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Item 9A. Controls and Procedures

2018-08-28 compared with 2015-08-14 · 751 added, 755 removed, 533 unchanged (74% of the section changed)

CONTROLS AND PROCEDURES

principal executive and financial officers, after evaluating the effectiveness of our "disclosure controls and procedures"

(as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of March 31, 2012, have concluded that as

of March 31, 2015, our disclosure controls and procedures were effective to provide reasonable assurance that information required

to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is accumulated and communicated to our

management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure, and

(ii) is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

have been no changes in our internal controls or in other factors that could affect these controls during or subsequent to the

end of the period covered by this report.

Management’s

Annual Report on Internal Control Over Financial Reporting

Annual Report on Internal Control over Financing Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule

13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934.

Our internal control over financial reporting is

a process designed to provide reasonable assurance with respect to the reliability of financial reporting and the preparation

and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles

and includes those policies and procedures which:

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

of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations

of our management and directors;

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets

that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

management assessed the effectiveness of our internal control over financial reporting as of March 31, 2015 based upon the criteria

set forth in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission

Annual Report does not include an attestation report of our registered public accounting firm with respect to internal control

over financial reporting.

13a-15(f) under the Securities Exchange Act of 1934).

Management has assessed the effectiveness of our internal control over financial

reporting under COSO Framework 2013 as of March 31, 2016 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, 2016, our internal control over financial reporting was not effective.

The material weaknesses identified

related to (i) a lack of accounting staff and resources with appropriate knowledge of U.S.

GAAP and SEC reporting and compliance

requirements;

(ii) a lack of sufficient documented financial closing policies and procedures;

and (iii) a lack of independent

directors and an audit committee.

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.

such weaknesses, we hope to implement the following changes during our fiscal year ending March

(i) appoint additional qualified personnel to address inadequate segregation of

duties and ineffective risk management;

(ii) adopt sufficient written policies and procedures for accounting and financial reporting,

and (iii) strengthen our financial team by employing more qualified accountant(s) conversant with US GAAP to enhance the quality

of our financial reporting function.

The remediation efforts set out in (i), (ii) and (iii) 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.

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 temporary rules of the Securities and Exchange Commission which permit us to provide only our management’s report in

this Annual Report.

carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer

and Principal Financial Officer, of the effectiveness of the design and operation of our internal control over financial reporting

as of March 31, 2015, the end of the period covered by this Annual Report on Form 10-K for the year ended March 31, 2015.

this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

(COSO) in Internal Control - Integrated Framework, published in 1992 .

Based on that evaluation, our Principal Executive

Officer and Principal Financial Officer concluded that our internal control over financial reporting were effective during the

2015 fiscal year at the reasonable assurance level, as we had personnel with appropriate training and experience in accounting

principles generally accepted in the United States of America, or GAAP.

As a result we were able to test whether our financial

activity level controls or our information technology general controls were operating sufficiently to identify a deficiency, or

combination of deficiencies, that may result in a reasonable possibility that a material misstatement of the financial statements

would be prevented or detected on a timely basis.

Management has reviewed the financial statements and underlying information

included in this Annual Report on Form 10-K in detail and believes the procedures performed are adequate to fairly present our

financial position, results of operations and cash flows for the periods presented in all material respects.

in Internal Control over Financial Reporting

have been no changes in our internal control over financial reporting identified during our year ended March 31, 2015, which

have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection

in Internal Controls over Financial Reporting

regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve

controls and increase efficiency, while ensuring that we maintain an effective internal control environment.

Changes may include

such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

the last fiscal quarter’

assessment, we noted the material weaknesses as stated above.

does not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial

reporting will prevent or detect all error and fraud.

Any control system, no matter how well designed and operated, is based upon

certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met.

Further, no evaluation

of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues

and instances of fraud, if any, within the Company have been detected.

The Company’s disclosure controls and procedures

are designed to provide reasonable assurance of achieving their objectives and the Company’s Chief Executive Officer (who

is also our Chief Financial Officer) has concluded that the Company’s disclosure controls and procedures are effective at

that reasonable assurance level.

OTHER INFORMATION

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Directors and Executive Officers are shown below:

Kent Rodriguez

Chief Executive Officer, President,

Secretary, and Principal Financial Officer

Douglas Barton

Rene Haeusler

Executive Officer, President, Secretary, and Principal Financial Officer

Director is serving a term of office, which will continue until the next annual meeting of shareholders and until the election

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from the University of Minnesota.

Häusler has served as a Director of the Company

since August 2010.

He is a Political and Business Consultant, is Chairman of the Board and Managing Director of

all companies of the L’Avenir Group.

He also serves as Chairman of the Board of Bowl Construction AG ,

Member of the Board of ProgressNow!invest AG , a SIX-listed private equity investment company, and is a member of the Board

of Directors of ThaiSwiss SME-Industrial Center Ltd ., Pranburi, Thailand, and of Sempre-Automaten AG and Theracon

AG in Switzerland.

His background includes Assistant to the Managerial Committee and Head of several departments for Bank

He also served as a member of the military-diplomatic Swiss delegation to the Neutral Nations Supervisory

Commission (NNSC) in Korea, as liaison officer to the UN High Command and the Government of South Korea.

has a Master’s degree in history, political science and constitutional law from the University of Zurich/Switzerland.

Häusler has served as a Director of the Company since August 2010.

He is a Political and Business Consultant,

is Chairman of the Board and Managing Director of all companies of the L’Avenir Group.

He also serves as Chairman

of the Board of Bowl Construction AG , Member of the Board of ProgressNow!invest AG , a SIX-listed private

equity investment company, and is a member of the Board of Directors of ThaiSwiss SME-Industrial Center Ltd ., Pranburi,

Thailand, and of Sempre-Automaten AG and Theracon AG in Switzerland.

His background includes

Assistant to the Managerial Committee and Head of several departments for Bank Sogenal.

He also served as a member

of the military-diplomatic Swiss delegation to the Neutral Nations Supervisory Commission (NNSC) in Korea, as liaison officer

to the UN High Command and the Government of South Korea.

Häusler has a Master’s degree in history,

political science and constitutional law from the University of Zurich/Switzerland.

From 1995 –

1999 he was also a guest lecturer at the Chulalongkorn University in Bangkok (Thailand).

He has published two

books and numerous articles on political psychology, economy and stock markets.

is an experienced equity investment professional with a wide range of public company and private equity expertise in international

markets for commodities, mineral exploration, biotechnology, and software.

1999 he was also a

guest lecturer at the Chulalongkorn University in Bangkok (Thailand).

He has published two books and numerous articles on political

psychology, economy and stock markets.

Häusler is an experienced equity investment professional with a wide

range of public company and private equity expertise in international markets for commodities, mineral exploration, biotechnology,

and software.

Company's Directors will serve in such capacity until the next annual meeting of the Company's shareholders and until their successors

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officer or director was or is to be selected as an officer or director.

The Directors took action sixteen (16) times by written

consent during the fiscal year ended March 31, 2015.

The Directors took action six (6) times by written consent

during the fiscal year ended March 31, 2016.

2009, the Board of Directors established a Compensation Committee.

It is currently comprised of Messrs.

Häusler.

Barton and Häusler.

The Compensation Committee held one (1) meeting in fiscal 2016.

1 unchanged sentence

It is currently comprised of Messrs.

Häusler.

T he Audit Committee held one (1) meeting in fiscal 2015.

Barton and Häusler.

The Audit Committee held one (1) meeting in fiscal 2016.

have adopted a Code of Ethics which is designed to ensure that our directors and officers meet the highest standards of ethical

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COMPENSATION TABLE

Kent Rodriguez

CEO and President

$ 88,000 (2)(1)

and President

$ 88,000 (2)(1)

Rodriguez owns the 100 shares of Preferred Stock outstanding.

2 unchanged sentences

The balance due Mr.

as of March 31, 2015 is $32,950.

(2) In 2015, Mr.

was under an employment agreement dated April 1, 2014 that expired on March 31, 2015, pursuant to which he was compensated

at an annual rate of 48,000.

Rodriguez as of March 31, 2016 is $37,450.

Rodriguez was under an employment agreement dated April 1, 2014 that expired on March 31, 2016, pursuant to which

he was compensated at an annual rate of 48,000.

The Company extended the agreement for another year.

During the fiscal

year ending March 31, 2016, we paid Mr.

Rodriguez $50,457, and accrued $49,202.

During the fiscal year ending March

31, 2015, we paid Mr.

Rodriguez $44,500, and accrued $48,000.

During the fiscal year ending March 31, 2014, we

Rodriguez $44,500 and accrued $48,000, The balance due Mr.

3 unchanged sentences

of Securities Underlying Unexercised Options

Nonexercisable

Unexercisable

Incentive Plan Awards:

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That Have Not Vested

Kent Rodriguez

Douglas Barton

Rene Häusler

Company has an employment agreement with its President.

13 unchanged sentences

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following

table sets forth certain information regarding ownership of our Common Stock as of March 31, 2015 by (i) each person known by

us to be the beneficial owner of more than five (5%) percent of our outstanding Common Stock;

(ii) each director of our Company;

following table sets forth certain information regarding ownership of our Common Stock as of March 31, 2016 by (i) each person

known by us to be the beneficial owner of more than five (5%) percent of our outstanding Common Stock;

(ii) each director of our

and (iii) all executive officers and directors of our Company as a group.

5 unchanged sentences

Rodriguez (1)

Avenue South, Suite 7000

Fourth Avenue South, Suite 7000

Häusler (2)

Avenue South, Suite 7000

IP Technology Exchange, Inc.

Fourth Avenue South, Suite 7000

Technology Exchange, Inc.

