What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2020-08-13 compared with 2019-07-01 · 382 added, 1131 removed, 197 unchanged (88% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as that term

is defined in Rule 13a-15(e), promulgated by the Securities and Exchange

Commission pursuant to the Securities Exchange Act of 1934 , as amended.

Disclosure controls and procedures include controls and procedures designed to

ensure that information required to be disclosed in our companys reports filed

under the Securities Exchange Act of 1934 is recorded, processed,

summarized and reported within the time periods specified in the Securities and

Exchange Commissions rules and forms, and that such information is accumulated

and communicated to our management, including our principal executive officer

and our principal financial officer to allow timely decisions regarding required

As required by paragraph (b) of Rules 13a-15 under the

Securities Exchange Act of 1934 , our management, with the participation

of our principal executive officer and our principal financial officer,

evaluated our companys disclosure controls and procedures as of the end of the

period covered by this annual report on Form 10-K.

Based on this evaluation, our

management concluded that as of the end of the period covered by this annual

report on Form 10-K, our disclosure controls and procedures were not

We maintain "disclosure controls and procedures", as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 , as amended.

Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934 , our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company's disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K.

Based on this evaluation, our management concluded that as of the end of the period covered by this annual report on Form 10-K, our disclosure controls and procedures were not effective.

Internal Control over Financial Reporting

Managements Annual Report on Internal Control over

Financial Reporting

Our management, including our principal executive officer and

our principal financial officer, is responsible for establishing and maintaining

adequate internal control over financial reporting (as defined in Rule 13a-15(f)

under the Securities Exchange Act of 1934).

Our management, with the participation of our principal

executive officer and our principal financial officer, evaluated the

effectiveness of our internal control over financial reporting as of March 31,

Our managements evaluation of our internal control over financial

reporting was based on the framework in Internal ControlIntegrated Framework,

issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based on this evaluation, our management concluded that our internal control over financial reporting

was not effective as of March 31, 2019 and that there were material weaknesses

in our internal control over financial reporting.

A material weakness is a deficiency, or a combination of

deficiencies, in internal control over financial reporting, such that there is a

reasonable possibility that a material misstatement of our annual or interim

financial statements will not be prevented or detected on a timely basis.

management identified the following material weaknesses:

We did not document our risk assessment accounting processes and

procedures in a timely manner.

We did not retain evidence of the internal controls

established to document the approval and reconciliation of our sales and

inventory processes.

We lacked adequate oversight related to the development

and performance of internal control over financial reporting.

limited number of personnel in our company, there were inherent

limitations to segregation of duties amongst personnel to perform adequate

To address these material weaknesses, management performed

additional analyses and other procedures to ensure that the financial statements

included herein fairly present, in all material respects, our financial

position, results of operations and cash flows for the periods presented.

Accordingly, we believe that the financial statements included in this report

fairly present, in all material respects, our financial condition, results of

operations and cash flows for the periods presented

In response to the material weaknesses discussed above, we have

hired Ronald DaVella in April 2019 as our Executive Vice-President of Finance.

DaVella brings to our company over thirty years of experience as an audit

partner with the Big 4 accounting firm of Deloitte, and serves as the audit

committee chair of another NASDAQ listed company based in Arizona.

will be leading the effort to strengthen and improve our internal controls and

associated processes in fiscal year 2020 and beyond.

In addition we have engaged

a third party to document our controls, to develop and implement a comprehensive

control framework, and to train our employees on the related control execution and evidence.

We also are working on implementing a new integrated ERP system.

We will continue to monitor and evaluate the effectiveness of

our internal control over financial reporting on an ongoing basis and are

committed to taking further action and implementing additional improvements as

Management's Annual Report on Internal Control over Financial Reporting

Our management, including our principal executive officer and our principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934).

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of March 31, 2020.

Our management's evaluation of our internal control over financial reporting was based on the framework in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of March 31, 2020 and that there were material weaknesses in our internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Our management identified the following material weaknesses:

We had inadequate segregation of duties over both financial reporting and closing activities.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

In response to the material weaknesses discussed above, we are working on implementing a new integrated ERP system.

Once the ERP system in implemented in the second quarter of fiscal year 2021, we plan to engage a third party consultant to develop a comprehensive control framework using the ERP and to document our internal controls based on the implementation of the ERP system.

We will continue to monitor and evaluate the effectiveness of our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional improvements as necessary.

Limitations on Effectiveness of Controls

Our principal executive officer and our principal financial

officer do not expect that our disclosure controls or our internal control over

financial reporting will prevent all errors and all fraud.

A control system, no

matter how well conceived and operated, can provide only reasonable, not

absolute, assurance that the objectives of the control system are met.

the design of a control system must reflect the fact that there are resource

constraints, and the benefits of controls must be considered relative to their

Because of the inherent limitations in all control systems, no evaluation

of controls can provide absolute assurance that all control issues and instances

of fraud, if any, within our company have been detected.

