Right On Brands, Inc. - FORM 10-K

Attached files

file	filename
EX-32.2 - CERTIFICATION - Right On Brands, Inc.	rton_ex322.htm
EX-32.1 - CERTIFICATION - Right On Brands, Inc.	rton_ex321.htm
EX-31.2 - CERTIFICATION - Right On Brands, Inc.	rton_ex312.htm
EX-31.1 - CERTIFICATION - Right On Brands, Inc.	rton_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

☒	Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended March 31, 2021

☐	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission File Number: 000-55704

Right On Brands, Inc.

(Exact name of registrant as specified in its charter)

Nevada		45-1994478
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

6501 Dalrock Road, Suite 100, Rowlett, TX 75089

(Address of principal executive offices)

(214) 736-7252

(Registrant's telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

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 ☐ No ☒

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

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

If an emerging growth company, indicate by check mark if the registrant has elected transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of August 3, 2021, there were 5,909,426,193 shares of common stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS

		Page No.
PART I

Item 1.	Business	3
Item 1A.	Risk Factors	6
Item 1B	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosures	10

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	12
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 8.	Financial Statements and Supplementary Data	16
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	17
Item 9A.	Controls and Procedures	17
Item 9B.	Other Information	17

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	18
Item 11.	Executive Compensation	20
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
Item 13.	Certain Relationships and Related Transactions, and Director Independence	25
Item 14.	Principal Accounting Fees and Services	25

PART IV

Item 15.	Exhibits, Financial Statement Schedules	26

Table of Contents

PART I

Item 1. Business

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements." These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Overview

Our business is conducted through our wholly-owned subsidiaries, Humbly Hemp, Endo Brands, and Humble Water Company. Humbly Hemp sells and markets a line of hemp enhanced snack foods. Humble Water Company is in a partnership with Springhill Water Co. to develop a line of High Alkaline, Natural Mineral Water, and a bottling and packaging facility. Endo Brands creates and markets a line of CBD consumer products and through ENDO Labs creates white label products and formulations for CBD and Delta-8 based products. As of Fall 2019, in order to form a more efficient corporate structure, Humbly Hemp, Inc. has been merged into Right On Brands, Inc. Right on Brands creates lasting brands with emerging functional ingredients, and our focus right now is industrial hemp, hemp derived cannabinoids, and high alkaline water.

PRODUCT LINE

HUMBLY HEMP (CURRENTLY, THE COMPANY IS FOCUSING ITS TIME AND CAPITAL ON THE ENDO BRANDS LINE SO THE HUMBLY HEMP LINE IS NOT BEING PRODUCED, SOLD OR MARKETED BY THE COMPANY)

Humbly Hemp Snack Bar

The Humbly Hemp Snack Bar is a hemp powered superfood bar. Our bar is certified vegan, and gluten free. We manufacture in an allergen free facility so NO Soy, and NO-GMO's. We believe that it is one of the best bars on the market.

Flavors:

	·	Brownie Walnut
	·	Chocolate Chip Cookie Dough
	·	Peanut Butter & Honey
	·	Peanut Butter Chocolate Chip
	·	Salted Almond Chocolate

Humbly Hemp Sparkling Tea

Our Sparkling Teas are made with Black Tea, Ginseng Root Extract and Ashwagandha Root Extract and naturally flavored for a clean crisp taste.

Flavors:

	·	Peach Mango
	·	Raspberry Hibiscus
	·	Watermelon

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ENDO BRANDS

ENDO Water (CURRENTLY NOT IN PRODUCTION)

ENDO Water is one of a kind wellness drink as “structured water” is one of the biggest wants in the health and wellness market. ENDO Water is created to "Fuel Mind and Body" targeted to increase the performance of the Endo-Cannabinoid System. The endocannabinoid system (ECS) is a group of endogenous cannabinoid receptors located in the mammalian brain and throughout the central and peripheral nervous systems, consisting of neuromodulator lipids and their receptors. Our water is lightly flavored, almost an essence, and infused with CBD (Cannabidiol). CBD is a NON-PHSYCOACTIVE derivative of Cannabis. Our proprietary blend is Sugar Free, Naturally Flavored, has a high PH level and has emulsified CBD for increased bioavailability.

ENDO Drops

The easiest and most effective way to get your daily CBD, CBN or Delta-8 supplementation. These daily drops are blended with amazing essential oils for a great taste. You can take them either directly or mix them into your favorite beverage. There is even a peanut butter flavored drop for your pet. We recently introduced “Endo on the Go” Delta-8 drops that you can slip into your pocket and purse and take with you just about anywhere!

ENDO Ease

Topical Pain relief product, it is our Endo Select Hemp Oil used as either a warming lotion, cooling lotion or salve.

ENDO Tokes

Our ENDO Tokes products are a range of products made for people who would rather smoke their CBD or Delta-8. The original ENDO Toke is a pre-rolled CBD flower that comes in the shape of a cigarette. The product is, however, tobacco free and has less than 0.30% THC so it won’t get you high, but it is a quick delivery system for CBD. In addition, in 2021, the company has introduced a line of Delta-8 infused disposable and rechargeable vape pens as well as Delta-8 flower in jars or pre-rolled for quick consumption. All of these products are designed to give multiple choices to our customers who like to consume CBD and Delta-8 by smoking something.

ENDO Gummies

For people that don’t like to ingest CBD or Delta-8 by smoking, we have a line of gummies. Currently, we sell three different types of gummies: 1) CBD; 2) CBD & Melatonin; and 3) Delta-8.

Competition & our Advantages

In the market we are going to occupy, we face the following major competitors:

	·	Manitoba Hemp Foods: Based in Canada, Manitoba looks to be the industry leader in this market. They have been selling hemp products since 1998 and have created a strong brand. They carry Hemp Hearts, Hemp Heart Bars, Hemp protein smoothies, Hemp protein powder, and Hemp oil.

	·	Evo Hemp: Evo is a boulder-based Hemp bar company. They are one of the newer hemp brands in the market. They only offer bars in their product line.

	·	Nutiva: Nutiva is an organic superfood brand. They offer a wide range of products with chia, red palm, coconut, and hemp.

	·	Naturally Splendid: Naturally Splendid is a multifaceted biotechnology company developing, commercializing, producing, selling, and licensing an entirely new generation of hemp-derived, high quality, nutrient-dense Omega foods, nutritional food enhancers, and related products.

	·	CBD MD: CBD MD is a manufacturer of CBD infused products. CBD MD has a full line of CBD infused products.

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Our Potential Advantages

ENDO Brands advantage in the market is our unique formulation, price point and high quality. We work closely with our manufacturers to tailor our products to consumer demand.

Marketing, Sales, and Distribution Strategies

Marketing Plan

	·	Multi-Channel Marketing: We promote through multiple channels to build awareness of our products.

	·	Online Marketing: Most major online platform do not allow the advertising of CBD or Delta-8 infused products for sale so we are limited in what we can promote. As such, we use our internal email list to promote our products to people who have previously shown an interest. We are constantly working on expanding the size of this list.

	·	Instagram: Our goal on IG for our brands is to build an obsessed fan base and an engaged community. Hemp education is a vital part of these channels, we will utilize this channel to show the “lifestyle” using our products as well as unique info on our products to drive traffic to our online and retail stores.

	·	Twitter and Facebook: We use Twitter and Facebook to inform our customers and investors about the company and to drive traffic to our website that will convert into purchases.

	·	Consumer Outreach & Education: The most important factor in the marketing of our products will be consumer education on the benefits of hemp derived products.

Sales Plan

	·	Retail Store: In 2021 the company opened its first retail store just outside Dallas, Texas. The company is looking at opening up additional company owned stores in the Dallas area as well as licensed stores in other cities.

	·	Retail Distribution: The company did not find working with large distributors and retailer as too profitable. As such, it is selling directly to a few retail locations across the continental U.S.

	·	Online Sales: We currently sell our “ENDO” line of products through the following website: EndoBrands.com.

Manufacturing and Distribution

Humbly Hemp

Currently not being produced, distributed or sold.

Endo Brands

We use various manufacturers and co-packers to create our Endo branded products.

Joint Venture with Centre Manufacturing, Inc.

As of Fall 2020, we are no longer working with Centre Manufacturing, Inc. to manufacture products and/or create new products.

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Item 1A. Risk Factors

Risks Related to Our Company and Business

If we do not obtain additional financing, our business development plans will be delayed, and we may not achieve profitable operations.

We will require significant additional capital to execute on our business development plans. We intend to seek additional funds through private placements of our common stock or other securities as well as public sale of our stock to the public. Our business plan calls for incurring expenses for the purchase of products, website maintenance, and expenses for salary, legal, and administration. If no additional financing is secured, we may have to significantly curtail our plan of operations. If that is the case, our business will not grow as desired. Our ability to raise additional financing is unknown. We do not have any formal commitments or arrangements for the advancement of funds. Consequently, there can be no assurance that we will be able to obtain access to capital as and when needed or, if so, that the terms of any available financing will be commercially reasonable. If we are unable to raise suitable financing, our business development plans may be delayed, and we may be unable to achieve profitable operations.

Since we have limited operating history and limited revenues to date, we may be unable to achieve or maintain profitability. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a newer enterprise.

We have limited financial resources and have generated limited revenues to date in our business. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history and lack a track record of consistent revenues, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to fully meet our expenses and totally support our anticipated activities.