Spectrum Blvd, Suite 128E

Recon Technology, Inc

Maerki Baumann & Company AG (3)

Dreikonigstrasse 6

CH -8002, Zurich, Switzerland

Technology, Inc

Green Station

York, NY 10274

Includes 11,042,031 shares

of Common Stock issuable upon the conversion of 100 shares of Series A Preferred Stock.

Includes 13,334 shares owned by L’Avenir

Finanz an affiliate of Mr.

Maerki Baumann & Company

AG, holds the shares as custodian on behalf of fourteen (14) of their clients.

12,132,041 shares of Common Stock issuable upon the conversion of 100 shares of Series A Preferred Stock.

46,501 shares owned by L’Avenir Finanz an affiliate of Mr.

shares were cancelled in March 2018.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

8 unchanged sentences

the years ended March 31, 2016 and 2015, the Company incurred $40,000 in Class A preferred stock dividends, respectively.

March 31, 2015, there is $32,950 in accrued preferred stock dividends payable.

of March 31, 2016, there is $37,450 in accrued preferred stock dividends payable.

holders of the Series A Preferred Stock have the right to convert each share of preferred stock into a sufficient number of shares

6 unchanged sentences

convert into Common Stock and the remaining shares of Series A preferred Stock shall convert upon lapse of the applicable restrictions.

January 12, 2018, our Board of Directors agreed to amend Designation of the Series A Convertible Preferred Stock be amended

by changing the ratio for conversion, in Article IV, subparagraph (a), from .4% to .51% so that upon conversion the number of

shares of common stock to be exchanged shall equal 51% of then issued and outstanding common stock.

Rodriguez was under an employment agreement dated April 1, 2011 that expired on March 31, 2016, pursuant to which he

2 unchanged sentences

During the fiscal year

ending March 31, 2015, we paid Mr.

ended March 31, 2016, we paid Mr.

Rodriguez $50,547, and accrued $49,202.

During the fiscal year ending March 31, 2015,

2014, we paid Mr.

Rodriguez $44,500, and accrued $48,000.

4 unchanged sentences

tax return fees for the years ended March 31, 2016 and 2015 were as follows:

ALL OTHER FEES.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Restated Articles of Incorporation

(Incorporated by reference to Exhibit 3.1 to Registration Statement on Form SB-2, Registration No.

Restated Bylaws (Incorporated by reference

to Exhibit 3.2 to Registration Statement on Form SB-2, Registration No.

Articles of Incorporation for the State of Nevada.

(Incorporated

by reference to Exhibit 2.2 to Form 10-KSB filed February 2000) *

Articles of Merger for the Colorado

Corporation and the Nevada Corporation (Incorporated by reference to Exhibit 3.4 to Form 10-KSB filed February 2000) *

Bylaws of the Nevada Corporation (Incorporated

by reference to Exhibit 3.5 to Form 10-KSB filed February 2000) *

Specimen of Common Stock (Incorporated

by reference to Exhibit to Registration Statement on Form SB-2, Registration No.

Employment Agreement between the Company

and Kent Rodriguez dated April 1, 2011 *

Promissory Note between the Company

and Peter Messerli dated January 6, 2011, in the amount of $200.000 *

Promissory Note between the Company

and Maerki Baumann & Company AG dated January 11, 2011, in the amount of $250,000 *

Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Registration Statement on Form SB-2, Registration No.

Bylaws (Incorporated by reference to Exhibit 3.2 to Registration Statement on Form SB-2, Registration No.

of Incorporation for the State of Nevada.

(Incorporated by reference to Exhibit 2.2 to Form 10-KSB filed February 2000) *

of Merger for the Colorado Corporation and the Nevada Corporation (Incorporated by reference to Exhibit 3.4 to Form 10-KSB

filed February 2000) *

of the Nevada Corporation (Incorporated by reference to Exhibit 3.5 to Form 10-KSB filed February 2000) *

of Common Stock (Incorporated by reference to Exhibit to Registration Statement on Form SB-2, Registration No.

Agreement between the Company and Kent Rodriguez dated April 1, 2011 *

Note between the Company and Peter Messerli dated January 6, 2011, in the amount of $200.000 *

Note between the Company and Maerki Baumann & Company AG dated January 11, 2011, in the amount of $250,000*

Note between the Company and Maerki Baumann & Company AG dated January 27, 2012, in the amount of $200,000*

of Designation Series B Preferred Stock*

Certificate of Designation AFS Series A Preferred Stock

Note between the Company and Carebourn Capital, LLC dated January 29, 2018 in the amount of $230,000

Certification

* Incorporated

by reference to a previously filed exhibit or report.

Incorporated by reference to a previously filed exhibit or report.

accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

Avalon Oil & Gas, Inc.

Groove Botanicals,

August 28, 2018

1 unchanged sentence

Kent Rodriguez

Executive Officer, President,

and Principal Financial Officer

Chief Executive Officer, President,

Secretary and Principal Financial Officer

to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of

the Company in the capacities and on the dates indicated.

August 14, 2015

Kent Rodriguez

Executive Officer, President,

and Principal Financial Officer

August 14, 2015

Chief Executive Officer, President,

Secretary and Principal Financial Officer

Douglas Barton

August 14, 2015

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Balance Sheets (continued)

Consolidated Statements of Operations

Consolidated Statement of Cash Flows

Consolidated Statement of Cash Flows (Continued)

Statement of Changes in Shareholders’

Notes to Consolidated Financial Statements

Rene Häusler

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

Shareholders of Avalon Oil & Gas, Inc.

have audited the accompanying consolidated balance sheets of Avalon Oil & Gas, Inc.

(the “Company”) as of March

31, 2015 and 2014, and the related consolidated statements of operations, changes in shareholders’

deficit, and cash flows

for each of the years in the two-year period ended March 31, 2015.

Avalon Oil & Gas, Inc.’s management is responsible

for these consolidate financial statements.

Our responsibility is to express an opinion on these consolidated financial statements

based on our audits.

conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).

standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are

free of material misstatement.

The company is not required to have, nor were we engaged to perform, an audit of its internal control

over financial reporting.

Our audit included consideration of internal control over financial reporting as a basis for designing

audit procedures that are appropriate in the circumstances, 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.

An audit also includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting

principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

the Shareholders and Board of Directors of

Botanicals Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Groove Botanicals Inc.

(formerly known as Avalon Oil &

Gas, Inc.) (the “Company”) as of March 31, 2016 and 2015, the related consolidated statements of

operations, changes in equity and cash flows for each of the two years in the period ended March 31, 2016, 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, 2016 and 2015, and the

results of its operations and its cash flows for each of the two years in the period ended March 31, 2016, in conformity with

accounting principles generally accepted in the United States of America.

The accompanying

consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully

described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise

additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company's

ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The consolidated

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

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

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

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.

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.

our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated

financial position of Avalon Oil & Gas, Inc.

as of March 31, 2015 and 2014, and the results of its operations and its cash

flows for each of the years in the two-year period ended March 31, 2015, in conformity with accounting principles generally accepted

in the United States of America.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1, the Company has incurred significant losses from operations since its inception and has a working capital

These conditions raise substantial doubt about the Company's ability to continue as a going concern.

plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

& Pinchuk LLP

York, New York

Avalon Oil & Gas, Inc.

Consolidated Balance Sheets

/s/ Bernstein & Pinchuk LLP

Bernstein & Pinchuk LLP

We have served as the Company’s auditor since 2007.

New York, New York

August 28, 2018

Botanicals, Inc.

Balance Sheets

and cash equivalents

receivable, net of allowance for doubtful accounts of $28,741 and $0

and prepaid expenses

from joint interests, net of allowance for doubtful accounts of $153,209 and $131,236

current assets

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful

accounts of $0 and $0

Notes receivable

Deposits and prepaid expenses

Receivables from joint interests, net of allowance

for doubtful accounts of $131,236 and $136,873

Total current assets

Notes receivable

Property and equipment, net

Unproven oil & gas properties

Producing oil & gas properties, net

Intellectual property rights, net

and equipment, net

oil & gas properties

oil & gas properties, net

property rights, net

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

Avalon Oil & Gas, Inc.

Consolidated Balance Sheets (Continued)

Liabilities and Stockholders' Equity

Botanicals, Inc.

Balance Sheets (Continued)

payable and accrued liabilities

payroll - related parties

liabilities to joint interest

payable - related party

payable, net of discount

current liabilities

Accounts payable and accrued liabilities

Accrued payroll - related parties

Dividends payable

Accrued liabilities to joint interest

Notes payable - related party

Notes payable

Total current liabilities

Notes payable, net of discount

Accrued asset retirement obligation (ARO) liability

Total Liabilities

Commitments and contingencies

Stockholders' Equity

Preferred stock, Series A, $.10 par

value, 1,000,000 shares authorized;

100 shares issued and outstanding as of March 31, 2015 and 2014,

liquidation preference of $532,950 and $541,950 as of March 31, 2015 and 2014

Preferred stock, Series B, $.10 par value, 2,000

shares authorized;

1,625 shares issued and 1,300 shares issued and outstanding as of March 31, 2015 and 2014,

liquidation preference of $1,625,000 and $1,324,780 as of March 31, 2015 and 2014

Common stock, $.001 par value:

200,000,000 shares authorized 16,548,062 and 11,658,062 shares issued and

outstanding at March 31, 2015 and March 31, 2014, respectively

Additional paid in capital

Accumulated deficit

asset retirement obligation (ARO) liability

and contingencies

stock, Series A, $.10 par value, 1,000,000 shares authorized;

100 shares issued and outstanding stated at redemption value,

as of March 31, 2016 and March 31, 2015, liquidation preference of $537,450 and 532,950 as of March 31, 2016 and 2015

stock, Series B, $.10 par value, 2,000 shares authorized;

1,983 shares issued and 1,625 shares issued and outstanding stated

at redemption value as of March 31, 2016 and March 31, 2015, liquidation preference of $1,983,000 and 1,625,000 as of March

31, 2016 and 2015

stock, $.001 par value:

200,000,000 shares authorized 18,198,062 and 16,548,062 shares issued and outstanding at March 31,

2016 and March 31, 2015, respectively

paid in capital

(33,610,746 )

(30,898,873 )

Total Stockholders' Equity

Total Liabilities and Stockholders' Equity

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

Avalon Oil & Gas, Inc.

