depreciation expense related to tenant improvements and office equipment for the fiscal years ended January 31, 2019 and 2018 was $1,006 and $1,576, respectively.

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

Investment in Unconsolidated Entity – The Company has a significant and non-controlling investment in several entities.  The Company accounts for its investment using the equity method based on the ownership interest and ability to exert significant influence.  Accordingly, investments are recorded at cost, and adjustments to the carrying amount of the investment are recognized in the period incurred.  The Company’s share of the earnings or losses are reported in the other income and expense section of the income statement.

The Company acquired a 50% interest in Sentinel Strainwise, LLC (“SSL”) in June 2015 for $25,000. In accordance with Accounting Standard Codification 810-10, Consolidation-Overall, management evaluated the fair value of the Company’s investment in SLL and determined that there is no value as of January 31, 2018.  The entity was non-operational in the year-ended January 31, 2018 and fully dissolved in the year-ended January 31, 2019.

On September 5, 2018, the Company entered into a Binding Term Sheet (“BTS”) with Michael Hornbeck for the acquisition of an interest in a yet to be established joint-venture entity that will hold the intellectual property assets related to HiLife Creative (et. al.) Pursuant to the BTS, the Company agreed to pay$120,000 overall consideration, payable as follows:

● $25,000 within twenty-four (24) hours of execution of the BTS,

● $25,000 on or before November 1, 2018.

● 500,000 shares of common stock in STWC

● 500,000 common share purchase warrants

9

STWC will assume approximately $70,000 in debt owned by Hornbeck to various creditors.  The $70,000.00 assumed by STWC will be paid to Hornbeck or his assigns pursuant to a yet to be executed promissory note with a maturity date of January 31, 2019.

The joint-venture entity was established September 10, 2018 as Volume 2, LLC and was 51% owned by STWC and 49% by Michael Hornbeck. Notwithstanding the foregoing, the BTS called for Hornbeck to retain all control of and manage the day-to-day operations of Volume 2, LLC and draw a salary of $6,000 per month. The Company recognized an impairment on the investment effective day one as the entity is not able to funds its operations.  Loss on impairment of $345,394 was recognized in other expense for the year-ended January 31, 2019.  The Company recognized its share of the Volume 2’s losses of $18,722 in other expense for the year-ended January 31, 2019.  The consideration payment due November 1, 2018 has not been paid.

During the year-ended January 31, 2019 the Company invested in 2600 Meridian, LLC as a 25% owner.  The Company also loaned $29,368 to the entity during 2018.  The loans are reflected on the balance sheet in notes receivable, related party.

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

Beneficial Conversion Feature - If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF, and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method.

Trademarks – Trademarks and other intangible assets are stated at cost and are amortized using the straight-line method over fifteen years. Amortization expense for the years ended January 31, 2019 and 2018 was $820 and $732, respectively.

Trademarks	2019	2018
Gross carrying amount	$     13,260	$     11,010
Accumulated amortization	3,809	2,989
Net intangible assets	$       9,451	$      8,021

10

Discontinued Operations– During November 2017, the Company settled all remaining operations related to its rental activities with regulated entities. As a consequence of the disposition, the operating results and the assets and liabilities of the discontinued operations, which formerly comprised the rental operations, are presented separately in the Company's financial statements. Summarized financial information for the discontinued rental business is shown below. Prior period balances have been reclassified to present the operations of the rental business as a discontinued operation.  No amounts related to discontinued operations remained on the balance sheet as of January 31, 2018.  There was no discontinued operations activity during the year ended January 31, 2019.

Discontinued Operations Income Statement
	Year Ended January 31,
		2018
Rental income from the Regulated Entities (Affiliates)	$	2,342,391
Total revenues		2,342,391
Operating costs and expenses
Reserve for amounts due from Regulated Entities (Affiliates)		657,402
Rents and other occupancy		1,762,858
Depreciation and amortization		146,150
Total operating costs and expenses		2,566,410
Loss from continuing operations		(224,019)
Other income and (expenses)
Interest expense		(171,636)
Gain on settlement and cancellation of leases		1,959,177
Gain on sale of assets		—
Income (loss) from discontinued operations	$	1,563,522

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

Net income per share of common stock - We present earnings per share (“EPS”) in accordance with ASC 260 Earnings per Share, which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. 

Convertible notes, outstanding options and warrants underlying 4,150,000 and 2,224,700 shares, respectively, at January 31, 2019 and 2018 do not assume conversion, exercise or contingent exercise in the computation of diluted loss per share because the effect would be anti-dilutive.