Our ability to continue as a business and implement our business plan will depend on our ability to raise sufficient funds. There is no assurance that any debt or equity offerings will be successful or that we will remain in business or be able to implement our business plan if the offerings are not successful.

If we are unable to develop a reliable system for outside manufacturing and fulfillment, our ability to grow our business and achieve profitability will be severely adversely affected.

We currently do not manufacture any of the products that we sell. If our current manufacturers and/or co-packers do not continue to work with us in the future, we may be unable to produce any more product. Our ability to grow our business and customer base will depend upon smoothly functioning relationships with our manufacturing and fulfillment partners and our ability to integrate their roles with our sales, marketing and customer service operations. If we are unable to smoothly integrate these third-party operations into our business, or if we are unable to establish and maintain strong relationships with these key outside parties, our ability to successfully deliver quality products to our customer in a timely manner will be adversely affected, and our ability to achieve profitability will be severely impaired.

If we are unable to successfully market our products or our products do not perform as expected, our business and financial condition will be adversely affected.

We are subject to the risks generally associated with new product introductions and applications, including lack of market acceptance and failure of products to perform as expected. There can be no assurance that we will be successful in marketing our products to the public. Our success will depend on our ability to grow our wholesale distribution network and to develop additional sales channels on cost-effective terms. Our marketing efforts may not be sufficient to generate significant and ongoing sales. Further, if our products do not perform as expected by consumers, either in terms of flavor or perceived performance, our ability to expand our product distribution and grow overall sales will be severely impaired.

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Because consumer preferences change frequently, if we fail to innovate, our business and financial condition will be adversely affected.

As a result of changing consumer preferences, most new products are successfully marketed for a limited period of time. Even if our products show early signs of promise, there can be no assurance that our products will continue to be popular for an extended period of time. Our success will be dependent upon our ability to address the changing needs and tastes of the consumer market. Our failure to innovate over time and to adjust to consumer preferences on a regular basis could cause us to fail to achieve and sustain ongoing market acceptance could have a material adverse effect on our financial condition and results of operations.

Because of pressures from competitors with more resources, we may fail to implement our business strategy profitably.

The market for our products is intensely competitive and we expect competition to increase in the future. We will compete with larger and more established companies that have longer operating histories, greater name recognition, access to larger customer bases and distribution networks, and significantly greater financial, technical and marketing resources than we do. As a result, they may be able to adapt more quickly to changes in customer preferences and to devote greater resources to the promotion and sale of their products than we will. In addition, they may have more firmly established financial, manufacturing, distribution, and sales relationships in the industry. Therefore, we cannot be sure that we will be able to successfully implement our business strategy in the face of such competition. If we cannot compete effectively, we may experience future price reductions, reduced gross margins and loss of market share, any of which will materially adversely affect our business, operating results and financial condition.

If we are unable to manage growth, our operations could be adversely affected.

Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage sales, management, and technical personnel. There can be no assurance that management will be able to manage growth effectively.

If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our products. Our failure to properly manage the growth we might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers.

Our business and growth may suffer if we are unable to attract and retain key employees.

Our success depends on the expertise and continued service of my different persons. If one of them leaves the company, it may be difficult to find a sufficiently qualified and motivated individual to replace him/her and it may result in our being unable to implement our business plan and even a complete cessation of our operations, which would likely result in the total loss of an investor's investment.

Furthermore, our ability to expand operations to accommodate our anticipated growth will also depend on our ability to attract and retain qualified media, management, finance, marketing, sales and technical personnel. However, competition for these types of employees is intense due to the limited number of qualified professionals. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality people with advanced skills who understand our business. We hope that we will be able to attract competent employees, but no assurance can be given that we will be successful in this regard. If we are unable to engage and retain the necessary personnel, our business may be materially and adversely affected.

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The coronavirus outbreak may adversely affect our business.

In December 2019, a strain of coronavirus was reported to have surfaced in Wuhan, China, and has reached multiple other countries, resulting in government-imposed quarantines, travel restrictions and other public health safety measures in China, the U.S., Italy, Israel and other affected countries. The continued outbreak and spreading of the coronavirus has and may continue to adversely impact our business, as our operations are based in the United States which has been severely affected by the outbreak. The various precautionary measures taken by many governmental authorities around the world in order to limit the spread of the coronavirus has had and may continue to have an adverse effect on the global markets and global economy, including on the availability and pricing of employees, resources, materials, manufacturing and delivery efforts and other aspects of the global economy. The financial downturn has affected the working hours or availability of staff and third-party contractors, and our clients may encounter cash-flow issues that will delay their payments to us. We also rely on third-party professionals to provide services such as the preparation of our financial statements and to conduct audits, and many of these parties have been affected by government-imposed precautionary measures, thereby delaying our receipt of these services. Therefore, the coronavirus has and could continue to disrupt production and cause delays in the supply and delivery of our products, may continue to affect our operation and disrupt the marketplace in which we operate and may have a material adverse effect on our operations. The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. The development of the coronavirus outbreak could materially disrupt our business and operations, hamper our ability to raise additional funds or sell our securities, continue to slow down the overall economy, curtail consumer spending, interrupt our sources of supply, and make it hard to adequately staff our operations.

Risks Related to Legal Uncertainty

If we are the subject of significant future product liability or related lawsuits, our business will likely fail.

Like all sellers of products for human consumption, we cannot eliminate the risk that our products may be subjection to contamination during the manufacturing or distribution process. Although we currently maintain product liability and general liability insurance, we may not be able to obtain such coverage in the future or such coverage may not be adequate to cover all potential claims. Moreover, even if we are able to maintain sufficient insurance coverage in the future, any successful claim could significantly harm our business, financial condition and results of operations.

The legal status of the main ingredient in our products is uncertain.

Currently, even though many companies are selling items enhanced with Cannabidiol (CBD), the legal status of CBD for use in food is uncertain. For example, in July 2018, the Department of Public Health of the State of California issued a directive stating that CBD derived from industrial hemp, as is used in products like our ENDO Gummy line, is not approved for use in human or pet food. The State of New York has taken a similar position. The FDA has taken a similar position. If this position is adopted by many other states in the future, it could significantly harm our business, financial condition, and results of operations. Furthermore, the Food and Drug Administration has also not declared CBD Generally Recognized As Safe (GRAS) and, as such, it could issue a directive similar to the one issued by the State of California.

In addition, although we believe that Delta-8-Tetrahydrocannabinol is federally legal under the Farm Bill, certain states have moved to outlaw Delta-8 or have it regulated as Marijuana. A recent bill to outlaw Delta-8 was recently defeated in the Texas Legislature.

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Risks Related to Our Common Stock

Because we do not expect to pay dividends for the foreseeable future, investors seeking cash dividends should not purchase our common stock.

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their own common stock after price appreciation, which may never occur, as the only way to realize their investment. Investors seeking cash dividends should not purchase our common stock.

If we undertake future offerings of our common stock, shareholders will experience dilution of their ownership percentage.

Generally, existing shareholders will experience dilution of their ownership percentage in the company if and when additional shares of common stock are offered and sold. In the future, we may be required to seek additional equity funding in the form of private or public offerings of our common stock and/or use convertible debt. In the event that we undertake subsequent offerings of common stock, or raise money using convertible debentures, your ownership percentage, voting power as a common shareholder, and earnings per share, if any, will be proportionately diluted. This may, in turn, result in a substantial decrease in the per-share value of your common stock.

Because FINRA sales practice requirements may limit a stockholder's ability to buy and sell our stock, investors may not be able to sell their stock should they desire to do so.

In addition to the "penny stock" rules described below, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell shares of our common stock.

Because we are subject to the "Penny Stock" rules, the level of trading activity in our stock may be reduced.

Broker-dealer practices in connection with transactions in "penny stocks" are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, broker-dealers who sell these securities to persons other than established customers and "accredited investors" must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate headquarters are at 6501 Dalrock Road, Suite 100, Rowlett, TX 75089.

The property is sufficient for our current business size.

Item 3. Legal Proceedings

None.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

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

Market Information

Our common stock is quoted under the symbol "RTON" on the OTCQB tier of the over-the-counter electronic quotation system operated by OTC Markets Group, Inc. The following tables set forth the range of high and low prices for our common stock for the each of the periods indicated as reported by the OTC Markets quotation system. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Fiscal Year Ended March 31, 2021

Quarter Ended	High $		Low $
March 31, 2021	$	0.0108	$	0.0002
December 31, 2020	$	0.0006	$	0.0001
September 30, 2020	$	0.0004	$	0.0001
June 30, 2020	$	0.0015	$	0.0001

Fiscal Year Ended March 31, 2021

Quarter Ended	High $		Low $
March 31, 2020	$	0.0013	$	0.0001
December 31, 2019	$	0.0042	$	0.0009
September 30, 2019	$	0.0338	$	0.0034
June 30, 2019	$	0.0489	$	0.0065

On August 3, 2021, the last sales price per share of our common stock was $0.0028.

Penny Stock

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

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Holders of Our Common Stock

As of August 4, 2021, we had 5,909,426,193 shares of our common stock issued and outstanding, held by approximately 125 shareholders of record.

Dividends

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:

	1.	We would not be able to pay our debts as they become due in the usual course of business; or

	2.	Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

Item 6. Selected Financial Data

A smaller reporting company is not required to provide the information required by this Item.

