What changed in this filing

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Item 1A. Risk Factors

2018-06-29 compared with 2017-07-14 · 77 added, 130 removed, 426 unchanged (33% of the section changed)

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Our independent registered public accounting firm has

expressed substantial doubt about our ability to continue as a going

expressed substantial doubt about our ability to continue as a going concern.

Our financial statements are prepared using generally accepted

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Changes in the non-alcoholic beverage business

environment and retail landscape could adversely impact our financial

environment and retail landscape could adversely impact our financial results.

The non-alcoholic beverage business environment is rapidly

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bottled water and numerous specialty beverages, such as:

Core Hydration, SoBe;

Arizona Ice Tea;

Vitamin Water;

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sufficiently high to allow our company to successfully market, distribute and

sell our product, or to successfully compete with current or future

competition, all of which may result in total loss of your investment.

sell our product, or to successfully compete with current or future competition,

all of which may result in total loss of your investment.

Our growth and profitability depends on the performance

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The loss of one or more of our major customers or a

decline in demand from one or more of these customers could harm our

decline in demand from one or more of these customers could harm our business.

We have 3 major customers that together account for 51% (25%,

and 17%, respectively) of accounts receivable at March 31, 2017, and 3 customers

that together account for 58% (29%, 15%, and 14%, respectively) of the total

revenues earned for the year ended March 31, 2017.

There can be no assurance

that such customers will continue to order our products in the same level or at

A reduction or delay in orders from such customers, including reductions or

delays due to market, economic or competitive conditions, could have a material

adverse effect on our business, operating results and financial condition.

16% and 10%, respectively) of accounts receivable at March 31, 2018, and 3

customers that together account for 47% (25%, 12%, and 10%, respectively) of the

total revenues earned for the year ended March 31, 2018.

There can be no

assurance that such customers will continue to order our products in the same

level or at all.

A reduction or delay in orders from such customers, including

reductions or delays due to market, economic or competitive conditions, could

have a material adverse effect on our business, operating results and financial

Our dependence on a limited number of vendors leaves us

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continues to increase, as water becomes scarcer, and as the quality of available

water deteriorates, we may incur increasing production costs or face capacity constraints that could

adversely affect our profitability or net operating revenues in the long run.

water deteriorates, we may incur increasing production costs or face capacity

constraints that could adversely affect our profitability or net operating

revenues in the long run.

Increase in the cost, disruption of supply or shortage of

ingredients, other raw materials or packaging materials could harm our

We and our bottlers will use water, 84 trace Himalayan salts,

packaging materials for bottles such as plastic and paper products.

for these ingredients, other raw materials and packaging materials fluctuate

depending on market conditions.

Substantial increases in the prices of our or

our bottlers ingredients, other raw materials and packaging materials, to the

extent they cannot be recouped through increases in the prices of finished

beverage products, would increase our operating costs and could reduce our

profitability.

Increases in the prices of our finished products resulting from a

higher cost of ingredients, other raw materials and packaging materials could

affect the affordability of our product and reduce sales.

ingredients, other raw materials or packaging materials could harm our business.

We and our bottlers will use water, 84 trace minerals from

Himalayan salts, packaging materials for bottles such as plastic and paper

The prices for these ingredients, other raw materials and packaging

materials fluctuate depending on market conditions.

Substantial increases in the

prices of our or our bottlers ingredients, other raw materials and packaging

materials, to the extent they cannot be recouped through increases in the prices

of finished beverage products, would increase our operating costs and could

reduce our profitability.

Increases in the prices of our finished products

resulting from a higher cost of ingredients, other raw materials and packaging

materials could affect the affordability of our product and reduce sales.

An increase in the cost, a sustained interruption in the

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We and our bottlers intend to offer our product in

nonrefillable, recyclable containers in the United States.

non-refillable, recyclable containers in the United States.

Legal requirements

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deposits or certain ecotaxes or fees be charged for the sale, marketing and use

of certain nonrefillable beverage containers.

of certain non-refillable beverage containers.

Other proposals relating to

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bottle to $4.99 for a one-gallon bottle, and volumes ranging from half-liter

bottles to one-and-a half liter bottles.

We currently offer our product in a

three-liter bottle for an SRP of $3.99, one-gallon bottle for an SRP of $4.99,

700 milliliter single serving at an SRP of $1.19, 1 liter at an SRP of $1.99 and

a 500 milliliter at an SRP of $.99.

Our competitors may introduce larger sizes

and offer them at an SRP that is lower than our product.

We can provide no

assurances that consumers will continue to purchase our product or that they

will not prefer to purchase a competitive product.

bottles to one-gallon bottles.

We currently offer our product in a one-gallon

bottle for an SRP of $4.99, three-liter bottle for an SRP of $3.99, 1.5 liter at

an SRP of $2.49, 1 liter at an SRP of $1.99, 700 milliliter single serving at an

SRP of $1.19, and a 500 milliliter at an SRP of $0.99.

Our competitors may

introduce larger sizes and offer them at an SRP that is lower than our product.

We can provide no assurances that consumers will continue to purchase our

product or that they will not prefer to purchase a competitive product.

We are subject to periodic claims and litigation that

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among our guests and our brand image.

On April 7, 2017, our company terminated the employment of

Nickolas for cause.

In addition, our company removed Mr.

the president and chief executive officer of our company.

Nicholas filed

multiple lawsuits against our company.

In addition, we are currently subject to

multiple lawsuits by entities and individuals under the control of Mr.

