EDGAR 10-K Filing

Company CIK: 1580262
Filing Year: 2023
Filename: 1580262_10-K_2023_0001477932-23-006220.json

---

ITEM 1. BUSINESS
Item 1. Business
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements." These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Overview
Our business is conducted through our wholly-owned subsidiaries, Endo Brands, Endo Wellness Centers, and Humble Water Company, which is dormant and not operating. The Company creates and markets a line of CBD consumer products. Right on Brands creates lasting brands with emerging functional ingredients, and our focus right now is industrial hemp, hemp derived cannabinoids, and high alkaline water.
PRODUCT LINE
ENDO BRANDS
ENDO Drops
The easiest and most effective way to get your daily CBD, CBN or Delta-8 supplementation. These daily drops are blended with amazing essential oils for a great taste. You can take them either directly or mix them into your favorite beverage. There is even a peanut butter flavored drop for your pet. We recently introduced “Endo on the Go” Delta-8 drops that you can slip into your pocket and purse and take with you just about anywhere!
ENDO Ease
Topical Pain relief product, it is our Endo Select Hemp Oil used as either a warming lotion, cooling lotion or salve.
ENDO Tokes
Our ENDO Tokes products are a range of products made for people who would rather smoke their CBD or Delta-8. The original ENDO Toke is a pre-rolled CBD flower that comes in the shape of a cigarette. The product is, however, tobacco free and has less than 0.30% THC so it won’t get you high, but it is a quick delivery system for CBD. In addition, in 2021, the company has introduced a line of Delta-8 infused disposable and rechargeable vape pens as well as Delta-8 flower in jars or pre-rolled for quick consumption. All of these products are designed to give multiple choices to our customers who like to consume CBD and Delta-8 by smoking something.
ENDO Gummies
For people that don’t like to ingest CBD or Delta-8 by smoking, we have a line of gummies. Currently, we sell three different types of gummies: 1) CBD; 2) CBD & Melatonin; and 3) Delta-8.
Competition & our Advantages
In the market we are going to occupy, we face the following major competitors:
·
Manitoba Hemp Foods: Based in Canada, Manitoba looks to be the industry leader in this market. They have been selling hemp products since 1998 and have created a strong brand. They carry Hemp Hearts, Hemp Heart Bars, Hemp protein smoothies, Hemp protein powder, and Hemp oil.
·
Evo Hemp: Evo is a boulder-based Hemp bar company. They are one of the newer hemp brands in the market. They only offer bars in their product line.
·
Nutiva: Nutiva is an organic superfood brand. They offer a wide range of products with chia, red palm, coconut, and hemp.
·
Naturally Splendid: Naturally Splendid is a multifaceted biotechnology company developing, commercializing, producing, selling, and licensing an entirely new generation of hemp-derived, high quality, nutrient-dense Omega foods, nutritional food enhancers, and related products.
·
CBD MD: CBD MD is a manufacturer of CBD infused products. CBD MD has a full line of CBD infused products.
Our Potential Advantages
ENDO Brands advantage in the market is our unique formulation, price point and high quality. We work closely with our manufacturers to tailor our products to consumer demand.
Marketing, Sales, and Distribution Strategies
Marketing Plan
·
Multi-Channel Marketing: We promote through multiple channels to build awareness of our products.
·
Online Marketing: Most major online platform do not allow the advertising of CBD or Delta-8 infused products for sale so we are limited in what we can promote. As such, we use our internal email list to promote our products to people who have previously shown an interest. We are constantly working on expanding the size of this list.
·
Instagram: Our goal on IG for our brands is to build an obsessed fan base and an engaged community. Hemp education is a vital part of these channels, we will utilize this channel to show the “lifestyle” using our products as well as unique info on our products to drive traffic to our online and retail stores.
·
Twitter and Facebook: We use Twitter and Facebook to inform our customers and investors about the company and to drive traffic to our website that will convert into purchases.
·
Consumer Outreach & Education: The most important factor in the marketing of our products will be consumer education on the benefits of hemp derived products.
Sales Plan
·
Retail Store: In 2021 the company opened its first retail store just outside Dallas, Texas. The company is looking at opening up additional company owned stores in the Dallas area as well as licensed stores in other cities.
·
Retail Distribution: The company did not find working with large distributors and retailer as too profitable. As such, it is selling directly to a few retail locations across the continental U.S.
·
Online Sales: We currently sell our “ENDO” line of products through the following website: EndoBrands.com.
·
Branded Stores: We currently sell our “ENDO” line of products to branded stores through agreements requiring the branded stores to purchase from us a set percentage of their inventory for the right to use our name and products.
Manufacturing and Distribution
Endo Brands
We use various manufacturers and co-packers to create our Endo branded products.

