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EX-31.1 - EXHIBIT 31.1 - UPD HOLDING CORP.ex31_1.htm
EX-32.1 - EXHIBIT 32.1 - UPD HOLDING CORP.ex32_1.htm
EX-31.2 - EXHIBIT 31.2 - UPD HOLDING CORP.ex31_2.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
For the quarterly period ended March 31, 2018
OR

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: 001-13621

UPD HOLDING CORP.
(Exact name of Registrant as specified in its charter)

Nevada
13-3465289
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)


75 Pringle Way, 8th Floor, Suite 804
Reno, Nevada 89502
(Address of principal executive offices, including zip code)
  
775-829-7999 x112
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every 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 ☑ No ☐

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

Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer  ☐
Smaller reporting company ☑
(Do not check if a smaller reporting company)
Emerging growth company ☐

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

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

The aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant as of March 29, 2018 (the last business day of the registrants most recently completed second fiscal quarter), was approximately $5,163,733 based on the last trading price of the registrant’s common stock of $0.032 as reported on the OTC Bulletin Board on such date.

As of June 4, 2018, the issuer had 161,266,636 shares of Common Stock outstanding, par value $.005 per share.
 

 
 

 
UPD HOLDING CORP.

TABLE OF CONTENTS

 
Page
No.
3
   
PART I. FINANCIAL INFORMATION
 
   
4
   
4
5
6
7
   
12
15
16
   
PART II. OTHER INFORMATION
 
   
17
17
17
17
17
17
18
   
19
 
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

   
The statements contained in this Quarterly Report on Form 10-Q that are not historical fact 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, and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Investors are cautioned that these forward-looking statements that are not historical facts are only predictions. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. Because of the number and range of assumptions underlying the Company’s projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. Therefore, the actual experience of the Company and the results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. The inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate.
 
 
PART I. FINANCIAL INFORMATION

Item 1.
Financial Statements


UPD HOLDING CORP.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

   
(unaudited)
       
   
March 31,
2018
   
June 30,
2017
 
             
ASSETS
           
CURRENT ASSETS:
           
Cash and Cash Equivalents
 
$
88,581
   
$
65,308
 
Inventory
   
180,649
     
-
 
Other current assets
   
22,000
     
-
 
     Total Current Assets
   
291,230
     
65,308
 
Property, plant and equipment, net
   
389,967
     
-
 
Goodwill
   
492,762
     
-
 
Intangible Assets, net
   
1,243,462
     
-
 
Total noncurrent assets
   
2,126,191
     
-
 
TOTAL ASSETS
 
$
2,417,421
   
$
65,308
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accrued Interest
 
$
86,027
   
$
-
 
Accounts Payable
   
331,818
     
40,202
 
Accrued Liabilities
   
5,400
     
70,758
 
Convertible Notes Payable - Related Party
   
40,000
     
15,000
 
Convertible Notes Payable
   
497,500
     
50,000
 
Due to Shareholder(s)
   
67,501
     
-
 
Note Payable
   
360,000
     
-
 
Note Payable – Related Party
   
10,000
     
-
 
     Total Current Liabilities
   
1,398,246
     
175,960
 
                 
TOTAL LIABILITIES
   
1,398,246
     
175,960
 
                 
STOCKHOLDERS’ EQUITY:
               
Preferred stock, $.01 par value 10,000,000 authorized: 0 shares
issued and outstanding as of March 31, 2018 and June 30, 2017,
respectively
   
-
     
-
 
Common stock, $.005 par value 200,000,000 authorized:
161,266,636 and 79,766,636 shares issued and outstanding as of
March 31, 2018 and June 30, 2017, respectively
   
806,333
     
398,833
 
Additional paid-in capital
   
946,678
     
(265,405
)
Accumulated deficit
   
(733,836
)
   
(244,080
)
                 
TOTAL STOCKHOLDERS’ EQUITY
   
1,019,175
     
(110,652
)
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
2,417,421
   
$
65,308
 
 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
 
 
UPD HOLDING CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
Three Months Ended
   
Nine Months Ended
 
   
March 31,
   
March 31,
 
   
2018
   
2017
   
2018
   
2017
 
                         
Sales
 
$
2,103
   
$
-
   
$
2,103
   
$
-
 
Cost of sales
   
(14,503
)
   
-
     
(14,503
)
   
-
 
Gross Profit
   
(12,400
)
   
-
     
(12,400
)
   
-
 
Operating expenses:
                               
 General, and administrative expense
   
(74,064
)
   
(365
)
   
(74,905
)
   
(4,019
)
 Professional fees
   
(56,345
)
   
(6,272
)
   
(164,783
)
   
(33,480
)
   Total operating expenses
   
(130,409
)
   
(6,637
)
   
(239,688
)
   
(37,499
)
Operating income
   
(142,809
)
   
(6,637
)
   
(252,088
)
   
(37,499
)
Other expenses:
                               
 Bad debt Expense
   
-
     
-
     
(199,064
)
   
-
 
 Interest expense
   
(31,115
)
   
(21,666
)
   
(38,604
)
   
(64,998
)
   Total other expenses
   
(31,115
)
   
(21,666
)
   