These inherent

limitations include the realities that judgments in decision-making can be

faulty, and that breakdowns can occur because of a simple error or mistake.

Additional controls can be circumvented by the individual acts of some persons,

by collusion of two or more people, or by management override of the controls.

The design of any system of controls also is based in part upon certain

assumptions about the likelihood of future events, and there can be no assurance

that any design will succeed in achieving its stated goals under all potential

future conditions;

over time, controls may become inadequate because of changes

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

Because of the inherent limitations in a cost- effective control

system, misstatements due to error or fraud may occur and not be detected.

Prager Metis CPAs, LLC, an independent registered public

accounting firm, has provided an attestation report on our internal control over

financial reporting as of March 31, 2019 (which includes a disclaimer), is included herein.

Changes in Internal Control over Financial

There were no changes in our internal control over financial

reporting during the fourth quarter of our fiscal year ended March 31, 2019 that

have materially affected, or are reasonably likely to materially affect, our

internal control over financial reporting.

Our principal executive officer and our principal financial officer do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.

Additional controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions;

over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost- effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the fourth quarter of our fiscal year ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

On June 27, 2019, we entered into an amendment to the credit and security agreement with CNH Finance Fund I, L.P.

(formerly known as SCM Specialty Finance Opportunities Fund, L.P.), pursuant to which the credit and security agreement was amended to extend the expiration date to July 1, 2021, to increase the loan commitment amount to $5 million from $4 million and to change the termination fee to 1% from 2%.

All other terms and conditions of the credit and security agreement remains the same.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

All directors of our company hold office until the next annual

meeting of our stockholders or until their successors have been elected and

qualified, or until their death, resignation or removal.

The executive officers

of our company are appointed by our board of directors and hold office until

their death, resignation or removal from office.

Our directors and executive officers, their ages, positions

held, and duration of such, are as follows:

All directors of our company hold office until the next annual meeting of our stockholders or until their successors have been elected and qualified, or until their death, resignation or removal.

The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.

Our directors and executive officers, their ages, positions held, and duration of such, are as follows:

Position Held with Our

Date First Elected or Appointed

Richard Wright

President, Chief Executive Officer,

Vice-President, Chief Operating Officer, and Director

David Guarino

Chief Financial Officer, Secretary, Treasurer

President, Chief Executive Officer, Vice-President, Chief Operating Officer, and Director

Chief Financial Officer, Secretary, Treasurer and Director

April 28, 2017

3 unchanged sentences

September 14, 2018

Ronald DaVella

Executive Vice President of Finance

Business Experience

The following is a brief account of the education and business

experience of our directors and executive officers during at least the past five

years, indicating their principal occupation during the period, and the name and

principal business of the organization by which they were employed:

Richard Wright

The following is a brief account of the education and business experience of our directors and executive officers during at least the past five years, indicating their principal occupation during the period, and the name and principal business of the organization by which they were employed:

Wright is a Certified Public Accountant.

Magnum Cum Laude in 1978 from Mount Union University in Alliance, Ohio.

done graduate level MBA courses at Case Western Reserve College in Cleveland,

Wright became the Chief Financial Officer for PCT

International.

PCT is a leading worldwide developer and manufacturer of last

mile and access network solutions for broadband communication networks.

focuses on innovative and cost-effective solutions that allow service providers

to improve system integrity and expand service offerings.

It has manufacturing

plants in USA and China and sells their products in 42 countries.

Wright began his own tax and accounting CPA firm in Scottsdale, Arizona, Wright

Tax Solutions PLC.

Wright also began Wright Investment Group, LLC, a small

equity participation firm that helps provide seed capital through micro loans

and financial expertise to start-up enterprises.

He graduated Magnum Cum Laude in 1978 from Mount Union University in Alliance, Ohio.

He has taken graduate level MBA courses at Case Western Reserve College in Cleveland, Ohio.

Wright became the chief financial officer for PCT International, a leading worldwide developer and manufacturer of last mile and access network solutions for broadband communication networks.

PCT focuses on innovative and cost-effective solutions that allow service providers to improve system integrity and expand service offerings.

It has manufacturing plants in USA and China and sells its products in 42 countries.

Wright started his own tax and accounting CPA firm in Scottsdale, Arizona, Wright Tax Solutions PLC.

Wright also started Wright Investment Group, LLC, a small equity participation firm that helps provide seed capital through micro loans and financial expertise to start-up enterprises.

Effective as of May 31, 2013, Mr.

Wright was appointed as

vice-president, treasurer and a director of our company.

On August 7, 2013, our

board of directors appointed Mr.