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

Fiscal Year Ended March 31, 2021 Compared to Fiscal Year Ended March 31, 2020

During the year ended March 31, 2021, we generated revenue of $77,960. Our cost of goods sold was $56,709, resulting in gross margin of $21,251. We incurred total operating expenses of $422,684, consisting of executive compensation of $72,000, general and administrative expenses of $193,620, legal and professional fees of $48,821, bad debt expense of $7,169, advertising and promotion costs of $3,567, asset impairment of $91,200 and depreciation and amortization of $6,307. In addition, we incurred interest expense of $80,253, amortization of debt discount of $313,246, default penalties of $64,717, financing costs of $132,349 a loss on the change in fair value of derivative liabilities of $4,253,946, a gain on the settlement of derivative liabilities of $3,474,572 and a loss on the settlement of a warrant dispute of $80,000. Our net loss for the year ended March 31, 2021 was $1,851,372.

By comparison, during the year ended March 31, 2020, we generated revenue of $328,580. Our cost of goods sold was $307,280, resulting in gross margin of $21,300. We incurred total operating expenses of $968,540, consisting of consulting fees of $162,435, executive compensation of $101,000, general and administrative expenses of $345,157, legal and professional fees of $195,855, bad debt expense of $21,362, advertising and promotion costs of $66,838, asset impairment of $69,113 and depreciation and amortization of $6,780. In addition, we incurred interest expense of $906,177, default penalties of $301,980, financing costs of $496,784, a loss on the change in fair value of derivative liabilities of $821,961, a net loss on extinguishment of debt of $1,447 and other income of $112. Our net loss for the year ended March 31, 2020 was $3,475,477.

Our operating expenses decreased during the year ended March 31, 2021, as compared to the prior year, largely as a result of decreased costs for legal, professional, and consulting fees. While there was a significant decrease in financing costs incurred for debt funding received, default penalties and interest expenses in the current year, there were significant increases in expenses for the amortization of debt discounts and for the change in fair value of our derivative liabilities. As we continue with the development and marketing of our new products, we expect that our operating expenses, as well as our revenues, will increase significantly over the current fiscal year.

Liquidity and Capital Resources

As of March 31, 2021, we had current assets in the amount of $122,554, consisting of cash in the amount of $45,780, inventory of $73,553 and other current assets of $3,221.

As of March 31, 2021, we had current liabilities of $1,577,862, consisting of notes payable of $367,000, convertible debts, net of discounts, in the amount of $338,275, derivative liability of $472,471, accounts payable of $126,798, accrued interest of $81,977, accrued expenses of $121,741, and current portion of lease liability of $69,600.

We have funded our operations to date through the issuance of common stock in offerings exempt under Rule 506, as well as through the issuance of notes payable and convertible notes payable.

Our ability to successfully execute our business plan is contingent upon us obtaining additional financing and/or upon realizing sales revenue sufficient to fund our ongoing expenses. Until we are able to sustain our ongoing operations through sales revenue, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Off Balance Sheet Arrangements

As of March 31, 2021, there were no off-balance sheet arrangements.

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Going Concern

We have experienced recurring losses from operations and had an accumulated deficit of $15,512,951 as of March 31, 2021. To date, we have not been able to produce sufficient sales to become cash flow positive and profitable on a consistent basis. The success of our business plan during the next 12 months and beyond will be contingent upon generating sufficient revenue to cover our costs of operations and/or upon obtaining additional financing. If the Company raises additional funds through the issuance of equity, the percentage ownership of current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to the rights, preferences and privileges of the Company’s common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict its future plans for developing its business and achieving commercial revenues. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that the following accounting policies currently fit this definition.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of Right On Brands, Inc. and its wholly owned subsidiaries (Humbly Hemp, Inc., Endo Brands, Inc. and Humble Water Company). Intercompany accounts and transactions have been eliminated upon consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided by the straight-line method over the useful lives of the related assets, from three to five years.

The cost of building the Company's website has been capitalized and amortized over a period of three years. Expenditures for minor enhancements and maintenance are expensed as incurred.

Inventory

Inventories are stated at the lower of cost (average cost) or market (net realizable value). Inventory consisted of finished goods inventory of $73,553 as of March 31, 2021. Inventory consisted of raw materials and finished goods inventory of $3,921 and $11,615, respectively, as of March 31, 2020.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Long-lived Assets

The Company's long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360," Property, Plant, and Equipment", and FASB ASC Topic 205 " Presentation of Financial Statements ". The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through March 31, 2021 and 2020, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company's products or services will continue, which could result in an impairment of long-lived assets in the future.

Stock-Based Compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Revenue Recognition

We recognize revenue when our performance obligation is satisfied. Our primary performance obligation (the distribution and sales of hemp products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred. The transfer of control of products to our customers is typically based on written sales terms that do not allow for a right of return after 30 days from the date of purchase.

Our products are sold for cash or on credit terms. Our credit terms, which are established in accordance with local and industry practices, typically require payment within 30 days of delivery, and may allow discounts for early payment. We estimate and reserve for our bad debt exposure based on our experience with past due accounts and collectability, the aging of accounts receivable and our analysis of customer data.

Income Taxes

The Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. In accordance with FASB ASC Topic 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. The Company accounts for income tax under the provisions of FASB ASC Topic 740, "Income Taxes", which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

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Fair Value of Financial Instruments

The Company applies the provisions of accounting guidance, FASB Topic ASC 825 that requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2021 and 2020, the fair value of cash and accounts payable, approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates.

Convertible Instruments

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 "Derivatives and Hedging Activities".

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

Recently Issued Accounting Pronouncements

Our management has considered all recent accounting pronouncements issued since the last audit of our financial statements. Our management believes that these recent pronouncements will not have a material effect on our financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements Required by Article 8 of Regulation S-X:

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Audited Financial Statements:

F-3	Consolidated Balance Sheets as of March 31, 2021 and March 31, 2020;
F-4	Consolidated Statements of Operations for the years ended March 31, 2021 and 2020;
F-5	Consolidated Statement of Stockholders' Deficit for the years ended March 31, 2021 and 2020;
F-6	Consolidated Statements of Cash Flows for the years ended March 31, 2021 and 2020
F-7	Notes to the Financial Statements

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Right On Brands, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Right On Brands, Inc. (the “Company”) as of March 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended March 31, 2021 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered significant losses from inception and had a significant loss from operations. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter Description

As disclosed in Notes 3 and 6 to the consolidated financial statements, the Company had various debt instruments which included conversion features requiring bifurcation and separate accounting. Management evaluated the required accounting, significant estimates, and judgements around the valuation for these embedded derivatives. These embedded derivatives were initially measured at fair value and have subsequently been remeasured to fair value at each reporting period and at settlement.

There is no current observable market for these types of features and, as such, the Company determined the fair value of the embedded derivatives using an option pricing model to measure the fair value of the bifurcated derivative. As a result, a high degree of auditor judgment and effort was required in performing audit procedures to evaluate the conclusions reached by management as well as the inputs to the Company’s option pricing model.

How the Critical Audit Matter Was Addressed In the Audit

Our principal audit procedures performed to address this critical audit matter included the following:

	-	We obtained an understanding of the controls and processes surrounding the evaluation, initial measurement and revaluation of the bifurcated derivatives.

	-	We evaluated management’s assessment and the conclusions reached to ensure these instruments were recorded in accordance with the relevant accounting guidance.

	-	We evaluated the fair value of the bifurcated derivatives that included testing the valuation models and assumptions utilized by management. We reviewed and tested the fair value model used, significant assumptions, and underlying data used in the model.

/s/ Turner, Stone & Company, L.L.P.

We have served as the Company’s auditor since 2019.

Dallas, Texas

August 4, 2021

F-2

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RIGHT ON BRANDS, INC.

CONSOLIDATED BALANCE SHEETS

	March 31,			March 31,
	2021			2020

Assets
Current assets
Cash	$	45,780		$	67,153
Accounts receivable, net of allowance		-			7,169
Prepaid expenses		-			34,862
Inventory		73,553			15,536
Other current assets		3,221			-
Total current assets		122,554			124,720

Non-current assets
Property and equipment, net of depreciation		21,085			21,132
Intangible assets, net of amortization		-			307
Right of use asset		93,000			91,200
Total non-current assets		114,085			112,639

Total assets	$	236,639		$	237,359

Liabilities and Stockholders' Deficit

Current liabilities
Accounts payable	$	126,798		$	109,243
Accrued interest payable		81,977			71,318
Accrued expenses		121,741			-
Lease liability, current portion		69,600			45,600
Notes payable		367,000			299,000
Convertible debt, net of discount		338,275			275,941
Derivative liability		472,471			1,574,097
Total current liabilities		1,577,862			2,375,199

Lease liability, non-current		69,000			45,600

Total liabilities		1,646,862			2,420,799

Commitments and contingencies (Note 11)

Stockholders' deficit
Series A Preferred stock; 10,000,000 shares authorized of $.001 par value; 5,000,000 shares issued, respectively		5,000			5,000
Common stock; par value $.001; 12,000,000,000 and 500,000,000 shares authorized, 5,474,978,826 and 999,515,530 shares issued, respectively		5,474,979			999,516
Additional paid-in capital		8,546,492			10,382,366
Common stock payable		51,820			66,820
Accumulated deficit		(15,512,951	)		(13,661,579	)
Total Right On Brands stockholders' deficit		(1,434,660	)		(2,207,877	)
Noncontrolling interest		24,437			24,437
Total stockholders' deficit		(1,410,223	)		(2,183,440	)

