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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Right On Brands Inc (PK) | USOTC:RTON | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0002 | -0.43% | 0.04655 | 0.044 | 0.08 | 0.04775 | 0.04655 | 0.04775 | 480 | 21:15:15 |
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x
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended December 31, 2019
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¨
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Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from __________ to __________
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Commission File Number: 000-55704
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Right On Brands, Inc.
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(Exact name of registrant as specified in its charter)
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Nevada
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45-1994478
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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3235 Skyline Dr, Suite 127, Carrollton, TX 75006
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(Address of principal executive offices)
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(214) 736-7252
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(Registrant’s telephone number)
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N/A
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(Former name, former address and former fiscal year, if changed since last report)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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None
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N/A
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N/A
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Emerging growth company
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x
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Page
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3
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4
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7
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8
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8
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8
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8
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9
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2
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3
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F-1 |
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Three Months
Ended
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Three Months
Ended
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Nine Months
Ended
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Nine Months
Ended
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December 31,
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December 31,
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December 31,
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December 31,
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2019
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2018
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2019
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2018
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||||
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Revenue
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|
$ | 106,434 |
|
|
$ | 57,476 |
|
|
$ | 315,091 |
|
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$ | 153,087 |
|
Cost of goods sold
|
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|
83,357 |
|
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|
41,293 |
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|
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221,277 |
|
|
|
140,480 |
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Gross profit
|
|
|
23,077 |
|
|
|
16,183 |
|
|
|
93,814 |
|
|
|
12,607 |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
1,836 |
|
|
|
679 |
|
|
|
5,149 |
|
|
|
2,822 |
|
General and administrative
|
|
|
101,518 |
|
|
|
46,627 |
|
|
|
336,657 |
|
|
|
141,838 |
|
Advertising and promotion
|
|
|
5,818 |
|
|
|
33,351 |
|
|
|
54,749 |
|
|
|
58,737 |
|
Legal and professional
|
|
|
37,306 |
|
|
|
25,061 |
|
|
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169,233 |
|
|
|
51,639 |
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Executive compensation
|
|
|
39,000 |
|
|
|
- |
|
|
|
62,000 |
|
|
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18,000 |
|
Consulting
|
|
|
36,555 |
|
|
|
374,977 |
|
|
|
68,410 |
|
|
|
1,054,813 |
|
Research and development
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
337 |
|
Total operating expenses
|
|
|
222,033 |
|
|
|
480,695 |
|
|
|
696,198 |
|
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1,328,186 |
|
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Other income (expense)
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|
|
|
|
|
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|
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|
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Interest expense
|
|
|
(116,783 | ) |
|
|
(784,892 | ) |
|
|
(606,687 | ) |
|
|
(981,383 | ) |
Loss on interest settlement
|
|
|
- |
|
|
|
- |
|
|
|
(8,693 | ) |
|
|
- |
|
Change in fair value of derivative
|
|
|
145,868 |
|
|
|
(534,387 | ) |
|
|
49,230 |
|
|
|
(509,686 | ) |
Financing costs
|
|
|
(12,623 | ) |
|
|
- |
|
|
|
(335,102 | ) |
|
|
- |
|
Default penalty
|
|
|
- |
|
|
|
- |
|
|
|
(202,234 | ) |
|
|
- |
|
Other income
|
|
|
112 |
|
|
|
- |
|
|
|
112 |
|
|
|
- |
|
Total other income (expense)
|
|
|
16,574 |
|
|
|
(1,319,279 | ) |
|
|
(1,103,374 | ) |
|
|
(1,491,069 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net loss including noncontrolling interest
|
|
|
(182,382 | ) |
|
|
(1,783,791 | ) |
|
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(1,705,758 | ) |
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(2,806,648 | ) |
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Net income attributable to noncontrolling interest
|
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|
- |
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|
|
- |
|
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- |
|
|
|
253 |
|
|
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Net loss attributable to Right On Brands, Inc.