Wright was appointed as the vice-president, treasurer and as a director of our company.

On August 7, 2013, our board of directors appointed Mr.

Wright as secretary of our company.

28, 2016, our board of directors appointed Mr.

Wright as chief operating officer of

On August 28, 2016, our board of directors appointed Mr.

Wright as chief operating officer of our company.

On April 7, 2017, our board of directors appointed Mr.

president of our company.

Wright as president of our company.

On April 28, 2017, Mr.

Wright resigned as the

secretary and treasurer of our company and our board of directors appointed Mr.

Wright resigned as the secretary and treasurer of our company and our board of directors appointed Mr.

Wright as the chief executive officer of our company.

We believe that Mr.

Wright is qualified to serve on our board

of directors because of his knowledge of our current operations in addition to

his education and business experiences described above.

David Guarino

Wright is qualified to serve on our board of directors because of his knowledge of our current operations in addition to his education and business experience described above.

On April 28, 2017, Mr.

Guarino was appointed as the chief

financial officer, secretary and treasurer and a director of our company.

Guarino currently holds a bachelor of science in accounting and a masters of

accountancy from the University of Denver.

Guarino was appointed as the chief financial officer, secretary, treasurer and a director of our company.

Guarino holds a bachelor of science in accounting and a master of accountancy from the University of Denver.

From 2008 to 2013, Mr.

President and a Director of Kahala Corp, a worldwide franchisor of multiple

quick service restaurant brands with locations in 49 states and over 25

Guarino was the president and a director of Kahala Corp, a worldwide franchisor of multiple quick service restaurant brands with locations in 49 states and over 25 countries.

From 2014 to 2015, Mr.

Guarino was President of HTI International

Holdings, Inc., a technology company focused on forward osmosis water filtration

Guarino was the president of HTI International Holdings, Inc., a technology company focused on forward osmosis water filtration technology.

From 2015 until April, 2017, Mr.

Guarino had been a consultant to

Guarino had been a consultant to our company.

We believe that Mr.

Guarino is qualified to serve on our board

of directors because of his knowledge of our current operations in addition to

his education and business experiences described above.

Guarino is qualified to serve on our board of directors because of his knowledge of our current operations in addition to his education and business experience described above.

On July 22, 2016, Mr.

Keay was appointed as a director of our

company and on August 17, 2017, Mr.

Keay was appointed as the Chairman of the

Keay has been the President and Managing Partner of Inform

Capital Partner, a corporate finance advisory and merchant banking firm, from

2008 to present.

He was the Chairman, CEO and director of Inform Resources

Corp., a mining company listed on the TSX Venture Exchange (the TSXV), from

August 2010 until July 10, 2014.

Keay was the CEO, President and director of

IDM Mining Ltd.

(formerly Revolution Resources), a mining company listed on the

Toronto Stock Exchange, from 2009 until January 7, 2015.

He was a director of

OrganiGram Holdings Inc., an industrial company specializing in the production

of condition specific medical marijuana under license from Health Canada listed

on the TSXV, from September 14, 2010 until July 17, 2014.

director of Plateau Uranium Inc.

(formerly Macusani Yellowcake Inc.), a uranium

exploration and development company listed on the TSXV, from April 5, 2013 until

September 4, 2014.

Keay was appointed as a director of our company and on August 17, 2017, Mr.

Keay was appointed as the chairman of the board.

Keay has been the president and managing partner of Inform Capital Partner, a corporate finance advisory and merchant banking firm, from 2008 to present.

Keay was a director of Vivo Cannabis Inc., a company listed on the TSXV Venture Exchange, from September 17, 2015 until June 4, 2019.

He was the chairman, chief executive officer and director of Inform Resources Corp., a mining company listed on the TSX Venture Exchange, from August 2010 until July 10, 2014.

Keay was the chief executive officer, president and a director of IDM Mining Ltd.

(formerly Revolution Resources), a mining company listed on the Toronto Stock Exchange, from 2009 until January 7, 2015.

He was a director of OrganiGram Holdings Inc., an industrial company specializing in the production of condition specific medical marijuana under license from Health Canada listed on the TSX Venture Exchange, from September 14, 2010 until July 17, 2014.

Keay was a director of Plateau Uranium Inc.

(formerly, Macusani Yellowcake Inc.), a uranium exploration and development company listed on the TSX Venture Exchange, from April 5, 2013 until September 4, 2014.

He was a director of Aftermath Silver Inc.

(formerly Full

Metal Zinc Ltd.), a mineral exploration and development company listed on the

TSXV, from February 2011 until December 12, 2013.

Keay holds a Bachelor of

Human Kinetics from the University of British Columbia.

(formerly, Full Metal Zinc Ltd.), a mineral exploration and development company listed on the TSX Venture Exchange, from February 2011 until December 12, 2013.