Total liabilities and stockholders' deficit	$	236,639		$	237,359

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

F-3

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RIGHT ON BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the years ended
	March 31,
	2021			2020

Revenues	$	77,960		$	328,580
Cost of goods sold		56,709			307,280
Gross profit		21,251			21,300

Operating expenses
General and administrative		193,620			345,157
Advertising and promotion		3,567			66,838
Legal and professional		48,821			195,855
Executive compensation		72,000			101,000
Consulting		-			162,435
Depreciation and amortization		6,307			6,780
Bad debt expense		7,169			21,362
Impairment expense		91,200			69,113
Total operating expenses		422,684			968,540

Loss from operations		(401,433	)		(947,240	)

Other income and (expense)
Interest expense		(80,253	)		(96,150	)
Amortization of debt discount		(313,246	)		(810,027	)
Change in fair value of derivative liability		(4,253,946	)		(821,961	)
Financing costs		(132,349	)		(496,784	)
Default penalty		(64,717	)		(301,980	)
Loss on settlement of liabilities		-			(9,247	)
Gain on settlement of liabilities		-			7,800
Gain on settlement of derivative liabilities		3,474,572			-
Loss on settlement of warrant dispute		(80,000	)		-
Other income		-			112
Total other income (expense)		(1,449,939	)		(2,528,237	)

Net loss including noncontrolling interest	$	(1,851,372	)	$	(3,475,477	)
Net loss attributable to noncontrolling interest		-			-
Net loss attributable to Right on Brands, Inc.	$	(1,851,372	)	$	(3,475,477	)

Loss per share	$	0.00		$	(0.01	)

Weighted average shares outstanding - basic		3,375,947,310			376,175,431

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

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RIGHT ON BRANDS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

	Preferred Stock				Common Stock				Additional Paid in			Common Stock			Accumulated			Noncontrolling
	Shares		Amount		Shares		Amount		Capital			Payable			Deficit			Interest		Total

Balances, March 31, 2019		5,000,000	$	5,000		73,652,594	$	73,653	$	8,295,767		$	56,050		$	(10,186,102	)	$	24,437	$	(1,731,195	)

Issuance of common stock for cash		-		-		14,416,666		14,417		80,583			30,770			-			-		125,770

Settlement of liabilities		-		-		28,000,000		28,000		(5,800	)		-			-			-		22,200

Conversion of debt and interest		-		-		840,946,270		840,946		1,439,210			(20,000	)		-			-		2,260,156

Settlement of note payable		-		-		800,000		800		473,200			-			-			-		474,000

Shares issued for financing costs		-		-		40,700,000		40,700		(20,350	)		-			-			-		20,350

Warrants issued for financing costs		-		-		-		-		33,113			-			-			-		33,113

Warrants issued for services		-		-		-		-		11,543			-			-			-		11,543

Shares issued for default penalty		-		-		1,000,000		1,000		75,100			-			-			-		76,100

Net loss		-		-		-		-		-			-			(3,475,477	)		-		(3,475,477	)

Balances, March 31, 2020		5,000,000	$	5,000		999,515,530	$	999,516	$	10,382,366		$	66,820		$	(13,661,579	)		24,437	$	(2,183,440	)

Conversion of debt and interest		-		-		3,640,429,964		3,640,430		(1,245,831	)		-			-			-		2,394,599

Issuance of common stock for services		-		-		381,700,000		381,700		(297,710	)		-			-			-		83,990

Issuance of common stock for cash		-		-		369,999,999		370,000		(234,000	)		(15,000	)		-			-		121,000

Issuance of common stock for inventory		-		-		83,333,333		83,333		(58,333	)		-			-			-		25,000

Net loss		-		-		-		-		-			-			(1,851,372	)		-		(1,851,372	)

Balances, March 31, 2021		5,000,000	$	5,000		5,474,978,826	$	5,474,979	$	8,546,492		$	51,820		$	(15,512,951	)	$	24,437	$	(1,410,223	)

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

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RIGHT ON BRANDS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the years ended
	March 31,
	2021			2020
OPERATING ACTIVITIES
Net loss	$	(1,851,372	)	$	(3,475,477	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		6,307			6,780
Bad debt expense		7,169			21,362
Inventory impairment		-			69,113
Right of use asset impairment		91,200			-
Amortization of debt discount		313,246			810,027
Financing costs		132,349			496,784
Change in fair value of derivative liability		4,253,946			821,961
Loss on settlement of liabilities		-			1,447
Gain on settlement of derivative liabilities		(3,474,572	)		-
Loss on settlement of warrant dispute		80,000			-
Stock based compensation		83,990			11,543
Default penalty		64,717			301,980
Changes in operating assets and liabilities:
Accounts receivable		-			(4,347	)
Prepaid expenses		34,862			(34,862	)
Inventory		(33,017	)		129,308
Other current assets		(3,221	)		-
Accounts payable		17,555			43,865
Accrued interest payable		77,659			117,516
Accrued expenses		(3,859	)		-
NET CASH USED IN OPERATING ACTIVITIES		(203,041	)		(683,000	)

INVESTING ACTIVITIES
Purchase of property and equipment		(5,953	)		-
NET CASH USED IN INVESTING ACTIVITIES		(5,953	)		-

FINANCING ACTIVITIES
Proceeds from notes payable		68,000			25,000
Proceeds from convertible debt		-			508,500
Repayment of convertible debt		(1,379	)		-
Proceeds from issuance of common stock		121,000			125,770
NET CASH PROVIDED BY FINANCING ACTIVITIES		187,621			659,270

NET DECREASE IN CASH	$	(21,373	)	$	(23,730	)
CASH, BEGINNING OF YEAR		67,153			90,883
CASH, END OF YEAR	$	45,780		$	67,153

CASH PAID FOR INCOME TAXES	$	-		$	-
CASH PAID FOR INTEREST	$	3,180		$	-

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Convertible debt and interest converted into common stock	$	2,394,599		$	2,260,156
Common stock issued for inventory	$	25,000		$	-
Original issuance discount on note payable	$	-		$	25,000
Original issuance discount on convertible debt	$	-		$	42,150
Discount on convertible debt from derivative liability	$	-		$	495,795
Common stock issued to settle notes payable	$	-		$	474,000

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

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RIGHT ON BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Formation and Business Activity

Right on Brands, Inc. (“we” or “the Company” or “Right on Brands”) was incorporated under the laws of the State of Nevada on April 1, 2011, as HealthTalk Live, Inc. On August 10, 2017, the Company amended is articles of incorporation and changed its name to Right On Brands, Inc. On August 31, 2017, the Company common shares commenced trading under the new stock symbol RTON. The Company’s primary business is the sale of health and wellness products.

The Company has the following wholly owned subsidiaries:

	·	Humbly Hemp, Inc.
	·	Endo Brands, Inc.
	·	Humble Water Company

The Company has the following partially owned subsidiaries:

	·	Endo & Centre Venture LLC (51% owner)
	·	Spring Hill Water Company, LLC (49% owner – see Note 7)

The Company, through its subsidiaries Humble Water Company and Endo & Centre Venture LLC, had joint ventures with no activity. The Company has discontinued these joint ventures and Humble Water Company and Endo & Centre Venture LLC contain no assets, liabilities, or operations.

The Company continues to sell health and wellness products focused in the hemp marketplace through online and in-person retail sales.

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. For the year ended March 31, 2021, the Company had an accumulated deficit of approximately $15,513,000, had a net loss of approximately $1,851,000, and net cash used in operating activities of approximately $203,000, with approximately $78,000 revenue earned, and a lack of profitable operational history. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern.

While the Company is attempting to generate greater revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of additional public and/or private offerings of its stock. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of Right On Brands, Inc. and its wholly owned subsidiaries and majority owned business (Humbly Hemp, Inc., Endo Brands, Inc., Humble Water Company, Springhill Water Co, and Endo & Centre Venture LLC). Intercompany accounts and transactions have been eliminated upon consolidation.

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RIGHT ON BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company has defined cash and cash equivalents as all cash in banks and highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. The Company had no cash equivalents at March 31, 2021, or March 31, 2020.

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $250,000 per depositor, per financial institution, for the aggregate total of depositors' interest and non-interest-bearing accounts. At March 31, 2021, none of the Company's cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.

Accounts Receivable

The Company performs periodic credit evaluations of its customers’ financial condition and extends credit to virtually all of its customers on an uncollateralized basis. Credit losses to date have been insignificant and within management’s expectations. The Company provides an allowance for doubtful accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Normal accounts receivable are due 30 to 45 days after the issuance of the invoice. Receivables past due more than 60 days are considered delinquent. Delinquent receivables are evaluated for collectability based on individual credit evaluation and specific circumstances of the customer. As of March 31, 2021, and March 31, 2020, the Company’s allowance for doubtful accounts was $0, respectively. The Company wrote off $7,169 and $34,479 of accounts receivable against the allowance for doubtful accounts during fiscal years ended March 31, 2021 and 2020, respectively.

Inventory

Inventories are stated at the lower of cost (average cost) or market (net realizable value). Cost includes materials related to the purchase of finished goods to be sold to retail customers. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided by the straight-line method over the useful lives of the related assets, ranging from one to five years.

The cost of building the Company's website has been capitalized and amortized over a period of three years. Expenditures for minor enhancements and maintenance are expensed as incurred.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recoverability of Long-Lived Assets

The Company's long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360, "Property, Plant, and Equipment," and FASB ASC Topic 205 "Presentation of Financial Statements". The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through March 31, 2021, and 2020, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company's products or services will continue, which could result in an impairment of long-lived assets in the future.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probably that a liability has been incurred and the amount can be reasonable estimated.