Consolidated Statements of Operations

Stockholders (Deficit) Equity

Non-controlling

(Deficit) Equity

Liabilities and Equity

accompanying notes are an integral part of these financial statements.

Botanicals, Inc.

Statements of Operations

the year ended

Oil & Gas Sales

operating expense, severance taxes and ARO accretion

general and administrative expenses

based compensation

Depreciation,

depletion, and amortization

operating expenses

Lease operating expense, severance taxes

and ARO accretion

Selling, general and administrative expenses

Stock based compensation

Depreciation, depletion, and amortization

Total operating expenses

Operating loss

Other income (expense):

Gain on extinguishment of debt

(Loss) on conversion of notes payable

Gain on conversion of dividends payable

Other miscellaneous income

Interest expense, net

Total other income (expense)

Gain (loss) before income tax

Provision for income taxes

Net Income (loss)

Preferred stock dividends

Net loss attributable to common shareholders

Net loss per share - basic and diluted

Weighted average shares outstanding - basic and diluted

The accompanying notes are an integral

part of these financial statements.

Avalon Oil & Gas, Inc.

Consolidated Statement of Cash Flows

For the year ended

March 31, 2015

March 31, 2014

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used

in operating activities:

Stock based compensation

Gain on extinguishment of debt

Gain (loss) on conversion of debt

Gain on conversion of dividends payable

Stock issued for reduction of interest on notes payable

Stock issued for licensing fees

Depreciation and ARO liability

Amortization of intangible assets

Net change in operating assets and liabilities:

Accounts receivable

Accounts payable and other accrued expenses

Dividends payable

Due to related party

Asset retirement obligation accretion

Net cash (used) in operationg activities

Cash flows from investing activities:

Deposit on the purchase of additional assets

Purchase of property and equipment

Acquisition of oil producing properties

Principle payments received on notes receivable

Net cash (used) in investing activities

Cash flows from financing activities:

Payments on notes payable

Proceeds from notes payable

Common stock issued for cash

Preferred stock B issued for cash

Dividends paid on preferred stock

Net cash provided by financing activities

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

Avalon Oil & Gas, Inc.

Consolidated Statement of Cash Flows (Continued)

For the year ended

March 31, 2015

March 31, 2014

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

Supplemental disclosures of cash flow information:

Cash paid during the period for:

Common stock issued in exchange for consulting

Common stock issued in exchange for licenses

Common stock issued for conversion of note payable,

accrued interest, and assumption of debt

Common stock issued for the conversion of dividends payable

Gain (Loss) on estinguishment of debt

Preferred stock issued in exchange for consulting

Preferred stock issued for conversion of note payable,

accrued interest, and assumption of debt

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

AVALON OIL AND GAS, INC.

STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT

(Restated to reflect June 2012 300 to 1 reverse stock split)

Preferred Stock,

Additional Paid-In Capital

Balance at March 31, 2013

income (expense):

on settlement of debt

on conversion of dividends payable

miscellaneous income

(Loss) before income tax

for income taxes

(loss) Income

$ (2,503,934 )

Preferred stock issued for common stock

Preferred stock issued for conversion of notes payable

Preferred stock issued for cash

Common stock issued for conversion of note payable and assumption liabilities

Common stock issued for consulting services

Common stock issued for cash

Preferred Dividends

Balance at March 31, 2014

net loss attributable to noncontrolling interests

income (loss) attributable to the Company

$ (2,503,835 )

Preferred shares issued in exchange for notes payable

Common stock issued for consulting services

Preferred stock issued for cash

Preferred stock issued in exchange for consulting services

Common stock issued for licenses

Common stock issued for consulting services

Common stock issued in exchange for notes payable

Common stock issued in exchange for dividends payable

Preferred Dividends

Balance at March 31, 2015

stock dividends

income (loss) attributable to common shareholders

$ (2,711,873 )

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

OIL & GAS, INC.

loss per share - basic & diluted

average shares outstanding - basic & diluted

accompanying notes are an integral part of these financial statements.

Botanicals, Inc.

Statement of Cash Flows

the year ended

flows from operating activities:

(loss) income

$ (2,503,934 )

to reconcile net loss to net cash used in operating activities:

stock issued for services

consulting services

for allowances for doubtful accounts

on extinguishment of debt

on the reduction of dividends payable

issued for reduction of interest on notes payable

issued for licensing fees

Depreciation,

depletion, and amortization

and ARO liability

change in operating assets and liabilities:

payable and other accrued expenses

to related party

retirement obligation accretion

cash (used) in operating activities

flows from investing activities:

on the purchase of additional assets

of property and equipment

of oil producing properties

payments received on notes receivable

cash provided by (used in) investing activities

flows from financing activities:

from advances from related party

on notes payable

from notes payable

Non-controlling

interest stock sale

stock B issued for cash

paid on preferred stock

cash provided by financing activities

accompanying notes are an integral part of these financial statements.

Botancials, Inc.

Statement of Cash Flows (Continued)

the year ended

decrease in cash and cash equivalents

and cash equivalents at beginning of period

and cash equivalents at end of period

disclosures of cash flow information:

paid during the period for:

stock issued in exchange for consulting services

stock issued in exchange for licenses

stock issued for the conversion of dividends payable

stock issued for conversion of note payable, accrued interest, and assumption of debt

(Loss) on extinguishment of debt

stock issued in exchange for consulting services

stock issued for conversion of note payable, accrued interest, and assumption of debt

accompanying notes are an integral part of these financial statements.

BOTANCALS, INC.

Statements of Changes in Equity

Stock, Series A

Stock, Series B

Paid-in Capital

Non-Controlling

at March 31, 2014

$ (30,823,588 )

shares issued in exchange for notes payable

stock issued for consulting services

stock issued for cash

stock issued in exchange for consulting services

stock issued for licenses

stock issued for consulting services

stock issued in exchange for notes payable

stock issued in exchange for dividends payable

at March 31, 2015

$ (30,898,873 )

shares issued in exchange for notes payable

stock issued for consulting services

stock issued for cash

stock issued for cash (AFS Holdings, Inc.)

stock issued in exchange for consulting services

stock issued to pay accounts payable

stock issued for consulting services

stock issued in exchange for notes payable

stock issued in exchange for dividends payable

Non-controlling

$ (2,503,934 )

at March 31, 2016

$ (33,610,746 )

accompanying notes are an integral part of these financial statements.

BOTANICALS, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

of Operations

Oil & Gas, Inc.

(the "Company") was originally incorporated in Colorado in April 1991 under the name Snow Runner

Botanicals, Inc.

(the "Company") (formally known as Avalon Oil & Gas, Inc.), was originally incorporated in Colorado

in April 1991 under the name Snow Runner (USA), Inc.

The Company was the general partner of Snow Runner (USA) Ltd.;

a Colorado limited partnership to sell proprietary

snow skates under the name "Sled Dogs"

limited partnership to sell proprietary snow skates under the name "Sled Dogs"

which was dissolved in August 1992.

In late 1993, the Company relocated its operations

to Minnesota and in January 1994 changed our name to Snow Runner, Inc.

In November 1994 we changed our name to the Sled Dogs Company.

late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc.

1994 we changed our name to the Sled Dogs Company.

On November 5, 1997, we filed for protection under Chapter 11 of the U.S.

Bankruptcy Code.

In September 1998, we emerged from

protection of Chapter 11 of the U.S.

In September 1998, we emerged from protection of Chapter 11 of the U.S.

Bankruptcy Code.

In May, 1999, we changed our state of domicile to Nevada and our name to

XDOGS.COM, Inc.

On July 22, 2005, the Board of Directors and a majority of the Company's shareholders approved an amendment to

our Articles of Incorporation to change the Company's name to Avalon Oil & Gas, Inc., and to increase the authorized number

of shares of our common stock from 200,000,000 shares to 1,000,000,000 shares par value of $0.001, and engage in the acquisition

of producing oil and gas properties.

On November 16, 2011, a majority of the Company's shareholders approved an amendment

to our Articles of Incorporation to increase the authorized number of shares of our common stock from 1,000,000,000 shares to

3,000,000,000 shares par value of $0.001.

In May, 1999, we changed our state

of domicile to Nevada and our name to XDOGS.COM, Inc.

On July 22, 2005, the Board of Directors and a majority of the Company's

shareholders approved an amendment to our Articles of Incorporation to change the Company's name to Avalon Oil & Gas, Inc.,

and to increase the authorized number of shares of our common stock from 200,000,000 shares to 1,000,000,000 shares par value

of $0.001, and engage in the acquisition of producing oil and gas properties.

On November 16, 2011, a majority of the

Company's shareholders approved an amendment to our Articles of Incorporation to increase the authorized number of shares of our

common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001.

June 4, 2012 the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and

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Secretary of State on April 10, 2013, to increase our authorized shares to 200,000,000.

Company is currently in the process of raising funds to acquire oil and gas properties and related oilfield technologies, which

the Company plans to develop into commercial applications.

March 21, 2018 the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation

to change the Company's name to Groove Botanicals, Inc.

We filed an amendment to our Articles of Incorporation with the

State of Nevada on May 18, 2018.

Company is currently in the process of raising funds to manufacture and sell our CBD skincare products.

September 22, 2007 the Company entered into an agreement with respect to its purchase of a 75.6% interest in Oiltek, Inc.