---

ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
Risks Related to Our Company and Business
If we do not obtain additional financing, our business development plans will be delayed, and we may not achieve profitable operations.
We will require significant additional capital to execute on our business development plans. We intend to seek additional funds through private placements of our common stock or other securities as well as public sale of our stock to the public. Our business plan calls for incurring expenses for the purchase of products, website maintenance, and expenses for salary, legal, and administration. If no additional financing is secured, we may have to significantly curtail our plan of operations. If that is the case, our business will not grow as desired. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement of funds. Consequently, there can be no assurance that we will be able to obtain access to capital as and when needed or, if so, that the terms of any available financing will be commercially reasonable. If we are unable to raise suitable financing, our business development plans may be delayed, and we may be unable to achieve profitable operations.
Since we have limited operating history and limited revenues to date, we may be unable to achieve or maintain profitability. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a newer enterprise.
We have limited financial resources and have generated limited revenues to date in our business. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history and lack a track record of consistent revenues, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to fully meet our expenses and totally support our anticipated activities.
Our ability to continue as a business and implement our business plan will depend on our ability to raise sufficient funds. There is no assurance that any debt or equity offerings will be successful or that we will remain in business or be able to implement our business plan if the offerings are not successful.
If we are unable to develop a reliable system for outside manufacturing and fulfillment, our ability to grow our business and achieve profitability will be severely adversely affected.
We currently do not manufacture any of the products that we sell. If our current manufacturers and/or co-packers do not continue to work with us in the future, we may be unable to produce any more product. Our ability to grow our business and customer base will depend upon smoothly functioning relationships with our manufacturing and fulfillment partners and our ability to integrate their roles with our sales, marketing and customer service operations. If we are unable to smoothly integrate these third-party operations into our business, or if we are unable to establish and maintain strong relationships with these key outside parties, our ability to successfully deliver quality products to our customer in a timely manner will be adversely affected, and our ability to achieve profitability will be severely impaired.
If we are unable to successfully market our products or our products do not perform as expected, our business and financial condition will be adversely affected.
We are subject to the risks generally associated with new product introductions and applications, including lack of market acceptance and failure of products to perform as expected. There can be no assurance that we will be successful in marketing our products to the public. Our success will depend on our ability to grow our wholesale distribution network and to develop additional sales channels on cost-effective terms. Our marketing efforts may not be sufficient to generate significant and ongoing sales. Further, if our products do not perform as expected by consumers, either in terms of flavor or perceived performance, our ability to expand our product distribution and grow overall sales will be severely impaired.
Because consumer preferences change frequently, if we fail to innovate, our business and financial condition will be adversely affected.
As a result of changing consumer preferences, most new products are successfully marketed for a limited period of time. Even if our products show early signs of promise, there can be no assurance that our products will continue to be popular for an extended period of time. Our success will be dependent upon our ability to address the changing needs and tastes of the consumer market. Our failure to innovate over time and to adjust to consumer preferences on a regular basis could cause us to fail to achieve and sustain ongoing market acceptance could have a material adverse effect on our financial condition and results of operations.
Because of pressures from competitors with more resources, we may fail to implement our business strategy profitably.
The market for our products is intensely competitive and we expect competition to increase in the future. We will compete with larger and more established companies that have longer operating histories, greater name recognition, access to larger customer bases and distribution networks, and significantly greater financial, technical and marketing resources than we do. As a result, they may be able to adapt more quickly to changes in customer preferences and to devote greater resources to the promotion and sale of their products than we will. In addition, they may have more firmly established financial, manufacturing, distribution, and sales relationships in the industry. Therefore, we cannot be sure that we will be able to successfully implement our business strategy in the face of such competition. If we cannot compete effectively, we may experience future price reductions, reduced gross margins and loss of market share, any of which will materially adversely affect our business, operating results and financial condition.
If we are unable to manage growth, our operations could be adversely affected.
Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage sales, management, and technical personnel. There can be no assurance that management will be able to manage growth effectively.
If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our products. Our failure to properly manage the growth we might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers.
Our business and growth may suffer if we are unable to attract and retain key employees.
Our success depends on the expertise and continued service of my different persons. If one of them leaves the company, it may be difficult to find a sufficiently qualified and motivated individual to replace him/her and it may result in our being unable to implement our business plan and even a complete cessation of our operations, which would likely result in the total loss of an investor's investment.
Furthermore, our ability to expand operations to accommodate our anticipated growth will also depend on our ability to attract and retain qualified media, management, finance, marketing, sales and technical personnel. However, competition for these types of employees is intense due to the limited number of qualified professionals. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality people with advanced skills who understand our business. We hope that we will be able to attract competent employees, but no assurance can be given that we will be successful in this regard. If we are unable to engage and retain the necessary personnel, our business may be materially and adversely affected.
The coronavirus outbreak may adversely affect our business.
In December 2019, a strain of coronavirus was reported to have surfaced in Wuhan, China, and has reached multiple other countries, resulting in government-imposed quarantines, travel restrictions and other public health safety measures in affected countries. The continued outbreak and spreading of the coronavirus has and may continue to adversely impact our business, as our operations are based in the United States which has been severely affected by the outbreak. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of the coronavirus has had and may continue to have an adverse effect on the global markets and global economy, including on the availability and pricing of employees, resources, materials, manufacturing and delivery efforts and other aspects of the global economy. The financial downturn has affected the working hours or availability of staff and third-party contractors, and our clients may encounter cash-flow issues that will delay their payments to us. We also rely on third-party professionals to provide services such as the preparation of our financial statements and to conduct audits, and many of these parties have been affected by government-imposed precautionary measures, thereby delaying our receipt of these services. Therefore, the coronavirus has and could continue to disrupt production and cause delays in the supply and delivery of our products, may continue to affect our operation and disrupt the marketplace in which we operate and may have a material adverse effect on our operations. The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. The development of the coronavirus outbreak could materially disrupt our business and operations, hamper our ability to raise additional funds or sell our securities, continue to slow down the overall economy, curtail consumer spending, interrupt our sources of supply, and make it hard to adequately staff our operations.
Risks Related to Legal Uncertainty
If we are the subject of significant future product liability or related lawsuits, our business will likely fail.
Like all sellers of products for human consumption, we cannot eliminate the risk that our products may be subjection to contamination during the manufacturing or distribution process. Although we currently maintain product liability and general liability insurance, we may not be able to obtain such coverage in the future or such coverage may not be adequate to cover all potential claims. Moreover, even if we are able to maintain sufficient insurance coverage in the future, any successful claim could significantly harm our business, financial condition and results of operations.
The legal status of the main ingredient in our products is uncertain.
Currently, even though many companies are selling items enhanced with Cannabidiol (CBD), the legal status of CBD for use in food is uncertain. For example, in July 2018, the Department of Public Health of the State of California issued a directive stating that CBD derived from industrial hemp, as is used in products like our ENDO Gummy line, is not approved for use in human or pet food. The State of New York has taken a similar position. The FDA has taken a similar position. If this position is adopted by many other states in the future, it could significantly harm our business, financial condition, and results of operations. Furthermore, the Food and Drug Administration has also not declared CBD Generally Recognized As Safe (GRAS) and, as such, it could issue a directive similar to the one issued by the State of California.
In addition, although we believe that Delta-8-Tetrahydrocannabinol is federally legal under the Farm Bill, certain states have moved to outlaw Delta-8 or have it regulated as Marijuana. A recent bill to outlaw Delta-8 was recently defeated in the Texas Legislature.
Risks Related to Our Common Stock
Because we do not expect to pay dividends for the foreseeable future, investors seeking cash dividends should not purchase our common stock.
We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their own common stock after price appreciation, which may never occur, as the only way to realize their investment. Investors seeking cash dividends should not purchase our common stock.
If we undertake future offerings of our common stock, shareholders will experience dilution of their ownership percentage.
Generally, existing shareholders will experience dilution of their ownership percentage in the company if and when additional shares of common stock are offered and sold. In the future, we may be required to seek additional equity funding in the form of private or public offerings of our common stock and/or use convertible debt. In the event that we undertake subsequent offerings of common stock, or raise money using convertible debentures, your ownership percentage, voting power as a common shareholder, and earnings per share, if any, will be proportionately diluted. This may, in turn, result in a substantial decrease in the per-share value of your common stock.
Because FINRA sales practice requirements may limit a stockholder's ability to buy and sell our stock, investors may not be able to sell their stock should they desire to do so.
In addition to the "penny stock" rules described below, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell shares of our common stock.
Because we are subject to the "Penny Stock" rules, the level of trading activity in our stock may be reduced.
Broker-dealer practices in connection with transactions in "penny stocks" are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, broker-dealers who sell these securities to persons other than established customers and "accredited investors" must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.

---

ITEM 2. PROPERTIES
Item 2. Properties
Our corporate headquarters are at 6501 Dalrock Road, Suite 100, Rowlett, TX 75089.
The property is sufficient for our current business size.

---

ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
None.