Revenue Recognition

Effective February 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers using the modified retrospective method.  There was no adjustment required upon transition. Under ASC 606, the Company recognizes revenue applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured.

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Consulting Services

We generate revenues from professional services consulting agreements. These arrangements are generally entered into: (1) on an hourly basis for an hourly fee; or, (2) on a fixed fee basis; or (3) a monthly fee basis. Generally, we require a complete or partial prepayment or retainer prior to performing services for hourly or fixed fee contracts.

For hourly based service contracts, we recognize revenue over time as services are performed and customers simultaneously consume such services. Any advances or retainers received from clients for hourly services are reflected in the Deferred revenue liability  account until we recognize revenues as we incur and charge billable hours.

Our fixed fee basis engagements are recognized at a point in time. Generally, our fixed fee arrangements are for completion of a final deliverable or act which is significant to the arrangement as a whole. Although fees are typically collected in advance and the services provided have no alternative use to the Company, there is not a specific enforceable right to payment for the cost of services provided plus a reasonable profit margin.  Accordingly, advances received at contract inception are reflected in the Deferred revenue liability account until the end of the contract when revenue is recognized and the customer takes control of the deliverable.  These engagements do not generally exceed a one-year term.

Revenue recognition is affected by a number of factors that change the estimated amount of work required to complete the deliverable, such as changes in scope, timing, awaiting notification of license award from local government, and the level of client involvement. Losses, if any, on fixed-fee engagements are recognized in the period in which the loss first becomes probable and reasonably estimable. During the year ended January 31, 2019 we have refunded approximately $26,251 of advances or retainers from fixed fee and hourly engagements that terminated prior to completion. We believe if an engagement terminates prior to completion, we can recover the costs incurred related to the services provided.

Certain of our fixed fee contracts assisting customers with license applications include a success fee which is earned if the customer is awarded a license.  We exclude such variable consideration from the transaction price and recognize the revenue when and if the license is awarded as the uncertainty of the application process creates a probability of significant revenue reversal.

Our monthly fee arrangements are billed on a monthly basis in arrears for a variety of services and are recognized over time as the customers simultaneously consume such services.

The revenue by contract type for the periods ending January 31, 2019 and 2018 are listed in the table below.

	2019	2018
Hourly fee contracts	$                                                  3,749	$                                                          -
Fixed fee contracts	96,000	263,500
Monthly contracts	36,788	-
	$                                               136,537	$                                               263,500

Deferred revenue as of January 31, 2019 and 2018 was $192,500 and $150, respectively.  The Company is unable to determine the timing for revenue recognition at this time for its deferred revenue due to state regulation changes.

Reclassifications- Certain account reclassifications have been made to prior period balances to reflect the current period’s presentation format; such reclassifications had no impact on the Company’s consolidated statements of operations or consolidated statements of cash flows and had no material impact on the Company’s consolidated balance sheets.

Stock-Based Compensation – The Company records equity instruments at their fair value on the measurement date by utilizing the Black-Scholes option-pricing model.  Stock Compensation for all share-based payments, is recognized as an expense over the requisite service period.

Significant assumptions utilized in determining the fair value of our stock options included the volatility rate, estimated term of the options, risk-free interest rate and forfeiture rate.  The term of the options was assumed to be five years.  The risk-free interest rate was determined utilizing the treasury rate with a maturity equal to the estimated term of the option grant.  Finally, management assumed a 0% forfeiture rate in fiscal year 2018.

Non-employee share-based compensation charges generally are immediately vested and have no future performance requirements by the non-employee and the total share-based compensation charge is recorded in the period of the measurement date.

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Recently Issued Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and ensure that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below:

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases (“ASU 2016-02”). The guidance in this new standard requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to the current accounting and eliminates the current real estate-specific provisions for all entities. The guidance also modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the standard effective February 1, 2019 by recording an immaterial transition adjustment and right of use assets and lease liabilities of approximately $150,000.  

In July 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which among other things, these amendments require the measurement of all expected credit losses of financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for periods beginning after December 15, 2019, and interim periods within those fiscal years. The Company is in the process of evaluating the impact of the pronouncement.

In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-13, Fair Value Measurement (Topic 820), “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this Update modify certain disclosure requirements of fair value measurements and are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company adopted the standard effective February 1, 2019 by recording an immaterial transition adjustment and right of use assets and lease liabilities of approximately $150,000.  

is in the process of evaluation the impact of the pronouncement.