2 unchanged sentences

Weyer Partners, LLC, was formed to operate oil and gas properties in Oklahoma and Texas.

Weyer is consolidated in

these financial statements.

Weyer is consolidated

in these financial statements.

May 9, 2014, the Company formed AFS Holdings, Inc., (“AFS”) a one hundred percent (100%) wholly owned Nevada Corporation.

1 unchanged sentence

AFS is consolidated in these financial statements.

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

All significant inter-company items have been eliminated in consolidation.

March 31, 2015, consolidated financial statements have been prepared assuming the Company will continue as a going concern.

the Company has incurred a loss of $30,898,873 from inception through March 31, 2015, and has a working capital deficiency of

$363,453 and stockholders’

equity of $1,690,152 as of March 31, 2015.

These conditions raise substantial doubt about

the ability of the Company to continue as a going concern.

The Company currently has minimal revenue generating operations and

expects to incur substantial operating expenses in order to expand its business.

As a result, the Company expects to incur operating

losses for the foreseeable future.

The Company will continue to seek equity and debt financing to meet our operating

The accompanying consolidated financial statements do not include any adjustments that might become necessary should the

Company be unable to continue as a going concern.

Company has minimal revenues from our remaining oil and gas assets.

We are in need of additional cash resources to maintain our

As of March 31, 2016, the Company had a working capital deficit of $676,586, had incurred losses since inception of

$33,610,746, and have not yet received any revenue from the sale our CBD skincare products.

These factors raise substantial doubt

about its ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent on its

ability to raise additional capital or obtain necessary debt financing.

The Company is presently dependent on its controlling

shareholder to provide us funding for its daily operation and expenses, including professional fee and fees charged by regulators,

although he is under no obligation to do so.

Company intends to meet the cash requirements for the next 12 months from the issuance date of this report through a combination

of debt and equity financing by way of private placements, friends, family and business associates.

The Company currently did

not have any arrangements in place to complete any private placement financings and there is no assurance that the Company will

be successful in completing any such financings on terms that will be acceptable to it.

we do not have sufficient working capital to pay our operating costs for the next 12 months, we will require additional funds

to pay our legal, accounting and other fees associated with our Company and our filing obligations under United States federal

securities laws, as well as to pay our other accounts payable generated in the ordinary course of our business.

Once these costs

are accounted for, we will focus on the following the manufacture and sale of our CBD skincare products.

failure to raise money will have the effect of delaying the timeframes in the business plan as set forth above, and the Company

may have to push back the dates of such activities.

financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets

and discharge its liabilities in the normal course of business for the foreseeable future.

The Company has incurred losses and

further losses are anticipated as a result of the development of business which raises substantial doubt about the Company’s

ability to continue as a going concern within the next twelve months from the issuance date of this report.

The ability to continue

as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining financing necessary

to meet the Company’s obligations and repay its liabilities arising from normal business operations when they come due.

Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors

and/or private placement of the Company’s common stock.

cash and cash equivalents were $108,220 on March 31, 2016, compared to $135,713 on March 31, 2015.

We met our liquidity needs

through the issuance of our common stock, preferred stock, and notes payable for cash and from the revenue derived from our oil

and gas operations.

need to raise additional capital during the fiscal year, but currently have not acquired sufficient additional funding.

to continue operations as a going concern is highly dependent upon our ability to obtain immediate additional financing, or generate

revenues from the sale of our CBD skincare products, and to achieve profitability, none of which can be guaranteed.

Unless additional

funding is obtained, it is highly unlikely that we can continue to operate.

There is no assurance that even with adequate financing

or combined operations, we will generate revenues and be profitable.

our success is dependent upon our ability to generate revenues from the sale of our CBD skin care products.

preparation of financial statements in conformity with generally accepted accounting principles generally accepted in the United

6 unchanged sentences

when incurred.

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

and Cash Equivalents

and cash equivalents consist primarily of cash on deposit, certificates of deposit, money market accounts, and investment grade

commercial paper that are readily convertible into cash and purchased with original maturities of three months or less.

maintains its cash balances at several financial institutions.

Accounts at the institutions are insured by the Federal Deposit

Insurance Corporation up to $250,000.

and cash equivalents consist primarily of cash on deposit.

The Company maintains its cash balances at several financial

institutions.

Accounts at the institutions are insured by the Federal Deposit Insurance Corporation up to $250,000.

Value of Financial Instruments

8 unchanged sentences

determined to be uncollectible are charged to operations when that determination is made.

The Company had an allowance for receivables

from the Joint Interest of $131,236 and $136,873 for the years ended March 31, 2015 and 2014.

The Company determined that the accounts

receivable from the Joint Interest accounts were uncollectable for the year ended March 31, 2016.

and Natural Gas Properties

7 unchanged sentences

of net income, until all of the properties constituting the amortization base are disposed of, at which point gain or loss is

All acquisition, exploration, and development costs are capitalized.

The Company capitalizes all internal costs, including:

salaries and related fringe benefits of employees directly engaged in the acquisition, exploration and development of natural

gas and oil properties, as well as other identifiable general and administrative costs associated with such activities.

the year ended March 31, 2014 no acquisition costs were capitalized.

During the year ended March 31, 2015, we capitalized

$120,000 for the purchase of the Kensington Energy Assets.

Oil and natural gas properties are reviewed for recoverability at least

annually or when events or changes in circumstances indicate that its carrying value may exceed future undiscounted cash inflows.

As of March 31, 2015 and 2014, the Company had not identified any such impairment.

OIL & GAS, INC.

salaries and related fringe benefits of employees directly

engaged in the acquisition, exploration and development of natural gas and oil properties, as well as other identifiable general

and administrative costs associated with such activities.

During the year ended March 31, 2016 no acquisition costs were capitalized.

the year ended March 31, 2015, we capitalized $120,000 for the purchase of the Kensington Energy Assets.

Oil and natural

gas properties are reviewed for recoverability at least annually or when events or changes in circumstances indicate that its

carrying value may exceed future undiscounted cash inflows.

Under the full cost method of accounting, a ceiling test is performed

on a quarterly basis.

The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10.

test determines a limit on the book value of oil and natural gas properties.

The capitalized costs of proved oil and natural gas

properties, net of accumulated depletion in the Company’s Consolidated Balance Sheets, may not exceed the estimated future

net cash flows from proved oil and natural gas reserves, excluding future cash outflows associated with settling asset retirement

obligations that have been accrued in the Company’s Consolidated Balance Sheets, using the unweighted average first day

of the month commodity sales prices for the previous twelve months (adjusted for quality and basis differentials), held constant

for the life of production, discounted at 10%, plus the cost of unevaluated properties and major development projects excluded

from the costs being amortized.

If capitalized costs exceed this limit, the excess is charged to expense.

As of March 31, 2016

and 2015, the Company impaired $128,462 in Proven Oil and Gas Properties and $1,690,183 in Unproved Oil and Gas Properties and

- 0- respectively.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2016 AND 2015

and Equipment, net

and equipment is reviewed on an annual basis for impairment and as of March 31, 2015, the Company had not identified any such

and Equipment

property and equipment is reviewed on an annual basis for impairment and as of March 31, 2016 the Company had not identified any

such impairment.

Repairs and maintenance are charged to operations when incurred and improvements and renewals are capitalized.

and equipment are stated at cost.

Depreciation is calculated using the straight-line method for financial reporting purposes and

accelerated methods for tax purposes.

property and equipment are stated at cost.

Depreciation is calculated using the straight-line method for financial reporting purposes

and accelerated methods for tax purposes.

estimated useful lives are as follows:

11 unchanged sentences

relate to the plugging and abandonment of its oil properties.

Property Rights, net

cost of licensed technologies acquired is capitalized and will be amortized over the shorter of the term of the licensing agreement

8 unchanged sentences

the carrying amount of the assets against the estimated undiscounted future cash flows associated with it.

were not any impairment losses for the fiscal years ended March 31, 2015 and 2014.

Company impaired $21,292 for the year ended March 31, 2016.

There were not any impairment loss for the fiscal year ended

March 31, 2015.

the sum of the expected cash flows be less than the carrying amount of assets being evaluated, an impairment loss would be recognized.

1 unchanged sentence

amortization of intangible assets over the next five years is as follows:

OIL & GAS, INC.

and thereafter

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

15 unchanged sentences

to be the earlier of the performance commitment date or the service completion date.

value of warrants issued is recorded at their fair values as determined by use of a Black Scholes Model at such time or over such

periods as the warrants vest.

per Common Share

37 unchanged sentences

of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.

adoption of ASC 740-10-25 at January 1, 2007 did not have a material effect on the Company's financial position.

accordance with the requirements ASC topic 605 "Revenue Recognition", revenues are recognized at such time as (1) persuasive

3 unchanged sentences

at such time as the oil and gas are delivered to a viable third party purchaser at an agreed price.

Interest income is recognized

as it is earned.

OIL & GAS, INC.

Accounting Standards

August 2014, the FASB issued ASU No.

2014-15, Presentation of Financial Statements –

Going Concern (Subtopic 205-40):

of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).

ASU 2014-15 provides

guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability

to continue as a going concern and sets rules for how this information should be disclosed in the financial statements.

is effective for annual periods ending after December 15, 2016 and interim periods thereafter.

The Company adopted ASU 2014-15

prospectively for the annual period ending December 31, 2016.

Pursuant to ASU 2014-15, the Company is required to consider whether

there are adverse conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern

within one year after the date that the financial statements are issued and the probability that management’s plans will

mitigate the adverse conditions or events (if any).

Adverse conditions or events would include, but not be limited to, negative

financial trends (such as recurring operating losses, working capital deficiencies, or insufficient liquidity), a need to restructure

outstanding debt to avoid default, and industry developments (for example commodity price declines and regulatory changes).