(237,668
)
   
(64,998
)
NET LOSS
 
$
(173,924
)
 
$
(28,303
)
 
$
(489,756
)
 
$
(102,497
)
                                 
BASIC AND DILUTED PER SHARE DATA:
                               
Net loss per common share, basic and diluted
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
                                 
Weighted Average Common Shares
Outstanding, basic and diluted
   
138,230,739
     
79,766,636
     
99,474,665
     
79,766,636
 
 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
 
 
UPD HOLDING CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
Nine Months Ended March 31,
 
   
2018
   
2017
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
 
$
(489,756
)
 
$
(102,497
)
Adjustments to reconcile net loss to net cash used in operating
activities:
               
Stock compensation   
   
19,583
     
-
 
Bad Debt Expense
   
199,064
     
-
 
Changes in operating assets and liabilities:
               
Inventory
   
(123,867
)
   
-
 
Accounts Payable
   
103,783
     
11,917
 
Accrued Interest
   
20,669
     
64,998
 
Net Cash Used in Operating Activities
   
(270,524
)
   
(25,582
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Cash acquired from acquisition
   
17,121
     
-
 
Issuance of note receivable
   
(199,064
)
   
-
 
Net Cash Used in Investing Activities
   
(181,943
)
   
-
 
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from Sale of Common Stock
   
-
     
25,000
 
Proceeds from Loans from Shareholders
   
3,240
     
-
 
Proceeds from Convertible Notes Payable - Related Party
   
25,000
     
15,000
 
Proceeds from Convertible Notes Payable
   
447,500
     
-
 
Proceeds from Notes Payable
   
-
     
50,000
 
Net Cash Provided by Financing Activities
   
475,740
     
90,000
 
                 
NET CHANGE IN CASH AND CASH EQUIVALENTS
   
23,273
     
64,418
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
   
65,308
     
1,619
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
88,581
   
$
66,037
 
                 
INTEREST PAID:
 
$
12,000
   
$
-
 
TAXES PAID:
 
$
-
   
$
-
 
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
               
Purchase of Record Street Brewing by issuing 80,000,000 shares
of common stock
 
$
1,600,000
   
$
-
 
 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
 
 
UPD HOLDING CORP.
AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 – BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES; GOING CONCERN

Business, Operations and Organization

Esio Water & Beverage Development Corp. was incorporated in Nevada in June 1988 as Richard Barrie Fragrances, Inc. Over the years, the Company changed its name several times, most recently from Tempco, Inc. to Esio Water & Beverage Development Corp. Esio Water & Beverage Development Corp. and its wholly-owned subsidiaries Net Edge Devices, LLC, an Arizona Limited Liability Company, and iMetabolic Corp, (“IMET”) a Nevada Corporation are hereinafter collectively referred to as the “Company.”

On March 16, 2015, the Company issued to the IMET 16 shareholders of record an aggregate of 60,000,000 shares, or 76.2% of the Company’s common stock. Prior to the close of the reverse merger, IMET had 10,000,000 common shares outstanding immediately prior to the merger and net liabilities of $20,500. Prior to closing, the predecessor company had 18,566,636 shares outstanding and net assets of $89,615, of which $85,378 was cash and $4,237 was non-cash. As a result of the closing of this transaction, IMET is now a wholly owned subsidiary of the Company and its business and operations represent those of the Company

For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of the Company with IMET considered the accounting acquirer, and the financial statements of the accounting acquirer become the financial statements of the registrant. This transaction is hereinafter referred to as the “Reverse Merger.” The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 60,000,000 common shares issued to the shareholders of IMET in conjunction with the share exchange transaction have been presented as outstanding for all periods.

On December 30, 2015, the Company filed Articles of Merger (the “Merger”) with the Nevada Secretary of State. The Merger was between the Company and our wholly-owned subsidiary, UPD Holding Corp. (the “Subsidiary”). Pursuant to Nevada corporate law, we amended our Articles of Incorporation by the Merger to change our name to UPD Holding Corp. We believe our new name more properly indicates our current lines of business because the Company has not been in the water and beverage industry since 2012. “UPD” stands for United Product Development.

On January 8, 2018, the Company filed an 8-K with the Securities and Exchange Commission on announcing the closing of its Agreement of Exchange and Plan of Reorganization dated December 31, 2017 between UPD Holding Corp. and Record Street Brewing (“RSB”). An audit of Record Street Brewing (“RSB”) is ongoing and expected to consummate not later than June 30, 2018. Therefore, a possibility exists that certain financial aspects could be subject to revision.

In the quarter ending March 31, 2018, the Company entered into a production relationship with BrewHub and launched the new Stylus lager in all formats as well as blonde and pale ales in cans along with the Company’s existing 1/6 and 1/2-barrel kegs and 12 oz bottles.

Going Concern

The Company’s unaudited interim consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern, has recurring net losses and net capital deficiency. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The March 31, 2018 financial statements do not include any adjustments that might be necessary if UPD Holding Corp. is unable to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (i) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses; (ii) obtaining funding from outside sources through the sale of its debt and/or equity securities; and (iii) completing a merger with or acquisition of an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
 
 
Unaudited Interim Financial Statements
  
The accompanying unaudited interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission and are unaudited. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the nine-month period ended March 31, 2018, may not be indicative of the results for the entire year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017 filed with the Securities and Exchange Commission on October 13, 2017.