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|
$ | (182,382 | ) |
|
$ | (1,783,791 | ) |
|
$ | (1,705,758 | ) |
|
$ | (2,806,395 | ) |
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Loss per share
|
|
|
|
|
|
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Basic loss per share
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|
$ | (0.00 | ) |
|
$ | (0.03 | ) |
|
$ | (0.01 | ) |
|
$ | (0.04 | ) |
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Basic weighted average shares outstanding
|
|
|
387,273,071 |
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|
66,366,478 |
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230,093,250 |
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64,930,832 |
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F-2 |
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Total
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|||||||||||
|
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Preferred Shares
|
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Common Shares
|
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Additional
Paid In
|
|
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Common
Stock
|
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|
Accumulated
|
|
|
Noncontrolling
|
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|
Stockholders’
Equity
|
|
|||||||||||||||
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Shares
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Amount
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|
Shares
|
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Amount
|
|
|
Capital
|
|
|
Issuable
|
|
|
Deficit
|
|
|
Interest
|
|
|
(Deficit)
|
|
|||||||||
Balance, March 31, 2018
|
|
|
5,000,000 |
|
|
$ | 5,000 |
|
|
|
63,543,869 |
|
|
$ | 63,544 |
|
|
$ | 6,513,979 |
|
|
$ | 474,000 |
|
|
$ | (4,100,945 | ) |
|
$ | 24,437 |
|
|
$ | 2,980,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash
|
|
|
- |
|
|
|
- |
|
|
|
3,000,000 |
|
|
|
3,000 |
|
|
|
3,000 |
|
|
|
38,950 |
|
|
|
- |
|
|
|
- |
|
|
|
44,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash and warrants
|
|
|
- |
|
|
|
- |
|
|
|
40,000 |
|
|
|
40 |
|
|
|
9,960 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,000 |
|
Issuance of common stock for consulting services
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
36,050 |
|
|
|
- |
|
|
|
- |
|
|
|
36,050 |
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,806,395 | ) |
|
|
(252 | ) |
|
|
(2,806,647 | ) |
Balance, December 31, 2018
|
|
|
5,000,000 |
|
|
$ | 5,000 |
|
|
|
66,583,869 |
|
|
$ | 66,584 |
|
|
$ | 6,526,939 |
|
|
$ | 549,000 |
|
|
$ | (6,907,340 | ) |
|
$ | 24,185 |
|
|
$ | 264,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2019
|
|
|
5,000,000 |
|
|
$ | 5,000 |
|
|
|
73,652,594 |
|
|
$ | 73,653 |
|
|
$ | 8,295,767 |
|
|
$ | 56,050 |
|
|
$ | (10,186,102 | ) |
|
$ | 24,437 |
|
|
$ | (1,731,195 | ) |
Issuance of common stock for cash
|
|
|
- |
|
|
|
- |
|
|
|
24,416,666 |
|
|
|
24,417 |
|
|
|
80,583 |
|
|
|
20,000 |
|
|
|
- |
|
|
|
- |
|
|
|
125,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of debt and interest to common stock
|
|
|
- |
|
|
|
- |
|
|
|
354,971,286 |
|
|
|
354,971 |
|
|
|
1,555,014 |
|
|
|
(20,000 | ) |
|
|
- |
|
|
|
- |
|
|
|
1,889,985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants issued as financing costs
|
|
|
-
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
33,113 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
33,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,705,758 | ) |
|
|
- |
|
|
|
(1,705,758 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019