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

RECEIVABLE FROM JOINT INTERESTS

Company is the operator of certain wells acquired in the Expanded Bedford Agreement (see note 4).

Pursuant to an operating

agreement (the “Operating Agreement”), the Company charges the other owners of the Grace Wells for their pro-rata

share of operating and workover expenses.

These receivables are carried on the Company’s balance sheet as Receivable

from Joint Interests.

At March 31, 2015 and 2014, the amount of these receivables is $151,236 and $156,873, respectively.

the year ended March 31, 2015, the Company deemed the collectability of the receivable from joint interests in the amount of $131,236

and 136,873, respectively as unlikely.

Company is the operator of certain wells acquired in the Expanded Bedford Agreement.

Pursuant to a joint interest operating

agreement (the “Joint Interest Agreement”), the Company charges the other owners of the Grace Wells for their

pro-rata share of operating and workover expenses.

These receivables are carried on the Company’s balance sheet

as Receivable from Joint Interests.

At March 31, 2016 and 2015, the amount of these receivables is $153,209 and $151,236,

respectively.

During the year ended March 31, 2016, the Company deemed the collectability of the receivable from joint

interests in the amount of $153,209, as unlikely.

DEPOSITS AND PREPAID EXPENSES

the year ended March 31, 2015 and 2014 the Company has advanced $279,400 and $302,057 toward the purchase of properties.

the year ended March 31, 2015 the Company prepaid consulting fees in the amount of $100,000 which is being amortized over 36 months.

the years ended March 31, 2016 and 2015 the Company has advanced $- 0- and $279,400 toward the purchase of properties.

wrote off the $279,000 in deposits of $279,400 on March 31, 2016.

the year ended March 31, 2015 the Company incurred prepaid consulting fees in the amount of $100,000 which was

being amortized over 36 months.

In November 2015 the Company incurred prepaid consulting fees to Rene Haeusler, a director

of the company, in the amount of $50,000 which is being amortized over 48 months.

Amortization through March 31, 2016 was

Deposits on wells

Prepaid consulting fees

Accumulated amortization on

We wrote off the remaining balance of our prepaid consulting

fees in the on March 31, 2016.

consulting fees

Accumulated Amortization on Prepaid Consulting Fees

Impairment of Well Deposits and Consulting Fees

PROPERTY AND EQUIPMENT

summary of property and equipment at March 31, 2016 and 2015 is as follows:

Office Equipment

Leasehold improvements

Accumulated depreciation

expense for the years ended March 31, 2016 and 2015 was $4,533 and $4,532 respectively.

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

accumulated amortization

expense for the years ended March 31, 2015 and 2014 was $42,851 and $42,587, respectively.

OIL & GAS, INC.

expense for the years ended March 31, 2016 and 2015 was $31,938 and $42,851.

impaired the remaining $21,292 for the year ended March 31, 2016.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

OIL AND GAS PROPERTY ACTIVITY

table below shows the Company’s working interests in the Grace Wells as of March 31, 2015 and 2014:

31, 2015 Working Interest

oil and gas properties consist of the following:

Lincoln County, Oklahoma

Lipscomb County, Texas

Miller County, Arkansas

Ward Petroleum Assets

Kensington Energy Assets

Other Properties

Total Properties

Asset retirement cost, net

Property impairments

County, Oklahoma

County, Texas

County, Arkansas

Petroleum Assets

Energy Assets

retirement cost, net

the year ended March 31, 2016 and 2015, depletion per Bbl was $6.85 and $6.85 respectively.

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

payable and accrued liabilities consisted of the following:

Accounts payable

Accrued interest

NOTES PAYABLE

March 31, 2015

March 31, 2014

On May 8, 2006, the Company entered into a convertible note payable agreement with a shareholder in the amount of $100,000.

May 8, 2006, the Company entered into a convertible note payable agreement with a shareholder in the amount of

The note carries an interest rate of 10% per annum and matures of November 8, 2006.

The note holder has the right to convert the note and accrued interest at a rate of $0.01 per share.

The value of this conversion feature was treated as a loan discount for the full $100,000 of the loan and was amortized to interest expense over the life of the loan.

On May 8, 2007 the note was extended for one year.

The conversion feature of the note was valued at $25,852 and was treated as a prepaid loan costs.

The prepaid loan costs have been amortized over the life of the new note.

On October 19, 2007, the note holder converted $30,000 of principal plus accrued interest of $16,152 for 1,350,000 shares of common stock.

On November 30, 2007, the note holder converted $10,000 of principal for 950,000 shares of common stock.

On January 31, 2008, the note holder converted $10,000 of principal and accrued interest of $600 for 1,250,000 shares of common stock.

On February 29, 2008, the note holder converted $8,000 of principal for 1,250,000 shares of common stock.

On March 31, 2008, the note holder converted $5,000 of principal for 1,250,000 shares of common stock.

On June 6, 2008, the note holder converted $7,000 of principal and $1,372 of accrued interest for 1,550,000 shares of common stock.

On June 23, 2008, the note holder converted $10,000 of principal and $395 of accrued interest for 1,500,000 shares of common stock.

On October 15, 2008, the note holder converted $5,000 of principal and $10,000 of interest for 3,300,000 shares of common stock.

On December 3, 2008, the note holder converted $3,000 of principal and $201 of interest for 2,000,000 shares of common stock.

On February 24, 2009, the note holder converted $2,000 of principal and $167 of accrued interest into 4,000,000 shares of common stock During the three months ended September 30, 2009, the Company issued 33,000,000 shares for the conversion of $2,000 of principal and $367 of accrued interest on this note, and for other consideration.

During the three months ended December 31, 2009, the Company issued 30,000,000 shares of common stock for the conversion of $1,000 principal and $361 of accrued interest on this note and for other considerations.

During the period ended March 31, 2014, the Company issued 450,000 shares of common stock for the conversion of $450 principal.

Interest in the amount of $180 and $183 was accrued on this note during the year ended March 31, 2015 and 2014, respectively.

note holder has the right to convert the note and accrued interest at a rate of $0.01 per share.

this conversion feature was treated as a loan discount for the full $100,000 of the loan and was amortized to interest

expense over the life of the loan.

During the year ended March 31, 2016, the Company issued 700,000 shares of

common stock for the conversion of $100 of principal.

Interest in the amount of $175 and $180 was accrued on this note

during the year ended March 31, 2016 and 2015, respectively.

The maturity of this note has been extended until April 1,

On November 11, 2008, the Company issued a convertible promissory note to an investor in the amount of $50,000.

The outstanding principal balance and all outstanding interest was converted into 500,000 shares on June 15,

November 11, 2008, the Company issued a convertible promissory note to an investor in the amount of $50,000.

current balance of the note is $30,000.

The note carries an interest rate of 10% per annum and a maturity date of October

The note holder has the right to convert the note and accrued interest into shares of the Company’s common

stock at a rate of $3.00 per share.

The discount is being amortized to interest expense over the life of the note via the

effective interest method.

The note holder has the right to convert the note and accrued interest into shares of the Company’s

common stock at a rate of $3.00 per share.

The discount is being amortized to interest expense over the life of the note

via the effective interest method.

Interest in the amount of $3,000 and $3,000 was accrued on this note during the year ended March

1 unchanged sentence

Accrued interest was $17,884 and $14,877 respectively at March 31, 2016 and 2015.

date of this note has been extended until April 1, 2016.

On December 22, 2008, the Company issued a promissory note to an investor in the amount of $150,000.

note carries an interest rate of 10% per annum and matures of December 15, 2009.

In addition to the note payable, the

Company issued 7,500,000 shares of common stock to the note holder.

The shares are considered a discount to the note

At the time of the issuance of the shares to the note holder, the market price of the shares exceeded the fair value of

the note payable;

as a result the value of the discount was capped at the face value of the note, $150,000.

will be amortized to interest expense over the life of the note, 1 year, via the effective interest method.

in the amount of $10,891 and $15,000 was accrued on this note during the years ended March 31, 2015 and 2014, respectively.

interest was $79,110 on March 31, 2014.

The principal and interest on this note was extinguished with the issuance of 650,000 shares

of common stock to the note holder on December 22, 2014.

On December 31, 2008, the Company received a cash advance from an investor in the amount of $100,000.

January 1, 2009, the Company received an additional $50,000 and the Company entered into a note payable agreement in the amount

The note bears interest at a rate of 10% per annum and matures on December 15, 2009.

In additional

to the note payable, the Company issued 7,500,000 shares of common stock to the note holder.

The shares are considered

a discount to the note payable.

At the time of issuance of the shares to the note holders, the market price of the shares

exceeded the fair value of the note payable;

as a result the value of the discount was capped at the face value of the note, $150,000.

discount will be amortized over the life of the note via the effective interest method.

Interest in the amount of $14,836 and $15,000

was accrued on this note the years ended March 31, 2015 and 2014, respectively.

The total accrued interest was $78,123 on March

The principal and interest on this note was extinguished with the issuance of 500,000 shares of common stock and the

payment of $5,000 to the note holder on March 27, 2014.

March 31, 2015

March 31, 2014

On January 27, 2009, the Company issued a promissory note to an investor in the amount of $50,000.

note carries an interest rate of 10% per annum and matures on December 15, 2009.

In addition to the note payable, the

Company issued 1,000,000 shares of common stock to the note holder.

The shares are considered a discount to the note

The shares are value using the closing market price on the date the note was signed and have a value of $25,000.

remaining balance of $30,000 on this promissory note and the promissory note issued in the amount of $50,000 on January 27,

2009 and accrued interest, was settled on March 9, 2018 for $2,500 plus the issuance of 600,000 shares of Common Stock

January 27, 2009, the Company issued a promissory note to an investor in the amount of $50,000.

The note carries

an interest rate of 10% per annum and matures on December 15, 2009.

In addition to the note payable, the Company

issued 1,000,000 shares of common stock to the note holder.