Keay holds a bachelor of human kinetics from the University of British Columbia.

We believe that Mr.

Keay is qualified to serve on our board of

directors because of his knowledge of our current operations in addition to his

education and business experiences described above.

Keay is qualified to serve on our board of directors because of his knowledge of our current operations in addition to his education and business experience described above.

Leitch has been a director of our company since September 8, 2016.

During the past five years Mr.

Leitch has been actively engaged as a

management consultant with respect to business development strategies and

overseeing the corporate governance requirements for various private companies.

The bulk of his time has been spent as the V.P.

Corporate Finance and a Director

for Citadel LED Lighting Corp., a private company engaged in the importation of

innovative LED lighting products with applications in the retail, hospitality,

outdoor lighting and commercial buildings and facilities market sectors.

Leitch has extensive experience with consumer products

companies, and is well versed in all aspects of branding, marketing, cross

marketing through strategic relationships, interacting with advertising agencies

to create highly focused and effective sales campaigns, along with being very

conversant in wholesale distribution networks, logistics, managing multiple

channels of product distribution and supply chain management.

extensive experience in the capital markets and the securities industry, having

worked for several major financial services institutions as well as having been

an officer, director and principal of several public and private companies.

Leitch has been actively engaged as a management consultant with respect to business development strategies and overseeing the corporate governance requirements for various private companies.

The bulk of his time has been spent as the vice president of corporate finance and a director for Citadel LED Lighting Corp., a private company engaged in the importation of innovative LED lighting products with applications in the retail, hospitality, outdoor lighting and commercial buildings and facilities market sectors.

Leitch has extensive experience with consumer products companies, and is well versed in all aspects of branding, marketing, cross marketing through strategic relationships, interacting with advertising agencies to create highly focused and effective sales campaigns, along with being very conversant in wholesale distribution networks, logistics, managing multiple channels of product distribution and supply chain management.

Leitch has extensive experience in the capital markets and the securities industry, having worked for several major financial services institutions as well as having been an officer, director and principal of several public and private companies.

Leitch was the vice president corporate finance and a director of Canadian Glacier Beverage Corp, from 1993 to 1998, the president and director of Cool Can Technologies from 1998 to 2002 and subsequently it's successor NorPac Technologies from 2002 to 2005 and the chief operating officer of Stonepoint Global Brands from 2010 to 2012.

We believe that Mr.

Leitch is qualified to serve on our board

of directors because of his knowledge of our current operations in addition to

his business experiences described above.

Sudano is Managing Partner of Beverage Marketing

Corporation and BMC Strategic Associates.

Sudano has been Managing Partner

of Beverage Marketing Corporation since July 2008 and Managing Director of

Beverage Marketing Corporation from September 2000 to July 2008.

experience covers nearly the entire beverage industry, from energy drinks to

wine, with special expertise in beverage alcohol by virtue of varied industry

experience and broad range of projects.

Sudano manages several major

clients, providing on-going strategic and market advice, while leading projects

in strategic planning, market entry analysis and planning, sales/distribution,

business modeling, brand repositioning and international opportunity assessment.

Leitch is qualified to serve on our board of directors because of his knowledge of our current operations in addition to his business experience described above.

Sudano has been a director of our company since September 14, 2018.

Sudano is the managing partner of Beverage Marketing Corporation and BMC Strategic Associates.

Sudano has been the managing partner of Beverage Marketing Corporation since July 2008 and was the managing director of Beverage Marketing Corporation from September 2000 to July 2008.

Sudano's experience covers nearly the entire beverage industry, from energy drinks to wine, with special expertise in beverage alcohol by virtue of varied industry experience and broad range of projects.

Sudano manages several major clients, providing on-going strategic and market advice, while leading projects in strategic planning, market entry analysis and planning, sales/distribution, business modeling, brand repositioning and international opportunity assessment.

From 1997 to 2000, Mr.

Sudano was with Constellation Brands, a

leading US beverage alcohol company, where he held the position of VP Business

Processes responsible for creating a corporate operations and consulting

function to service Constellation's wine, spirits and beer businesses.

this role, Mr.

Sudano lead the due diligence and transition efforts for entering

the premium wine business and provided corporate oversight for the integration

and transition of the Black Velvet distillery and brands.

Other activities

included oversight of business risk management and covering issues such as

promotional effectiveness to performance metrics.

Sudano received an MBA from Rutgers Graduate School of

Management, a magna cum laude and honors graduate from Delaware Valley College

receiving a BS and a New Jersey CPA.

Sudano was with Constellation Brands, Inc., a leading US beverage alcohol company, where he held the position of vice president of business processes and was responsible for creating a corporate operations and consulting function to service Constellation's wine, spirits and beer businesses.