---

ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is quoted under the symbol "RTON" on the OTCQB tier of the over-the-counter electronic quotation system operated by OTC Markets Group, Inc. The following tables set forth the range of high and low prices for our common stock for the each of the periods indicated as reported by the OTC Markets quotation system. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Fiscal Year Ended March 31, 2023
Quarter Ended
High $
Low $
March 31, 2023
$ 0.0003
$ 0.0001
December 31, 2022
$ 0.0006
$ 0.0001
September 30, 2022
$ 0.0008
$ 0.0004
June 30, 2022
$ 0.0009
$ 0.0003
Fiscal Year Ended March 31, 2022
Quarter Ended
High $
Low $
March 31, 2022
$ 0.0010
$ 0.0005
December 31, 2021
$ 0.0023
$ 0.0006
September 30, 2021
$ 0.0043
$ 0.0013
June 30, 2021
$ 0.0055
$ 0.0013
On August 15, 2023, the last sales price per share of our common stock was $0.0001.
Penny Stock
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.
Holders of Our Common Stock
As of August 15, 2023, we had 6,374,516,097 shares of our common stock issued and outstanding, held by approximately 125 shareholders of record.
Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:
1.
We would not be able to pay our debts as they become due in the usual course of business; or
2.
Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

---

ITEM 6. SELECTED FINANCIAL DATA
Item 6. Selected Financial Data
A smaller reporting company is not required to provide the information required by this Item.