The preparation of the Company’s unaudited interim consolidated 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 expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates.

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes virtually all existing revenue guidance. Under this standard, an entity is required to recognize revenue upon transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. As such, an entity needs to use more judgment and make more estimates than under the previous guidance. On January 1, 2018, the Company adopted the new accounting standard and all related amendments using the modified retrospective method which allows application only to the most current reporting period presented in the financial statements with a cumulative effect adjustment to retained earnings.  The Company expects the impact of the adoption to be immaterial to its consolidated financial statements on an ongoing basis.

See also Note 5.

Accounting Pronouncements Not Yet Effective

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods.  The Company is still evaluating any potential impact that adoption of ASU 2016-02 may have on our financial position, results of operations, or cash flows.

NOTE 2 – RELATED PARTY TRANSACTIONS

For the nine months ended March 31, 2018, the President has provided the Company rent at no charge. We believe that the offices are adequate to meet our current operational requirements. We do not own any real property.

On September 1, 2016, through unanimous approval by its Board, the Company opened an escrow to initiate a proposed funding arrangement for future capital demands. The related party portion of this escrow consists of a $15,000 convertible Note held by the Company’s President which matured March 1, 2017. As a result of this date expiring, the President extended the maturity of the note to August 1, 2018. The company analyzed the extension under ASC 470-50 and concluded that this modification was not considered to be substantial. If not repaid by maturity, the note is convertible into 1,200,000 common shares at $0.0125 per share. If share conversion is not elected, then interest will be due in the amount of $15,000.

On December 31, 2017 when the Company acquired Record Street Brewing (“RSB), the Company assumed a note from a related party, Terie Ogle in the amount of $10,000. This note is currently held at zero percent interest, does not have a term and is unsecured. Also, on December 31, 2017 upon the acquisition of Record Street by the Company, two unsecured liabilities, without a term, representing outstanding payables were assumed on behalf of “RSB” shareholders, Corletto and Ogle in the amounts of $34,980 and $28,661, respectively. During the quarter ending March 31, 2018, The Company borrowed an additional $3,240 from the former RSB owners.  The current amounts outstanding to Corletto and Ogle are $37,080 and $29,801, respectively.

On March 5, 2018, the Company’s President and a related party invested $25,000 into a one-year Convertible Promissory Note at 12% which is if not repaid by the maturity, will convert into 280,000 common shares at $0.10 per share. If share conversion is not elected, then interest will be due in the amount of $3,000.
 

The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging” and determined that the instrument does not qualify for derivative accounting.

NOTE 3 – STOCKHOLDERS’ EQUITY

Authorized Shares

At March 31, 2018, our authorized capital stock consists of 200,000,000 shares of Common Stock, par value of $.005, and 10,000,000 shares of Preferred Stock, par value $.01. The Company’s Board of Directors has the authority to divide the preferred stock shares into series and to fix the voting powers, designation, preference, and relative participating, option or other special rights, and the qualifications, limitations, or restrictions of the shares of any series so established.
  
Common Stock

At March 31, 2018 and June 30, 2017, there were 161,266,636 and 79,766,636 shares of Common Stock issued and outstanding, respectively.

At March 31, 2018, we had a total of 1,200,000 shares reserved for issuance pursuant to the 1,200,000 outstanding options. As of March 31, 2018, all outstanding warrants issued by the predecessor company have expired. See “Options and Warrants” below for additional information.

On September 22, 2017, the Company entered into a consulting agreement with Sage Intergroup, Inc. for services related to investor relations. As part of this agreement, the Company issues 1.5M shares of the Issuer’s common stock, $0.005 par value. The value of the shares is $37,500 which is amortized over the 12-month term of the agreement. The Company accounted for $19,583 in stock-based compensation and the unamortized stock compensation expense as of March 31, 2018 is $17,917.

Preferred Stock

The Company has not issued any shares of preferred stock as of March 31, 2018.
 
Options and Warrants
 
The Company did not issue any options or warrants during the nine months ended March 31, 2018.

As of March 16, 2015, the effective date of the Reverse Merger, the Company had 3,522,767 options outstanding pursuant to the predecessor company’s 1999 Equity Compensation Plan, of which 2,322,767 options have expired, leaving 1,200,000 options outstanding as of March 31, 2017. These remaining options have a life span to Q1 2019.

In addition, as of the effective date of the Reverse Merger, the Company had 8,155,478 warrants outstanding issued by the predecessor company. Since the Reverse Merger, all 8,155,478 have expired and zero currently remain.

Additional information about the predecessor company’s options and warrants and expense calculations can be found in that company’s financial statements contained in its Annual Report on Form 10-K filed with the SEC on October 14, 2014 and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017 filed with the Securities and Exchange Commission on October 13, 2017.