While in this role, Mr.

Sudano lead the due diligence and transition efforts for entering the premium wine business and provided corporate oversight for the integration and transition of the Black Velvet distillery and brands.

Other activities included oversight of business risk management and covering issues such as promotional effectiveness to performance metrics.

Sudano received an MBA from Rutgers Graduate School of Management, was a magna cum laude and honors graduate from Delaware Valley College where he received a bachelor of science degree and is a New Jersey CPA.

We believe that Mr.

Sudano is qualified to serve on our board

of directors because of his knowledge of our current operations in addition to

his education and business experiences described above.

Ronald DaVella

On May 1, 2019, we appointed Ronald DaVella as our Executive

Vice President of Finance.

DaVella has served as a board director and

Chairman of the audit committee of the Joint Corp., a public franchisor and

operator of over 450 chiropractic clinics, since Joint Corp.s initial public

offering in November 2014.

DaVella formerly served as Chief Financial

Officer for NanoFlex Power Corporation, a public company that was

commercializing two disruptive solar technologies from May 2017 to March 2019.

He also formerly served as the Chief Financial Officer for Amazing Lash Studio

Franchise LLC from March 2016 to May 2017, a franchisor of eyelash extension

service studios with over 200 operating locations in the United States.

August 2015 to February 2019, Mr.

DaVella was also a franchise owner with

Amazing Lash Studio LLC.

DaVella was an audit partner with Deloitte &

Touche LLP from June 1989 to July 2014.

Sudano is qualified to serve on our board of directors because of his knowledge of our current operations in addition to his education and business experience described above.

Family Relationships

There are no family relationships between any director or

executive officer.

There are no family relationships between any director or executive officer.

Involvement in Certain Legal Proceedings

None of our directors and executive officers has been involved

in any of the following events during the past ten years:

any petition under the federal bankruptcy laws or any

state insolvency laws filed by or against, or an appointment of a

receiver, fiscal agent or similar officer by a court for the business or

property of such person, or any partnership in which such person was a

general partner at or within two years before the time of such filing, or

any corporation or business association of which such person was an

executive officer at or within two years before the time of such

any conviction in a criminal proceeding or being subject

to a pending criminal proceeding (excluding traffic violations and other

minor offences);

being subject to any order, judgment, or decree, not

subsequently reversed, suspended or vacated, of any court of competent

jurisdiction, permanently or temporarily enjoining such person from, or

otherwise limiting, the following activities:

(i) acting as a futures

commission merchant, introducing broker, commodity trading advisor,

commodity pool operator, floor broker, leverage transaction merchant, any

other person regulated by the Commodity Futures Trading Commission, or an

associated person of any of the foregoing, or as an investment adviser,

underwriter, broker or dealer in securities, or as an affiliated person,

director or employee of any investment company, bank, savings and loan

association or insurance company, or engaging in or continuing any conduct

or practice in connection with such activity;

engaging in any type of

business practice;

or (iii) engaging in any activity in connection with

the purchase or sale of any security or commodity or in connection with

any violation of federal or state securities laws or federal commodities

being the subject of any order, judgment or decree, not

subsequently reversed, suspended or vacated, of any federal or state

authority barring, suspending or otherwise limiting for more than 60 days

the right of such person to engage in any activity described in paragraph

(c)(i) above, or to be associated with persons engaged in any such

being found by a court of competent jurisdiction (in a

civil action), the Securities and Exchange Commission to have violated a

federal or state securities or commodities law, and the judgment in such

civil action or finding by the Securities and Exchange Commission has not

been reversed, suspended, or vacated;

being found by a court of competent jurisdiction in a

civil action or by the Commodity Futures Trading Commission to have

violated any federal commodities law, and the judgment in such civil

action or finding by the Commodity Futures Trading Commission has not been

subsequently reversed, suspended or vacated;

being the subject of, or a party to, any federal or state

judicial or administrative order, judgment, decree, or finding, not

subsequently reversed, suspended or vacated, relating to an alleged

violation of:

(i) any federal or state securities or commodities law or

or (ii) any law or regulation respecting financial

institutions or insurance companies including, but not limited to, a

temporary or permanent injunction, order of disgorgement or restitution,

civil money penalty or temporary or permanent cease- and-desist order, or

removal or prohibition order;

or (iii) any law or regulation prohibiting

mail or wire fraud or fraud in connection with any business entity;

being the subject of, or a party to, any sanction or

order, not subsequently reversed, suspended or vacated, of any self-

regulatory organization (as defined in Section 3(a)(26) of the Securities

Exchange Act of 1934), any registered entity (as defined in Section

1(a)(29) of the Commodity Exchange Act), or any equivalent exchange,

association, entity or organization that has disciplinary authority over

its members or persons associated with a member.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires

our executive officers and directors, and persons who own more than 10% of our

common stock, to file reports regarding ownership of, and transactions in, our

securities with the Securities and Exchange Commission and to provide us with

copies of those filings.