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Fiscal Year Ended March 31, 2023 Compared to Fiscal Year Ended March 31, 2022
During the year ended March 31, 2023, we generated revenue of $1,135,939. Our cost of goods sold was $530,474, resulting in gross margin of $605,465. We incurred total operating expenses of $741,378, consisting of general and administrative expenses of $562,888, legal and professional fees of $149,066, advertising and promotion costs of $23,824 and depreciation and amortization of $5,600. In addition, we incurred interest expense of $11,750, amortization of debt discount of $16,509, a gain on the change in fair value of derivative liabilities of $51,994, financing costs of $4,250, a loss on the settlement of dispute of $15,143, and a gain on the settlement of liabilities of $140,297. Our net income for the year ended March 31, 2023, was $8,726.
During the year ended March 31, 2022, we generated revenue of $997,100. Our cost of goods sold was $557,088, resulting in gross margin of $440,012. We incurred total operating expenses of $495,697, consisting of general and administrative expenses of $349,980, legal and professional fees of $111,599, advertising and promotion costs of $28,518 and depreciation and amortization of $5,600. In addition, we incurred interest expense of $25,636, amortization of debt discount of $966, a gain on the change in fair value of derivative liabilities of $100,209 and a loss on the settlement of liabilities of $274,938. Our net loss for the year ended March 31, 2022, was $257,016.
Our revenues increased during the year ended March 31, 2023, as compared to the prior year, largely as a result of the performance of our store in Rowlett, Texas, along with the Company beginning to sell to other stores on a bulk basis, which we hope expands in the future. Our gross margins increased significantly in 2023 as we increased prices and lowered our acquisition costs. Our operating expenses were relatively consistent as compared to the prior year. Over the last two years, the Company settled much of its debt obligations resulting in a decrease in interest expenses and derivative liabilities. As we continue with the development and marketing of our new products, we expect that our operating expenses, as well as our revenues, will increase significantly over the current fiscal year.
Liquidity and Capital Resources
As of March 31, 2023, we had current assets in the amount of $154,456, consisting of cash in the amount of $33,322, accounts receivable of $1,798, inventory of $116,115 and other current assets of $3,221.
As of March 31, 2023, we had current liabilities of $684,788, consisting of notes payable, net of discounts, of $257,077, convertible debts, net of discounts, in the amount of $182,051, unearned revenue of 12,500, accounts payable of $77,388, accrued interest of $28,236, accrued expenses of $104,148, and current portion of lease liability of $23,388.
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 notes payable and convertible notes payable.
Our ability to successfully execute our business plan is contingent upon us obtaining additional financing and/or upon realizing sales revenue sufficient to fund our ongoing expenses. Until we are able to sustain our ongoing operations through sales revenue, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.
Off Balance Sheet Arrangements
As of March 31, 2023, there were no off-balance sheet arrangements.
Going Concern
We have experienced recurring losses from operations and had an accumulated deficit of $15,761,241 as of March 31, 2023. To date, we have not been able to produce sufficient sales to become cash flow positive and profitable on a consistent basis. The success of our business plan during the next 12 months and beyond will be contingent upon generating sufficient revenue to cover our costs of operations and/or upon obtaining additional financing. If the Company raises additional funds through the issuance of equity, the percentage ownership of current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to the rights, preferences and privileges of the Company’s common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict its future plans for developing its business and achieving commercial revenues. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that the following accounting policies currently fit this definition.
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of Right On Brands, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated upon consolidation.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided by the straight-line method over the useful lives of the related assets, from three to five years.
Inventory
Inventories are stated at the lower of cost (average cost) or market (net realizable value).
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Long-lived Assets
The Company's long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, “Property, Plant, and Equipment”.
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.
Stock-Based Compensation
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-50, “Equity-Based Payments to Non-Employees”. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50, “Equity-Based Payments to Non-Employees”.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718, “Compensation - Stock Compensation”. Costs are measured at the estimated fair value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 718, “Compensation - Stock Compensation”.
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 online customers is typically based on sales terms that do not allow for a right of return after 7 days from the date of purchase. The transfer of control of products to our in-store customers is typically based on sales terms that do not allow for a right of return.
Our products are sold for cash with payments received at pickup or before shipping.
Income Taxes
The Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In accordance with FASB ASC 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. The Company accounts for income tax under the provisions of FASB ASC 740, "Income Taxes", which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Fair Value of Financial Instruments
The Company applies the provisions of accounting guidance, FASB ASC 825, “Financial Instruments”, that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties.
Convertible Instruments
The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities".
Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.
Recently Issued Accounting Pronouncements
Our management has considered all recent accounting pronouncements issued since the last audit of our financial statements. Our management believes that these recent pronouncements will not have a material effect on our financial statements.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements Required by Article 8 of Regulation S-X:
Audited Financial Statements:
Report of Independent Registered Public Accounting Firm PCAOB ID #76
Consolidated Balance Sheets as of March 31, 2023 and 2022;
Consolidated Statements of Operations for the years ended March 31, 2023 and 2022;
Consolidated Statement of Stockholders' Deficit for the years ended March 31, 2023 and 2022;
Consolidated Statements of Cash Flows for the years ended March 31, 2023 and 2022
Notes to the Consolidated Financial Statements
Your Vision Our Focus
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders of Right On Brands, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Right On Brands, Inc. as of March 31, 2023 and 2022, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended March 31, 2023, 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 Right On Brands, Inc. as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 2 to the financial statements, the entity has suffered recurring losses from operations since inception and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. 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 Right On Brands, Inc. 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Right On Brands, Inc. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.
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.
Turner, Stone & Company, L.L.P.
Accountants and Consultants
12700 Park Central Drive, Suite 1400
Dallas, Texas 75251
Telephone: 972-239-1660 ⁄ Facsimile: 972-239-1665
Toll Free: 877-853-4195
Web site: turnerstone.com
INTERNATIONAL ASSOCIATION OF ACCOUNTANTS AND AUDITORS
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Convertible notes payable
As discussed in Note 6 to the financial statements, the Company entered into certain financing transactions which included the issuance of notes payable which were convertible into common stock of the Company.
We identified the accounting evaluation of the conversion feature with each note payable to be a critical audit matter because the evaluation of the appropriate accounting treatment for this area involved a high degree of auditor judgment and an increased extent of effort to evaluate the Company’s conclusions.
How the Matter Was Addressed in the Audit
Our audit procedures related to the conclusions associated with the presentation and accounting for the conversion features involved the following procedures, among others:
-
We obtained management’s analysis of the conversion feature within each note payable.
-
We analyzed the conversion feature to identify and assess the reasonableness of management’s accounting treatment for this feature and how it impacted both the accounting and presentation in the financial statements.
/s/ Turner, Stone & Company, L.L.P.
We have served as Right On Brands, Inc.'s auditor since 2019.
Dallas, Texas
August 16, 2023
RIGHT ON BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
March 31,
March 31,
Assets
Current assets
Cash
$ 33,322
$ 28,056
Accounts receivable
1,798
-
Prepaid expenses
-
6,000
Inventory
116,115
114,944
Other current assets
3,221
3,221
Total current assets
154,456
152,221
Non-current assets
Property and equipment, net of depreciation
9,885
15,485
Right of use asset
42,488
66,425
Total non-current assets
52,373
81,910
Total assets
$ 206,829
$ 234,131
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable
$ 77,388
$ 56,723
Accrued interest payable
28,236
32,883
Accrued expenses
104,148
93,189
Unearned revenue
12,500
-
Lease liability, current portion
23,388
23,937
Notes payable, net of discount
257,077
94,945
Convertible debt, net of discount
182,051
296,788
Derivative liability
-
159,106
Total current liabilities
684,788
757,571
Lease liability, non-current
19,100
42,488
Total liabilities
703,888
800,059
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 authorized, 6,374,516,097 and 5,924,801,561 shares issued, respectively
6,374,517
5,924,802
Additional paid-in capital
8,845,228
9,197,980
Common stock payable
15,000
51,820
Accumulated deficit
(15,761,241 )
(15,769,967 )
Total Right On Brands stockholders' deficit
(521,496 )
(590,365 )
Noncontrolling interest
24,437
24,437
Total stockholders' deficit
(497,059 )
(565,928 )
Total liabilities and stockholders' deficit
$ 206,829
$ 234,131
The accompanying notes are an integral part of these consolidated financial statements.
RIGHT ON BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended
March 31,
Revenues
$ 1,135,939
$ 997,100
Cost of goods sold
530,474
557,088
Gross profit
605,465
440,012
Operating expenses
General and administrative
562,888
349,980
Advertising and promotion
23,824
28,518
Legal and professional
149,066
111,599
Depreciation and amortization
5,600
5,600
Total operating expenses
741,378
495,697
Loss from operations
(135,913 )
(55,685 )
Other income and (expense)
Interest expense
(11,750 )
(25,636 )
Amortization of debt discount
(16,509 )
(966 )
Change in fair value of derivative liability
51,994
100,209
Financing costs
(4,250 )
-
Loss on settlement of liabilities
140,297
(274,938 )
Loss on settlement of dispute
(15,143 )
-
Total other income (expense)
144,639
(201,331 )
Net income (loss) including noncontrolling interest
$ 8,726
$ (257,016 )
Net income (loss) attributable to noncontrolling interest
-
-
Net income (loss) attributable to Right on Brands, Inc.
$ 8,726
$ (257,016 )
Income (loss) per share - basic
$ 0.00
$ (0.00 )
Income (loss) per share - diluted
$ 0.00
Weighted average shares outstanding - basic
5,888,244,296
5,922,572,597
Weighted average shares outstanding - diluted
6,093,337,629
The accompanying notes are an integral part of these consolidated financial statements.
RIGHT ON BRANDS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