Note 3 – Going concern:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Since inception, we have not achieved profitable operations, and have cumulative losses through January 31, 2019 of $8.4 million. The Company’s losses to date raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s achieving a sustainable level of profitability. The Company intends to continue financing its future development activities and its working capital needs largely from the private sale of the Company’s securities, with additional funding from other traditional financing sources, including convertible term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. However, the financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

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Note 4 – Fair value of financial instruments

The carrying amounts of cash and current liabilities approximate fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments in the management of the Company’s interest rate market risks.

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

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2:                Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

Level 3:                Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

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

Note 5 – Commitments and contingencies

The Company entered into a lease agreement with an affiliate for the Company’s corporate office needs, consisting of 4,000 square feet of office space. The lease is for a 5-year period ending October 31, 2021. This lease to the Company is on the same terms and conditions as is the direct lease between the affiliate and the independent lessor.

During the year’s ended January 31, 2019 and 2018, rent expense was $59,450 and $67,927, respectively.

As of January 31, 2019, future minimum lease payments are as follows:

For the Fiscal Year Ending January  31,
2020		55,250
2021		56,250
2022		42,750
Thereafter		—
Total minimum lease payments	$	154,250

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Note 6 – Notes Receivable

The Company has management and licensing agreements with a private entity in Puerto Rico 39% owned by Erin Phillips to operate four dispensaries and one cultivation operation in Puerto Rico. In conjunction with these agreements, the Company as begun providing funds to operate the Puerto Rico operations, which will be evidenced by a promissory note. The terms have not been finalized on this note and currently there is no specified terms to the agreement. Through January 31, 2019 the Company has advanced $280,607 related to the note.

The Company has management and licensing agreements with two private entities in Oklahoma.  STWC has a 25% ownership in 2600 Meridian LLC, and an option to acquire 25% interest in HWH Farms, LLC.  In conjunction with these agreements, the Company has begun providing funds for start-up and development costs, which will be evidenced by a promissory note. The terms have not been finalized on these notes and currently there is no specified terms to the agreement. Through January 31, 2019 the Company has advanced $29,368 to 2600 Meridian, LLC and $141,388 to HWH Farms, LLC related to the notes.

Note 7 – Income Taxes

The Company uses the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the accounting bases and the tax bases of the Company’s assets and liabilities. The deferred tax assets and liabilities are computed using enacted tax rates in effect for the year in which the temporary differences are expected to reverse.

ASC 740, Income Taxes provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized. The components of the income tax provision are as follows:

	Year Ended January 31
	2019	2018
Income tax expense (benefit):
Current:
Federal	$   (346,143)	$     138,483
State	(76,361)	18,024
Deferred income tax expense (benefit):	(422,504)	156,507
Valuation allowance	422,504	(156,507)
Provision	$                 -	$               -

The enactment of the Tax Cuts and Jobs Act reduced the Federal corporate tax rate from 35% to 21%.

We have a net operating loss carryforward for financial statement reporting purposes of $8,440,108 and $6,164,832 from the years ended January 31, 2019 and 2018, respectively.

The net deferred tax assets for 2018 and 2017 were fully offset by a 100% valuation allowance.  

Note 8 – Notes Payable

Note purchase and security agreement – On August 29, 2018, the Company entered into a Note Purchase and Security Agreement with Richland Fund, LLC., a Delaware limited liability company. Pursuant to the Agreement, Richland agreed to purchase Convertible Promissory Notes of the Company in the aggregate principal amount of $225,000, funded in three tranches, (i) $100,000.00 (the "First Note"), (ii) $67,000.00 (the "Second Note"), and (iii) the balance of $58,000.00 (the "Third Note"). The Notes bear 12% interest per annum, with the last payment under the Notes due December 15, 2020. The Notes are secured by all assets of the Company and guarantees from Shawn and Erin Phillips.

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The Notes are convertible into common stock of the Company. The conversion price will be equal to the lower of (i) $0.15 cents per share (ii) or the average of the closing bid price of the Company's common stock taken over the three trading days prior to conversion or (iii) upon any issuance by the Company of common stock, or a security that is convertible into common stock, at a price lower than a net receipt to the Company of $0.15 per share, at such price that shall be at the same discount ratio as on the Funding Date. The conversion price of the Notes will be further subject to proportional adjustment for stock splits, reverse stock splits or combinations of shares, stock dividends, and the like. There are penalties for failure to timely deliver conversion shares.  The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $225,000.  The company has recognized $68,182 in interest expense for the amortization of the debt discount.