Stock Based Compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718. Costs are measured at the estimated fair value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 718.

Income Taxes

In accordance with FASB ASC Topic 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense.

Revenue Recognition

We recognize revenue when our performance obligation is satisfied. Our primary performance obligation (the distribution and sales of hemp products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred. The transfer of control of products to our online customers is typically based on sales terms that do not allow for a right of return after 7 days from the date of purchase. The transfer of control of products to our in-store customers is typically based on sales terms that do not allow for a right of return.

Our products are sold for cash with payments received at pickup or before shipping.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurement

ASC Topic 820, “Fair Value Measurement”, requires that certain financial instruments be recognized at their fair values at our balance sheet dates. However, other financial instruments, such as debt obligations, are not required to be recognized at their fair values, but Generally Accepted Accounting Principles in the United States (“GAAP”) provides an option to elect fair value accounting for these instruments. GAAP requires the disclosure of the fair values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our balance sheets. For financial instruments recognized at fair value, GAAP requires the disclosure of their fair values by type of instrument, along with other information, including changes in the fair values of certain financial instruments recognized in income or other comprehensive income. For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred.

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

Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company did not have any Level 1 or Level 2 assets and liabilities at March 31, 2021 or 2020. The Derivative liabilities are Level 3 fair value measurements.

The following is a summary of activity of Level 3 liabilities during the year ended March 31, 2021:

Balance at March 31, 2020	$	1,574,097
Additions		96,958
Conversions of debt to equity		(1,977,958	)
Settlements		(3,474,572	)
Change in fair value		4,253,946
Balance at March 31, 2021	$	472,471

During prior years, the Company entered into several convertible note agreements (Note 6). These notes are convertible at a fraction of the stock closing price near the conversion date. Additionally, the conversion price, as well as other terms including interest rates, adjust if any future financings have more favorable terms. The conversion features of these notes meet the definition of a derivative which therefore requires bifurcation and are accounted for as a derivative liability.

The Company estimated the fair value of the conversion feature derivatives embedded in the convertible debentures based on weighted probabilities of assumptions used in the Black Scholes pricing model. At March 31, 2020, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.0002; a risk-free interest rate ranging from 0.15% to 0.17%, and expected volatility of the Company’s common stock of 364%, various estimated exercise prices, and terms under one year.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Beginning on April 1, 2020, the Company began estimating the fair value of the conversion feature derivatives embedded in the convertible promissory notes based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model. The change in method used to value the derivative resulted in a trivial difference in valuation.

At March 31, 2021, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible promissory notes based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.0035; a risk-free interest rate of 0.05%, and expected volatility of the Company’s common stock of 375%, various estimated exercise prices, and terms under one year.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the consolidated balance sheets approximates fair value.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 "Derivatives and Hedging Activities."

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Proceeds from these convertible notes are reported under the financing section of the statements of cash flows. Changes to the fair value of the derivative liability are reported as adjustments to reconcile net loss to net cash used in operating activities in the accompanying statement of cash flows.

Basic and Diluted Loss Per Share

Basic net loss/income per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options, warrants and convertible notes. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented.

Recently Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases. This is a comprehensive new leases standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the term of the lease. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard became effective beginning April 1, 2019 at the inception of the Company’s office and warehouse lease (Note 11). The Company believes adoption of the standard did not have a material impact on our results of operations and financial condition.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended March 31, 2021, and subsequently, there were several new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

Subsequent Events

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration.

NOTE 4 – INVENTORY

At March 31, 2021 and March 31, 2020, inventory consisted of the following:

	March 31, 2021		March 31, 2020

Raw materials	$	-	$	3,921
Work-in-process		-		-
Finished goods		73,553		11,615
	$	73,553	$	15,536

NOTE 5 – PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

The Company’s property and equipment consisted of the following at the respective balance sheet dates:

	March 31, 2021			March 31, 2020

Website development	$	88,965		$	88,965
Automobile		31,596			31,596
Studio and office equipment		5,957			5,957
Tenant improvements		10,879			10,879
Intangible assets		1,024			1,024
		144,630			138,421
Accumulated depreciation and amortization		(123,545	)		(116,982	)
	$	21,085		$	21,439

Depreciation expense of property and equipment for the years ended March 31, 2021 and 2020 was $6,000 and $6,319, respectively.

Intangible assets consist of a trademark acquired March 31, 2017 and is being amortized over five years. Amortization expense for the years ended March 31, 2021 and 2020 was $307 and $461, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – DEBT

Notes Payable

During October 2016, the Company extinguished $129,549 of debt in exchange for 5,000,000 shares of newly issued common stock. The original note had a maturity date of November 11, 2016, and no interest rate. A total of 4,200,000 shares were issued to three of the four noteholders. As of December 31, 2016, the remaining balance of 800,000 shares of common stock was pending issuance to one noteholder, so common stock payable of $474,000 was recorded in the accompanying consolidated statement of stockholders’ equity. As of July 2019, the shares were still pending issuance; accordingly, the Company reclassified the amount due to Noteholder 8 to notes payable at the fair value of the common stock. During February 2020, the Company issued 800,000 shares of the Company’s common stock pursuant to the October 2016 debt extinguishment. As a result, the note payable of $474,000 is no longer outstanding. On February 12, 2019, Noteholder 1 submitted a notice of conversion for $125,000 principal and $11,250 accrued interest after the note was in default. The note terms provided a $3,000 daily fee for failure to deliver common stock prior to a deadline of two days after the conversion notice. The shares due under the conversion were not issued until May 8, 2019. Accordingly, a note payable of $135,000 was recorded as a penalty at March 31, 2019. An additional $114,000 was accrued as a penalty during the year ended March 31, 2020. The $249,000 balance remains outstanding and in default at March 31, 2021. The balance was resolved subsequent to March 31, 2021, as detailed in Note 11.

On November 22, 2019, the Company issued a $50,000 promissory note to a third-party lender for a $25,000 cash borrowing. Accordingly, a $25,000 discount was recorded at issuance, all of which was amortized by March 31, 2020. The non-interest-bearing note is secured by inventory, matured February 20, 2020, and remains in default at March 31, 2021.

On May 9, 2020, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), the Company received a two-year loan for $68,000 from Noteholder 12. Interest is deferred for six months, then is at 1% until maturity in May 2022. The Company has applied for the loan to be forgiven by the Small Business Administration and expects to be granted forgiveness.

During the year ended March 31, 2021, the Company incurred interest expenses related to notes payable totaling $30,184.

Convertible Debt

At March 31, 2021, the Company's convertible debt and derivative liability related to the notes which can be converted at variable discounted rates are summarized as follows:

Noteholder	Origination	Maturity	Interest rate		Variable conversion discount		Principal balance		Debt discount		Net amount of liabilities presented		Corresponding derivative balance
Noteholder 2	11/1/2018	8/1/2019		12.00%		35.00%	$	21,487	$	-	$	21,487	$	37,914
Noteholder 8	11/21/2017	5/21/2018		6.00%		See below		20,000		-		20,000		210,951
Noteholder 10	2/27/2020	2/26/2021		10.00%		40.00%		131,788		-		131,788		202,568
							$	173,275	$	-	$	173,275	$	451,433

Noteholder	Origination	Maturity	Interest rate		Fixed conversion rate		Principal balance		Debt discount		Net amount of liabilities presented		Corresponding derivative balance
Noteholder 9	7/7/2016	9/30/2019		6.00%	$0.10/Share		$	25,000	$	-	$	25,000	$	-
Noteholder 13	2/16/2021	8/16/2021		6.00%	$0.015/Share			140,000		-		140,000		21,038
							$	165,000	$	-	$	165,000	$	21,038

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At March 31, 2020, the Company's convertible debt and derivative liability related to the notes which can be converted at variable discounted rates are summarized as follows:

Noteholder	Origination	Maturity	Interest rate		Variable conversion discount		Principal balance		Debt discount		Net amount of liabilities presented		Corresponding derivative balance
Noteholder 2	11/1/2018	8/1/2019		12.00%		35.00%	$	21,487	$	-	$	21,487	$	59,069
Noteholder 3	2/20/2019	12/4/2019		15.00%		35.00%		6,950		-		6,950		18,990
Noteholder 3	7/17/2019	12/4/2019		15.00%		35.00%		22,500		-		22,500		61,970
Noteholder 5	8/5/2019	8/5/2020		12.00%		35.00%		102,750		48,208		54,542		280,745
Noteholder 5	9/13/2019	9/13/2020		12.00%		35.00%		110,250		49,839		60,411		301,237
Noteholder 5	10/14/2019	10/14/2020		12.00%		35.00%		68,250		29,827		38,423		192,915
Noteholder 6	2/13/2020	12/13/2020		12.00%		40.00%		100,000		84,539		15,461		308,481
Noteholder 10	2/27/2020	2/26/2021		10.00%		40.00%		110,000		100,833		9,167		350,690
							$	542,187	$	313,246	$	228,941	$	1,574,097

Noteholder	Origination	Maturity	Interest rate		Fixed conversion rate	Principal balance		Debt discount		Net amount of liabilities presented
Noteholder 8	11/21/2017	5/21/2018		6.00%	$0.20/Share	$	20,000	$	-	$	20,000
Noteholder 8	4/11/2016	9/30/2019		6.00%	$0.01/Share		2,000		-		2,000
Noteholder 9	7/7/2016	9/30/2019		6.00%	$0.10/Share		25,000		-		25,000
						$	47,000	$	-	$	47,000

During the year ended March 31, 2021, the Company incurred interest expenses related to convertible debt totaling $50,068.