|
|
|
5,000,000 |
|
|
$ | 5,000 |
|
|
|
453,040,546 |
|
|
$ | 453,041 |
|
|
$ | 9,964,477 |
|
|
$ | 56,050 |
|
|
$ | (11,891,860 | ) |
|
$ | 24,437 |
|
|
$ | (1,388,855 | ) |
F-3 |
|
|
|
Nine Months
Ended
|
|
|
Nine Months
Ended
|
|
||
|
|
December 31,
|
|
|
December 31,
|
|
||
|
|
2019 |
|
|
2018 |
|
||
|
|
|
|
|
|
|
||
Cash flows provided by (used in) operating activities
|
|
|
|
|
|
|
||
Net loss
|
|
$ | (1,705,758 | ) |
|
$ | (2,806,395 | ) |
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
5,149 |
|
|
|
2,822
|
|
Inventory impairment
|
|
|
21,137 |
|
|
|
35,387 |
|
Amortization of prepaid stock compensation
|
|
|
- |
|
|
|
962,585
|
|
Change in fair value of derivative
|
|
|
(49,230 | ) |
|
|
509,686 |
|
Amortization of debt discount
|
|
|
533,592 |
|
|
|
192,704 |
|
Financing costs for debt issuances
|
|
|
335,102 |
|
|
|
782,889
|
|
Loss on interest settlement
|
|
|
8,693 |
|
|
|
- |
|
Default penalties
|
|
|
202,234 |
|
|
|
- |
|
Common stock issuable
|
|
|
(20,000 | ) |
|
|
- |
|
(Increase) decrease in assets
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(2,695 | ) |
|
|
(92,835 | ) |
Prepaid expense
|
|
|
(15,575 | ) |
|
|
6,649 |
|
Inventory
|
|
|
(65,343 | ) |
|
|
(91,350 | ) |
Increase (decrease) in liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
133,083 |
|
|
|
34,426 |
|
Accrued interest payable
|
|
|
73,094 |
|
|
|
16,037 |
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(546,517 | ) |
|
|
(447,395 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
- |
|
|
|
2,000 |
|
Net cash from investing activities
|
|
|
- |
|
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds from convertible debt
|
|
|
321,250 |
|
|
|
514,500 |
|
Proceeds from notes payable
|
|
|
25,000 |
|
|
|
- |
|
Proceeds from issuances of common stock
|
|
|
125,000 |
|
|
|
91,000 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
471,250 |
|
|
|
605,500 |
|
|
|
|
|
|
|
|
|
|
Decrease in cash
|
|
|
(75,267 | ) |
|
|
160,105 |
|
|
|
|
|
|
|
|
|
|
Cash-beginning of period
|
|
|
90,883 |
|
|
|
47,506 |
|
|
|
|
|
|
|
|
|
|
Cash-end of period
|
|
$ | 15,616 |
|
|
$ | 207,611 |
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
Right of use asset and liability, office lease (Note 8)
|
|
$ | 136,800 |
|
|
$ | - |
|
Recognition of right of use asset and lease liability
|
|
$ | 34,200 |
|
|
$ | - |
|
Convertible debt converted into common stock
|
|
$ | 810,573 |
|
|
$ | - |
|
Penalty accrued as note payable
|
|
$ | 121,091 |
|
|
$ | - |
|
Debt discount at note payable origination
|
|
$ | 25,000 |
|
|
$ | - |
|
Debt discount at convertible note origination
|
|
$ | 327,945 |
|
|
$ | - |
|
Derivative at convertible note origination
|
|
$ | 608,211 |
|
|
$ | - |
|
Accrued interest converted to common stock
|
|
$ | 54,509 |
|
|
$ | - |
|
F-4 |
|
|
|
As of
December 31,
2019
|
|
|
As of
March 31,
2019
|
|
||
|
|
|
|
|
|
|
||
Raw materials
|
|
$ | 6,843 |
|
|
$ | 43,796 |
|
Work-in-process
|
|
|
30,611 |
|
|
|
30,611 |
|
Finished Goods
|
|
|
220,709 |
|
|
|
139,550 |
|
Ending Balance
|
|
$ | 258,163 |
|
|
$ | 213,957 |
|
F-5 |
|
F-6 |
|
Balance at March 31, 2019
|
|
$ | 1,034,939 | |
Additions to derivative liability for new debt
|
|
|
608,211 |
|
Additions to derivative liability for penalty
|
|
|
81,143 |
|
Reclass to equity upon conversion/cancellation
|
|
|
(1,190,705 | ) |
Change in fair value
|
|
|
(49,230 | ) |
Balance at December 31, 2019
|
|
$ | 484,358 |
F-7 |
|
|
|
Potential additional
|
|
|
|
|
common stock
|
|
|
|
|
shares
|
|
|
Potentially dilutive security:
|
|
|
|
|
Preferred stock
|
|
|
25,000,000 |
|
Warrants
|
|
|
19,230,000 |
|