In connection with the funding agreement, the Company agreed to form and organize a subsidiary. The Company and the lender are in discussions regarding the assets to be held in the subsidiary. Nothing has been finalized as of the issuance date. 

Loan Agreement – On April 6, 2018, the Company entered into a loan agreement with Green Acres Partners A, LLC, (the “lender”) whereby the lender agreed to loan to the Company $205,000.  The loan proceeds are to be used specifically for the capital needs of two related party projects in San Diego, California.  The interest rate on the notes is 12% per annum and monthly interest payments are due the first day beginning no later than August 1, 2019, thereafter the Company shall pay interest and principal on 60% of the Company’s ownership percentage of the available profits from the San Diego projects.   The loan is personally guaranteed by Shawn Phillips.

Secured Promissory Note – On December 7, 2018, the Company entered into a 15% Secured Promissory Note with Richland Fund, LLC, (the “lender”) whereby the lender agreed to loan to the Company $126,100.  The interest rate on the notes is 15% per annum and monthly interest payments are due the first day each month beginning January 1, 2019.  If any interest payment remains unpaid and the lender has not declared the entire principal and unpaid accrued interest due and payable, the interest rate on that amount only will be increased to 20% per annum, until the past due interest amount is paid in full.  The note originally matured on March 7, 2019 but was extended to a maturity date of August 1, 2019.

The table below indicates the mandatory principal payments under the notes payable.

2019	$         431,100
2020	125,000
	556,100
Less Debt discount	(156,818)
	$         399,282

Note 9 - Equity

Warrants

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

On October 15, 2018, the Company issued warrants to purchase 1,900,000 shares of its common stock to three individuals in exchange for services, respectively. The warrants all carry two-year terms and an exercise price of $0.16 per share. Forty percent of each warrant may be exercised pursuant to a cashless exercise formula.

On September 5, 2018, the Company granted 500,000 common share purchase warrants to Mr. Hornbeck as consideration for the joint-venture in Volume 2, LLC, the warrants have an exercise price equal to the 20 day volume weighted average price (VWAP).  These warrants are not included in the table below as the exercise price is variable.

The company entered into a consulting arrangement with J Paul Consulting during the period. As compensation for services, JPCC will receive warrants to purchase up to 150,000 shares of our common stock. The three-year Warrants shall vest according to the following schedule: (i)  50,000 two months from the November 1, 2018 (the "First Tranche"); (ii) 50,000 four months from the November 1, 2018 (the "Second Tranche"); and (iii) 3, 50,000 six months from the November 1, 2018 (the "Third Tranche").  The exercise price for the Warrants is $0.80 per share for the First Tranche, $1.00 for the Second Tranche, and $1.25 for the Third Tranche.  The term of the Consulting Agreement is for six months beginning on November 1, 2018. The warrants have not been granted as of the issuance date.

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	Warrants
	Number of Warrants	Exercise Price	Wtgd Avg Calculation	Wtgd Avg Remining Life
Balance at 1/31/2017	2,224,700	$      5.00	$   11,123,500	2.00
Granted	-	-	$                      -
Exercised	-	-	$                      -
Cancelled	-	-	$                      -
Balance at 1/31/2018	2,224,700	$      5.00	$    11,123,500	1.00
Granted	2,000,000	0.16	$          322,000
Exercised	(311,000)	0.16	$          (49,650)
Cancelled	(2,013,700)	$       5.00	$   (11,091,850)
Balance at 1/31/19	1,900,000	$      0.16	$         304,000	1.71

Stock Options

The Company granted 250,000 stock options during the period. The Company has recognized stock compensation expense of $197,720 for the period ended January 31, 2019.

The company entered into a consulting arrangement with Hayden & Tysadco during the period. As compensation for their services, we the Company issued a total of 25,000 shares which vest at a schedule of 10,000 shares on November 1, 2018, 7,500 shares on the 120^th day from November 1, 2018, and 7,500 shares on the 180^thday from November 1, 2018, subject to the IR Agreement being in effect as of each applicable vesting date.  Shares issued for services are recognized in other expense in the period earned.