The shares are considered a discount to the note payable.

shares are value using the closing market price on the date the note was signed and have a value of $25,000.

discount will be amortized over the life of the note via the effective interest method.

Interest in the amount of $5,000

and $5,000 was accrued on this note during the year ended March 31, 2015 and 2014, respectively.

Accrued interest was $35,877

and $30,863 at March 31, 2016 and 2015 respectively.

The maturity date of this note has been extended until Apri1 1, 2016.

On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable

in the amount of $2,500.

This note and the promissory note issued in the amount of $50,000 on

November 11, 2008, with a remaining balance of $30,000 plus accrued interest was settled on March 9, 2018 for $2,500 plus

the issuance of 600,000 shares of Common Stock.

November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount

This note bears interest at a rate of 8% per annum and matures on October 1, 2007.

principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of

$0.01 per share.

A beneficial conversion feature in the amount of $2,500 was recorded as a discount to the note and

was amortized to interest expense during the period ended December 31, 2006.

The principal

amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01

A beneficial conversion feature in the amount of $2,500 was recorded as a discount to the note and was

amortized to interest expense during the period ended December 31, 2006.

Interest in the amount of $200 and $200

was accrued on this note during the twelve months ended March 31, 2016 and 2015, respectively.

The maturity date of this note has

been extended until Apri1 1, 2016.

On November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable

in the amount of $5,000.

The maturity date of this note

has been extended until Apri1 1, 2018.

The outstanding principal balance and all accrued interest was converted into

950,000 shares on April 19, 2018.

November 28, 2006, Oiltek, of which the Company has a majority interest in, issued a convertible note payable in the amount

This note bears interest at a rate of 8% per annum and matured on October 1, 2007.

principal amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of

$0.01 per share.

A beneficial conversion feature in the amount of $5,000 was recorded as a discount to the note and

was amortized to interest expense during the period ended December 31, 2006.

The principal

amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01

A beneficial conversion feature in the amount of $5,000 was recorded as a discount to the note and was

amortized to interest expense during the period ended December 31, 2006.

Interest in the amount of $400 and $400

was accrued on this note during the twelve months ended March 31, 2016 and 2015, respectively.

The maturity date of this note has

been extended until Apri1 1, 2016.

March 31, 2015

March 31, 2014

On January 1, 2011 the Company issued a convertible note payable in the amount of $250,000.

note bears interest at a rate of 8% per annum and will mature on April 1, 2015.

The principal amount of the note and

accrued interest are convertible into shares of the Company’s common stock at a price of $0.01 per share.

conversion feature in the amount of $95,000 was recorded as a discount to the note and is being amortized to interest expense.

A discount of $-0- and $94,050 was deducted for the years ended March 31, 2015 and 2014 respectively.

Interest in the

amount of $4,010 and $17,945 was accrued on this note during the twelve months ended March 31, 2015 and 2014, respectively.

interest was $5,858 and $1,847 at March 31, 2015 and 2014 respectively as interest in the amount of $0 and $40,482 was paid through

In January 2014 the Company exchanged 125 shares of class B preferred stock for $125,000 in principal.

In June 2014,

the Company exchanged 50 shares of its Series B Preferred Stock for $50,000 in principal.

The maturity date of this note has been

extended until Apri1 1, 2016.

On September 29, 2014, the Company issued two promissory notes note payable in the total amount of $60,000.

The maturity date of this note

has been extended until Apri1 1, 2018.

The outstanding principal balance and all accrued interest was converted into

400,000 shares on April 19, 2018.

September 29, 2014, the Company issued two promissory notes note payable in the total amount of $60,000.

notes bear interest at a rate of 5% per annum, matured on January 1, 2014, and were extended until December 1, 2016.

Accrued interest

as of March 31, 2015 was $1,504.

Total outstanding

OIL & GAS, INC.

interest as of March 31, 2015 and March 31, 2016 was $1,504 and 4,512.

The principal and accrued interest on these notes

were settled in March 2018 for $5,000.

January 1, 2011 the Company issued a promissory note payable in the amount of $250,000.

This note bears interest

at a rate of 8% per annum and matured on January 1, 2014, and were extended until April 1, 2015.

The principal

amount of the note and accrued interest are convertible into shares of the Company’s common stock at a price of $0.01

A beneficial conversion feature in the amount of $95,000 was recorded as a discount to the note and

is being amortized to interest expense.

A discount of $-0- and $94,050 was deducted for the years ended March 31, 2015 and

2014 respectively.

Interest in the amount of $4,010 and $17,945 was accrued on this note during the twelve months

ended March 31, 2015 and 2014, respectively.

Accrued interest was $5,858 and $1,847 at March 31, 2015.

During the year ended

March 31, 2016, we settled $50,000 of this note plus accrued interest for $10,000 and issued 25 shares of our Series B Preferred

Stock for the remaining $25,000 plus accrued interest

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2016 AND 2015

March 31, 2015:

Notes payable –

payable –

long-term portion

Notes payable –

payable –

current portion

March 31, 2014:

Notes payable –

payable –

long-term portion

Notes payable –

payable –

current portion

future principal payments under the note payable are due as follows during the years ended March 31:

RELATED PARTY TRANSACTIONS

the fiscal year ended March 31, 2015 and 2014 the president advanced the Company $0 and $5,000 respectively.

The balance as of

March 31, 2015 and 2014 were $20,000 and $26,000 respectively.

OIL & GAS, INC.

future principal payments under the note payable are due as follows during the year ended March 31:

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2016 AND 2015

RELATED PARTY TRANSACTIONS

the fiscal year ended March 31, 2016 and 2015, the president advanced the Company $0 and $0, respectively.

The balance as of March

31, 2016 and 2015 were $20,000 and $20,000, respectively.

100 shares of Series A Preferred Stock were issued on June 3, 2002 as payment for $500,000 in promissory notes, are convertible

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after their issuance The holder of these shares of Series A Preferred Stock is our President, Kent Rodriguez.

The Series A Preferred

Stock pays an eight percent (8%) dividend.

A Preferred Stock pays an eight percent (8%) dividend.

The dividends are cumulative and payable quarterly.

The Series A Preferred Stock carries

liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends.

Series A Preferred Stock provides for voting rights on an "as converted to common stock"

the years ended March 31, 2015 and 2014, the Company incurred $40,000 in Class A preferred stock dividends, respectively.

The Series A Preferred

Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid

The Series A Preferred Stock provides for voting rights on an "as converted to common stock"

the years ended March 31, 2016 and 2015, the Company incurred $40,000 in Class A preferred stock dividends.

holders of the Series A Preferred Stock have the right to convert each share of preferred stock into a sufficient number of shares

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convert into Common Stock and the remaining shares of Series A preferred Stock shall convert upon lapse of the applicable restrictions.

the years ended March 31, 2015 and 2014, the Company charged to operations the amount of $48,000 in annual salary for Mr.

of which $44,500 and $42,400 was paid to him during the years ended March 31, 2015 and 2014, respectively.

31, 2015 and 2014, the balances of accrued and unpaid salaries were $211,317 and $207,817.

January 12, 2018, our Board of Directors agreed to amend Designation of the Series A Convertible Preferred Stock be amended by

changing the ratio for conversion, in Article IV, subparagraph (a), from .4% to .51% so that upon conversion the number of shares

of common stock to be exchanged shall equal 51% of then issued and outstanding common stock.

the years ended March 31, 2016 and 2015, the Company charged to operations the amount of $49,202 and $48,000 in annual salary

Rodriguez, of which $50,457 and $49,202 was paid to him during the years ended March 31, 2016 and 2015, respectively.

of March 31, 2016 and 2015, the balances of accrued and unpaid salaries were $205,462 and $211,317.

In March, 2013, our Board of Directors authorized

the issuance of 2,000 shares of Series B Preferred Stock, par value $0.10 per share (the "Series B Preferred Stock").

face amount of share of the Series B Preferred Stock is $1,000.

As of March 31, 2016 and 2015, the Company has 1,983

and 1,625 shares of Series B preferred stock respectively issued and outstanding.

The liquidation preference as of March 31, 2016

and 2015 was $1,983,000 and $1,625,000 or $1,000.00 per share.

The Series B Preferred Stock accrues dividends

at the rate of 9% per annum on the original purchase price for the shares.

These dividends are payable annually, beginning in

January 2014.

We are prohibited from paying any dividends on our Common Stock until all accrued dividends are paid on our Series

B Preferred Stock.

The Series B Preferred Stock ranks junior to the Series A Preferred Stock owned by our President

and Chief Executive Officer, as to Dividends and to a distribution of assets in the event of a liquidation of assets.

The Holders of Series B Preferred Stock do

not have any voting rights and their consent is not required to take any sort of corporate action.

In November 2015 we issued 50 shares Series

B Preferred Stock for consulting services to Rene Haeusler, a director of the Company, for $50,000.

As of March 31, 2016, the

balances of related party was $0.

For details, please refer to Note 3.

income taxes result from the temporary difference arising from the use of accelerated depreciation methods for income tax purposes

and the straight-line method for financial statement purposes, and an accumulation of Net Operating Loss carry forwards for

income tax purposes with a valuation allowance against the carry forwards for book purposes.

OIL & GAS, INC.

and the straight-line method for financial statement purposes, and an accumulation of Net Operating Loss carryforwards for

income tax purposes with a valuation allowance against the carryforwards for book purposes.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Included in deferred tax assets are Federal and State net operating loss

carry forwards of $30,798,559 which will expire beginning in 2028.

The ultimate realization of deferred tax assets

is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

carryforwards of $31,770,841 which will expire beginning in 2029.