NOTE 4 – ACQUISITION

On December 31, 2017 the Company completed its acquisition of RSB, a startup contract brewery based in Reno, NV. The aggregate purchase price for the transaction was $1,600,000 of equity equal to 80,000,000 shares of the Company’s common stock based on a closing stock price of $0.02 per share on December 29, 2017. The Company and RSB agreed to merge to increase the product portfolio of the Company. The Company gained control of RSB at the time of the acquisition through an exchange of 16,000 shares of the Company’s common stock per share outstanding of RSB. 100% of RSB’s voting equity was exchanged in the transaction. The transaction took place at the end of operations for the quarter and as such no revenue or earnings from RSB are included in the Consolidated Statements of Operations presented above. The Company accounted for the transaction in accordance with ASC 805, Business Combinations.

The total consideration given to the former members of RSB has been allocated to the assets acquired and liabilities assumed based on preliminary estimates of their estimated fair values as of the date of the acquisition. Because of the complexities involved with performing the valuation, the Company has recorded the tangible and intangible assets acquired and liabilities assumed based upon their preliminary fair values as of December 31, 2017. The preliminary measurements of fair value were based upon estimates of management and are subject to change within the measurement period (up to one year from the acquisition date). The Company expects appraisals of tangible and intangible assets and working capital adjustments to be finalized during the first quarter of fiscal 2019.
 
 
The following table summarizes the preliminary purchase price allocation based on the estimated fair values of the assets acquired and liabilities of RSB assumed at the acquisition date:

Consideration:
     
Fair value of equity consideration paid
 
$
1,600,000
 
         
Recognized preliminary amounts of identifiable assets acquired and (liabilities assumed), at fair value:
       
Cash
 
$
17,121
 
Current Assets
   
22,000
 
Inventory
   
56,782
 
Furniture & Equipment
   
91,933
 
Leasehold Improvements
   
298,034
 
Identifiable intangible assets
   
1,243,462
 
Accounts payable
   
(187,833
)
Notes payable to related parties
   
(74,261
)
Other current liabilities
   
(360,000
)
Preliminary estimate of the fair value of assets acquired and liabilities assumed
   
1,107,238
 
Goodwill
   
492,762
 
Total purchase price
 
$
1,600,000
 


The fair value of the identifiable intangible assets was determined based on the following approaches:

Lease Purchase – The value attributed to RSB’s Lease Purchase option was determined by fair market values over the current tenure of the existing lease purchase which survives until December 31, 2018.

Rent Abatement – The value attributed to RSB’s Rent Abatement was determined by assessing the fair market value of the space over the course of 2018 which the current lease purchase agreement documents.

Licensing Agreement – The value of RSB’s Licensing Agreement with Young’s Market was determined by examining operating metrics of small breweries.

The fair value of the intangible assets is being amortized using the straight-line method to general and administrative expenses over their useful lives. In the course of management’s preliminary assessment of the intangible assets acquired it was estimated that the range of useful lives of intangible assets is 1-10 years. Indefinite-lived intangible assets are not amortized, but instead are evaluated for potential impairment on an annual basis in accordance with the provisions of ASC Topic 350, Intangibles—Goodwill and Other. Goodwill of $492,762 arising from the acquisition consists of expected synergies as well as intangible assets that do not qualify for separate recognition. The goodwill acquired is expected to be deductible for income tax purposes.

The Company and RSB have been in the process of auditing RSB’s financial position as of December 31, 2017.  As such, adjustments have been made in the current quarter to the purchase price allocation first detailed in the December 31, 2017 10-Q.  Leasehold improvements of $298,034, inventory of $56,782, and an additional $97,938 in Accounts payable have been discovered during the course of the audit.  Furniture and Equipment was adjusted by ($22,000).  In addition, Notes payable to related parties has been adjusted by $620.  The cumulative effect on Goodwill from these adjustments was ($237,858).  It is possible further adjustments to the purchase price allocation are made in future quarters as the audit is ongoing.
 
 
Pro Forma Financial Information (unaudited):

The following unaudited pro forma consolidated results of operations for the three and nine months ended March 31, 2018 and 2017, assumes that the acquisition of RSB occurred as of July 1, 2016. The unaudited pro forma financial information combines historical results of UPD Holding Corp. and RSB. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2017 or the results that may occur in the future:

   
Three Months Ended March 31,
   
Nine Months Ended March 31,
 
   
2018
   
2017
   
2018
   
2017
 
Net Sales
 
$
2,103
   
$
16,384
   
$
40,835
   
$
42,312
 
Net (loss) income
   
(173,924
)
   
(33,536
)
   
(667,697
)
   
(119,173
)
Net (loss) income attributable to UPD Holding Corp.
   
(47,214
)
   
(29,298
)
   
(363,046
)
   
(100,493
)
Basic and Diluted (loss) earnings per share
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
 
$
(0.00
)
 

NOTE 5 – REVENUE RECOGNITION

Sales comprise the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Company’s activities.  Sales are presented, net of excise taxes, discounts and fees.

The Company sells beer through distributors.

Revenue is recognized when obligations under the terms of a contract with our customers are satisfied; generally, this occurs when the product arrives at distribution centers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. We consider customer purchase orders, which in some cases are governed by a master agreement, to be the contracts with a customer. For each contract related to the sale of beer, we consider the promise to transfer products, each of which is distinct, to be the identified performance obligation. The transaction price for each performance obligation is specifically identified within the contract with our customer and represents the fair standalone selling price. Discounts are recognized as a reduction to Sales at the time we recognize the revenue. We generally do not grant return privileges, except in limited and specific circumstances.
 

NOTE 6 – NOTES RECEIVABLE

The following notes were executed between Record Street Brewing (“RSB”) and the Company during the second quarter of fiscal 2018, at the Index of Applicable Federal Rates (AFR) Rulings for each applicable month in question for the period of 12 months. As a result of the Company’s announcement on January 5, 2018, in a filed an 8-K with the Securities and Exchange Commission announcing the closing of its Agreement of Exchange and Plan of Reorganization dated December 31, 2017 between UPD Holding Corp. and Record Street Brewing (“RSB”), these notes were expensed as a result of said merger.
  
Date
 
Days
   
IRS | Fed
Rate
   
Amount |
Borrowed
 
10/1/2017
   
91
     
0.1270
   
$
15,000
 
10/5/2017
   
87
     
0.1270
   
$
5,000
 
10/17/2017
   
75
     
0.1270
   
$
10,000
 
10/23/2017
   
69
     
0.1270
   
$
5,495
 
11/7/2017
   
54
     
0.1380
   
$
35,000
 
11/28/2017
   
33
     
0.1380
   
$
82,500
 
12/1/2017
   
30
     
0.1520
   
$
16,569
 
12/11/2017
   
20
     
0.1520
   
$
7,500
 
12/22/2017
   
9
     
0.1520
   
$
5,000
 
12/28/2017
   
3
     
0.1520
   
$
17,000
 
                         
                   
$
199,064
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   

 
NOTE 7 – CONVERTIBLE NOTES

Through the third quarter ending March 31, 2018, the Company had entered into the following unsecured Convertible Promissory Notes, with effective interest rates ranging from 12% to 50%. Maturity dates ranging between August 31, 2018 and March 19, 2019, at a conversion share price at $0.10 per share with an effective conversion to 9,617,000 shares. Thus far, $447,500 has been invested during the period ended of March 31, 2018 in addition to the $50,000 invested during prior periods making the total $497,500 . Details are as follows:
  
Convertible Note Detail
Date
Last
First
 
Amount
   
Total
w/Interest
   
Total
Convertible
 
Original
Maturity
Date
9/2/2016
Shoenberger
Deacon
 
$
50,000.00
   
$
100,000.00
     
4000000
 
8/1/2018
9/21/2017
Nonte
Paul
 
$
100,000.00
   
$
112,000.00
     
1120000
 
9/20/2018
10/10/2017
Wells
Richard
 
$
10,000.00
   
$
11,200.00
     
112000
 
10/9/2018
11/1/2017
Wells
Richard
 
$
75,000.00
   
$
86,250.00
     
862500
 
10/31/2018
11/3/2017
Richardson
Huxley
 
$
10,000.00
   
$
11,200.00
     
112000
 
11/2/2018
11/13/2017
Wells
Richard
 
$
75,000.00
   
$
86,250.00
     
862500
 
11/12/2018
11/16/2017
Heefner
Thomas
 
$
5,000.00
   
$
5,600.00
     
56000
 
11/15/2018
11/17/2017
Richardson
Huxley
 
$
10,000.00
   
$
11,200.00
     
112000
 
11/16/2018
12/21/2017
Heefner
Thomas
 
$
15,000.00
   
$
16,800.00
     
168000
 
12/20/2018
12/22/2017
Richardson
Huxley
 
$
20,000.00
   
$
22,400.00
     
224000
 
12/21/2018
12/28/2017
Heefner
Thomas
 
$
20,000.00
   
$
22,400.00
     
224000
 
12/27/2018
1/3/2018
Heefner
Thomas
 
$
7,500.00
   
$
8,400.00
     
84000
 
1/2/2019
1/8/2018
Orten
Gary
 
$
5,000.00
   
$
5,600.00
     
56000
 
1/7/2019
1/11/2018
Heefner
Thomas
 
$
10,000.00
   
$
11,200.00
     
112000
 
1/10/2019
1/22/2018
Richardson
Huxley
 
$
10,000.00
   
$
11,200.00
     
112000
 
1/21/2019
1/29/2018
Heefner
Thomas
 
$
10,000.00
   
$
11,200.00
     
112000
 
1/28/2019
2/9/2018
Heefner
Thomas
 
$
10,000.00
   
$
11,200.00
     
112000
 
2/8/2019
2/12/2018
Leslie
Mark
 
$
5,000.00
   
$
5,600.00
     
56000
 
2/11/2019
2/15/2018
Berkley
Richard
 
$
5,000.00
   
$
5,600.00
     
56000
 
2/14/2019
2/15/2018
Goldstein
Raymond
 
$
5,000.00
   
$
5,600.00
     
56000
 
2/14/2019
2/15/2018
Heefner
Thomas
 
$
10,000.00
   
$
11,200.00
     
112000
 
2/14/2019
3/13/2018
Shoenberger
Deacon
 
$
25,000.00
   
$
84,000.00
     
840000
 
3/12/2019
3/20/2018
Mollberg
Melvin
 
$
5,000.00
   
$
5,600.00
     
56000
 
3/19/2019
                                     
Grand
Total
      
$
497,500
             
9,617,000
   

The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and   Hedging” and determined that the instruments do not qualify for derivative accounting.

The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature and determined that the instrument does have a beneficial conversion feature equivalent. The conversion price is out-of-money on the issuance date of the note, thus there is no value to the beneficial conversion feature.

NOTE 8 – NOTE PAYABLE

On December 31, 2017 when the Company acquired Record Street Brewing (“RSB), the Company assumed a note from Jason Klore in the amount of $10,000. This note is currently held at zero percent interest, does not have a term and is unsecured. Also, on December 31, 2107 upon the acquisition of Record Street by the Company, three additional unsecured liabilities were assumed. The first was executed on October 1, 2017 to Ian Maddan in the amount of $100,000, fixed at 12% interest for one (1) year. The second was executed on October 1, 2017 to Mike Maddan in the amount of $150,000, fixed at 12% interest for one (1) year. The third was executed on October 1, 2017 to Mike & Linda Maddan in the amount of $100,000, fixed at 18% interest for one (1) year.

NOTE 9 – SUBSEQUENT EVENTS

During April and May 2018, the Company entered nine (9) Convertible Promissory Notes with investors totaling a principal sum of $155,000. The effective interest rate is 12% for all notes with the exception of one which is 33.3% with various maturity dates out as far as May 9, 2019, at a conversion share price at $0.10 per share with an effective conversion to 1,896,000 shares.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim consolidated financial statements and related notes which are included in Item 1 of this Quarterly Report on Form 10-Q, and with our audited financial statements included in our Form 10-K for the fiscal year ended June 30, 2017, filed with the Securities and Exchange Commission on October 13, 2017.
 
 
Overview

Acquisition of iMetabolic Corp.

On December 31, 2014, we entered into an Agreement of Share Exchange and Plan of Reorganization (the “Share Exchange Agreement”) and consummated a share exchange (the “Share Exchange”) with iMetabolic Corp. (“IMET”), a Nevada corporation. The Effective Date of the transaction was March 16, 2015 (the “Effective Date”) and resulted in the acquisition of IMET (the “Acquisition”). Pursuant to the terms of the Share Exchange Agreement, we acquired all of the outstanding capital stock of IMET  from the 16 IMET shareholders for an aggregate of 60,000,000 shares, or 76.2% of the Company’s common stock.

As a result of the Share Exchange Agreement, the IMET shareholders transferred all their interest in IMET to the Company and, as a result, IMET became a wholly owned subsidiary of the Company.

As a further condition of the Share Exchange Agreement, the then current officers of the Company resigned on March 16, 2015 and Mark W. Conte was appointed President, CEO and a director of the Company, Kevin J. Pikero as CFO, Treasurer, Secretary, and a director and Andrew D. Smith as a director.

The IMET acquisition is discussed more fully in the Form 8-K we filed with the Securities and Exchange Commission (“SEC”) on March 20, 2015. Included as an exhibit to that Form 8-K is a copy of the Share Exchange Agreement.

Name Change

On December 30, 2015, the Company filed Articles of Merger (the “Merger”) with the Nevada Secretary of State. The Merger was between the Company and our wholly-owned subsidiary, UPD Holding Corp. (the “Subsidiary”). Pursuant to Nevada corporate law, we amended our Articles of Incorporation by the Merger to change our name to UPD Holding Corp. We believe our new name more properly indicates our current lines of business because the Company has not been in the water and beverage industry since 2012. “UPD” stands for United Product Development which is the name of one of our wholly-owned subsidiaries. On March 1, 2017, FINRA successfully grated the company a new trading symbol (UPDC).
  
IMET Products

IMET was formed on July 1, 2013 for the purpose of marketing products under the brand “iMetabolic” that were previously being sold by the brand’s licensor, International Metabolic Institute LLC (“IMI”), as well as to develop new products that would be specifically suited for a national marketing plan. IMI transferred certain product and trademark rights to IMET on July 22, 2013 (the “License”). The License was amended on March 16, 2015 to clarify IMET’s and IMI’s future rights. See “IMET License Agreement” below. The mission of IMET is to build upon preexisting brand equity and the expert copy and other literature authored by Dr. Kent Sasse as applied to the national launch of products with extraordinary profitability and novel market appeal.

A pre-existing line of five (5) soft-bound books authored by the founder of the iMetabolic brand, Dr. Kent Sasse, is available for sale under the brand “A Sasse Guide” on both the www.imetabolic.com and www.sasseguide.com websites. These books are titled: (i) Life- Changing Weight Loss; (ii) Doctor’s Orders – 101 Medically Proven Tips for Losing Weight; (iii) Outpatient Weight Loss Surgery – Safe and Successful Weight Loss with Modern Bariatric Surgery; (iv) Weight-Loss Surgery – Which One is Right for You?; and (v) After Weight Loss Surgery. Pursuant to the terms of the License Amendment these books will continue to be the property of and sold by IMI.

A pre-existing line of products, including, but not limited to, proprietary blend meal replacements, dietary specialty foods, and nutraceuticals, have been sold by IMI at IMI’s company store / doctor’s office pursuant to a reservation of rights in the License and online at www.imetabolic.com. An amendment to the License provides that after IMI has sold its entire inventory existing or ordered on March 16, 2015, IMI will not sell any more products which may be deemed to compete with IMET’s products.

IMET has developed the following four new products to be marketed:

A new product concept to be marketed under the name iMetabolic “Catalyst”, which is intended to provide the essential vitamins and plant compounds that are necessary to aid in metabolic functions. Such ingredients include broad spectrum B- Complex Vitamins, as well as Green Tea Extract and Resveratrol (polyphenols).

A new product concept to be marketed under the name iMetabolic “Mini-Meal”, which is intended to provide the essential whey protein isolate intake for a person who is on a four-to-five meal per day diet or needs a snack that will act as a low- calorie, high nutritional value appetite suppressant.

A new product concept to be marketed under the name iMetabolic “Multi-Pro”, which is intended to provide the essential broad-spectrum vitamins and minerals that are typically marketed as “multi-vitamin supplements;” however, this product is specifically tailored to dovetail with the “Catalyst” so as to virtually eliminate the duplicate consumption of overlapping ingredients that routinely plagues supplement users.
 
 
A new product concept to be marketed under the name iMetabolic “BittX.” This product is premised on the scientific theory that modern horticulture and food producers have systematically promoted foods that are sweet or lack bitterness, which is the flavor typically associated with foods that have the greatest health benefits. Accordingly, this product is intended to reform the body’s disposition toward bitter foods in a subtle, inoffensive way.

We believe IMET’s current four products can be successfully marketed through the use of infomercials and have made progress with identifying a creator and producer for an infomercial to sell the products. Additionally, the Company is building a new website with e- commerce capabilities and plans to use SEO (search engine optimization), social media, e-mail marketing, and PPC (pay for click) venues as well to drive the business. However, there is no assurance IMET’s infomercial marketing strategy will be successful.

We have also investigated using regional distributors for our products and may use them in the future, on a region by region basis as working capital permits. The Company has identified some prospects and is working to move those prospects forward.

We believe IMET has located experienced nutrition and supplemental manufacturers who have indicated an interest and an ability to manufacture IMET’s initial four products. We have received written cost quotations from these manufactures and production timetables, as well. The Company is in the process of evaluating the best venue to move forward.
  
The Company was hopeful that it was going to be able to secure its new website, marketing program, and product manufacturing schedules to begin marketing our products within six months of the closing of the Exchange. In reality, these details are taking more time to prepare and thus the Company is now targeting some initial product and marketing launches in late 2018.

IMET License Agreement

IMET entered into a license with IMI, a Nevada limited liability company, on July 22, 2013 (the “License”). In the License, IMI granted to IMET the exclusive licenses to use, produce, market and sell: (i) five marks (the “Licensed Marks”); (ii) four books written by Dr. Sasse (the “Licensed Content”); and (iii) approximately 150 supplements and foods created and previously sold by IMI (the “Licensed Articles”). The Licensed Marks include the trademark “iMetabolic”; the domain name “www.imetabolic.com”; the trademark “iMetabolic Catalyst”; and a trademark and domain name related to Dr. Sasse. The License had a term of three years, commencing on July 1, 2013 (the “Initial Term”), with a provision stating that the term of the License would automatically become perpetual if IMET sold $3.0 Million of Licensed Content or Licensed Articles before July 1, 2016. As a result of this date passing, an extension was executed until December 31, 2018. IMET is to bear all expenses of the creation and sale of the Licensed Content and Licensed Articles. The License contains other provisions standard in licenses.

In conjunction with closing the Exchange, on March 16, 2015 IMI and IMET executed an amendment to the License (the “License Amendment”). In the License Amendment: (i) IMET returned to IMI all rights to the Licensed Content (Dr. Sasse’s books), the two Dr. Sasse Licensed Marks and all revenues from the sale of the Licensed Articles since July 1, 2013 through the date of closing the Exchange; (ii) the Initial Term was increased from three to four years; (iii) a provision was added stating that after the closing of the Exchange, IMI shall not sell any more of the Licensed Articles or any other products IMET deems as competing with the Licensed Articles; (iv) a provision was added stating that upon reaching the $3.0 Million milestone, IMI shall transfer and or assign to IMET the three remaining Licensed Marks; and (v) a provision was added stating that upon completion of the Initial Term, IMET shall have all rights, obligations, and burdens of enforcing the Licensed Marks.

During 2014, the trademark “iMetabolic” expired at the U.S. Patent and Trademark Office. In conjunction with the closing of the Exchange, IMI re-applied for that trademark and the service mark "iMetabolic" on December 16, 2014. In May 2015, we engaged Drinker, Biddle & Reath, LLP to correspond with the U.S. Patent and Trademark Office regarding our application. As of April 19, 2016, the Company was awarded Registration Number 4,941,531 in the Class 5 Category. Additionally, on September 6, 2016, the Company was awarded Registration Number 5,034,186 in the Class 44 Category. At this juncture, the Company has succeeded in reclaiming both marks for consideration in its future operations.


RESULTS OF OPERATIONS

Gross Loss

The Company expects to benefit from economies of scale in the future and is currently operating at a gross loss.  The gross loss is primarily due to the high cost associated with contract brewing in small batches and shipping.
 
 
General and Administrative Expenses

For the nine months ended March 31, 2018 and 2017, we recorded operating expenses of $254,191 and $37,499, respectively. Both consist primarily of general and administrative expenses along with professional fees all of which are associated with maintaining the Company as a publicly traded entity.

Net Loss

For the nine months ended March 31, 2018 and 2017, the company recorded a net loss of $489,756 and $102,497, respectively.
Liquidity and Capital Resources
 
At March 31, 2018, the Company is beginning to engage in business activities that generate cash flow. As of March 31, 2018, the Company had current assets of $291,230 current liabilities of $1,398,246, and negative working capital of $1,107,016

On September 1, 2016, through unanimous approval by its Board, the Company opened a $65,000 escrow to initiate a proposed funding arrangement for future capital demands. This $65,000 escrow was funded by two private placements which have convertible notes associated with them (the “Notes”). These notes have since been extended at the same terms for an additional period of time moving the expiration to August 30, 2018. If share conversion is not elected, then interest will be due on the Notes in the amount of
$65,000. At September 30, 2017, the Company had a total of 5,200,000 shares reserved for issuance upon conversion of the Notes.
$15,000 of the $65,000 private placement was funded by the Company’s President.

Over the next twelve months, we have estimated that in order to maintain reporting company status as defined under the Securities Exchange Act of 1934, as amended, we will require cash for general and administrative expenses and professional fees, which include accounting, legal and other professional fees, as well as filing fees. We believe we will be able to meet these costs through the use of existing cash and cash equivalents or additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors. However, no assurance can be given that we will be able to raise additional capital, when needed or at all, or that such capital, if available, will be on acceptable terms. In the absence of obtaining additional financing, we may be unable to fund our operations. As a result, the Company’s independent registered public accounting firm has issued going concern opinion on the consolidated financial statements of the Company for the fiscal year ended June 30, 2017.

Off-Balance Sheet Arrangements

During the nine months ended March 31, 2018, we did not engage in any off-balance sheet arrangements set forth in Item 303(a) (4) of Regulation S-K.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require us to make estimates and judgments that significantly affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Note 1, “Business, Basis of Presentation and Significant Accounting Policies” in the Notes to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017 filed with the Securities and Exchange Commission on October 13, 2017, describes our significant accounting policies which are reviewed by management on a regular basis.  Other than as described in Note 1 of Notes to Consolidated Financial Statements included in Item 1 of this Form 10-Q regarding revenue recognition, there have been no changes to our critical accounting policies since June 30, 2017.

New Accounting Pronouncements

See Note 1 of Notes to Consolidated Financial Statements included in Item 1 of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risks is limited to changes in interest rates. We do not use derivative financial instruments as part of an overall strategy to manage market risk. We have no debt outstanding nor do we have any investment in debt instruments other than highly liquid short-term investments. Accordingly, we consider our interest rate risk exposure to be insignificant at this time.
 

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2018 our disclosure controls and procedures were not effective due to the size and nature of the existing business operation. Given the size of our current operation and existing personnel, the opportunity to implement internal control procedures that segregate accounting duties and responsibilities is limited. Until the organization can increase in size to warrant an increase in personnel, formal internal control procedure will not be implemented until they can be effectively executed and monitored. As a result of the size of the current organization, there will not be significant levels of supervision, review, independent directors nor formal audit committee.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2018, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
PART II.
OTHER INFORMATION

Item 1.
Legal Proceedings

As of the date of this report, the Company is not currently involved in any legal proceedings.
  
Item 1A.
Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. However, the risks associated with our Company are set forth in the "Risk Factors" section of our Form 8-K filed with the SEC on March 20, 2015.

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
None.
 
Item 3.
Defaults Upon Senior Securities
 
None.
 
Item 4.
Mine Safety Disclosures
 
Not applicable.
 
Item 5.
Other Information
 
None.
 
 
Item 6. Exhibits

The exhibits listed below are filed herewith.

Exhibit
Number
 
Description
     
10.1
 
2.1
 
2.2
 
2.3
 
31.1*
 
31.2*
 
32.1*
 
32.2*
 
101.INS*
 
XBRL Instance Document**
101.SCH*
 
XBRL Extension Schema Document**
101.CAL*
 
XBRL Extension Calculation Linkbase Document**
101.DEF*
 
XBRL Extension Definition Linkbase Document**
                                                 
* Filed herewith.
**In accordance with Rule 406T of Regulation S-T, this information is deemed not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
 
 
SIGNATURES


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

 
UPD HOLDING CORP.
   
     
Dated:   June 4, 2018
By:
/s/ Mark W. Conte
 
Mark W. Conte
   
President and Chief Executive Officer
   
(Principal Executive Officer)
     
     
     
     
Dated:   June 4, 2018
By:
/s/ Kevin J. Pikero
   
Kevin J. Pikero
   
Chief Financial Officer
   
(Principal Financial and Accounting Officer)
 
 
19