The Company accounts for unit-based compensation using the Black-Scholes model to estimate the fair value of unit-based awards at the date of grant. The Black-Scholes model requires the use of highly subjective assumptions, including value of the enterprise, expected life, expected volatility, and expected risk-free rate of return.  Other reasonable assumptions could provide differing results.

The Company amortizes the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods.  The expected life of awards granted represents the period of time that they are expected to be outstanding.  The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, expected time to a liquidity event, exercise patterns, and post-vesting forfeitures.  The Company estimates volatility based on the historical volatility of comparable company’s common stock over the most recent period corresponding with the estimated expected life of the award.  The Company bases the risk-free interest rate used in the Black-Scholes model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent term equal to the expected life of the award. The Company uses historical data to estimate pre-vesting option forfeitures and record unit-based compensation for those awards that are expected to vest. The Company adjusts unit-based compensation for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience.  The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed.

The assumptions used in the fair value calculations are as follows for the period ended January 31, 2019:

Expected term (years)	5
Risk-free interest rate	2.73%
Volatility	218%
Expected dividend yield	0.00%

Note 10 – Related Party

The Company has entered into separate management and licensing contracts with STWC Sorrento Valley, LLC which is partially owned by the Company's CEO, Erin Phillips. Ms. Phillips owns 27.5% of the STWC Sorrento Valley, LLC.  Ms. Phillips allocated $200,000 of the Green Acres note to fund the related project in California as directed by the note agreement which reduced the liability to Ms. Phillips for loan advances received as of January 31, 2019.

The Company manages its cash flow by utilizing related party loans.  During the year ended January 31, 2019 and 2018 the company borrowed $171,597 and $181,263, respectively, from related parties to fund operations. The loans do not carry any interest. The Company converted an accrued expense to a related party to a note payable in the amount of $60,300.  The note has a maturity of May 2020, $48,240 is reflected in Long-term loan to related party on the balance sheet.  As of January 31, 2019, and 2018, the Company reflected current loans payable to related parties of $32,021 and $490,970, respectively.

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Note 11 – Subsequent Events

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

Power Up

On February 13, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up agreed to purchase a convertible promissory note in the face amount of $103,000. On February 15, 2019, the Company issued the Note. The Note matures on February 13, 2020, and bears interest at 12% per annum, increasing to 22% after maturity.

On March 18, 2019, STWC Holdings, Inc., entered into the second tranche of the potential $1,000,000 funding with Power Up.  The Company entered into a second Securities Purchase Agreement pursuant to which Power Up agreed to purchase a convertible promissory note in the face amount of $53,000. On March 18, 2019, the Company issued the Note. The Note matures on March 18, 2020, and bears interest at 12% per annum, increasing to 22% after maturity.

Under the Note, Power Up may convert all or a portion of the outstanding principal of the Note into shares of common stock of the Company beginning on the date which is 180 days from the date of the Note, at a price equal to 61% of the lowest trading price during the 20 trading day period ending on the last complete trading date prior to the date of conversion; provided, however, that Power Up may not convert the Note to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepays the Note within 30 days of the date of the Note, the Company must pay all of the principal at a cash redemption premium of 110%; if the prepayment is made between the 31^st day and the 60^th day after the date of the Note, then the redemption premium is 115%; if the prepayment is made from the 61^st to the 90^th day after date of the Note, then the redemption premium is 120%; if the prepayment is made from the 91^st to the 120^th day after the date of the Note, then the redemption premium is 125%; if the prepayment is made from the 121^st to the 150^th day after the date of the Note, then the redemption premium is 130%; and if the prepayment is made from the 151^st to the 180^th day after the date of the Note, then the redemption premium is 135%. The Note cannot be prepaid after the 180^th day following the date of the Note.

The Company is required to reserve for issuance upon conversion of the Note, six times the number of shares that would be issuable upon full conversion of the Note, assuming the 4.99% limitation were not in effect.  In connection with the Note, the Company has caused its transfer agent to reserve initially 1,494,276 shares of Common Stock. The Company received a net amount of $150,000, with $6,000 paid for Power Up’s legal and due diligence expenses.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our officers and sole director are listed below. Our director is generally elected at the annual shareholders' meeting and holds office until the next annual shareholders' meeting or until a successor is elected and qualified. Executive officers are elected by our Director and serve at her discretion. The Board of Directors believes that our sole director named below is highly qualified and has the skills and experience required for effective service on the Board of Directors.