Legal Proceedings, below for more information on these lawsuits.

We rely on key executive officers, and their knowledge of

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We do not have key person life insurance

policies for any of our officers nor do we currently have Directors &

Officers Insurance coverage.

The loss of management and industry expertise of

any of our key executive officers could result in delays in product development,

loss of any future customers and sales and diversion of management resources,

which could adversely affect our operating results.

policies for any of our officers The loss of management and industry expertise

of any of our key executive officers could result in delays in product

development, loss of any future customers and sales and diversion of management

resources, which could adversely affect our operating results.

Our executive officers are not subject to supervision or

review by an independent board or audit committee.

review by an independent board.

Our board of directors consists of Richard A.

Wright, David

Guarino, Aaron Keay, Bruce Leitch and Steven P.

We do not have an

independent audit committee.

As a result, the activities of our executive

officers are not subject to the review and scrutiny of an audit committee.

Wright, David A.

Guarino, Aaron Keay, and Bruce Leitch.

The activities of our executive officers

are not subject to the review of an independent board of directors.

Risk Related to Our Stock

Because Richard A.

Wright controls a large percentage of

our voting stock, he has the ability to influence matters affecting our

stockholders.

Wright, our President and Chief Executive Officer

and Director, directly owns 10,000,000 shares of our Series A Preferred Stock,

which has 10 votes per share upon any matter submitted to our stockholders for a

Accordingly, he controls a large percentage of the votes attached to our

outstanding voting securities.

As a result, he has the ability to influence

matters affecting our stockholders, including the election of our directors, the

acquisition or disposition of our assets, and the future issuance of our

Because he controls such large percentage of votes, investors may

find it difficult to replace our management if they disagree with the way our

business is being operated.

Because the influence by Mr.

Wright could result in

management making decisions that are in the best interest of Mr.

Wright and not

in the best interest of the investors, you may lose some or all of the value of

your investment in our common stock.

Because Steven P.

Nickolas controls a large percentage of

our voting stock, he has the ability to influence matters affecting our

stockholders.

To our knowledge, Steven P.

Nickolas, our former President and

Chief Executive Officer and current Director, exercises voting and dispositive

power with respect to approximately 776,000 shares of our common stock, which

are beneficially owned by WiN Investments, LLC and Lifewater

Industries, LLC, and he directly owns 10,000,000 shares of our Series A

Preferred Stock, which has 10 votes per share upon any matter submitted to our

stockholders for a vote.

Accordingly, he controls a large percentage of the

votes attached to our outstanding voting securities.

As a result, he has the

ability to influence matters affecting our stockholders, including the election

of our directors, the acquisition or disposition of our assets, and the future

issuance of our securities.

Because he controls such large percentage of votes,

investors may find it difficult to replace our management if they disagree with

the way our business is being operated.

Because the influence by Mr.

could result in management making decisions that are in the best interest of Mr.

Nickolas and not in the best interest of the investors, you may lose some or all

of the value of your investment in our common stock.

Because we can issue additional shares of common stock,

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stock and 100,000,000 shares of preferred stock, of which 30,989,727 shares of

common stock are issued and outstanding, 20,000,000 shares of Series A Preferred

Stock are issued and outstanding, as of July 13, 2017.

Our board of directors

has the authority to cause us to issue additional shares of common stock and

common stock are issued and outstanding, 1,500,000 shares of Series C Preferred

Stock are issued and outstanding, and 3,800,000 shares of Series D Preferred

Stock are issued and outstanding as of June 28, 2018.

Our board of directors has

the authority to cause us to issue additional shares of common stock and

preferred stock, and to determine the rights, preferences and privileges of

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of our stock in the future.

Trading on the OTCQB may be volatile and sporadic, which

could depress the market price of our common stock and make it difficult for our

stockholders to resell their shares.

Trading on the OTCQB or TSX Venture Exchange may be

volatile and sporadic, which could depress the market price of our common stock

and make it difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTCQB operated by the OTC

Markets Group.

Trading in stock quoted on the OTCQB is often thin and

characterized by wide fluctuations in trading prices, due to many factors that

may have little to do with our operations or business prospects.

This volatility

could depress the market price of our common stock for reasons unrelated to

operating performance.

Moreover, the OTCQB is not a stock exchange, and trading

of securities on the OTCQB is often more sporadic than the trading of securities

listed on a national securities exchange like the NASDAQ or the NYSE.

Accordingly, stockholders may have difficulty reselling any of our shares.

Markets Group and listed on the TSX Venture Exchange.

Trading in stock quoted on

the OTCQB or TSX Venture Exchange is often characterized by wide fluctuations in

trading prices, due to many factors that may have little to do with our

operations or business prospects.

This volatility could depress the market price

of our common stock for reasons unrelated to operating performance.

trading of securities on the OTCQB or TSX Venture Exchange is often more

sporadic than the trading of securities listed on a stock exchange like the

NASDAQ, the NYSE or the Toronto Stock Exchange.

Accordingly, stockholders may

have difficulty reselling any of our shares.

A decline in the price of our common stock could affect

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other factors as the board of directors considers relevant.

assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the

amount of any such dividend.

Unless we pay dividends, our stockholders will not

be able to receive a return on their shares unless they sell them.

assurance that future dividends will be paid, and if dividends are paid, there

is no assurance with respect to the amount of any such dividend.

Unless we pay

dividends, our stockholders will not be able to receive a return on their shares

unless they sell them.

Our stock is a penny stock.

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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 1A. Risk Factors