Based solely on our review of the copies of such forms

received by us, or written representations from certain reporting persons we

believe that during year ended March 31, 2019 all filing requirements applicable

to our executive officers and directors, and persons who own more than 10% of

our common stock were complied with, with the exception of the following:

None of our directors and executive officers has been involved in any of the following events during the past ten years:

any petition under the federal bankruptcy laws or any state insolvency laws filed by or against, or an appointment of a receiver, fiscal agent or similar officer by a court for the business or property of such person, or any partnership in which such person was a general partner at or within two years before the time of such filing, or any corporation or business association of which such person was an executive officer at or within two years before the time of such filing;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining such person from, or otherwise limiting, the following activities:

(i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

engaging in any type of business practice;

or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

being the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (c)(i) above, or to be associated with persons engaged in any such activity;

being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission to have violated a federal or state securities or commodities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been reversed, suspended, or vacated;

being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

(i) any federal or state securities or commodities law or regulation;

or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order;

or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self- regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings.

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons we believe that during year ended March 31, 2020 all filing requirements applicable to our executive officers and directors, and persons who own more than 10% of our common stock were complied with, with the exception of the following:

Number of Transactions

Reported on a

Not Reported on a

Failure to File

Richard Wright

David Guarino

Requested Forms

Code of Ethics

On September 4, 2018, our board of directors adopted a code of

ethics and business conduct for directors, senior officers and employees of our

We adopted the code of ethics and business conduct for the purpose of

honest and ethical conduct, including the ethical handling of actual or

apparent conflicts of interest;

full, fair, accurate, timely and understandable disclosure in all reports

and documents that we file with, or submits to, the Securities and Exchange

Commission and in other public communications made by our company;

On September 4, 2018, our board of directors adopted a code of ethics and business conduct for directors, senior officers and employees of our company.

We adopted the code of ethics and business conduct for the purpose of promoting:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;

• full, fair, accurate, timely and understandable disclosure in all reports and documents that we file with, or submits to, the Securities and Exchange Commission and in other public communications made by our company;

• compliance with applicable governmental laws, rules and regulations;

the protection of our assets, including corporate opportunities and

confidential information;

• the protection of our assets, including corporate opportunities and confidential information;

• fair dealing practices;

the prompt internal reporting of violations of the code of ethics and

business conduct;

• the prompt internal reporting of violations of the code of ethics and business conduct;

• accountability for adherence to the code of ethics and business conduct.

1 unchanged sentence

Audit Committee

Effective February 22, 2018, our board of directors established

an audit committee.

The audit committee currently consists of three directors,

Aaron Keay, Bruce Leitch and Brian Sudano.

Our audit committee assists our board

of directors in fulfilling its financial oversight responsibilities by reviewing

the financial reports and other financial information provided by our company to

regulatory authorities and stockholders, our systems of internal controls

regarding finance and accounting and our auditing, accounting and financial

reporting processes.

Our audit committees primary duties and responsibilities

serve as an independent and objective party to monitor our financial

reporting and internal control system and review our financial statements;

oversee our accounting and financial reporting processes and the preparation and

auditing of our financial statements;

review and appraise the performance of our

external auditor;

and provide an open avenue of communication among our auditor,

financial and senior management and our board of directors.

Effective February 22, 2018, our board of directors established an audit committee.

The audit committee currently consists of three directors, Aaron Keay, Bruce Leitch and Brian Sudano.

Our audit committee assists our board of directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by our company to regulatory authorities and stockholders, our systems of internal controls regarding finance and accounting and our auditing, accounting and financial reporting processes.

Our audit committee's primary duties and responsibilities are to:

serve as an independent and objective party to monitor our financial reporting and internal control system and review our financial statements;

oversee our accounting and financial reporting processes and the preparation and auditing of our financial statements;

review and appraise the performance of our external auditor;

and provide an open avenue of communication among our auditor, financial and senior management and our board of directors.

Audit Committee Financial Expert

Our board of directors has determined that Bruce Leitch, an

independent director of our company, qualifies as an audit committee financial

expert as defined in Item 407(d)(5)(ii) of Regulation S-K.

Our board of directors has determined that Bruce Leitch, an independent director of our company, qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K.

Nomination of Directors

On September 4, 2018, our board of directors adopted the board

director nomination process.

Our board of directors has determined that it is in

our best interests to have director nominees recommended for the boards

selection by a majority of our independent directors in a vote in which only

independent directors participate and to have the full board participate in the

consideration of the board of directors nominees.