Preferred Stock
Common Stock
Additional
Common Stock
Accumulated
Noncontrolling
Shares
Amount
Shares
Amount
Paid in Capital
Payable
Deficit
Interest
Total
Balances, March 31, 2021
5,000,000
$ 5,000
5,474,978,826
$ 5,474,979
$ 8,546,492
$ 51,820
$ (15,512,951 )
$ 24,437
$ (1,410,223 )
Issuance of common stock for cash
-
-
299,999,999
300,000
(211,000 )
-
-
-
89,000
Issuance of common stock for services
-
-
1,500,000
1,500
1,500
-
-
-
3,000
Settlement of accounts payable
-
-
13,000,000
13,000
16,900
-
-
-
29,900
Settlement of warrant dispute
-
-
38,114,035
38,114
41,886
-
-
-
80,000
Settlement of debt
-
-
309,243,333
309,243
590,168
-
-
-
899,411
Correction of shares issued in prior period
-
-
(212,034,632 )
(212,034 )
212,034
-
-
-
-
Net loss
-
-
-
-
-
-
(257,016 )
-
(257,016 )
Balances, March 31, 2022
5,000,000
$ 5,000
5,924,801,561
$ 5,924,802
$ 9,197,980
$ 51,820
$ (15,769,967 )
24,437
$ (565,928 )
Issuance of common stock payable
-
-
1,400,000
1,400
35,420
(36,820 )
-
-
-
Recission of shares
-
-
(153,114,035 )
(153,114 )
153,114
-
-
-
-
Issuance of common stock for cash
-
-
450,000,000
450,000
(405,000 )
-
-
-
45,000
Shares to settle dispute
-
-
151,428,571
151,429
(136,286 )
-
-
-
15,143
Net income
-
-
-
-
-
-
8,726
-
8,726
Balances, March 31, 2023
5,000,000
$ 5,000
6,374,516,097
$ 6,374,517
$ 8,845,228
$ 15,000
$ (15,761,241 )
$ 24,437
$ (497,059 )
The accompanying notes are an integral part of these consolidated financial statements.
RIGHT ON BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended
March 31,
OPERATING ACTIVITIES
Net income (loss)
$ 8,726
$ (257,016 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization
5,600
5,600
Amortization of debt discount
16,509
Financing costs
4,250
-
Change in fair value of derivative liability
(51,994 )
(100,209 )
(Gain) loss on settlement of liabilities
(140,297 )
274,938
Shares issued for services
-
3,000
Loss on settlement of dispute
15,143
-
Changes in operating assets and liabilities:
Accounts receivable
(1,798 )
-
Prepaid expenses
6,000
(6,000 )
Inventory
(1,171 )
(41,391 )
Accounts payable
20,665
(62,075 )
Accrued interest payable
11,750
25,636
Accrued expenses
28,010
5,848
Unearned revenue
12,500
-
NET CASH USED IN OPERATING ACTIVITIES
(66,107 )
(150,703 )
INVESTING ACTIVITIES
NET CASH USED IN INVESTING ACTIVITIES
-
-
FINANCING ACTIVITIES
Proceeds from notes payable
202,101
65,000
Repayment of notes payable
(175,728 )
(21,021 )
Repayment of convertible debt
-
-
Proceeds from issuance of common stock
45,000
89,000
NET CASH PROVIDED BY FINANCING ACTIVITIES
71,373
132,979
NET INCREASE (DECREASE) IN CASH
$ 5,266
$ (17,724 )
CASH, BEGINNING OF YEAR
28,056
45,780
CASH, END OF YEAR
$ 33,322
$ 28,056
CASH PAID FOR INCOME TAXES
$ -
$ -
CASH PAID FOR INTEREST
$ -
$ -
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for common stock payable
$ 36,820
$ -
Original issuance discount on note payable
$ 16,991
$ 8,450
Convertible note payable issued for settlement of accrued expenses
$ 17,051
$ -
Recission of shares issued in prior period
$ 153,114
$ 212,034
Common stock issued for settlement of liabilities
$ -
$ 1,009,311
The accompanying notes are an integral part of these consolidated financial statements.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Formation and Business Activity
Right on Brands, Inc. (“we” or “the Company” or “Right on 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 RTON. The Company’s primary business is the sale of health and wellness products.
The Company has the following wholly owned subsidiaries:
·
Endo Brands, Inc.
·
Humble Water Company
The Company has the following partially owned subsidiaries:
·
Endo & Centre Venture LLC (51% owner)
·
Spring Hill Water Company, LLC (49% owner - see Note 7)
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.
On April 16, 2018, the Company entered into an operating agreement with Centre Manufacturing, Inc. (“Centre”) and 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 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 to date. At March 31, 2023 and 2022, the Company owed Centre $14,154, respectively, which is included in accounts payable on the accompanying condensed consolidated balance sheets.
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 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 normal course of business. For the year ended March 31, 2023, the Company had an accumulated deficit of approximately $15,761,000, had a net loss from operations of approximately $136,000, and net cash used in operating activities of approximately $66,000, with approximately $1,136,000 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 private offerings of its stock. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.
The 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
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of Right On Brands, Inc. and its wholly owned subsidiaries and majority owned business (Endo Brands, Inc., Humble Water Company, Springhill Water Co, and Endo & Centre Venture LLC). Intercompany accounts and transactions have been eliminated upon consolidation.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 March 31, 2023, or March 31, 2022.
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 March 31, 2023, 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 March 31, 2023 and 2022, 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 years ended March 31, 2023 and 2022, respectively.
Inventory
Inventories are stated at the lower of cost (average cost) or market (net realizable value). Cost includes materials related to the purchase of finished goods to be sold to retail and wholesale customers. 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. Depreciation is provided by the straight-line method over the useful lives of the related assets, ranging from one to five years.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 ASC 360, "Property, Plant, and Equipment," and FASB ASC 205 "Presentation of Financial Statements". The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through March 31, 2023, and 2022, 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.
Stock Based Compensation
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718, “Compensation - Stock Compensation”. Costs are measured at the estimated fair value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 718, “Compensation - Stock Compensation”.
Income Taxes
In accordance with FASB ASC 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 online customers is typically based on sales terms that do not allow for a right of return after 7 days from the date of purchase. The transfer of control of products to our in-store customers is typically based on sales terms that do not allow for a right of return.
Our products are sold for cash with payments received at pickup or before shipping.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fair Value Measurement
ASC Topic 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 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 the asset or liability along with other information, including the gain or loss recognized in income in the 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 fair value measurement and unobservable (supported by little or no market activity).
The Company did not have any Level 1 or Level 2 assets and liabilities at March 31, 2023 or 2022. The Derivative liabilities are Level 3 fair value measurements.
Balance at March 31, 2022
$ 159,106
Settlement
(107,112 )
Change in fair value
(51,994 )
Balance at March 31, 2023
$ -
The following is a summary of activity of Level 3 liabilities during the year ended March 31, 2022:
Balance at March 31, 2021
$ 472,471
Settlement
(213,156 )
Change in fair value
(100,209 )
Balance at March 31, 2022
$ 159,106
During prior years, the Company entered into several convertible note agreements (Note 6). These notes were 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 met the definition of a derivative which therefore requires bifurcation and are accounted for as a derivative liability.
At March 31, 2022, 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 $0.0007; a risk-free interest rate of 1.06%, and expected volatility of the Company’s common stock of 180%, various estimated exercise prices, and terms under one year.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 accounts for conversion options embedded in convertible instruments in accordance with ASC 815 "Derivatives and Hedging Activities."
Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. 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 net loss/income per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options, warrants and convertible notes. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented. See Note 8.
Recently Accounting Pronouncements
During the year ended March 31, 2023, and 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.
Subsequent Events
The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - INVENTORY
At March 31, 2023 and March 31, 2022, inventory consisted of the following:
March 31,
March 31,
Finished goods
$ 116,115
$ 114,944
$ 116,115
$ 114,944
NOTE 5 - PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS
The Company’s property and equipment consisted of the following at the respective balance sheet dates:
March 31,
March 31,
Website development
$ 88,965
$ 88,965
Automobile
31,596
31,596
Studio and office equipment
11,910
11,910
Tenant improvements
11,135
11,135
Intangible assets
1,024
1,024
144,630
144,630
Accumulated depreciation and amortization
(134,745 )
(129,145 )
$ 9,885
$ 15,485
Depreciation expense of property and equipment for the years ended March 31, 2023 and 2022 was $5,600, respectively.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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 remained outstanding and was in default at March 31, 2021. On June 28, 2021, the Company and Noteholder 1 entered into a Settlement Agreement and Mutual Release whereby the Company issued 83,333,333 shares valued at $425,000 to Noteholder 1 to settle the $249,000 balance of the note and $59,760 in accrued interest.
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 March 31, 2023.
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 applied for the loan to be forgiven by the Small Business Administration and on October 12, 2021, forgiveness of the principal and interest related to the loan was granted.
During December 2021, the Company was listed as defendant on a complaint from Noteholder 10 seeking repayment of amounts due under a February 2020 convertible note payable. The Company has recorded all unpaid principal and interest due to Noteholder 10 through March 31, 2022. On April 15, 2022, the Company and Noteholder 10 entered into a settlement agreement whereby the Company will repay Noteholder 10 a total of $115,000 consisting of $25,000 paid on April 18, 2022, $5,000 to be paid monthly from May 15, 2022 to October 15, 2022, $6,250 to be paid monthly from November 15, 2022 to April 15, 2023, and $7,500 to be paid monthly from May 15, 2023 to July 15, 2023. As a result of the settlement, the Company reclassified the note from convertible debt to notes payable and recorded a gain on settlement of liabilities totaling 140,297, including $107,112 from the elimination of the derivative liability associated with the note. On March 31, 2023, the balance of the note totaled $60,000.
On January 31, 2022, the Company entered into a loan agreement totaling $73,450, consisting of cash proceeds totaling $65,000 and loan fees totaling $8,450. The note is to be repaid on an ongoing basis by deducting 19.75% of daily sales and applying against the loan balance. The note matures on July 1, 2023 but will be paid off during the year ending March 31, 2023, based on current daily sales. On July 21, 2022, the $6,999 balance of the note was rolled into the July 21, 2022 note below.
On July 21, 2022, the Company entered into a note payable agreement totaling $89,581, consisting of cash proceeds totaling $72,101, repayment of the January 31, 2022 loan balance totaling $6,999, and loan fees totaling $10,481. The note is to be repaid on an ongoing basis by deducting 19.75% of daily sales and applying against the loan balance. The note matures on January 21, 2024. On March 31, 2023, the balance of the note totaled $66,632.
On August 4, 2022, the Company entered into a note payable agreement for $80,000 received as advances during the three months ended June 30, 2022. The note is to be repaid in $3,000 monthly installments beginning on September 10, 2022, with the remaining balance due at maturity on December 31, 2022. On March 31, 2023, the balance of the note totaled $75,286 and was in default.