On July 10, 2020, the Company and Noteholder 8 agreed to amend the conversion terms of the $20,000 convertible note payable so that the conversion price is equal to the lessor of $0.0002 or the lowest price the Company has issued stock to any other common stockholder or through the issuance of stock for the conversion of debt during the 90 days prior to the date of submission of a conversion notice by Noteholder 8. The change in conversion terms resulted in a derivative liability and financing costs incurred of $96,958 as a result of this debt extinguishment.

The convertible debt held by noteholders 2, 8, 9 and 10 are in default at March 31, 2021.

Future Maturities

The Company’s future maturities of notes payable and convertible debt are as follows:

Years ending
March 31,	Amount
2022	$	701,475
2022		3,800
	$	705,275

Amortization of Debt Discount

During the years ended March 31, 2021 and 2020, the Company recorded amortization of debt discounts totaling $313,246 and $810,027, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – NONCONTROLLING INTEREST

Investments in partnerships, joint ventures and less-than-majority-owned subsidiaries in which we have significant influence are accounted for under the equity method.

As of March 31, 2018, the Company's consolidated financial statements includes a venture for the development of a commercial bottled water operation near Browning, Montana. The new venture will be operated through Spring Hill Water Company, LLC, a Nevada limited liability company ("Spring Hill"). Spring Hill is 49% owned by our newly-formed subsidiary corporation, Humble Water Company, and 51% owned by Doore, LLC. Doore, LLC, which serves as the manager of Spring Hill, has contributed the land and water source to be used in the new operation through a Land & Water Lease Agreement under which Spring Hill will have the use of 2 acres of land and no less than 5 acre-feet of water for an initial term of 25 years and at a lease rate of $1 per year. Through Humble Water Company, our initial capital contribution to Spring Hill was approximately $100,000 to be used in commencing operations. In addition, we have committed to provide additional capital to be used for a bottling facility and equipment, in an amount up to $530,000, within the next 2 years. Should we fail to provide this additional capital within the next 2 years, our ownership percentage in Spring Hill will be reduced from 49% to 20%. Although we hold a minority ownership percentage in Spring Hill, we will have voting control over the company with 75% of the voting membership units. Further, 100% of the losses, expenditures, and deductions from Spring Hill will be allocated to our subsidiary, Humble Water Company. The activity of Spring Hill is accounted for under the voting interest method, and we consolidate 100% of the business activity and record 25% of noncontrolling interest on the balance sheet and 0% of the net losses based on the terms of the agreement.

As of March 31, 2021 and 2020, the noncontrolling interest was $24,437 in the accompanying consolidated financial statements. As of March 31, 2021 and 2020, our total investment into Spring Hill to date was $101,470. During the years ended March 31, 2021 and 2020, there have been no significant operations or expenditures in the joint venture.

NOTE 8 – EARNINGS PER SHARE

FASB ASC Topic 260, “Earnings Per Share,” requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations.

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

The Company had no potential additional dilutive securities outstanding at March 31, 2021 and 2020, except as follows:

	March 31, 2021		March 31, 2020
Preferred stock		25,000,000		25,000,000
Warrants		14,750,000		19,230,000
Options		8,000,000		8,000,000
Convertible debt		152,763,705		8,611,119,231
Total		200,513,705		8,663,349,231

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – STOCKHOLDERS’ EQUITY

Series A Preferred Stock

The Series A Preferred Stock is convertible to common stock at a rate of five shares for every share held and the holder(s) have the right to cast a total of fifty-percent (50%) plus one votes on all matters submitted to a vote of holder of the Company’s common stock. Our Series A Preferred Stock ranks equally, on an as-converted basis, to our common stock with respect to rights upon winding up, dissolution, or liquidation.

On June 6, 2019 the Board of Directors agreed to amend the certificate of designation for the Series A Preferred stock to have the right to cast a total of fifty-percent (50%) plus one votes on all matters submitted to a vote of holder of the Company’s common stock, including the election of directors, and all other matters as required by law. There is no right to cumulative voting in the election of directors. The holders of Series A Preferred Stock shall vote together with all other classes and series of common stock of the Company as a single class on all actions to be taken by the common stock holders of the Company except to the extent that voting as a separate class or series is required by law. Our Series A Preferred Stock does not have any special dividend rights.

On October 1, 2016, the Company issued 5,000,000 shares of our Series A Preferred Stock to Daniel Crawford, a related party, in exchange for 10,000,000 shares of Series A Preferred Stock in Humbly Hemp.

Common Stock

During December 2017, the Company entered into a three-year consulting agreement with Dr. Ashock Patel, the Company’s former CEO, to serve as Director of Product Development. Consideration for services under the agreement provided for the issuance of 700,000 shares of common stock of the Company at the time of execution of the agreement, and the following two anniversaries of the agreement. Since the shares have yet to be issued at March 31, 2021 and 2020, they are reported in common stock payable in the accompanying consolidated statement of stockholders’ deficit.

During the year ended March 31, 2020, the Company issued a total of 840,946,270 shares of common stock to lenders for conversions of convertible debt of $899,230 and related accrued interest of $54,835. The fair value of the derivative liability of the amounts settled at the time of settlement was $1,306,091.

During February 2020, the Company issued 800,000 shares of the Company’s common stock pursuant to an October 2016 debt extinguishment (Note 6).

During the year ended March 31, 2020, the Company issued a total of 14,416,666 shares of common stock to investors for cash of $125,770.

During the year ended March 31, 2020, the Company issued a total of 28,000,000 shares of common stock for the settlement of accounts payable totaling $22,200.

During the year ended March 31, 2020, the Company issued a total of 40,700,000 shares of common stock for debt financing fees totaling $20,350.

During the year ended March 31, 2020, the Company issued a total of 1,000,000 shares of common stock for a debt default penalty totaling $76,100.

During the year ended March 31, 2021, the Company received conversion notices related to $416,641 in convertible debt and accrued interest resulting in the issuance of 3,640,429,964 shares of common stock. As a result of the conversions, the derivative liability related to convertible debt was reduced by $1,977,958.

During July 2020, the Company issued 3,000,000 shares of common stock related to $15,000 cash received when the investor purchased the shares in June 2019, reducing common stock payable by $15,000.

During October 2020, the Company issued a total of 380,000,000 shares of common stock valued at $76,000 to five individuals for services performed on behalf of the Company. Included in the shares issued were 100,000,000 shares to Director A. David Youssefyeh, 100,000,000 shares to Director and CEO Jerry Grisaffi, and 50,000,000 shares to Director David Lewis.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During February 2021, the Company issued 369,999,999 shares of common stock to four investors for proceeds totaling $124,000, of which $14,000 was received in May 2021.

During February 2021, the Company issued 83,333,333 shares of common stock to an investor for $25,000, all of which was paid directly to a vendor for the purchase of inventory.

During March 2021, the Company issued a total of 1,700,000 shares of common stock valued at $7,990 to three individuals for services performed on behalf of the Company.

Stock Options and Warrants

On November 19, 2018, the Company issued options to its former Chief Executive Officer and Chief Financial Officer to purchase 6,000,000 and 2,000,000 shares of common stock, respectively, at $0.05 per share. The options were immediately vested and expire November 19, 2021.

During the year ended March 31, 2020, stock warrants for 11,250,000 common shares were issued in connection with financing received. An additional warrant to purchase 500,000 common shares was issued with a subscription agreement dated September 16, 2019. The warrants are convertible one-for-one into common stock at an exercise price of $.05. The warrants were immediately exercisable and expire between July and November 2021.

Additionally, in connection with the appointment of Advisory Board members, warrants for 3,000,000 common shares were issued during October 2019. The warrants are convertible one-for-one into common stock at an exercise price of $.01. The warrants were immediately exercisable and expire September 30, 2021.

A summary of the status of the Company’s option and warrant grants as of March 31, 2020, and the changes during the fiscal year then ended is presented below:

	Shares		Weighted Avg Exercise Price
Outstanding, March 31, 2019		12,480,000	$	0.06
Granted		14,750,000	$	0.04
Exercised		-	$	-
Expired		-	$	-
Outstanding, March 31, 2020		27,230,000	$	0.05
Exercisable, March 31, 2020		27,230,000	$	0.05

A summary of the status of the Company’s option and warrant grants as of March 31, 2021, and the changes during the fiscal year then ended is presented below:

	Shares			Weighted Avg Exercise Price
Outstanding, March 31, 2020		27,230,000		$	0.05
Granted		-		$	-
Exercised		-		$	-
Expired		(4,480,000	)	$	0.01
Outstanding, March 31, 2021		22,750,000		$	0.04
Exercisable, March 31, 2021		22,750,000		$	0.04

F-17

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RIGHT ON BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – RELATED PARTY TRANSACTIONS

During December 2017, the Company entered into a consulting agreement with Dr. Ashok Patel, who served as CEO until September 2019, to serve as Director of Product Development. Consideration for services under the agreement provided for the issuance of 700,000 shares of common stock of the Company at the time of execution of the agreement, and the following two anniversaries of the agreement. At March 31, 2021, and 2020, the anniversary shares have yet to be issued. Accordingly, they are reported in the accompanying consolidated statement of stockholders’ deficit as common stock payable.