In general, when our board of directors determines that

expansion of the board or replacement of a director is necessary or appropriate,

our independent directors will be responsible for identifying one or more

candidates to fill such directorship, investigating each candidate, evaluating

his/her suitability for service on our board of directors and recommending for

selection suitable candidates for nomination to our board of directors.

independent directors may engage outside search firms to identify suitable

Stockholders desiring to suggest a candidate for consideration

must do so in accordance with our bylaws and applicable securities laws, and

should send a letter to our Chief Financial Officer at our principal office

located at 14646 N.

On September 4, 2018, our board of directors adopted the board director nomination process.

Our board of directors has determined that it is in our best interests to have director nominees recommended for the board's selection by a majority of our independent directors in a vote in which only independent directors participate and to have the full board participate in the consideration of the board of directors nominees.

In general, when our board of directors determines that expansion of the board or replacement of a director is necessary or appropriate, our independent directors will be responsible for identifying one or more candidates to fill such directorship, investigating each candidate, evaluating his/her suitability for service on our board of directors and recommending for selection suitable candidates for nomination to our board of directors.

Our independent directors may engage outside search firms to identify suitable candidates.

Stockholders desiring to suggest a candidate for consideration must do so in accordance with our bylaws and applicable securities laws, and should send a letter to our Chief Financial Officer at our principal office located at 14646 N.

Kierland Blvd., Suite 255, Scottsdale, Arizona 85254, U.S.A.

Candidates recommended by our stockholders will be considered in the same manner

as other candidates.

Candidates recommended by our stockholders will be considered in the same manner as other candidates.

Compensation Committee

Our board of directors has a compensation committee comprised

of Aaron Keay and Bruce Leitch.

Our compensation committee has the following

authority and responsibilities:

to review and approve annually the corporate goals and objectives

applicable to the compensation of the chief executive officer (CEO),

evaluate at least annually the CEOs performance in light of those goals and

objectives, and determine and approve the CEOs compensation level based on

this evaluation;

to review and make recommendations to the board regarding the compensation

of all other executive officers;

to review and make recommendations to the board regarding incentive

compensation plans and equity-based plans, and where appropriate or required,

recommend for approval of such plans by the stockholders of our company;

to review and discuss with management our compensation discussion and

analysis (CD&A) and the related executive compensation information,

recommend that the CD&A and related executive compensation information be

included in our annual report on Form 10-K and proxy statement, and produce

the compensation committee report on executive officer compensation

required to be included in our proxy statement or annual report on Form 10-K;

to review and make recommendations to the board regarding any employment

agreements and any severance arrangements or plans, including any benefits to

be provided in connection with a change in control, for the CEO and other

executive officers, which includes the ability to adopt, amend and terminate

such agreements, arrangements or plans;

to determine stock ownership guidelines for the CEO and other executive

officers and monitor compliance with such guidelines;

to review and make recommendations to the board regarding all employee

benefit plans for our company, which includes the ability to adopt, amend and

terminate such plans;

to review our incentive compensation arrangements to determine whether they

encourage excessive risk-taking, to review and discuss at least annually the

relationship between risk management policies and practices and compensation,

and to evaluate compensation policies and practices that could mitigate any

to review and recommend to the board for approval the frequency with which

our company will conduct say on pay votes, taking into account the results of

the most recent stockholder advisory vote on frequency of say on pay votes

required by Section 14A of the Securities Exchange Act of 1934, and review and

approve the proposals regarding the say on pay vote and the frequency of the

say on pay vote to be included in our proxy statement;

to review all director compensation and benefits for service on the board

and any committees of the board at least once a year and to recommend any

changes to the board as necessary.

Our board of directors has a compensation committee comprised of Aaron Keay and Bruce Leitch.

Our compensation committee has the following authority and responsibilities:

• to review and approve annually the corporate goals and objectives applicable to the compensation of the chief executive officer ("CEO"), evaluate at least annually the CEO's performance in light of those goals and objectives, and determine and approve the CEO's compensation level based on this evaluation;

• to review and make recommendations to the board regarding the compensation of all other executive officers;

• to review and make recommendations to the board regarding incentive compensation plans and equity-based plans, and where appropriate or required, recommend for approval of such plans by the stockholders of our company;

• to review and discuss with management our compensation discussion and analysis ("CD&A") and the related executive compensation information, recommend that the CD&A and related executive compensation information be included in our annual report on Form 10-K and proxy statement, and produce the compensation committee report on executive officer compensation required to be included in our proxy statement or annual report on Form 10-K;

• to review and make recommendations to the board regarding any employment agreements and any severance arrangements or plans, including any benefits to be provided in connection with a change in control, for the CEO and other executive officers, which includes the ability to adopt, amend and terminate such agreements, arrangements or plans;