The ultimate realization of deferred tax assets is

dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies

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tax rates to income from continuing operations before income taxes is as follows:

Computed “expected”

income tax benefit

at approximately 38.73%

Change in valuation allowance

“expected”

income tax benefit at approximately 34%

$ (10,802,086 )

$ (10,471,510 )

in valuation allowance

STOCKHOLDERS’

Preferred Stock

is authorized to issue 1,000,000 shares of preferred stock, par value $0.10 per share.

As of March 31, 2015 and 2014,

the Company has 100 shares of Series A preferred stock issued and outstanding.

A Preferred Stock

Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.10 per share.

As of March 31, 2016

and 2015, the Company has 100 shares of Series A preferred stock issued and outstanding.

the twelve months ended March 31, 2016 and 2015, the Company incurred $40,000 respectively in Series A preferred stock dividends,

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The liquidation preference as of March 31, 2016 and

March 31, 2014 was $532,950 or $53,295 per share.

March 31, 2015 was $537,450 or $5,374.5 per share and $532,950 or $5,329.5 per share.

100 shares of Series A Preferred Stock, issued to Mr.

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The Series A Preferred Stock provides for voting rights on an "as converted to common stock"

January 12, 2018, our Board of Directors agreed to amend Designation of the Series A Convertible Preferred Stock be amended by

changing the ratio for conversion, in Article IV, subparagraph (a), from .4% to .51% so that upon conversion the number of shares

of common stock to be exchanged shall equal 51% of then issued and outstanding common stock.

holders of the Series A Preferred Stock have the right to convert the preferred stock into shares of common stock such that if

converted simultaneously, they shall represent forty percent (40%) of the fully diluted shares outstanding after their issuance.

converted simultaneously, they shall represent fifty-one percent (51%) of the fully diluted shares outstanding after their issuance.

Fully diluted shares outstanding is computed as the sum of the number of shares of common stock outstanding plus the number of

shares of common stock issuable upon exercise, conversion or exchange of outstanding options, warrants, or convertible securities.

Series B Preferred

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2016 AND 2015

B Preferred Stock

March, 2013, our Board of Directors authorized the issuance of 2,000 shares of Series B Preferred Stock, par value $0.10 per share

2 unchanged sentences

of March 31, 2016 and 2015, the Company has 1,983 and 1,625 shares of Series B preferred stock respectively issued and outstanding.

The liquidation preference as of March 31, 2015 and March 31, 2014 was $1,625,000 and $1,324,780 or $1,000.00 and $1,019.06 per

share, respectively.

The liquidation preference as of March 31, 2016 and 2015 was $1,983,000 and $1,625,000 or $1,000.00 per share.

Series B Preferred Stock accrues dividends at the rate of 9% per annum on the original purchase price for the shares.

6 unchanged sentences

Holders of Series B Preferred Stock do not have any voting rights and their consent is not required to take any sort of corporate

Preferred Stock Issuances during the year ended March 31, 2015:

2014 we exchanged 50 shares Series B Preferred Stock for $50,000 of notes payable.

B Preferred Stock Issuances during the year ended March 31, 2016:

June 2015 we exchanged 25 shares Series B Preferred Stock for $25,000 of notes payable.

June 2015 we issued 100 Shares of Series B Preferred Stock to an accredited investor for $100,000.

September 2015 we issued 75 Shares of Series B Preferred Stock to an accredited investor for $75,000.

2014 we issued 15 shares Series B Preferred Stock for consulting services for $15,000.

November 2015 we issued 50 shares Series B Preferred Stock for consulting services for $50,000.

December 2015 we issued 85 Shares of Series B Preferred Stock to an accredited investor for $85,000.

March 2016 we issued 23 Shares of Series B Preferred Stock to an accredited investor for $23,000.

March 2015 we issued 1,540,000 Shares of Common Stock for all accrued interest as of March 31, 2015, on the outstanding 1,625

shares of our Series B Preferred Stock.

twelve months ended March 31, 2015 and 2014, the Company incurred $135,599 and $24,780 in dividends on Series B preferred stock.

Total dividends

payable from both A and B preferred shares at March 31, 2015 and 2014 is $32,950 and $66,730 respectively.

OIL & GAS, INC.

March 2018 we issued 2,015000 Shares of Common Stock for all accrued interest as of March 31, 2018, on the outstanding 1,625 shares

of our Series B Preferred Stock.

the twelve months ended March 31, 2016 and 2015, the Company incurred $165,038 and $135,599 in dividends on Series B preferred

dividends payable from both A and B preferred shares at March 31, 2016 and 2015 is $205,488 and $32,950 respectively.

Holdings, Inc.

Series A Preferred Stock

October 5, 2015, the Articles of Incorporation of AFS were amended to authorize the issuance of 5,000,000 shares of Preferred

Stock, par value $0.001, of which 1,000 shares are designated as Series A Preferred Stock.

Series A Preferred Stock accrues dividends at the rate of 12% per annum on the original purchase price for the shares.

These dividends

are payable annually in cash or the AFS Common Stock at the discretion of the Board of Directors, beginning in March 2016.

is prohibited from paying any dividends on AFS Common Stock until all accrued dividends are paid on our Series A preferred Stock.

Upon liquidation, the Series A Preferred Stock shareholders shall be entitled to the stated value of each shares held, in addition

to accrued and unpaid dividends, as long as AFS possesses the funds necessary to make payments.

AFS may, at any time, redeem the

shares of Series A Preferred Stock without the prior written consent of the Series A Preferred Stock shareholders.

A Preferred Stock ranks senior to AFS Common Stock in a distribution of assets in the event of a liquidation of assets.

are currently 50 shares of AFS Series A Preferred Stock outstanding.

As of March 31, 2016, the liquidation preference is $53,000

or $1,060 per share.

Accrued interest as of March 31, 2016 is $3,000.

Holders of AFS Series A Preferred Stock do not have any voting rights and their consent is not required to take any sort of corporate

Series A Preferred Stock Issuances during the year ended March 31, 2016:

October 13, 2015 we issued 50 shares of AFS Series A Preferred Stock to an unaffiliated accredited investor for $50,000.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

9 unchanged sentences

stock issuances during the year ended March 31, 2015:

May 3, 2013, the Company issued 500,000 shares of Common Stock for $50,000 or $0.10 per share, and was based on current market

value at the date of issuance.

May 5, 2013, the Company issued 100,000 shares of Common Stock for compensation for the placement of 500,000 shares of Common

Stock and 50 Shares of Series B Preferred Stock for $100,000 to a third party.

The value of these shares in the amount

of $10,000, or $0.10 per share was charged to operations, and was based on the current market value at the date of issuance.

June 4, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.

fair market value of these shares was $8,000 or $0.08 per share and was based on the current market value on the date

$100 has been credited to the note payable, and a loss of $7,900 was recognized on this conversion, and was charged

to operations.

June 28, 2013, the Company issued 2,800,000 shares of Common Stock for $250,000, and was based on current market value at the

date of issuance.

June 28, 2013, the Company issued 500,000 shares of Common Stock to a consultant, the value of these shares in the amount

of $50,000, or $0.10 per share was charged to operations, and was based on the current market value at the date of issuance.

July 1, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.

fair market value of these shares was $17,000, or $0.17 per share which was based on the current market value on the date of issuance.

$100 has been credited to the note payable, and a loss of $16,900 was recognized on this conversion, and was charged to operations.

July 2, 2013, the Company issued 180,000 shares of Common Stock to its board of directors, the value of these shares in the

amount of $18,000, or $0.10 per share was charged to operations, and was based on the on current market value at the date of issuance.

July 26, 2013, the Company issued 250,000 shares of Common Stock to a consultant, the value of these shares in the amount

of $25,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on

the date the Consulting Agreement was executed by the Company.

September 13, 2013, the Company issued 150,000 shares of common stock for the conversion of a note payable and assumption of debt.

fair market value of these shares was $22,500, or $0.15 per share which was based on the current market value on the date of issuance.

$150 has been credited to the note payable, and a loss of $22,350 was recognized on this conversion, and was charged to operations.

October 10, 2013, the Company issued 220,000 shares of common stock to a consultant, the value of these shares in the amount

of $22,000, or $0.10 per share was charged to operations, and was valued at closing bid price of the Company's common stock on

the date the Consulting Agreement was executed by the Company.

October 16, 2013, the Company issued 100,000 shares of common stock for the conversion of a note payable and assumption of debt.

fair market value of these shares was $10,000 or $0.10 per share which was based on the current market value on the date of issuance.

$100 has been credited to the note payable, and a loss of $9,900 was recognized on this conversion, and was charged to operations.

November 6, 2013, the Company issued 250,000 to a consultant, the value of these shares in the amount of $25,000, or $0.10

per share was charged to operations, and was valued at closing bid price of the Company's common stock on the date the Consulting

Agreement was executed by the Company.

25, 2014 the Company exchanged 2,000,000 shares of Common Stock for 200 shares of Series B Preferred Stock.

March 31, 2014, the Company issued 600,000 shares of common stock for payment of accrued interest of $51,507.

OIL & GAS, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2015 AND 2014

March 31, 2014 the Company issued 1,600,000 shares of common stock to a consultant, the value of these shares in the amount

of $112,000, or $0.07 per share was charged to operations, and was valued at closing bid price of the Company's common stock on

the date the Consulting Agreement was executed by the Company.

stock issuances during the year ended March 31, 2015:

April 25, 2014, the Company issued 200,000 shares of common stock to a consultant, the value of these shares in the amount

7 unchanged sentences

of accrued interest.

The value of these shares in the amount of $32,500, or $0.05 per share and was valued at closing bid price

of the Company's common stock on the date the Agreement was executed by the Company.

$207,500 was treated as a gain from this

The value of these shares in the amount of $32,500, or $0.05 per share and was valued at closing bid

price of the Company's common stock on the date the Agreement was executed by the Company.

$207,500 was treated as a gain from

this transaction.