Options
|
|
|
8,000,000 |
|
Convertible debt
|
|
|
613,058,462 |
|
Potentially dilutive securities
|
|
|
665,288,462 |
|
|
|
|
|
Weighted-Average
|
|
|||
|
|
Shares
|
|
|
Exercise Price
|
|
||
Outstanding, March 31, 2019
|
|
|
12,480,000 |
|
|
$ | 0.17 |
|
Granted
|
|
|
14,750,000 |
|
|
|
.04 |
|
Exercised
|
|
|
- |
|
|
|
- |
|
Expired
|
|
|
- |
|
|
|
- |
|
Outstanding, December 31, 2019
|
|
|
27,230,000 |
|
|
$ | 0.11 |
|
Options and warrants exercisable at December 31, 2019
|
|
|
27,230,000 |
|
|
$ | 0.11 |
|
F-8 |
|
F-9 |
|
|
|
As of
December 31,
2019
|
|
|
As of
March 31,
2019
|
|
||
|
|
|
|
|
|
|
||
Website development
|
|
$ | 88,965 |
|
|
$ | 88,965 |
|
Automobile
|
|
|
31,596 |
|
|
|
31,596 |
|
Studio and office equipment
|
|
|
5,957 |
|
|
|
5,957 |
|
Tenant improvements
|
|
|
11,135 |
|
|
|
11,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
137,653 |
|
|
|
137,653 |
|
|
|
|
|
|
|
|
|
|
Less: accumulated depreciation
|
|
|
(114,941 | ) |
|
|
(110,202 | ) |
|
|
|
|
|
|
|
|
|
Ending Balance
|
|
$ | 22,712 |
|
|
$ | 27,451 |
|
F-10 |
|
|
|
|
|
Gross amount
|
|
|
Net amounts
|
|
|
Corresponding
|
|
|||||
|
|
Gross amount
|
|
|
offset by
|
|
|
of liabilities
|
|
|
Derivative
|
|
||||
Note holder
|
|
of liability
|
|
|
debt discount
|
|
|
presented
|
|
|
Balance
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noteholder 2
|
|
$ | 21,487 |
|
|
$ | - |
|
|
$ | 21,487 |
|
|
$ | 14,350 |
|
Noteholder 3
|
|
|
37,125 |
|
|
|
- |
|
|
|
37,125 |
|
|
|
21,470 |
|
Noteholder 5
|
|
|
318,150 |
|
|
|
204,026 |
|
|
|
114,124 |
|
|
|
437,118 |
|
Noteholder 6
|
|
|
21,206 |
|
|
|
- |
|
|
|
21,206 |
|
|
|
11,420 |
|
Other notes
|
|
|
47,000 |
|
|
|
- |
|
|
|
47,000 |
|
|
|
- |
|
|
|
$ | 444,968 |
|
|
$ | 204,026 |
|
|
$ | 240,942 |
|
|
$ | 484,358 |
|
F-11 |
|
F-12 |
|
Years Ending
|
|
|
||
March 31,
|
|
Amount
|
|
|
2020
|
|
$ | 11,400 |
|
2021
|
|
|
45,600 |
|
2022
|
|
|
45,600 |
|
|
|
$ | 102,600 |
|
|
|
Shares
|
|
|
Penalty
|
|
|
Principal
|
|
|||
Noteholder
|
|
Issued |
|
|
Settled |
|
|
Converted
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Noteholder 6
|
|
|
90,500,260 |
|
|
$ | - |
|
|
$ | 21,206 |
|
Noteholder 3
|
|
|
232,700,000 |
|
|
$ | 5,551 |
|
|
|
25,000 |
|
|
|
|
323,200,260 |
|
|
$ | 5,551 |
|
|
$ | 46,206 |
|
F-13 |
|
|
|
|
|
|
Average
|
|
|
|
|
|||
Noteholder
|
|
Debt Converted
|
|
|
Conversion Price
|
|
|
Shares Issued
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Noteholder 2
|
|
$ | 210,663 |
|
|
$ | 0.005 |
|
|
|
44,759,514 |
|
Noteholder 3
|
|
|
60,375 |
|
|
$ | 0.002 |
|
|
|
38,415,000 |
|
Noteholder 4
|
|
|
104,341 |
|
|
$ | 0.003 |
|
|
|
41,431,396 |
|
Noteholder 5
|
|
|
244,650 |
|
|
$ | 0.003 |
|
|
|
75,316,850 |
|
Noteholder 6
|
|
|
108,794 |
|
|
$ | 0.001 |
|
|
|
135,652,946 |
|
Noteholder 7
|
|
|
81,750 |
|
|
$ | 0.004 |
|
|
|
19,395,570 |
|
4 |
|
5 |
|
|
· | We issued a total of 24,416,666 shares of common stock to an investor for total proceeds of $125,000. |
6 |
|
7 |
|
8 |
|
Exhibit
Number
|
|
Description of Exhibit
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
101
|
|
Materials from the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2019 formatted in Extensible Business Reporting Language (XBRL)
|
9 |
|
|
Right On Brands, Inc.
|
||
|
|||
Date: February 14, 2020
|
By:
|
/s/ Jerry Grisaffi
|
|
|
Name:
|
Jerry Grisaffi
|
|
|
Title:
|
Chief Executive Officer
|
Date: February 14, 2020
|
By:
|
/s/ A. David Youssefyeh
|
|
|
Name:
|
A. David Youssefyeh
|
|
|
Title:
|
Chief Financial Officer
|
10 |
1 Year Right On Brands (PK) Chart |
1 Month Right On Brands (PK) Chart |
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