On August 11, 2022, the Company entered into a 12% note payable agreement totaling $60,760, consisting of cash proceeds totaling $50,000, financing costs of $4,250, and an original discount totaling $6,510. The note requires monthly payments of $6,805 beginning on September 30, 2022 until maturity on August 11, 2023. On March 31, 2023, the balance of the note totaled $13,125.
During the years ended March 31, 2023 and 2022, the Company incurred interest expenses related to notes payable totaling $1,761 and $661, respectively.
Convertible Debt
At March 31, 2023, the Company's convertible debt related to the notes which can be converted at fixed conversion rates are summarized as follows:
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
Noteholder 13
2/16/2021
8/16/2021
6.00 %
$0.015/Share
140,000
-
140,000
Noteholder 17
2/17/2023
8/20/2023
6.00 %
$0.0001/Share
17,051
-
17,051
$ 182,051
$ -
$ 182,051
At March 31, 2022, the Company's convertible debt and derivative liability related to the notes which can be converted at variable discounted and fixed conversion 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 10
2/27/2020
2/26/2021
10.00 %
40.00 %
$ 131,788
$ -
$ 131,788
$ 159,045
$ 131,788
$ -
$ 131,788
$ 159,045
Noteholder
Origination
Maturity
Interest
rate
Fixed
conversion
rate
Principal
balance
Debt
discount
Net amount
of liabilities presented
Corresponding derivative
balance
Noteholder 9
7/7/2016
9/30/2019
6.00 %
$0.10/Share
$ 25,000
$ -
$ 25,000
$ -
Noteholder 13
2/16/2021
8/16/2021
6.00 %
$0.015/Share
140,000
-
140,000
$ 165,000
$ -
$ 165,000
$ 61
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the years ended March 31, 2023 and 2022, the Company incurred interest expenses related to convertible debt totaling $9,989 and $24,975, respectively.
On October 20, 2021, the Company and Noteholder 8 reached an agreement resolving an ongoing dispute related to Noteholder 8’s convertible note payable. As part of the agreement, the Company issued 225,910,000 shares of the Company’s common stock to settle the dispute and all unpaid principal and interest on the convertible note.
The convertible debt held by noteholders 9 and 13 are in default at March 31, 2023.
Future Maturities
The Company’s future maturities of notes payable and convertible debt are as follows:
Year ending
March 31,
Amount
$ 447,094
Amortization of Debt Discount
During the years ended March 31, 2023 and 2022, the Company recorded amortization of debt discounts totaling $16,509 and $966, respectively.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 will 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, 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 March 31, 2023 and 2022, the noncontrolling interest was $24,437 in the accompanying consolidated financial statements. As of March 31, 2023 and 2022, our total investment into Spring Hill to date was $101,470. During the years ended March 31, 2023 and 2022, there have been no significant operations or expenditures in the joint venture.
NOTE 8 - EARNINGS PER SHARE
FASB ASC 260, “Earnings Per Share,” requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations.
Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
The Company had no potential additional dilutive securities outstanding at March 31, 2023 and 2022, except as follows:
March 31,
March 31,
Preferred stock
25,000,000
25,000,000
Warrants
-
-
Options
-
-
Convertible debt
180,093,333
339,053,333
Total
205,093,333
364,053,333
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - STOCKHOLDERS’ EQUITY
During December 2022, the Company’s shareholders approved a reverse split of the Company’s common stock in the amount of 250 for 1. The reverse split was to be effective during January 2023. However, the reverse split was not approved by FINRA. As of the date of this report, FINRA has not approved the reverse split and, accordingly, the effect of the reverse split has not been presented in these consolidated financial statements.
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.
Common Stock
During December 2017, the Company entered into a three-year consulting agreement with Dr. Ashock Patel, the Company’s former CEO, 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. Since the shares were yet to be issued at March 31, 2022, they were reported in common stock payable in the accompanying consolidated statement of stockholders’ deficit. During June 2022, the Company issued 1,400,000 shares of common stock to settle the common stock payable to Dr. Patel.
During the year ended March 31, 2022, the Company issued several subscription agreements for the purchase of common stock by various investors. A total of 299,999,999 shares of common stock were issued during the year ended March 31, 2022, and the Company received cash proceeds received totaling $89,000.
During May 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. As part of the agreement, the Company agreed to issue 38,114,035 shares of common stock with a fair value of $80,000 to settle the convertible debt and outstanding warrants. The resulting loss from the settlement was accrued at March 31, 2021 and has been settled as of March 31, 2022.
During June 2021, the Company issued 13,000,000 shares of common stock to a vendor to pay accounts payable owed to the vendor totaling $8,000. The shares were valued at $29,900, resulting in a loss on settlement of $21,900.
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During August 2021, the Company issued 1,500,000 shares of common stock for services provided to the Company.
During the year ended March 31, 2022, the Company and a former noteholder determined that the Company had issued 212,034,632 common shares in excess of what was owed for conversion notices received by the Company from the noteholder during the year ended March 31, 2021. Accordingly, the Company rescinded the excess share issuance as detailed on the consolidated statement of stockholders’ deficit. On March 31, 2023, the Company noted the former noteholder had not returned 151,428,571 common shares and determined the shares were not recoverable. Accordingly, management recorded a loss of $15,143 which represented the value of the shares at March 31, 2023.
During August 2022, Crown Bridge Partners LLC (“CBP”), one of the Company’s former lenders, settled charges with the Securities and Exchange Commission (“SEC”) for failing to register with the SEC as a securities dealer. As part of the agreement, CBP agreed to surrender any shares it held which were acquired through its convertible notes and related activities. As a result, on August 22, 2022, 153,114,035 shares of the Company’s common stock were returned and cancelled.
During the year ended March 31, 2023, the Company entered into a subscription agreement for the purchase of common stock. A total of 450,000,000 shares of common stock were issued during the year ended March 31, 2023, and the Company received cash proceeds received totaling $45,000.
Stock Options and Warrants
On November 19, 2018, the Company issued options to its former 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 expired November 19, 2021.
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 expired 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 $0.01. The warrants were immediately exercisable and expired September 30, 2021.
A summary of the status of the Company’s option and warrant grants as of March 31, 2022, and the changes during the fiscal year then ended is presented below:
Shares
Weighted Avg Exercise Price
Outstanding, March 31, 2021
22,750,000
$ 0.04
Granted
-
$ -
Exercised
-
$ -
Expired
(22,750,000 )
$ 0.04
Outstanding, March 31, 2022
-
$ -
Exercisable, March 31, 2022
-
$ -
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - RELATED PARTY TRANSACTIONS
During the year ended March 31, 2022, the Company incurred $16,514 and $47,700 in compensation expenses to the Company’s CEO and CFO, respectively.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
On April 1, 2019, the Company entered into an office and warehouse lease 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. As a result of the ongoing COVID-19 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 year ended March 31, 2021. The lease states the Company is responsible for the remaining payments through March 31, 2022, totaling approximately $87,000. Through March 31, 2023 and 2022, the Company has accrued $87,341, respectively, of the remaining payments as accrued expenses. To date, the lessor has not demanded payment from the Company for the any unpaid amounts due under the lease.
On March 17, 2021, the Company entered into a storefront lease agreement in Rowlett, Texas. At the inception of the lease, the Company recorded a right of use asset and lease liability of $93,000, respectively. The Company records rent on straight-line basis over the terms of the underlying lease. Minimum lease payments under the lease are as follows:
Year Ending March 31,
Amount
$ 26,658
25,025
Total remaining lease payments
$ 51,683
Less: imputed interest
(9,195 )
Present Value of remaining lease payments
$ 42,488
Current
$ 23,388
Noncurrent
$ 19,100
Remaining lease term (years)
1.92
Discount rate
5.00 %
RIGHT ON BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - FEDERAL INCOME TAX
The Company accounts for income taxes under ASC 740-10, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes. The provision (benefit) for income taxes for the years ended March 31, 2023, and 2022, assumes a statutory 21%, effective tax rate for federal income taxes.
March 31, 2023
March 31, 2022
Federal tax statutory rate
21 %
21 %
Temporary differences
-126 %
8 %
Changes in estimates
0 %
0 %
Valuation allowance
103 %
-29 %
Effective rate
0 %
0 %
The components of deferred tax expense (benefit) as of March 31, 2023 and 2022, are as follows:
March 31, 2023
March 31, 2022
Deferred tax expense (benefit):
Net income (loss)
$ 8,726
$ (257,016 )
Temporary differences
Stock-based compensation
-
3,000
Change in derivative valuation
(51,994 )
(100,209 )
Valuation allowance
43,268
354,225
Net deferred tax expense (benefit)
$ -
$ -
The Company had deferred income tax assets as of March 31, 2023, and 2022, as follows:
March 31, 2023
March 31, 2022
Loss carryforwards
$ 2,308,000
$ 2,299,000
Less - valuation allowance
(2,308,000 )
(2,299,000 )
Total net deferred tax assets
$ -
$ -
The Company provides for a valuation allowance when it is more likely than not that it will not realize a portion of the deferred tax assets. The Company has established a valuation allowance against the net deferred tax asset due to the uncertainty that enough taxable income will be generated in those taxing jurisdictions to utilize the assets. Therefore, we have not reflected any benefit of such deferred tax assets in the accompanying financial statements. Our net deferred tax asset and valuation allowance increased by $9,000 and $74,000 in the fiscal years ending March 31, 2023 and 2022, respectively. In the fiscal year ended March 31, 2022, the valuation allowance was increased by $427,000 due to an adjustment of the previously estimated loss carryforward of approximately $2,032,000.
At March 31, 2023, the Company had approximately $10,993,000 in federal net operating loss carryforwards. These carry forwards are allowed to be carried forward indefinitely and are to be limited to 80% of the taxable income. Pursuant to Internal Revenue Code Section 382, the future utilization of our net operating loss carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future.
To the extent that the tax deduction is included in a net operating loss carry forward and is in excess of amounts recognized for book purposes, no benefit will be recognized until the loss carry forward is recognized. Upon utilization and realization of the carry forward, the corresponding change in the deferred asset and valuation allowance will be recorded as additional paid-in capital.
As of March 31, 2023, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. The company is subject to U.S. federal, state and local income tax examinations by tax authorities for years 2016 through 2022. The tax returns for the fiscal years ended March 31, 2023 and 2022 have not yet been filed.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
No events occurred requiring disclosure under Item 307 and 308 of Regulation S-K during the fiscal year ending March 31, 2023.

---

ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year ended March 31, 2023. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, including our Chief Executive Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of March 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of March 31, 2023, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending March 31, 2024: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

---

ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
None
PART III

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
The following information sets forth the names, ages, and positions of our current directors and executive officers as of August 16, 2023.
Name
Age
Present Positions
Jerry Grisaffi
CEO and Chairman of the Board
Michael Brown
Director
Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.
Jerry Grisaffi - Chairman of the Board
Mr. Grisaffi is a serial entrepreneur who has lived all of his life in Texas. Prior to his appointment Mr. Grisaffi was a consultant to public companies, assisting them with corporate strategy and development. Prior to that, from 2014 to 2017, Mr. Grisaffi was the founder and chairman of the board of Rocky Mountain High Brands, a brand management company that markets healthy products to health-conscious consumers. Prior to founding Rocky Mountain High Brands, from 2010 to 2013, Mr. Grisaffi was the Chairman of the Board and President of Republic of Texas Brands. From 2003 to 2008, Mr. Grisaffi was the President of Microtrack, a company focused on monetizing GPC technology. Previously, Mr. Grisaffi spent forty successful years in the automobile business. He is a lifelong Texan and enjoys spending time with his extended family of 11 grandchildren and 2 great-grandchildren.
Michael Brown - Director
Mr. Brown is a lifelong Texan born in Garland, Texas. Mr. Brown was born with Cerebral Palsy and has a passion for helping people. Michael has been with Right on Brands Inc for 3 years and previously was in the oil and gas industry.
Term of Office
Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by the Company to become directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time except that Jerry Grisaffi filed for personal bankruptcy in 2019; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
Committees of the Board
We do not currently have a compensation committee, executive committee, or stock plan committee.
Audit Committee
We do not have a separately designated standing audit committee. The entire Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by an audit committee. The Board approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the Board reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor. Our Board of Directors, which performs the functions of an audit committee, does not have a member who would qualify as an "audit committee financial expert" within the definition of Item 407(d)(5)(ii) of Regulation S-K. We believe that, at our current size and stage of development, the addition of a special audit committee financial expert to the Board is not necessary.
Nomination Committee
Our Board of Directors does not maintain a nominating committee. As a result, no written charter governs the director nomination process. Our size and the size of our Board, at this time, do not require a separate nominating committee.
When evaluating director nominees, our directors consider the following factors:
·
The appropriate size of our Board of Directors;
·
Our needs with respect to the particular talents and experience of our directors;
·
The knowledge, skills and experience of nominees, including experience in finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;
·
Experience in product development and marketing;
·
Experience with accounting rules and practices; and
·
The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new Board members.
Our goal is to assemble a Board that brings together a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Board will also consider candidates with appropriate non-business backgrounds.
Other than the foregoing, there are no stated minimum criteria for director nominees, although the Board may also consider such other factors as it may deem are in our best interests as well as our stockholders. In addition, the Board identifies nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of the Board does not wish to continue in service or if the Board decides not to re-nominate a member for re-election, the Board then identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Board are polled for suggestions as to individuals meeting the criteria described above. The Board may also engage in research to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the right in the future to retain a third-party search firm, if necessary. The Board does not typically consider shareholder nominees because it believes that its current nomination process is sufficient to identify directors who serve our best interests.
Code of Ethics
As of March 31, 2023, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

---

ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
Compensation Discussion and Analysis
Until August 2018, our sole executive officer, Daniel Crawford, received a base salary of $72,000 per year under an employment contract dated April 1, 2017. Subsequent to August 2018, there have been no employment agreements in effect except one consulting agreement with our former President, Ashok Patel. Under the terms of the agreement, Mr. Patel received 700,000 shares of common stock at issuance, and on the successive anniversary in December 2018. Any bonus compensation is at the discretion of the board, or the compensation committee.
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended March 31, 2023, and March 31, 2022.
Name and
principal
position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation ($)
Nonqualified Deferred Compensation Earnings ($)
All Other Compensation ($)
Total
($)
Jerry Grisaffi, BOD Chairman
-
-
-
-
-
-
$ 16,514
$ 16,514
and CEO
-
-
-
-
-
-
-
-
A. David Youssefyeh, Director and
-
-
-
-
-
-
$ 47,700
$ 47,700
CFO until July 26, 2022
-
-
-
-
-
-
-
-
David Lewis,
-
-
-
-
-
-
-
-
Director until July 26, 2022
-
-
-
-
-
-
-
-
Michael Brown, Director
-
-
-
-
-
-
-
-
Narrative Disclosure to the Summary Compensation Table
Our executive officers received, or accrued, the cash compensation set forth above.
Stock Option Grants
We have not granted any stock options to the executive officers or directors except for the options to our President and former CFO to purchase 6,000,000 and 2,000,000 shares of common stock, respectively. These options were immediately vested when issued November 19, 2018 and expired after three years during November 2021.
Outstanding Equity Awards at Fiscal Year-End
The Company has no unexercised options, stock that has not vested, and equity incentive plan awards for any executive officer or director as of March 31, 2023.
Director Compensation
The table below summarizes all compensation of our directors for our last completed fiscal year.
Name
Fees Earned or Paid in Cash
($)
Stock
Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation ($)
Nonqualified Deferred Compensation Earnings
($)
All Other Compensation ($)
Total
($)
Jerry Grisaffi, BOD Chairman and CEO
-
-
-
-
-
-
-
A.David Youssefyeh, Director and CFO until July 26, 2022
-
-
-
-
-
-
-
David Lewis, Director until July 26, 2022
-
-
-
-
-
-
-
Narrative Disclosure to the Director Compensation Table
We did not provide compensation to directors for their service as directors during our last fiscal year.
Employment Agreements with Current Management
As of the date of this filing, there are no employment agreements in effect.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of August 16, 2023, the beneficial ownership of our common stock by each executive officer and director, by each person known by us to beneficially own more than 5% of our common stock and by the executive officers and directors as a group. Except as otherwise indicated, all shares are owned directly. The voting power shown is based on a total of 12,749,032,194 shares, consisting of 6,374,516,097 shares of common stock issued and outstanding, and 6,374,516,098 votes that may be cast by holders of our Series A Preferred Stock. Class ownership percentages for the class of common stock are based on 6,399,516,097 shares, consisting of 6,374,516,097 shares of common stock and 25,000,000 of common stock issuable upon conversion of all shares of our Series A Preferred Stock.
Title of Class
Name and Address of Beneficial Owner
Amount of Beneficial
Ownership
Percent of
Class
Percent Voting
Power
Common
Daniel Crawford
6501 Dalrock Road, Suite 100
Rowlett, TX
48,507,536 (1)
0.76 %
50.38 %
Common
Jerry Grisaffi
6501 Dalrock Road, Suite 100
Rowlett, TX
80,000,000
1.25 %
0.63 %
Common
Total all Executive Officers and
Directors
128,507,536
2.01 %
51.01 %
Common
Other 5% Shareholders - None
Series A Preferred
Daniel Crawford
6501 Dalrock Road, Suite 100
Rowlett, TX
5,000,000 (1)
100.00 %
(1) Consists of 23,507,536 shares of common stock and 5,000,000 shares of Series A Preferred Stock convertible to 25,000,000 shares of common stock. Series A Preferred stock has 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.
As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.
The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as set forth below, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either case, has or will materially affect us:
Subsequent to August 2018, there have been no employment agreements in effect except one consulting agreement with our former President, Ashok Patel. Under the terms of the agreement, Mr. Patel received 700,000 shares of common stock at issuance, and on the successive anniversary in December 2018. Any bonus compensation is at the discretion of the board, or the compensation committee. Mr. Patel was terminated as an officer and director during December 2020.
Director Independence
We are not a "listed issuer" within the meaning of Item 407 of Regulation S-K and there are no applicable listing standards for determining the independence of our directors. Applying the definition of independence set forth in Rule 4200(a)(15) of The Nasdaq Stock Market, Inc., we do not believe that we currently have any independent directors.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services
The following table presents the aggregate fees billed for each of the last two fiscal years by the Company's independent registered public accounting firm, Turner, Stone, & Company, L.L.P., in connection with the audit of the Company's consolidated financial statements and other professional services rendered.
Year Ended:
Audit
Services
Audit
Related
Fees
Tax Fees
Other
Fees
March 31, 2023
$ 60,000
n/a
n/a
n/a
March 31, 2022
$ 46,200
n/a
n/a
n/a
Audit fees represent the professional services rendered for the audit of the Company's annual consolidated financial statements and the review of the Company's consolidated financial statements included in quarterly reports, along with services normally provided by the accounting firm in connection with statutory and regulatory filings or other engagements. Audit-related fees represent professional services rendered for assurance and related services by the accounting firm that are reasonably related to the performance of the audit or review of the Company's consolidated financial statements that are not reported under audit fees.
Tax fees represent professional services rendered by the accounting firm for tax compliance, tax advice, and tax planning. All other fees represent fees billed for products and services provided by the accounting firm, other than the services reported for the other categories.
PART IV

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statements Schedules
(a) Financial Statements and Schedules
The following financial statements and schedules listed below are included in this Form 10-K.
Financial Statements (See Item 8)
(b) Exhibits
Exhibit Number
Description
3.4
Bylaws (1)
31.1*
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
Certification of 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**
The following materials from the Company's Annual Report on Form 10-K for the year ended March 31, 2022, formatted in Extensible Business Reporting Language (XBRL).
101.INS
XBRL Instance Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase
101.LAB
XBRL Taxonomy Extension Label Linkbase
101.DEF
XBRL Taxonomy Extension Definition Linkbase
101.CAL
XBRL Taxonomy Extension Calculation Linkbase
101.SCH
XBRL Taxonomy Extension Schema
(1) Incorporated by reference to Registration Statement on Form S-1 filed July 1, 2013.
* Filed Herewith
** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed "furnished" and not "filed" or part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933 or deemed "furnished" and not "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Right on Brands, Inc.
August 16, 2023
By:
/s/ Jerry Grisaffi
Jerry Grisaffi
Chief Executive Officer
In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
August 16, 2023
By:
/s/ Jerry Grisaffi
Jerry Grisaffi
Chief Financial Officer