Name	Age	Position	Director Since
Erin Phillips	43	President, Chief Financial and Accounting Officer and a Director	2014
Matthew D. Willer	42	President

The following is a brief summary of the background of our officers and directors, including their principal occupation during the five preceding years.

Erin Phillips has been our Chief Executive Officer since 2015 and our Chief Financial Officer since 2014. She served as our President from 2014 until February 12, 2019. From May 2010 until January 2015 she served as Chief Operating Officer for 5110 Race, LLC, an entity which owned a marijuana dispensary and growing facility owned by Ms. Phillips and her husband, Shawn Phillips. From September 2014 until December 2017 Ms. Phillips served as an administrative assistant overseeing all back-office operations of The Denver Corridor, Inc., a holding company for the regulated

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marijuana entities owned by Mr. Phillips. Ms. Phillips has over 20 years of operational and management experience in the marijuana industry. She was one of the early pioneers in the marijuana industry in Colorado and is one of our founders. In concert with her spouse, Shawn Phillips, she has been instrumental in the management of the operations of the Regulated Entities since the date they were either purchased as an existing retail store, or initially opened for medical marijuana sales beginning in 2010. Ms. Phillips was responsible for managing the marketing, advertising and promotions at these Regulated Entities, and was responsible for establishing and expanding the brand recognition of the Strainwise name and logo throughout our target markets. Prior to establishing Strainwise, Ms. Phillips spent 13 years in the mortgage industry as a business owner, audit and funding supervisor, title company closer, mortgage loan processer, and loan originator. Ms. Phillips filed a personal bankruptcy petition in May 2009 and received a discharge in August 2009. Her experience in the marijuana industry, coupled with her prior business experience, qualifies her to serve as our director.

Matthew D. Willer has served as our President since February 12, 2019. He provided consulting services for us from June 2018 until February 2019. From June 2016 until May 2018 he served as President and a director of Assure Holdings, a publicly traded company ("ARHH"). From January 2011 until May 2016 he served as a Vice-President and director of XYLITOL, a publicly traded company ("SYLTF"). Mr. Willer received his Bachelor of Science degree in business administration from the University of Southern California in 1999.

Legal Proceedings

Except as described above, during the past ten years there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any of the executive officers or directors, and none of these persons has been involved in any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity, any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws or regulations, or any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.

Committees

Because we have only one director, the Board of Directors carries out the duties of the committees. We do not have compensation, audit, nominating, or other standing committees of the Board of Directors.

Audit Committee

Our Board of Directors performs the duties that would normally be performed by an audit committee. Our Board of Directors believes that its current sole member has sufficient knowledge and experience necessary to fulfill the duties and obligations of the audit committee for our company. The Board of Directors has determined that we do not have an audit committee financial expert, due to lack of funds.

Nominating Procedures

Recommendations for candidates to stand for election as directors are made by the Board of Directors. We have not adopted a policy which permits security holders to recommend candidates for election as directors or a process for stockholders to send communications to the Board of Directors. There have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

Code of Ethics

We have not adopted a code of ethics because of the small size of our management team.

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ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements Index:	Page
Report of Independent Registered Public Accounting firm	3
Consolidated Balance Sheets, January 31, 2019 and 2018	4
Statements of Operations, for the years ended January 31, 2019 and 2018	5
Statements of Cash Flows, for the years ended January 31, 2019 and 2018	6
Statement of Changes in Stockholders’ Equity (Deficit), for the years ended January 31, 2019 and 2018	7
Notes to Financial Statements, January 31, 2019 and 2018	8

Exhibits Index:  The following exhibits are filed with this Amendment:

		Incorporated by Reference
Exhibit Number	Exhibit Description		Form	File No.	Exhibit	Filing Date	Filed Herewith
3.1	Articles of Incorporation						X
10.1	Convertible Promissory Note dated March 22, 2019 with Power Up Lending Group		8-K	000-52825	99.1	4/12/19
10.2	Stock Purchase Agreement dated March 22, 2019 with Power Up Lending Group		8.K	000-52825	99.2	4/12/19
10.3	Convertible Promissory Note dated February 13, 2019 with Power Up Lending Group		8-K	000-52825	99.1	2/19/19
10.4	Stock Purchase Agreement dated February 13, 2019 with Power Up Lending Group		8.K	000-52825	99.2	2/19/19
10.5	LLC Operating Agreement of Meridian A, LLC dated 1/7/19		8-K	000-52825	99.2	2/5/19
10.6	15% Promissory Note dated December 7, 2018 to Richland Fund, LLC		8-K	000-52825	99.1	3/5/19
10.7	Settlement Agreement dated November 15, 2018 with Headgate II, LLC		8-K	000-52825	99.1	12/12/18
10.8	Investor Relations Consulting Agreement dated October 26, 2018 with Hayden IR, LLC		8-K	000-52825	99.1	11/1/18
10.9	Consulting Agreement dated November 1, 2018 with J Paul Consulting Corp.		8-K	000-52825	99.2	11/1/18
10.10	Master Services Agreement, Trademark Agreement, Management Agreement, and Consulting Services Agreement, each dated June 16, 2017 with STWC Sorrento Valley, LLC		8-K	000-52825	99.1	10/24/18
10.11	Master Services Agreement, Development Agreement, Trademark Agreement, Management Agreement, and Consulting Services Agreement, each dated October 11, 2018 with 2600 Meridian, LLC		8-K	000-52825	99.2	10/24/18
10.12	Master Services Agreement, Trademark Agreement, Management Agreement, and Consulting Services Agreement, each dated October 11, 2018 with HWH Farms, LLC		8-K	000-52825	99.3	10/24/18
10.13	Employment Agreement dated October 15, 2018 with Erin Phillips*		8-K	000-52825	99.1	10/22/18
10.14	Employment Agreement dated October 15, 2018 with Jay Kotzker		8-K	000-52825	99.2	10/22/18
10.15	Employment Agreement dated October 18, 2018 with Shawn Phillips		8-K	000-52825	99.3	10/22/18
10.16	Exchange Agreement dated October 15, 2018 with Shawn Phillips		8-K	000-52825	99.4	10.22/18
10.17	Note Purchase and Security Agreement dated August 29, 2018 with Richland Fund, LLC		8-K	000-52825	99.5	10/22/18
10.18	Binding Term Sheet dated September 5, 2018 with HiLife Creative		8-K	000-52825	99.6	10/22/18
10.19	Warrant to Purchase Common Stock dated _____ to Elizabeth Illa		8-K	000-52825	99.7	10/22/18
10.20	Warrant to Purchase Common Stock dated _____ to Jason Kotzker		8-K	000-52825	99.8	10/22/18
10.21	Warrant to Purchase Common Stock dated _____ to Jennifer Yunker		8-K	000-52825	99.9	10/22/18
10.22	Lease Assignment dated January 31, 2018 with Kalyx Colorado 695 Bryant LLC		8-K	000-52825	99.1	6/19/18
10.26	Assignment and Assumption Agreement dated April 6, 2018 with Green Acres Partners A, LLC, et al.		8-K	000-52825	99.2	6/19/18
10.27	Loan Agreement with Green Acres Partners A, LLC dated April 6, 2018 with Green Acres Partners A, LLC		8-K	000-52825	99.3	6/19/18
10.28	Commercial Real Estate Lease dated October 1, 2017 with Timothy Riopelle		8-K	000-52825	99.4	6/19/18
10.29	Master Services Agreement, Trademark Agreement, Management Agreement, and Consulting Services Agreement, each dated January 1, 2018 with COPR Enterprises, LLC		8-K	000-52825	99.5	6/19/18
10.30	Form of Master Services Agreement		8-K	000-52825	99.6	6/19/18
10.31	Advisor Agreement dated July 1, 2018, with Matthew Willer						X
21	Subsidiaries						X
31.1	Rule 13a-14(d) Certification by Principal Executive Officer						X
31.2	Rule 13a-14(d) Certification by Principal Financial Officer						X
32.1	Section 1350 Certification of Principal Executive and Financial Officer						X
101.INS	XBRL Instance Document		10-K	000-52825	101.INS	4/30/19
101.SCH	XBRL Taxonomy Extension Schema Document		10-K	000-52825	101.SCH	4/30/19
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document		10-K	000-52825	101.CAL	4/30/19
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document		10-K	000-52825	101.DEF	4/30/19
101.LAB	XBRL Taxonomy Extension Label Linkbase Document		10-K	000-52825	101.LAB	4/30/19
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document		10-K	000-52825	101.PRE	4/30/19

 * Management contract, or compensatory plan or arrangement, required to be filed as an exhibit.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(a) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to its Report to be signed on its behalf by the undersigned, thereunto duly authorized.

STWC HOLDINGS, INC.

May 1, 2019By: /s/ Erin Phillips

                              Erin Phillips, CEO

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