The trustee of La Dulce Vita Trust, Noteholder 8, is the aunt of Daniel Crawford, a related party. The trust is a noteholder as detailed in Note 6 and was issued 25,910,000 shares of common stock for the conversion of $2,000 in convertible debt during the year ended March 31, 2021.

On April 16, 2018, the Company entered into an operating agreement with Centre Manufacturing, Inc. ("Centre") and agreed to form an LLC. The LLC is owned 51% by the Company and 49% owned by Centre, but all income and losses will be split evenly. The owner of Centre is the former CEO of the Company. On June 19, 2018, the Company formed a majority owned subsidiary, Endo & Centre Venture LLC. No significant activity has occurred to date.

During the years ended March 31, 2021 and 2020, the Company purchased inventory totaling $-0- and $13,495, respectively, from Centre. At March 31, 2021 and 2020, the Company owed Centre $14,154, respectively, which is included in accounts payable on the accompanying consolidated balance sheets.

During the year ended March 31, 2021, the Company incurred $32,000 in compensation expenses to the Company’s CEO. At March 31, 2021, the Company had accounts payable totaling $45,227 and $9,500 due to the Company’s CEO and CFO, respectively.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

On April 1, 2019, the Company entered into an office and warehouse lease in Carrollton, Texas. At the inception of the lease, the Company adopted ASC 842 requiring the recording of assets and liabilities related to leases on the balance sheet. The Company records rent on straight-line basis over the terms of the underlying lease. As a result of the ongoing COVID-19 pandemic, the lease was abandoned during May 2020. The Company impaired the right-of-use asset related to the lease, resulting in a $91,200 impairment expense for the year ended March 31, 2021. The lease states the Company is responsible for the remaining payments through March 31, 2022, totaling approximately $83,659. Through March 31, 2021, the Company has accrued $30,341 of the remaining payments as accrued expenses and will amortize the remaining lease liability to accrued expenses over the remaining life of the lease. To date, the lessor has not demanded payment from the Company for the any unpaid amounts due under the lease.

On March 17, 2021, the Company entered into a storefront lease agreement in Rowlett, Texas. At the inception of the lease, the Company recorded a right of use asset and lease liability of $93,000, respectively. The Company records rent on straight-line basis over the terms of the underlying lease. Minimum lease payments under the lease are as follows:

Year Ending March 31,	Amount
2022	$	25,200
2023		25,900
2024		26,600
2025		27,300
	$	105,000

There was a dispute between the Company and Noteholder 1 regarding the timing of the conversion. As of March 31, 2021, the full amount of the penalty totaling $249,000 has been recorded within notes payable on the accompanying consolidated balance sheet, and neither side had filed formal legal proceedings against the other side and negotiations are ongoing to resolve the matter. On June 28, 2021, the Company and Noteholder 1 entered into a Settlement Agreement and Mutual Release whereby the Company issued 83,333,333 shares to Noteholder 1 to settle the dispute.

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RIGHT ON BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – FEDERAL INCOME TAX

The Company accounts for income taxes under ASC 740-10, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes. The provision (benefit) for income taxes for the years ended March 31, 2021, and 2020, assumes a statutory 21%, effective tax rate for federal income taxes.

	March 31, 2021		March 31, 2020

Federal tax statutory rate		21%		21%
Temporary differences		-12%		-8%
Changes in estimates		0%		0%
Valuation allowance		-9%		-13%
Effective rate		0%		0%

The components of deferred tax assets and liabilities as of March 31, 2021, are as follows:

	March 31, 2021
Deferred tax assets (liabilities):
Net loss	$	(1,851,372	)
Temporary differences
Bad debt expense		7,169
Impairment		91,200
Stock-based compensation		83,990
Change in derivative valuation		779,374
Financing costs		89,762
Valuation allowance		799,877
Net deferred tax assets	$	-

The Company had deferred income tax assets as of March 31, 2021, and 2020, as follows:

	March 31, 2021			March 31, 2020

Loss carryforwards	$	1,798,000		$	1,630,000
Less - valuation allowance		(1,798,000	)		(1,630,000	)
Total net deferred tax assets	$	-		$	-

The Company provides for a valuation allowance when it is more likely than not that it will not realize a portion of the deferred tax assets. The Company has established a valuation allowance against the net deferred tax asset due to the uncertainty that enough taxable income will be generated in those taxing jurisdictions to utilize the assets. Therefore, we have not reflected any benefit of such deferred tax assets in the accompanying financial statements. Our net deferred tax asset and valuation allowance increased by $168,000 and $448,000 in the fiscal years ending March 31, 2021, and 2020, respectively. In the fiscal year ended March 31, 2020, the March 31, 2019, valuation allowance was increased by $570,000 due to an adjustment of the previously estimated loss carryforward of approximately $2,715,000.

At March 31, 2021, the Company had approximately $8,564,000 in federal net operating loss carryforwards. These carry forwards are allowed to be carried forward indefinitely and are to be limited to 80% of the taxable income. Pursuant to Internal Revenue Code Section 382, the future utilization of our net operating loss carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future.

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RIGHT ON BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

To the extent that the tax deduction is included in a net operating loss carry forward and is in excess of amounts recognized for book purposes, no benefit will be recognized until the loss carry forward is recognized. Upon utilization and realization of the carry forward, the corresponding change in the deferred asset and valuation allowance will be recorded as additional paid-in capital.

As of March 31, 2021, the Company had no uncertain tax positions, or interest and penalties, that qualify for either recognition or disclosure in the financial statements. The company is subject to U.S. federal, state and local income tax examinations by tax authorities for years 2016 through 2019. The tax returns for the fiscal years ended March 31, 2021 and 2020 have not yet been filed.

NOTE 13 – SUBSEQUENT EVENTS

During April 2021, the Company issued 50,000,000 shares of common stock to an investor under a subscription agreement. As part of the subscription agreement, the Company received cash proceeds totaling $25,000.

During May 2021, the Company and Noteholder 3 entered into a settlement and mutual release agreement to settle a dispute over the dilution of 750,000 warrants issued during the year ended March 31, 2020, and the convertible debt held by Noteholder 3 (Note 6). As part of the agreement, the Company agreed to issued Noteholder 3 38,114,035 shares of common stock with a fair value of $80,000 to settle the convertible debt and outstanding warrants. The resulting loss from the settlement has been accrued at March 31, 2021.

During June 2021, the Company issued a total of 249,999,999 shares of common stock to three investors under three subscription agreements. As part of the subscription agreements, the Company received cash proceeds totaling $75,000.

During June 2021, the Company authorized 13,000,000 shares of common stock to a vendor to pay accounts payable owed to the vendor totaling $8,000.

During June 2021, the Company and Noteholder 1 agreed to settle the dispute and default balance detailed in Note 6. As part of the agreement, the Company issued Noteholder 1 83,333,333 shares of common stock in exchange for the $249,000 default penalty owed to Noteholder 1.

F-20

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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

No events occurred requiring disclosure under Item 307 and 308 of Regulation S-K during the fiscal year ending March 31, 2021.

Item 9A. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year ended March 31, 2021. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of March 31, 2021, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending March 31, 2022: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Item 9B. Other Information

None

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following information sets forth the names, ages, and positions of our current directors and executive officers as of August 4, 2021.

Name	Age	Present Positions
Jerry Grisaffi	75	CEO and Chairman of the Board
David Lewis	51	Director
A. David Youssefyeh	50	CFO and Director

Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.

Jerry Grisaffi – Chairman of the Board

Mr. Grisaffi is a serial entrepreneur who has lived all of his life in Texas. Prior to his appointment Mr. Grisaffi was a consultant to public companies, assisting them with corporate strategy and development. Prior to that, from 2014 to 2017, Mr. Grisaffi was the founder and chairman of the board of Rocky Mountain High Brands, a brand management company that markets healthy products to health-conscious consumers. Prior to founding Rocky Mountain High Brands, from 2010 to 2013, Mr. Grisaffi was the Chairman of the Board and President of Republic of Texas Brands. From 2003 to 2008, Mr. Grisaffi was the President of Microtrack, a company focused on monetizing GPC technology. Previously, Mr. Grisaffi spent forty successful years in the automobile business. He is a lifelong Texan and enjoys spending time with his extended family of 11 grandchildren and 2 great-grandchildren.

David Lewis – Director

Mr. Lewis is a seasoned executive with over twenty-five years’ experience in the capital markets. Having started his career at the boutique investment banking firm Alex Brown, he developed an interest in the public markets and was responsible for the firm underwriting various initial public offerings and secondary offerings. Since then, he has served on the board of numerous companies and has advised dozens of private and public companies on diverse corporate activities, including securing growth capital, capital restructuring, debt restructuring, reverse mergers, M&A, as well as building management and advisory boards, marketing, distribution and strategic direction. For the past five years through the present, he has been the Executive Director of Protext Pharma.

A. David Youssefyeh – CFO and Director

A. David Youssefyeh specializes in complex business, tort, real estate and employment litigation in state and federal courts. He completed his undergraduate studies in International Finance at the University of Southern California and later received his J.D. from Loyola Law School.

Mr. Youssefyeh’s distinctive background as an attorney and an entrepreneur allows him to draw upon his knowledge and experience from a variety of fields – from consumer products to on-line ventures to distribution companies and real-estate management – to provide his clients with real world solutions to their needs.