December 26, 2014, the Company issued 1,700,000 shares of common to a consultant, the value of these shares in the amount

3 unchanged sentences

interest as of March 31, 2015.

The value of these shares is in the amount of $61,600, or $.04 per share.

The value of these shares in the amount of $61,600, or $.04 per share.

March 27, 2015, the Company issued 500,000 shares of common stock along with $6,000, in exchange for a $150,000 promissory note

payable and $90,000 of accrued interest.

The value of these shares in the amount of $20,000 or $0.04 per share, and were valued

at closing bid price of the Company's common stock on the date the Agreement was executed by the Company, $215,000 was treated

as a gain from this transaction.

The value of these shares in the amount of $20,000 or $0.04 per share, and were

valued at closing bid price of the Company's common stock on the date the Agreement was executed by the Company, $215,000 was

treated as a gain from this transaction.

stock issuances during the year ended March 31, 2016:

April 2, 2015 we issued 300,000 shares of our Common Stock to our directors for their services.

The shares were valued at $12,000

or $0.04 per share and were valued based on the midpoint between the closing bid and offer price of the Company's common stock

on the date the shares were issued.

June 25, 2015, the company issued 650,000 shares of Common Stock, paid $5,000 in cash and issued a $5,000 promissory note for

settlement of an account payable of $280,972.06.

The shares were valued at $26,000 or $0.04 per share.

The value of the shares

was based on the closing bid price of the Company's common stock on the date the Agreement was executed by the Company.

was treated as a gain from this transaction.

November 9, 2015, the Company issued 700,000 shares of common stock for the conversion of a note payable and assumption of debt.

fair market value of these shares was $28,000 or $0.04 per share which was based on the current market value on the date of issuance.

$100 has been credited to the note payable, $830 to interest payable, and a loss of $27,070 was recognized on this conversion,

and was charged to operations.

are no stock options outstanding.

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2016 AND 2015

following table summarizes the warrants outstanding and the related prices for the shares of the Company’s common stock

issued to non-employees of the Company at March 31, 2015:

involving warrants are summarized as follows:

Price Per Share

Outstanding at March 31, 2014

Cancelled or expired

Outstanding at March 31, 2015

TECHNOLOGY LICENSE AGREEMENTS

1 unchanged sentence

exchange for three hundred thousand (300,000) shares of our common stock.

This license calls for an earned royalty of three percent

(3.00%) on sales of licensed products and services as they may relate to corrosion prevention and maintenance of sump pumps at

gasoline and diesel dispensing locations, including, but not limited to gas stations, convenience stores, trucking companies,

This license calls for an earned royalty of three

percent (3.00%) on sales of licensed products and services as they may relate to corrosion prevention and maintenance of sump

pumps at gasoline and diesel dispensing locations, including, but not limited to gas stations, convenience stores, trucking companies,

bus companies, and any other locations where gasoline and/or diesel is dispensed.

1 unchanged sentence

March 31, 2015.

OIL & GAS, INC.

The Company terminated this agreement on August 7, 2017

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

260-10-45 requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations.

As the Company is in a loss position during the year ended March 31, 2015 and 2014, there is no dilutive effect included.

net loss per share was $0.006 and $0.085 for March 31, 2015 and 2014.

COMMITMENTS AND CONTINGENCIES

We compute basic EPS by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares

of common stock outstanding during the period.

The calculation of income (loss) available to common stockholders and EPS is based

on the underlying premise that all income after payment of dividends on preferred shares is available to and will be distributed

to the common stockholders.

As the Company is in a loss position during the year ended March 31, 2016 and 2015, there is no dilutive

effect included.

The net loss per share was $0.154 and $0.006 for March 31, 2016 and 2015.

AND CONTINGENCIES

and contingencies through the date of these financial statements were issued have been considered by the Company and none were

3 unchanged sentences

Company's aggregate capitalized costs related to natural gas and oil producing activities are summarized as follows:

Natural gas and oil properties and related equipment:

Accumulated depreciation, depletion,

and impairment

Net capitalized costs

development of the unproven properties is dependent on future financing and market prices for oil and gas.

Costs Incurred

gas and oil properties and related equipment:

depreciation, depletion, and impairment

capitalized costs

incurred in natural gas and oil property acquisition, exploration and development activities that have been capitalized are summarized

of properties

costs incurred

in natural gas and oil property acquisition, exploration and development activities that have been capitalized are summarized

Acquisition of properties

Development costs

Total costs incurred

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

7 unchanged sentences

indicative of the contribution to consolidated net operating results of the Company's natural gas and oil operations.

Production revenues

Production costs

Impairment of property

Depreciation and depletion expense

Imputed income tax provision (1)

Results of operation for natural

gas / oil producing activity

and depletion expense

income tax provision (1)

of operation for natural gas / oil producing activity

(1) Concentration

the year ended March 31, 2016, three customers, KROG Partners, Scissortail Energy and Ward Petroleum, individually accounted for

28%, 20% and 16% of the Company’s revenues, respectively.

For the year ended March 31, 2015, four customers, Scissortail

Energy, KROG Partners, Rockwell Energy and Swift Energy, individually accounted for 33%, 14%, 11% and 11% of the Company’s

revenues, respectively.

Except for the aforementioned customers, there was no other single customer who accounted for more than

10% of the Company’s revenues for the year ended March 31, 2016 and 2015.

imputed income tax provision is hypothetical (at the statutory rate) and determined without regard to the Company's deduction

1 unchanged sentence

tax provision will be payable.

OIL & GAS, INC.

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

13 unchanged sentences

estimates are generally less precise than other estimates presented in connection with financial statement disclosures.

Proved reserves:

Balance as of March 31, 2006

Purchase of reserves-in-place

Extensions and discoveries

Balance as of March 31, 2007

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

Balance as of March 31, 2008

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

Balance as of March 31, 2009

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

Balance as of March 31, 2010

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

Balance as of March 31, 2011

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

Balance as of March 31, 2012

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

Balance as of March 31, 2013

OIL & GAS, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2015 AND 2014

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

Balance as of March 31, 2014

Purchase of reserves-in-place

Extensions and discoveries

Change in estimates

as of March 31, 2014

OIL & GAS, INC.

of reserves-in-place

as of March 31, 2015

of reserves-in-place

as of March 31, 2016

as of March 31, 2014

of reserves-in-place

as of March 31, 2015

of reserves-in-place

as of March 31, 2016

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

9 unchanged sentences

of operations.

Future production revenue

Future production costs

Future development costs

Future cash flows before income taxes

Future income tax

Future net cash flows

Effect of discounting future annual

cash flows at 10%

Standard measure of discounted net

weighted average oil wellhead price used in computing the Company's reserves were $80.60 per bbl and $93.51 per bbl at March 31,

2015 and 2014, respectively.

The weighted average gas wellhead price used in computing the Company's reserves were $3.34 and $3.63/mmbtu

at March 31, 2015 and 2014, respectively.

The oil and gas pricing were calculated using the arithmetic average of the price on

the first day of each month that was received for each property during the previous fiscal year.

These prices were

held constant throughout the economic life of the properties.

Previous year run checks were used to determine the actual

prices received.

production revenue

production costs

development costs

cash flows before income taxes

net cash flows

of discounting future annual cash flows at 10%

measure of discounted net cash flows

weighted average oil wellhead price used in computing the Company's reserves were $42.10 per bbl and $80.60 per bbl at

March 31, 2016 and 2015, respectively.

The weighted average gas wellhead price used in computing the Company's reserves were

$1.824 and $3.34/mmbtu at March 31, 2016 and 2015, respectively.

The oil and gas pricing were calculated using the arithmetic

average of the price on the first day of each month that was received for each property during the previous fiscal

These prices were held constant throughout the economic life of the properties.

Previous year run

checks were used to determine the actual prices received.

following schedule contains a comparison of the standardized measure of discounted future net cash flows to the net carrying value

of proved natural gas and oil properties at March 31, 2016 and 2015:

Standardized measure of discount future net

Proved natural oil and gas property, net of accumulated

depreciation, depletion, and amortization, including

Standardized measure of discount future net cash flows in

excess of net carrying value of proved natural oil and

gas properties

OIL & GAS, INC.

measure of discount future net cash flows

natural oil and gas property, net of accumulated depreciation,

depletion, and amortization, including

measure of discount future net cash flows in excess of net carrying value of proved natural oil and gas properties

BOTANICAL, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

SUBSEQUENT EVENTS

has evaluated subsequent events through the issuance of the consolidated financial statements and no subsequent event is identified.

continue to review our operations with the regard to the current market price oil and natural gas.

Company has reviewed the subsequent event through the date of this report.

Below are our subsequent events:

January 29, 2018 the Company executed a Promissory Note between the Company and Carebourn Capital, LLC in the amount of $230,000.

March 21, 2018 the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation

to change the Company's name to Groove Botanicals, Inc.

We filed an amendment to our Articles of Incorporation with the State

of Nevada on May 18, 2018.

Our Company’s new name reflects our new corporate direction as a consumer health products company

dedicated to improving people’s health and well-being.

We will assemble a portfolio of assets via royalty agreements, equity

investments, and licensing agreements, as well as develop our own proprietary CB3 skin care products.

Our products will contain

premium hemp extracts with a broad range of cannabinoids, including cannabidiol (CBD).

CBD is a cannabinoid compound naturally

derived from the hemp plant.

It is not a drug and has no intoxicating effects, but has a long history of natural uses.

breakthroughs in research have shown the powerful health benefits of CBD on the body.

CBD is also rich in vitamins A, B, D, and

E, antioxidants, and fatty acids, all of which dramatically improve skin health.

When applied topically to the skin, CBD has been

shown to reduce inflammation, retain skin moisture levels, reduce cellular damage, inhibit oil production leading to breakouts,

and protect skin from free radicals that damage collagen and elastin.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures