Rainbow Coral Corp. - FORM 10-K

Attached files

file	filename
EX-21 - SUBSIDIARIES OF THE REGISTRANT - Rainbow Coral Corp.	ex_21.htm
EX-31 - RULE 13(A)-14(A)/15(D)-14(A) CERTIFICATION - Rainbow Coral Corp.	ex_31-1.htm
EX-32 - SECTION 1350 CERTIFICATION - Rainbow Coral Corp.	ex_32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

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

For the fiscal year ended March 31, 2013

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

For the transition period from ________to _________

Commission File Number 333-168530

Rainbow Coral Corp.

(Exact name of registrant as specified in its charter)


Florida		27-3247562
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

495 Grand Blvd., Suite 206
Miramar Beach, Florida		32550
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (850) 269-7230

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

Securities registered pursuant to Section 12(g) of the Act: Common stock, $0.0001 par value

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

Yes o No þ

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

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, ever Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes þ No o

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


Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price on September 30, 2011, was $2,500,000. Shares of common stock held by each officer and director and by each person who owns 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

There were 14,798,239 shares of the registrant’s common stock issued and outstanding as of June 30, 2013.

IMPORTANT INFORMATION REGARDING THIS FORM 10-K

Unless otherwise indicated, references to “we,” “us,” and “our” in this Annual Report on Form 10-K refer to Rainbow Coral Corp.

Readers should consider the following information as they review this Annual Report:

Forward-Looking Statements

The statements contained or incorporated by reference in this Annual Report on Form 10-K that are not historical facts are “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include any statement that may project, indicate or imply future results, events, performance or achievements. The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as “believes,” “expect,” “may,” “will,” “should,” “intend,” “plan,” “could,” “estimate” or “anticipate” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.

Given the risks and uncertainties relating to forward-looking statements, investors should not place undue reliance on such statements. Forward-looking statements included in this Annual Report on Form 10-K speak only as of the date of this Annual Report on Form 10-K and are not guarantees of future performance. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such expectations may prove to have been incorrect. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.

Except to the extent required by applicable securities laws, we expressly disclaim any obligation or undertakings to release publicly any updates or revisions to any statement or information contained in this Annual Report on Form 10-K, including the forward-looking statements discussed above, to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement or information is based.

RAINBOW CORAL CORP.

FORM 10-K

TABLE OF CONTENTS


PART I
		Page
Item 1. Business.		1
Item 1A. Risk Factors.		1
Item 1B. Unresolved Staff Comments.		2
Item 2. Properties		2
Item 3. Legal Proceedings		2
Item 4. Mine Safety Disclosure		2

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.		2
Item 6. Selected Financial Data.		5
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		5
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.		7
Item 8. Consolidated Financial Statements and Supplementary Data		8

Report of Independent Registered Public Accounting Firm		8
Consolidated Balance Sheet		9
Consolidated Statements of Operations		10
Consolidated Statement of Changes in Stockholders’ Equity		11
Consolidated Statement of Cash Flows		12
Notes to Consolidated Financial Statements		13

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.		22
Item 9A. Controls and Procedures.		22
Item 9B. Other Information.		24

PART III

Item 10. Directors, Executive Officers and Corporate Governance.		24
Item 11. Executive Compensation.		25
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.		26
Item 13. Certain Relationships and Related Transactions, and Director Independence.		26
Item 14. Principal Accountant Fees and Services.		27

PART IV

Item 15. Exhibits and Financial Statement Schedules.		27

Signatures		28

iii

Part I

Item 1. Business.

Rainbow Coral Corp. (“we”, “us”, “our”, “RBCC”, or the “Company”) was incorporated in the State of Florida on August 13, 2010. On June 13, 2011, we acquired all of the assets and the business of Father Fish Aquarium, Inc., (“Father Fish”) for $50,000. We have continued the business of Father Fish under the name of Rainbow Coral Corp. The Company’s current business is operating a retail fish store and coral farm facility. The Company was formed to build a coral farm facility to develop and propagate (or grow) live coral, independent of oceans, as a future farm reserve against the decline of natural wild reefs. In order to fully implement our business plan, we plan to develop a larger scale coral farm facility in order to grow, harvest and distribute as many varieties of hard and soft sizes as possible for use by consumers and as a source for advances in bio-research. The uses for coral as a source of potential leading edge medical discoveries are an attractive opportunity for the Company’s coral farming activity.

We believe that the world of bio-research is a natural continuation of our core coral propagation business. Accordingly on October 23, 2011, the Company formed a subsidiary, Rainbow Biosciences, LLC to explore opportunities within the bioscience market.

On March 13, 2012, we entered into a stock purchase agreement (“N3D Stock Purchase Agreement”) with Nano3D Biosciences, Inc. (“N3D”), a Texas corporation that has developed a unique concept in three dimensional cell research tools. Under the terms of the N3D Stock Purchase Agreement, we have agreed to acquire 604 shares of common stock of N3D, representing approximately 5% of the outstanding shares on the date of the agreement, for a price of $413.62 per share. According to the N3D Stock Purchase Agreement, the total purchase price of $249,826 is to be paid by making weekly payments of $5,000 until fully paid. We made weekly investments of $5,000 in N3D up to a total of $60,000 resulting in our acquisition of approximately 145 shares of N3D’s common stock. We discontinued payments to N3D in May 2012 because of their delay in reaching certain milestones in the commercialization process. Their ability to achieve scientific adoption of their new methodology has been slower than expected; however, we remain enthusiastic about the potential of this investment to generate positive returns for our Company as their device is a significant technological advancement in cell culturing. Once N3D reaches certain milestones in the development of the Bio-Assembler, we will consider resuming our investment in N3D. We remain shareholders of N3D as a result of the $60,000 investment that we have made and continue to support N3D with marketing and other support.

On February 1, 2013, we entered into a Joint Venture Agreement with TheraKine Ltd. (“TheraKine”) in order to explore potential business opportunities to exploit TheraKine’s novel drug delivery technologies. TheraKine is the developer of a revolutionary, sustained-release drug delivery platform that could soon make local delivery of biologic agents and small molecules safer, more effective and more convenient than ever before. Under the terms of the Joint Venture Agreement, we have committed to fund $55,000 of the cash flow requirements of the Joint Venture by making weekly payments of $6,875. In addition, we will provide management and marketing services to assist with bringing the platform to market and help identify potential target users of the platform. Through July 15, 2013, we have funded $20,625 under the Joint Venture Agreement with TheraKine. We expect to continue to fund this joint venture.

Our subsidiary, Father Fish, is a retail tropical fish store with a license from the Florida Department of Agriculture to raise a number of ornamental animals. Among these are various types of coral and the live food they require for nutrition. In addition, Father Fish raises a number of fresh water and salt water fish and invertebrates. Sales are made out of a retail location in Florida and online to hobbyists and serious collectors and by contracts with local departments of education for classroom and science lab use. Father Fish has a varied customer base and no individual customer is significant to the total sales of the Company.

We were a development stage entity until June 13, 2011 when we acquired Father Fish.

The Company’s fiscal year ends on March 31.

EMPLOYEES AND EMPLOYMENT AGREEMENTS

As of March 31, 2013, we have two employees. We do not have any employment agreements with any employees.

We do not presently have pension, health insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our sole director and officer.

Item 1A. Risk Factors.

As a smaller reporting company we are not required to provide the information required by this item.

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Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

Executive Offices

We lease office space located at 495 Grand Blvd., Suite 206, Miramar Beach, Florida 32550 on a month-to-month basis in an executive office suite. The rent is approximately $110 per month. The amount of space utilized is flexible and depends on our needs for each month.

Our CEO utilizes office space in Houston, Texas, an area of significant biomedical research, on a month-to-month basis through a sublease from a professional services corporation. The space sublet comprises approximately 425 square feet. The Company pays approximately $1,100 per month for rent, which along with other services, is billed on a proportional basis with other companies that also occupy this space.

Retail Location

We lease a combined retail and warehouse location in Venice, Florida. The space is approximately 3,000 square feet and is adequate for our needs. The lease term is one year. The rent is approximately $800 per month.

Item 3. Legal Proceedings.

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.

Item 4. Mine Safety Disclosure

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock began trading on the “Over the Counter” Bulletin Board (“OTC”) under the symbol “RBCC” in September 2011. The following table sets forth, for the period indicated, the prices of the common stock in the over-the-counter market, as reported and summarized by OTC Markets Group, Inc. These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown or commission and may not represent actual transactions. There is an absence of an established trading market for the Company’s common stock, as the market is limited, sporadic and highly volatile, which may affect the prices listed below.


	High		Low
Fiscal Year Ended March 31, 2012
Quarter ended September 30, 2011	$	25.00	$	25.00
Quarter ended December 31, 2011	$	60.00	$	1.40
Quarter ended March 31, 2012	$	66.00	$	6.40

Fiscal Year Ended March 31, 2013
Quarter ended June 30, 2012	$	14.00	$	0.51
Quarter ended September 30, 2012	$	2.67	$	1.10
Quarter ended December 31, 2012	$	2.45	$	0.38
Quarter ended March 31, 2013	$	0.96	$	0.11

On June 1, 2012, the majority shareholder of the Company approved a 1-for-20 reverse stock split. This stock split was effective June 28, 2012.

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Holders

As of the date of this filing, there were three holders of record of our common stock.

Dividends

To date, we have not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by our Board of Directors.

Common Stock

We are authorized to issue 100,000,000 shares of common stock, with a par value of $0.0001. The closing price of our common stock on June 28, 2013, as quoted by OTC Markets Group, Inc., was $0.27.

Shares of our common stock:


	·	have equal ratable rights to dividends from funds legally available if and when declared by our Board of Directors;

	·	are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;

	·	do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and

	·	are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.

Our Articles of Incorporation, our Bylaws, and the applicable statutes of the State of Florida contain a more complete description of the rights and liabilities of holders of our securities.

There were 14,798,239 shares of common stock issued and outstanding as of June 30, 2013. All shares of common stock have one vote per share on all matters including election of directors, without provision for cumulative voting. The common stock is not redeemable and has no conversion or preemptive rights. The common stock currently outstanding is validly issued, fully paid and non- assessable. In the event of liquidation of the Company, the holders of common stock will share equally in any balance of the Company’s assets available for distribution to them after satisfaction of creditors and preferred shareholders, if any. The holders of common stock of the Company are entitled to equal dividends and distributions per share with respect to the common stock when, as and if, declared by the Board of Directors from funds legally available.

During the year ended March 31, 2013, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

Non-cumulative voting

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table shows the number of shares of common stock that could be issued upon exercise of outstanding options and warrants, the weighted average exercise price of the outstanding options and warrants, and the remaining shares available for future issuance as of March 31, 2013.

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Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance (c)
Equity compensation plans approved by security holders		—		—		—

Equity compensation plans not approved by security holders (1)		6,000,000		$0.0001		5,895,000

Total		6,000,000		$0.0001		5,895,000

(1) On March 1, 2012, the Company approved its 2012 Stock Plan for Directors, Officers and Consultants (“2012 Stock Plan”). The 2012 Stock Plan authorized the issuance of 6,000,000 shares of the Company’s common stock for directors, officers, and employees (including consultants meeting the definition of “employee” under Rule 405 promulgated under the Securities Act). Pursuant to the 2012 Stock Plan, the Company registered 6,000,000 shares of its stock with the SEC on Form S-8 on March 5, 2012. The 2012 Stock Plan does not state an exercise price, and therefore, the par value of the Company’s common stock has been used.

Preferred Stock

Our authorized preferred stock consists of 10,000,000 shares of $0.0001 par value preferred stock. As of the date of this report, there are no shares of preferred stock outstanding. The Company’s preferred stock ranks senior to all other equity securities, including common stock. Dividends, when, as and if declared by the Board of Directors, shall be paid out of funds at the time legally available for such purpose.

Recent Sales of Unregistered Securities

On March 7, 2012, the Company issued 25,000 shares of common stock to an individual for consulting services. The shares were valued at $355,000 based on the market value of the stock on the date of issuance.

On April 13, 2012, the Company issued 20,000 shares of common stock to a third party for services. The shares were valued at $200,000 based on the market value of the stock on the date of issuance.

On April 30, 2012, the Company issued 30,000 shares of common stock to a third party for services. The shares were valued at $216,000 based on the market value of the stock on the date of issuance.

On May 31, 2012, the Company issued 30,000 shares of common stock to a third party for services. The shares were valued at $126,000 based on the market value of the stock on the date of issuance.

On August 1, 2012, the holder of the Convertible Promissory Note in the original amount of $69,586 elected to convert the note into 6,958,598 shares of common stock. These shares were issued to Glendive Investments, a significant shareholder of the Company. As a result of the conversion on August 1, 2012, the remaining unamortized discount of $69,586 was immediately amortized to interest expense.

On August 2, 2012, the holders of Convertible Promissory Notes in the original amount of $18,650 elected to convert principal in the amount of $11,250 into 1,125,000 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $9,270 was immediately amortized to interest expense.

On August 30, 2012, the holder of the Convertible Promissory Note in the original amount of $18,650 elected to convert principal in the amount of $4,300 into 430,000 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $3,536 was immediately amortized to interest expense.

On December 17, 2012, the holders of the Convertible Promissory Note in the original amount of $94,515 elected to convert principal in the amount of $90,000 into 1,800,000 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $75,594 was immediately amortized to interest expense.

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On February 4, 2013, the holder of the Convertible Promissory Note in the original amount of $18,650 elected to convert principal in the amount of $3,100 and unpaid accrued interest in the amount of $1,286 into 438,646 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $1,697 was immediately amortized to interest expense.

On February 26, 2013, the holder of the Convertible Promissory Note in the original amount of $117,775 elected to convert principal in the amount of $22,000 into 550,000 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $18,692.29 was immediately amortized to interest expense.

On March 6, 2013, the holder of the Convertible Promissory Note in the original amount of $117,775 elected to convert principal in the amount of $22,500 into 562,500 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $19,030 was immediately amortized to interest expense.

Item 6. Selected Financial Data.

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD LOOKING STATEMENTS

Caution Regarding Forward-Looking Information

All statements contained in this Form 10-K, other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements containing the words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” and similar expressions . All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new acquisitions, products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks and uncertainties that may cause actual results to differ materially.

Consequently, all of the forward-looking statements made in this Form 10-K are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations. Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of the Company’s views as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The following discussion and analysis should be read in connection with the Company’s audited consolidated financial statements and related notes thereto, as included in this report.

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the plans of our current management.

Going Concern

We incurred a net loss of $1,263,190 for the year ended March 31, 2013. Net cash used by operations for the year ended March 31, 2013 was $373,465. We do not anticipate having positive net income in the immediate future. These conditions create an uncertainty as to our ability to continue as a going concern.

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We will need to obtain loans or other financing in order to fund operating shortfalls and do not foresee a change in this situation in the immediate future. There can be no assurance that we will be able to obtain these loans or that they will be available to us on terms that are acceptable to the Company. We will not be able to continue operations without them. We are pursuing alternate sources of financing, but there is no assurance that additional capital will be available to the Company when needed or on acceptable terms.

Results of Operations for the year ended March 31, 2013 compared to the year ended March 31, 2012.

Revenue

During the years ended March 31, 2013 and 2012, we recognized revenue of $100,186 and $74,675, respectively. The revenue was derived from retail sales of coral, fish and related supplies through our subsidiary, Father Fish. Revenue for the year ended March 31, 2012, includes Father Fish revenue only for the period from June 14, 2011 (date of acquisition of Father Fish) through March 31, 2012. The primary reason for the increase in revenue is the fact that revenue for the year ended March 31, 2012 includes only a partial year of Father Fish revenue.

Cost of Goods Sold

During the years ended March 31, 2013 and 2012, we recognized cost of goods sold of $69,385 and $46,061, respectively. Cost of goods sold represents the costs associated with the items sold to generate the revenue described above. Cost of goods sold includes cost of acquiring, propagating and holding coral, fish and live plants. In addition, it includes the cost of acquiring other related supplies. Cost of goods sold for the year ended March 31, 2012 includes the cost associated with generating revenue during the period from June 14, 2011 (date of acquisition of Father Fish) through March 31, 2012. The primary reason for the increase in cost of goods sold is the fact that cost of goods sold for the year ended March 31, 2012 includes only a partial year of Father Fish activity.

General and administrative expenses

We recognized general and administrative expenses in the amount of $1,026,342 and $582,349 for the years ended March 31, 2013 and 2012, respectively. General and administrative expense was comprised of the following:


	Year Ended
	2013		2012
Stock based compensation	$	542,000	$	355,000
General and administrative expense of Father Fish		88,549		63,820
Officer compensation		88,500		50,000
Other general and administrative expense		307,293		113,529
Total general and administrative expense	$	1,026,342	$	582,349

During the years ended March 31, 2013 and 2012, we issued stock to a consultant for services resulting in stock based compensation of $542,000 and $355,000, respectively. The increase in this expense is the result of more shares being issued during fiscal 2013 over fiscal 2012.

Father Fish incurred general and administrative expense of $88,549 for the year ended March 31, 2012 and $63,820 during the period from June 14, 2011 (date of acquisition of Father Fish) through March 31, 2012. These expenses were related to maintaining and operating the retail store in Venice, Florida. The primary reason for the increase in general and administrative expense for Father Fish is the result of the period ended March 31, 2012 including only a partial year of expense.

During the years ended March 31, 2013 and 2012, we incurred officer compensation of $88,500 and $50,000, respectively, related to cash compensation paid to Patrick Brown and Lou Foxwell.

The remaining general and administrative expense of $307,293 and $113,529 for the years ended March 31, 2013 and 2012, respectively, relates to operating the Company and maintaining its reporting status. The increase is the result of an increased level of operations by the Company as it began to implement its business plan. The level of expense incurred during the year ended March 31, 2013 is expected to continue for the near term.

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Liquidity and Capital Resources

Net cash used by operating activities was $373,465 and $195,095 for the years ended March 31, 2013 and 2012, respectively. The primary reason for the increase in net cash used by operating activities was the increase in “Other general and administrative expense” discussed above.

The Company anticipates it will require around $200,000 to sustain operations and implement its business plan over the next twelve months. The Company intends to seek to raise these funds through equity and debt financing; however, there is no guarantee that funds will be raised and the Company has no agreements in place as of the date of this filing for any financing.

We do not have any material commitments for capital expenditures. However, should we execute our business plan as anticipated, we would incur substantial capital expenditures and require financings in addition to what is required to fund our present operations.

Additional Financing

Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.

Off Balance Sheet Arrangements

None.

Critical Accounting Policies

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.

USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

GOING CONCERN - The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended March 31, 2013, the Company had a net loss of $1,263,190 and generated negative cash flow from operations in the amount of $373,465. In view of these matters, the Company’s ability to continue as a going concern is dependent upon its ability to achieve a level of profitability or to obtain additional capital to finance its operations. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information required by this Item.

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Item 8. Financial Statements and Supplementary Data.

Messineo & Co, CPAs LLC

2451 N McMullen Booth Rd - Ste. 309

Clearwater, FL 33759-1362

T: (727) 421-6268

F: (727) 674-0511

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders:

Rainbow Coral Corp.