Term of Office

Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

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Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by the Company to become directors or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time except that Jerry Grisaffi filed for personal bankruptcy in 2019; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Committees of the Board

We do not currently have a compensation committee, executive committee, or stock plan committee.

Audit Committee

We do not have a separately designated standing audit committee. The entire Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by an audit committee. The Board approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the Board reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor. Our Board of Directors, which performs the functions of an audit committee, does not have a member who would qualify as an "audit committee financial expert" within the definition of Item 407(d)(5)(ii) of Regulation S-K. We believe that, at our current size and stage of development, the addition of a special audit committee financial expert to the Board is not necessary.

Nomination Committee

Our Board of Directors does not maintain a nominating committee. As a result, no written charter governs the director nomination process. Our size and the size of our Board, at this time, do not require a separate nominating committee.

When evaluating director nominees, our directors consider the following factors:

	·	The appropriate size of our Board of Directors;
	·	Our needs with respect to the particular talents and experience of our directors;
	·	The knowledge, skills and experience of nominees, including experience in finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;
	·	Experience in product development and marketing;
	·	Experience with accounting rules and practices; and
	·	The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new Board members.

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Our goal is to assemble a Board that brings together a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Board will also consider candidates with appropriate non-business backgrounds.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the Board may also consider such other factors as it may deem are in our best interests as well as our stockholders. In addition, the Board identifies nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of the Board does not wish to continue in service or if the Board decides not to re-nominate a member for re-election, the Board then identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Board are polled for suggestions as to individuals meeting the criteria described above. The Board may also engage in research to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the right in the future to retain a third-party search firm, if necessary. The Board does not typically consider shareholder nominees because it believes that its current nomination process is sufficient to identify directors who serve our best interests.

Code of Ethics

As of March 31, 2021, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

Item 11. Executive Compensation

Compensation Discussion and Analysis

Until August 2018, our sole executive officer, Daniel Crawford, received a base salary of $72,000 per year under an employment contract dated April 1, 2017. Subsequent to August 2018, there have been no employment agreements in effect except one consulting agreement with our former President, Ashok Patel. Under the terms of the agreement, Mr. Patel received 700,000 shares of common stock at issuance, and on the successive anniversary in December 2018. Any bonus compensation is at the discretion of the board, or the compensation committee.

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Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended March 31, 2021, and March 31, 2020.

Name and principal position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Jerry Grisaffi, BOD Chairman	2021	$	32,000		-	$	20,000		-		-		-		-	$	52,000
and CEO	2020	$	59,000		-		-		-		-		-		-	$	59,000
A. David Youssefyeh, Director and	2021		-		-	$	20,000		-		-		-		-	$	20,000
CFO	2020	$	45,000		-		-		-		-		-		-	$	45,000
David Lewis,	2021		-		-	$	10,000		-		-		-		-	$	10,000
Director	2020		-		-		-		-		-		-		-		-
Ashok Patel, Former Director and Former	2021		-		-		-		-		-		-		-		-
President	2020		-		-		-		-		-		-		-		-

Narrative Disclosure to the Summary Compensation Table

Our executive officers received, or accrued, the cash compensation set forth above.

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Stock Option Grants

We have not granted any stock options to the executive officers or directors except for the options to our President and CFO to purchase 6,000,000 and 2,000,000 shares of common stock, respectively. These options were immediately vested when issued November 19, 2018 and expire after three years.

Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of March 31, 2021.

Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number Of Shares or Shares of Stock That Have Not Vested (#)		Market Value of Shares or Shares of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Shares or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Shares or Other Rights That Have Not Vested (#)
Jerry Grisaffi, BOD Chairman and CEO		-		-		-		-		-		-		-		-		-
A.David Youssefyeh, Director and CFO		2,000,000		-		-	$	0.05	11/19/2021			-		-		-		-
David Lewis, Director		-		-		-		-		-		-		-		-		-
Ashok Patel, Former Director and Former President		6,000,000		-		-	$	0.05	11/19/2021			-		-		-		-

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Director Compensation

The table below summarizes all compensation of our directors for our last completed fiscal year.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Jerry Grisaffi, BOD Chairman and CEO	$	32,000	$	20,000		-		-		-		-	$	52,000
A.David Youssefyeh, Director and CFO		-	$	20,000		-		-		-		-	$	20,000
David Lewis, Director		-	$	10,000		-		-		-		-	$	10,000

Narrative Disclosure to the Director Compensation Table

We did not provide compensation to directors for their service as directors during our last fiscal year.

Employment Agreements with Current Management

As of the date of this filing, there are no employment agreements in effect.

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

The following table sets forth, as of July 30, 2021, the beneficial ownership of our common stock by each executive officer and director, by each person known by us to beneficially own more than 5% of our common stock and by the executive officers and directors as a group. Except as otherwise indicated, all shares are owned directly. The voting power shown is based on a total of 11,818,852,387 shares, consisting of 5,909,426,193 shares of common stock issued and outstanding, and 5,909,426,194 votes that may be cast by holders of our Series A Preferred Stock. Class ownership percentages for the class of common stock are based on 5,934,426,193 shares, consisting of 5,909,426,193 shares of common stock and 25,000,000 of common stock issuable upon conversion of all shares of our Series A Preferred Stock.

Title of Class	Name and Address of Beneficial Owner	Amount of Beneficial Ownership			Percent of Class			Percent Voting Power
Common	Daniel Crawford 6501 Dalrock Road, Suite 100 Rowlett, TX		48,507,536	⁽¹⁾		0.82	%		50.20	%
Common	Jerry Grisaffi 6501 Dalrock Road, Suite 100 Rowlett, TX		80,000,000	⁽²⁾		1.35	%		0.68	%
Common	A. David Youssefyeh 6501 Dalrock Road, Suite 100 Rowlett, TX		100,987,442			1.70	%		0.85	%
Common	David Lewis 6501 Dalrock Road, Suite 100 Rowlett, TX		50,000,000			0.84	%		0.42	%
Common	Total all Executive Officers and Directors		279,494,987			4.71	%		52.15	%

Common	Other 5% Shareholders - None

Series A Preferred	Daniel Crawford 6501 Dalrock Road, Suite 100 Rowlett, TX		5,000,000	⁽¹⁾		100.00	%

⁽¹⁾	Consists of 23,507,536 shares of common stock and 5,000,000 shares of Series A Preferred Stock convertible to 25,000,000 shares of common stock. Series A Preferred stock has the right to cast a total of fifty percent (50%) plus one votes on all matters submitted to a vote of holder of the Company’s common stock.

⁽²⁾	Held by A. David Youssefyeh for the benefit of Jerry Grisaffi.

As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.

The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.

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

Except as set forth below, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either case, has or will materially affect us:

Subsequent to August 2018, there have been no employment agreements in effect except one consulting agreement with our former President, Ashok Patel. Under the terms of the agreement, Mr. Patel received 700,000 shares of common stock at issuance, and on the successive anniversary in December 2018. Any bonus compensation is at the discretion of the board, or the compensation committee. Mr. Patel was terminated as an officer and director during December 2020.

Director Independence

We are not a "listed issuer" within the meaning of Item 407 of Regulation S-K and there are no applicable listing standards for determining the independence of our directors. Applying the definition of independence set forth in Rule 4200(a)(15) of The Nasdaq Stock Market, Inc., we do not believe that we currently have any independent directors.

Item 14. Principal Accountant Fees and Services

The following table presents the aggregate fees billed for each of the last two fiscal years by the Company's former independent registered public accounting firm, Turner, Stone, & Company, L.L.P., in connection with the audit of the Company's consolidated financial statements and other professional services rendered.

Year Ended:

Audit Services

Audit Related Fees

Tax Fees

Other Fees

March 31, 2021

39,000

n/a

March 31, 2020

37,500

n/a

Audit fees represent the professional services rendered for the audit of the Company's annual consolidated financial statements and the review of the Company's consolidated financial statements included in quarterly reports, along with services normally provided by the accounting firm in connection with statutory and regulatory filings or other engagements. Audit-related fees represent professional services rendered for assurance and related services by the accounting firm that are reasonably related to the performance of the audit or review of the Company's consolidated financial statements that are not reported under audit fees.

Tax fees represent professional services rendered by the accounting firm for tax compliance, tax advice, and tax planning. All other fees represent fees billed for products and services provided by the accounting firm, other than the services reported for the other categories.

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PART IV

Item 15. Exhibits, Financial Statements Schedules

(a) Financial Statements and Schedules

The following financial statements and schedules listed below are included in this Form 10-K.

Financial Statements (See Item 8)

(b) Exhibits

Exhibit Number		Description
3.4		Bylaws (1)
31.1*		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**		The following materials from the Company's Annual Report on Form 10-K for the year ended March 31, 2021, formatted in Extensible Business Reporting Language (XBRL).
101.INS		XBRL Instance Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.SCH		XBRL Taxonomy Extension Schema

(1)	Incorporated by reference to Registration Statement on Form S-1 filed July 1, 2013.
*	Filed Herewith
**	Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed "furnished" and not "filed" or part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933 or deemed "furnished" and not "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Right on Brands, Inc.

August 4, 2021	By:	/s/ Jerry Grisaffi
		Jerry Grisaffi
		Chief Executive Officer

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

August 4, 2021	By:	/s/ A. David Youssefyeh
		A. David Youssefyeh
		Chief Financial Officer

Right On Brands, Inc. - FORM 10-K - August 4, 2021

Attached files

Right On Brands, Inc. Reports