We have audited the consolidated balance sheets of Rainbow Coral Corp. (the “Company”) as of March 31, 2013 and 2012, and the related consolidated statements of operations, stockholders’ deficit, and consolidated cash flows for each of the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements, referred to above, present fairly, in all material respects, the consolidated financial position of Rainbow Coral Corp. as of March 31, 2013 and 2012, and the consolidated results of its operations and its consolidated cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has recurring losses from operations, has negative working capital, has negative cash flows from operations, and is requiring traditional financing or equity funding to continue its operating plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Further information and management’s plans in regard to this uncertainty were also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Messineo & Co. CPAs, LLC

Clearwater, FL

July 15, 2013

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Rainbow Coral Corp.

CONSOLIDATED BALANCE SHEETS


	March 31,
		2013		2012
ASSETS
Current assets
Cash and cash equivalents	$	84,592		$	20,219
Prepaid expenses		350			350
Inventory		29,020			28,253
Total current assets		113,962			48,822

Fixed assets, net of accumulated depreciation of $1,760 and $-, respectively		5,428			6,460
Goodwill		27,868			27,868
TOTAL ASSETS	$	147,258		$	83,150

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	110,464		$	30,848
Advances payable		151,271			182,751
Current portion of convertible notes payable, net of discount of $3,491		1,024			—
Note payable to related party		94,881			—
Total current liabilities		357,640			213,599

Convertible note payable, net of discount of $193,607 and $—, respectively		24,576			—
Note payable		—			21,476
Note payable to related party		—			31,299

TOTAL LIABILITIES		382,216			266,374

COMMITMENTS AND CONTINGENCIES (Note 12)		—			—

Stockholders’ Deficit
Preferred stock; $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding at March 31, 2013 and 2012		—			—
Common stock, 100,000,000 authorized; $0.0001 par value; 12,519,828 and 575,000 shares issued and outstanding at March 31, 2013 and 2012, respectively		1,252			58
Additional paid in capital		1,599,204			388,942
Accumulated deficit		(1,835,414	)		(572,224	)
Total stockholders’ deficit		(234,958	)		(183,244	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	147,258		$	83,150

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

- 9 -

Rainbow Coral Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS


	Year ended March 31,
	2013			2012

REVENUE	$	100,186		$	74,675
COST OF GOODS SOLD		69,385			46,061

GROSS PROFIT		30,801			28,614

OPERATING EXPENSES
Sales, general and administrative expenses		1,026,342			582,349

LOSS FROM OPERATIONS		(995,541	)		(553,735	)

OTHER INCOME (EXPENSE)
Interest expense		(267,649	)		(1,476	)

NET LOSS	$	(1,263,190	)	$	(555,211	)

NET LOSS PER COMMON SHARE – Basic and fully diluted	$	(0.18	)	$	(1.01	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		6,921,485			551,639

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

- 10 -

Rainbow Coral Corp.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT


	Common Stock				Additional Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total

Balance, March 31, 2011		550,000	$	55	$	33,945	$	(17,013	)	$	16,987

Issuance of common stock for services		25,000		3		354,997		—			355,000
Net loss		—		—		—		(555,211	)		(555,211	)

Balance, March 31, 2012		575,000	$	58	$	388,942	$	(572,224	)	$	(183,224

Issuance of common stock for:
Share-based compensation		80,000		8		541,992		—			542,000
Conversion of note payable		11,864,744		1,186		222,836		—			224,022
Share rounding as a result of reverse split		84		—		—		—			—
Discount on issuance of convertible note payable		—		—		445,434		—			445,434
Net loss		—		—		—		(1,263,190	)		(1,263,190	)

Balance, March 31, 2013		12,519,828	$	1,252	$	1,599,204	$	(1,835,414	)	$	(234,958	)

On June 28, 2012, the Company effected a one-for-20 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.

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

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Rainbow Coral Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year ended March 31,
	2013			2012

CASH (USED IN) OPERATING ACTIVITIES:
Net loss	$	(1,263,190	)	$	(555,211	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		542,000			355,000
Amortization of discount on convertible note payable		248,336			—
Depreciation		1,438			—
Changes in operating assets and liabilities:
Inventory		(767	)		(21,840	)
Prepaid expenses		—			(350	)
Accounts payable and accrued liabilities		79,616			27,306
Accrued interest payable		19,102			—
NET CASH (USED IN) OPERATING ACTIVITIES		(373,465	)		(195,095	)

CASH USED IN INVESTING ACTIVITIES
Acquisition of Father Fish, net of cash acquired		—			6,229
Purchase of fixed assets		(406	)		(6,460	)
NET CASH USED IN INVESTING ACTIVITIES		(406	)		(231	)

CASH PROVIDED BY FINANCING ACTIVITIES:
Proceeds from advances		396,138			182,751
Proceeds from issuance of loans to related parties		61,896			31,299
Repayments of notes payable		(19,790	)		(18,524	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		438,244			195,526

NET INCREASE IN CASH		64,373			200
CASH, at the beginning of the period		20,219			20,019

CASH, at the end of the period	$	84,592		$	20,219

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	—		$	—
Taxes	$	—		$	—

Noncash investing and financing transactions:
Acquisition of Father Fish for note payable	$	—		$	40,000
Refinancing of advances into convertible notes payable	$	445,434		$	—
Discount on convertible notes payable	$	445,434		$	—
Conversion of convertible notes payable into common stock	$	224,022		$	—

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

- 12 -

Rainbow Coral Corp.

Notes to Consolidated Financial Statements

March 31, 2013

1. BACKGROUND INFORMATION

RAINBOW CORAL CORP. (the “Company”), a Florida corporation, was formed to build a coral farm facility to develop and propagate (or grow) live coral, independent of the oceans, as a future farm reserve against the decline of natural wild reefs. We intend to grow, harvest and distribute as many varieties of hard and soft sizes as possible of captive-bred corals that are attractive, to as many consumers as possible who can maintain them in a healthy ecosystem aquarium. We believe that coral and other marine aquarium livestock should be supplied by farms or captive breeders, rather than removed from the natural reefs. The additional uses for coral as a source of potential leading edge medical discoveries are an attractive opportunity for the Company’s coral farming activity. We believe that the world of bio-research is a natural continuation of our core coral propagation business. Accordingly on October 23, 2011, the Company formed a subsidiary, Rainbow Biosciences, LLC to look into the opportunities within the bioscience market. Rainbow Biosciences, LLC will continue to research opportunities into the bioscience markets.

The Company was incorporated on August 13, 2010 with its corporate headquarters located in Miramar Beach, Florida. The Company’s fiscal year has been changed from August 31 to March 31.

We were a development stage entity until June 13, 2011 when we acquired Father Fish Aquarium, Inc. See Note 4.

2. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

The Company incurred a net loss of $1,263,190 during year ended March 31, 2013 and had net cash used in operating activities of $373,465 for the same period. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to achieve a level of profitability or to obtain adequate financing through the issuance of debt or equity in order to finance its operations. The Company intends on financing its future development activities and its working capital needs largely from the issuance of debt or convertible debt until such time that funds provided by operations are sufficient to fund working capital requirements. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed are:

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

Basis of Presentation

The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC. The financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States (See Note 2 regarding the assumption that the Company is a “going concern”).

Principles of Consolidation

The consolidated financial statements include the accounts and operations of Rainbow Coral Corp. and its wholly owned subsidiaries, Rainbow Biosciences, LLC and Father Fish Aquarium, Inc. (collectively referred to as the “Company”). All material intercompany accounts and transactions are eliminated in consolidation. The year end for the Company and its subsidiaries is March 31.

- 13 -

Cash and cash equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company had $84,592 and $20,219 in cash and cash equivalents as of March 31, 2013 and 2012, respectively.

Cash Flows Reporting

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

Inventory

The Company follows ASC 330, Inventory. Inventory represents live coral, fresh and saltwater fish, invertebrates and other aquarium supplies valued at the lower of cost or net realizable value determined using the weighted average cost method, and with market defined as the lower of replacement cost or realizable value. The cost of inventory includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to its present location and condition. The cost of conversion of living coral and fish inventory includes the cost of maintenance through the balance sheet date. Inventory is reduced for the estimated losses due to obsolescence and death.

Impairment of long-lived assets

Long-lived assets, including fixed assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value. The Company determined that there was no impairment of long-lived assets during the year ended March 31, 2013.

Goodwill

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and intangible assets of businesses acquired. We evaluate goodwill for impairment utilizing undiscounted projected cash flows in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, “Intangibles – Goodwill and Other”. The Company has determined that there was no impairment of goodwill during the year ended March 31, 2013.

Research and development expense

Expenditures for research, development, and engineering of products are expensed as incurred. There has been no research and development cost incurred for the year ended March 31, 2013.

Common stock

The Company records common stock issuances when all of the legal requirements for the issuance of such common stock have been satisfied.

Revenue and cost recognition

Our revenue arises primarily from sales of live coral, fish and other items in our retail store or as online purchases. In addition, we make sales by contracts with local departments of education for classroom and science lab use.

- 14 -

In accordance with ASC 605, Revenue Recognition, the Company recognizes revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue is recognized for retail store sales when the customer receives and pays for the merchandise. For online sales, we defer revenue and related cost of goods sold until the customer receives the products. Revenue under contracts is recognized when contract terms have been agreed to, products have been delivered and collectability is reasonably assured. Revenue is recognized net of sales returns and allowances and excludes sale tax collected.

Costs of goods sold represents product costs associated with generating revenue. It includes all costs of purchase, costs of conversion and other costs of acquiring products which have been sold.

Advertising costs

The Company’s policy regarding advertising is to expense advertising when incurred. There has been no advertising cost incurred for the year ended March 31, 2013.

Income taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company adopted the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Share-based Expense

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Share-based expense for the year ended March 31, 2013 and 2012 was $542,000 and $350,000, respectively.

Earnings (loss) per share

Basic loss per share is computed in accordance with ASC Topic 260, Earnings per Share, by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered antidilutive and thus are excluded from the calculation. At March 31, 2013, the Company’s potentially dilutive common stock equivalents consisted of convertible notes payable. These instruments have been excluded from the calculation of fully diluted loss per share for the year ended March 31, 2013 because their effect would be antidilutive. At March 31, 2012, the Company did not have any potentially dilutive common stock equivalents.

Financial instruments

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

- 15 -

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:


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

	·	Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	·	Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Commitments and Contingencies

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of March 31, 2013 and 2012.

Recent accounting pronouncements

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

4. ACQUISITION OF FATHER FISH AQUARIUM, INC., NOTE PAYABLE AND GOODWILL

On June 13, 2011, Rainbow Coral Corp. entered into an agreement to purchase all of the assets and the business of Father Fish Aquarium, Inc. (“Father Fish”) for $50,000. Father Fish was owned and operated by Lou Foxwell, the Company’s CEO and sole director. Rainbow Coral, as the surviving entity, will continue the business operations as a publicly-traded business under the same name of Rainbow Coral Corp. In the Agreement, the parties agreed that Rainbow Coral Corp would convey to Lou Foxwell at closing $10,000 cash and a note payable in the amount of $40,000. The note bears interest at 6% per year and is payable in 16 monthly installments of $2,500 with a final balloon payment due in the 17^th month. As of March 31, 2013, this note has been paid in full.

- 16 -

As a result of the acquisition, the Company recorded goodwill in the amount of $27,868. The Company performs an annual goodwill impairment test as of February 28 each year in accordance with ASC subtopic 350-20, Goodwill, and updates the test between annual tests if events or circumstances occur that indicate an impairment might exist.

Reporting units are determined based on the organizational structure at the date of the impairment test. A separate goodwill impairment test is performed for each reporting unit on the goodwill that has been allocated to it.

Reporting units are the component business units from the Company’s operating segment where discrete financial information exists for them. Management regularly reviews operating results. Also, for each reporting unit, their economic characteristics are dissimilar from each other. Currently, the Company has only one reporting unit under goodwill impairment testing.

The annual test of the potential impairment of goodwill requires a two-step process. Step one of the impairment test involves comparing the estimated fair values of reporting units with their aggregate carrying values, including goodwill. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, step two must be performed to determine the amount, if any, of the goodwill impairment loss. If the carrying amount is less than fair value, further testing of goodwill impairment is not performed.

Since the carrying amount of the reporting unit was less than zero, the Company performed only the second step of the impairment test. Step two of the goodwill impairment test involves comparing the implied fair value of the reporting unit’s goodwill against the carrying value of the goodwill. Under step two, determining the implied fair value of goodwill requires the valuation of a reporting unit’s identifiable tangible and intangible assets and liabilities as if the reporting unit had been acquired in a business combination on the testing date. The difference between the fair value of the entire reporting unit as determined in step one and the net fair value of all identifiable assets and liabilities represents the implied fair value of goodwill. The goodwill impairment charge, if any, would be the difference between the carrying amount of goodwill and the implied fair value of goodwill upon the completion of step two. The Company determined that goodwill was not impaired as of March 31, 2013 and 2012 and no impairment was recognized for the years then ended.

Goodwill consisted of the following as of March 31, 2013 and 2012:


	March 31,
	2013		2012
Goodwill related to acquisition of Father Fish	$	27,868	$	27,868
Less: impairment		—		—

Total	$	27,868	$	27,868

5. INVESTMENT IN NANO3D BIOSCIENCES

We made weekly investments of $5,000 in N3D up to a total of $60,000 resulting in our acquisition of approximately 145 shares of N3D’s common stock. We discontinued payments to N3D in May 2012 because of their delay in reaching certain milestones in the commercialization process. We remain shareholders of N3D as a result of the $60,000 investment that we have made.

This investment is being accounted for on the cost basis. As of March 31, 2013 and 2012, we wrote off the investment to general and administrative expense due to the uncertainty about whether the carrying amount is recoverable.

6. PREPAID EXPENSE

At March 31, 2013 and 2012, prepaid expense consisted primarily of utility deposits in the amount of $350.

- 17 -

7. INVENTORY

Inventory consists of live coral, fresh and saltwater fish, invertebrates and other aquarium supplies.


	March 31,
	2013		2012
Live coral, fish and other supplies	$	29,020	$	28,253

Total	$	29,020	$	28,253

8. CONVERTIBLE NOTES PAYABLE

During the two years ended March 31, 2013, the Company entered into Convertible Promissory Notes which refinance non-interest bearing advances. The Convertible Promissory Notes entered into had the following terms:


Effective Date	Maturity Date	Interest Rate	Conversion Rate	Loan Amount
November 30, 2011	July 20, 2013	10%	$0.01 per share	$ 69,586
December 31, 2011	July 20, 2013	10%	$0.01 per share	$ 18,650
March 31, 2012	March 31, 2014	10%	$0.05 per share	$ 94,515
June 30, 2012	June 30, 2014	10%	$0.04 per share	$ 117,775
January 1, 2013	January 1, 2015	10%	$0.05 per share	$ 101,333
March 31, 2013	March 31, 2015	10%	$0.05 per share	$ 43,575

All principal along with accrued interest is payable on the maturity date. The notes are convertible into common stock at the option of the holder.

Convertible notes payable consist of the following as of March 31, 2013:


Convertible note payable in the original principal amount of $94,515, effective March 31, 2012 due March 31, 2014, bearing interest at 10% per year, convertible into common stock at a rate of $0.05 per share	$	4,515
Convertible note payable in the original principal amount of $117,775, effective June 30, 2012 due June 30, 2014, bearing interest at 10% per year, convertible into common stock at a rate of $0.04 per share		73,275
Convertible note payable in the original principal amount of $101,333, effective January 1, 2013 due January 1, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.05 per share		101,333
Convertible note payable in the original principal amount of $43,575, effective March 31, 2013 due March 31, 2015, bearing interest at 10% per year, convertible into common stock at a rate of $0.05 per share		43,575
Total convertible notes payable		222,698
Less: Current portion of convertible notes payable		(4,515	)
Less: Discounts on convertible notes payable		(193,607	)
Convertible notes payable	$	24,576

There were no convertible notes payable outstanding as of March 31, 2012.

The Company evaluated the application of ASC 470-50-40/55, Debtor’s Accounting for a Modification or Exchange of Debt Instrument as it applies to the notes listed above and concluded that the revised terms constituted a debt modification rather than a debt extinguishment because the present value of the cash flow under the terms of each of the new instruments was less than 10% from the present value of the remaining cash flows under the terms of the original notes. No gain or loss on the modifications was required to be recognized.

The Company evaluated the terms of these notes in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bifurcate the conversion features and account for them as a separate derivative liabilities. The Company evaluated the conversion features for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized beneficial conversion features in the amounts of $69,586, $18,650, $94,515, $117,775, $101,333 and $43,575 on the date the notes were signed. The beneficial conversion features were recorded as an increase in additional paid-in capital and a discount to the Convertible Notes Payable. The discounts to the Convertible Notes Payable will be amortized to interest expense over the life of the respective notes.

- 18 -

9. RELATED PARTY TRANSACTIONS

Notes Payable

As of March 31, 2013 and 2012, related party transactions totaled $93,195 and $31,299. Transactions consist solely of notes payable to Mr. Foxwell for amounts advanced to Father Fish for operating cash flow.

Other

The officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities that become available. Our sole officer and director may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

The above terms and amounts are not necessarily indicative of the terms and amounts that would have been incurred had comparable transactions been entered into with independent parties.

10. INCOME TAXES

At March 31, 2013, the Company has available for federal income tax purposes net operating loss (“NOL”) carry-forwards of $1,835,414 at the statutory tax rate of 34% that may be used to offset future taxable income. The NOLs approximating $624,000 begin expiring in 2031. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements since the Company believes that the realization of its net deferred tax asset of approximately $624,000 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by the full valuation allowance.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.

- 19 -

Components of deferred tax assets as of March 31, 2013 and 2012 are as follows:


	Year ended March 31,
	2013			2012
Tax benefit at U.S. statutory rate	$	353,700		$	155,500
State income tax benefit, net of federal benefit.		31,600			13,900
		385,300			169,400
Non-deductible stock based compensation		(165,300	)		(106,500	)
Valuation allowance		(220,000	)		(62,900	)
Income tax expense	$	—		$	—

The Company did not have any temporary differences for the years ended March 31, 2013 or 2012. The deferred tax asset generated by the loss carry-forward has been fully reserved.


	March 31,
	2013			2012
Deferred tax asset, generated from net operating loss at statutory rates	$	624,000		$	195,000
Valuation allowance		(624,000	)		(195,000	)
	$	—		$	—

11. STOCKHOLDERS’ EQUITY

Upon formation, the Company was authorized to issue 10,000,000 shares of $0.0001 par value preferred stock and 100,000,000 shares of $0.0001 par value common stock. As of March 31, 2013 and 2012, there was no preferred stock issued or outstanding. There were 12,519,828 shares and 575,000 shares of common stock outstanding as of March 31, 2013 and 2012, respectively.

On March 5, 2012, the Company approved a 2012 Stock Plan for Directors, Officers and Consultants (“Plan”) for the issuance of up to 6,000,000 shares of common stock or equivalent value, as determined. The Plan provides eligible employees and consultants the opportunity to participate in the enhancement of shareholder value by the grants of warrants, options, restricted common or convertible preferred stock if, as and when preferred stock is authorized by the Company and its shareholders, unrestricted common or convertible preferred stock and other awards under this Plan and to have their bonuses and/or consulting fees payable in warrants, restricted common or convertible preferred stock, unrestricted common or convertible preferred stock and other awards, or any combination thereof.

On April 13, 2012, the Company issued 20,000 shares of common stock to a third party for services. The shares were valued at $200,000 based on the market value of the stock on the date of issuance.

On April 30, 2012, the Company issued 30,000 shares of common stock to a third party for services. The shares were valued at $216,000 based on the market value of the stock on the date of issuance.

On May 31, 2012, the Company issued 30,000 shares of common stock to a third party for services. The shares were valued at $126,000 based on the market value of the stock on the date of issuance.

On August 1, 2012, the Company issued 6,958,596 shares of common stock as a result of conversion of a Convertible Note Payable in the amount of $69,586.

On August 2, 2012, the Company issued 1,125,000 shares of common stock as a result of the conversion of a Convertible Note Payable in the amount of $11,250.

On August 30, 2012, the Company issued 430,000 shares of common stock as a result of the conversion of a Convertible Note Payable in the amount of $4,300.

On December 17, 2012, the Company issued 1,800,000 shares of common stock as a result of the conversion of a Convertible Note Payable in the amount of $90,000.

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On February 4, 2013, the Company issued 438,646 shares of common stock as a result of the conversion of a Convertible Note Payable in the amount of $4,386.

On February 26, 2013, the Company issued 550,000 shares of common stock as a result of the conversion of a Convertible Note Payable in the amount of $22,000.

On March 6, 2013, the Company issued 562,500 shares of common stock as a result of the conversion of a Convertible Note Payable in amount of $22,500.

12. COMMITMENTS AND CONTINGENCIES

From time to time Rainbow Coral Corp. may become a party to litigation matters involving claims against Rainbow Coral Corp. Management believes that there are no current matters that would have a material effect on Rainbow Coral Corp.’s financial position or results of operations.

Operating Lease Obligations

We rent office space on a month-to-month basis. In addition, our CEO utilizes office space in Houston, Texas on an as-needed basis through a management agreement with a professional services corporation.

13. SUBSEQUENT EVENTS

Management has evaluated all events that occurred after the balance sheet date through the date the financial statements were issued. The following events and transactions are reportable subsequent events requiring disclosure:

On February 1, 2013, we entered into a Joint Venture Agreement with TheraKine Ltd. (“TheraKine”) in order to explore potential business opportunities to exploit TheraKine’s novel drug delivery technologies. TheraKine is the developer of a revolutionary, sustained-release drug delivery platform that could soon make local delivery of biologic agents and small molecules safer, more effective and more convenient than ever before. Under the terms of the Joint Venture Agreement, we have committed to fund $55,000 of the cash flow requirements of the Joint Venture by making weekly payments of $6,875. In addition, we will provide management and marketing services to assist with bringing the platform to market and help identify potential target users of the platform. As of March 31, 2013, we had not provided any funding to TheraKine. During June and July 2013, we funded $20,625 under the Joint Venture Agreement with TheraKine. We expect to continue to fund this joint venture.

On April 10, 2013, the holder of the Convertible Promissory Note in the original amount of $117,775 elected to convert principal in the amount of $25,000 into 625,000 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $20,688.96 was immediately amortized to interest expense.

On April 11, 2013, the holder of the Convertible Promissory Note in the original amount of $117,775 elected to convert principal in the amount of $48,275 and unpaid accrued interest in the amount of $1,725 into 1,250,000 shares of common stock. As a result of this conversion, the remaining unamortized discount related to the converted principal in the amount of $39,950 was immediately amortized to interest expense.

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Changes in

On December 27, 2012, Peter Messineo, CPA declined to sit for re-election as the Company’s independent registered public accountant due to changes in his firm. On December 17, 2012, Peter Messineo joined the firm known as DKM Certified Public Accountants.

On December 27, 2012, the Company engaged DKM Certified Public Accountants as its registered independent public accountant.

On June 28, 2013, the Company dismissed DKM Certified Public Accountants as its registered independent public accountant. The Company engaged Messineo & Co. CPAs LLC as its registered independent public accountant on June 28, 2013. The decision to change independent registered public accounting firms was made and approved by our Board of Directors.

The report of Peter Messineo CPA on the financial statements of the Registrant for the years ended March 31, 2012 and March 31, 2011 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles except that the report contained an explanatory paragraph stating that there was substantial doubt about the Company’s ability to continue as a going concern.

Disagreements with

There were no disagreements with accountants on accounting and financial disclosure for the years ended March 31, 2013 and 2012.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Limitations on Systems of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

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	·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

	·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

	·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of March 31, 2013, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: lack of a functioning audit committee; lack of a majority of independent members and a lack of a majority of outside directors on our board of directors; inadequate segregation of duties consistent with control objectives; ineffective oversight of the entity’s financial reporting and internal control by management and those charged with governance; and, management is dominated by a single individual. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of March 31, 2013.

Management believes that the material weaknesses did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Management’s Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

We will work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.

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Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B. Other Information

None.

Part III

Item 10. Directors, Executive Officers and Corporate Governance.

Officers and Directors

Our sole officer and director will serve until his successor is elected and qualified. Our officers are elected by the board of directors to a term of one (1) year and serve until his successor(s) is duly elected and qualified, or until he is removed from office. The board of directors has no nominating, auditing or compensation committees.

The name, address, age and position of our president, secretary/treasurer, and director is set forth below:


NAME AND ADDRESS	AGE	POSITION(S)

Patrick Brown	45	President, Secretary/Treasurer
495 Grand Blvd., Suite 206		Chief Executive Officer
Miramar Beach, FL 32550		Principal Financial Officer and Sole Director

Lou Foxwell was the sole officer and director at the inception of the Company until October 14, 2011.

On October 14, 2011, our Board of Directors appointed Patrick Brown to serve as CEO, President and a member of the Board of Directors.

Additionally, on October 14, 2011, Mr. Louis Foxwell resigned as our CEO, President and Director. He will remain as the President of our Father Fish subsidiary and will continue to manage that segment of our business. Mr. Foxwell’s resignation was not the result of a disagreement with the Company.

Business Experience

PATRICK BROWN, CHIEF EXECUTIVE OFFICER AND SOLE DIRECTOR

Over the past two decades, Mr. Brown has cultivated a wealth of knowledge and expertise as an executive and financial consultant for international clean-energy innovators in the U.S. and abroad. In addition to his work assessing the prospects and feasibility of clean-energy projects, Mr. Brown is highly experienced in securing financing for new technologies from government and venture capital sources. Prior to joining the Company Mr. Brown was the President of West Coast Financial Services, Ltd. which provided boutique financial consulting services for private and pre-listed public companies. From 2009 – 2011, he worked for MNP, LLP, a Canadian accounting firm, where he maintained a client base in entertainment, renewable energy and emerging markets. From 2005 to 2009, he worked for RSM Richter, LLP where he branded the firm’s emerging markets and renewable energy practice specialty. He is trained as a Canadian Chartered Accountant, and holds a diploma from the British Columbia Institute of Technology in Financial Management with an option in Taxation. Mr. Brown also serves as Chief Executive Office and sole director of On the Move Systems, Inc., which provides personal and business safety and protection products.

Mr. Brown does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

Family Relationships

There are no family relationships among our directors, executive officers or persons nominated to become executive officers or directors.

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Involvement in Certain Legal Proceedings

During the past ten (10) years, none of our directors, persons nominated to become directors, executive officers, promoters or control persons was involved in any of the legal proceedings listen in Item 401 (f) of Regulation S-K.

Arrangements

There are no arrangements or understandings between an executive officer, director or nominee and any other person pursuant to which he was or is to be selected as an executive officer or director.

Item 11. Executive Compensation.

Mr. Brown is being paid $5,500 per month. We have no employment agreement with Mr. Brown. He receives no other compensation other than the salary described above.

Subsequent to the acquisition of the assets of Father Fish, Mr. Foxwell is being compensated at a rate of $2,500 per month.

The table below summarizes all compensation awarded to, earned by, or paid to our named officers and directors for all services rendered in all capacities to us during the fiscal years ended March 31, 2013 and 2012.

SUMMARY COMPENSATION TABLE


Name and principal position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compen- sation	Total ($)

Patrick Brown, CEO	2013 2012	$ 66,000 $ 27,500	$ — $ —	$ — $ —	$ — $ —	$ — $ —	$ — $ —	$ — $ —	$ 66,000 $ 27,500

Lou Foxwell, former CEO and current president of Father Fish	2013 2012	$ 25,000 $ 22,500	$ — $ —	$ — $ —	$ — $ —	$ — $ —	$ — $ —	$ — $ —	$ 25,000 $ 22,500

There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Our principal executive officers and directors do not have any earned or unearned equity awards outstanding as of the end of our fiscal year.

On March 1, 2012, the Company approved its 2012 Stock Plan for Directors, Officers and Consultants (“2012 Stock Plan”). The 2012 Stock Plan authorized the issuance of 6,000,000 shares of the Company’s common stock for directors, officers, and employees (including consultants meeting the definition of “employee” under Rule 405 promulgated under the Securities Act). Pursuant to the 2012 Stock Plan, the Company registered 6,000,000 shares of its stock with the SEC on Form S-8 on March 5, 2012.

The Company has not granted any awards or options to our principal executive officers or directors pursuant to the 2012 Stock Plan.

COMPENSATION OF DIRECTORS

We do not compensate our directors for their services in their capacity as directors nor do we have any agreements to do so.

DIRECTOR INDEPENDENCE

We do not currently have any independent directors and we do not anticipate appointing additional directors in the foreseeable future. If we engage further directors and officers, however, we plan to develop a definition of independence.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information as of June 30, 2012, with respect to the beneficial ownership of shares of the Company’s common stock by (i) each person known to us who owns beneficially more than 5% of the outstanding shares of the Company’s common stock, (ii) each of our Directors, (iii) each of our Executive Officers, and (iv) all of our Executive Officers and Directors as a group. Unless otherwise indicated, each stockholder has sole voting and investment power with respect to the shares shown. As of June 30, 2013, there were 595,000 shares of the Company’s common stock issued and outstanding.


Name and address of beneficial owner	Relationship to Registrant	Number of Shares of Common Stock		Percentage of Common Stock ⁽¹⁾

Glendive Investments Al. Jerozolimskie 56C Warsaw, 00-803 Poland	Shareholder		7,408,598		50.1	%

Patrick Brown	Sole director and CEO		0		0.0	%

All officers and directors as a group (total of 1)			0		0.0	%

_________

(1) Under Rule 13d-3 promulgated under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on March 31, 2012.

EQUITY COMPENSATION PLAN INFORMATION


Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance (c)
Equity compensation plans approved by security holders		—		—		—

Equity compensation plans not approved by security holders (1)		6,000,000		$0.0001		5,895,000

Total		6,000,000		$0.0001		5,895,000

_________

Item 13. Certain Relationships and Related Transactions, and Director Independence.

None.

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Item 14. Fees and Services.

The following is a summary of the fees billed to the Company by its independent accountants, Peter Messineo, CPA, for the years ended March 31, 2013 and 2012:


Fee Category	2013		2012

Audit Fees	$	6,350	$	4,100

Audit-Related Fees ⁽¹⁾		—		—

Tax Fees ⁽²⁾		—		—

All Other Fees ⁽³⁾		—		—

Total Fees	$	6,350	$	4,100

Notes to the Accountants Fees Table:


(1)	Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees.”

(2)	Consists of fees for professional services rendered by our principal accountants for tax related services.

(3)	Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees” above.

As part of its responsibility for oversight of the independent registered public accountants, the Board has established a pre-approval policy for engaging audit and permitted non-audit services provided by our independent registered public accountants. In accordance with this policy, each type of audit, audit-related, tax and other permitted service to be provided by the independent auditors is specifically described and each such service, together with a fee level or budgeted amount for such service, is pre-approved by the Board. All of the services provided by Peter Messineo, CPA described above were approved by our Board.

The Company’s principal accountant did not engage any other persons or firms other than the principal accountant’s full-time, permanent employees.

Part IV

Item 15. Exhibits and Financial Statement Schedules.

Exhibit Number Description


2.1	Stock Purchase Agreement, dated as of June 13, 2011, by and among Rainbow Coral Corporation and Father Fish Aquarium, Inc. (1)

2.2	Membership Interest Purchase Agreement, dated as of June 13, 2011 by and among Father Fish Aquarium, Inc. and Father Fish Aquarium, LLC. (1)

3.1(a)	Articles of Incorporation of Rainbow Coral Corp. (2)

3.1(b)	Articles of Amendment of Rainbow Coral Corp. (1)

3.1(c)	Articles of Amendment of Rainbow Coral Corp. (3)

3.2(a)	Bylaws of Rainbow Coral Corp. (2)

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10.1	Note from Rainbow Coral Corp. to Louis Foxwell (1)

21 *	Subsidiaries of the Registrant

31.1 *	Section 302 Certification

32.1 *	Section 906 Certification

101 **	XBRL Interactive Data

* Filed or furnished herewith

** To be submitted by amendment

(1) Incorporated by reference to the comparable exhibit filed with our Form 8-K filed on June 13, 2011

(2) Incorporated by reference to the comparable exhibit filed with our Registration Statement on Form S-1

(3) Filed on July 17, 2012 as an exhibit to the Registrant’s Form 10-K for the year ended March 31, 2012.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: July 16, 2013	Rainbow Coral Corp.

	By: /s/ Patrick Brown
	Patrick Brown
	Chairman of the Board
	Chief Executive Officer
	Principal Financial Officer

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