• to determine stock ownership guidelines for the CEO and other executive officers and monitor compliance with such guidelines;

• to review and make recommendations to the board regarding all employee benefit plans for our company, which includes the ability to adopt, amend and terminate such plans;

• to review our incentive compensation arrangements to determine whether they encourage excessive risk-taking, to review and discuss at least annually the relationship between risk management policies and practices and compensation, and to evaluate compensation policies and practices that could mitigate any such risk;

• to review and recommend to the board for approval the frequency with which our company will conduct say on pay votes, taking into account the results of the most recent stockholder advisory vote on frequency of say on pay votes required by Section 14A of the Securities Exchange Act of 1934, and review and approve the proposals regarding the say on pay vote and the frequency of the say on pay vote to be included in our proxy statement;

• to review all director compensation and benefits for service on the board and any committees of the board at least once a year and to recommend any changes to the board as necessary.

EXECUTIVE COMPENSATION

Summary Compensation

The particulars of compensation paid to the following

all individuals serving as our principal executive

officer during the year ended March 31, 2019

each of our two most highly compensated executive

officers who were serving as executive officers at the end of the year

ended March 31, 2019;

up to two additional individuals for whom disclosure

would have been provided under (b) but for the fact that the individual

was not serving as our executive officer at March 31,

who we will collectively refer to as the named executive

officers, for all services rendered in all capacities to our company and

subsidiaries for the years ended March 31, 2019 and 2018 are set out in the

following summary compensation table:

Summary Compensation Table Years ended March 31, 2019

Richard Wright

The particulars of compensation paid to the following persons:

all individuals serving as our principal executive officer during the year ended March 31, 2020

each of our two most highly compensated executive officers who were serving as executive officers at the end of the year ended March 31, 2020;

up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at March 31, 2020,

who we will collectively refer to as the named executive officers, for all services rendered in all capacities to our company and subsidiaries for the years ended March 31, 2020 and 2019 are set out in the following summary compensation table:

Summary Compensation Table - Years ended March 31, 2019 and 2018

President, Chief Executive

Officer, Vice-President, Chief Operating Officer,

Director and Former Secretary and

Officer, Vice-President, Chief Operating Officer, Director and Former Secretary and

Treasurer (1)

David Guarino

Chief Financial Officer,

Secretary, Treasurer and

Ronald DaVella

Former Executive Vice President of Finance (3 )

Effective as of May 31, 2013, Mr.

Wright was appointed as

vice-president, treasurer and a director of our company.

2013, our board of directors appointed Mr.

Wright as secretary of our

Wright was appointed as vice-president, treasurer and a director of our company.

On August 7, 2013, our board of directors appointed Mr.

as chief operating officer of our company.

On April 7, 2017, our board of

directors appointed Mr.

Wright as secretary of our company.

On August 28, 2016, our board of directors appointed Mr.

Wright as chief operating officer of our company.

On April 7, 2017, our board of directors appointed Mr.

Wright as president of our company.

Wright resigned as the secretary and treasurer of our company

and our board of directors appointed Mr.

Wright as the chief executive

officer of our company.

On April 28, 2017, Mr.

Wright resigned as the secretary and treasurer of our company and our board of directors appointed Mr.

Wright as the chief executive officer of our company.

On April 28, 2017, our board of directors appointed Mr.

Guarino as the chief financial officer, secretary and treasurer and a

director of our company.

Guarino as the chief financial officer, secretary and treasurer and a director of our company.

From 2015 until April, 2017, Mr.

Guarino has been

a consultant to our company.

Reflects the grant date fair value computed in accordance

with FASB ASC Topic 718.

Reflects the issuance of 1,500,000 shares of

Series D Preferred Stock which will be convertible, without the payment of

any additional consideration by the holder and at the option of the

holder, into one fully paid and non-assessable share of our common stock

at any time after (i) we achieve the consolidated revenue of our company

and all of its subsidiaries equal to or greater than $40,000,000 in any 12

month period, ending on the last day of any quarterly period of our fiscal

or (ii) a Negotiated Trigger Event, defined as an event upon which

the Series D Preferred Stock will be convertible as may be agreed by our

company and the holder in writing from time to time.

Reflects the grant date fair value computed in accordance

with FASB ASC Topic 718.

Reflects the issuance of 130,000 shares of common

stock effective April 28, 2017 (valued at $167,700) and the issuance of

1,000,000 shares of Series D Preferred Stock (valued at

Employment Agreement with Richard Wright

On March 30, 2016, we entered into an employment agreement

dated effective March 1, 2016 with Richard Wright, our vice-president,

secretary, treasurer and director, pursuant to which Mr.

Wright agreed to

perform such duties as are regularly and customarily performed by the vice

president, secretary and treasurer of a corporation, and any other duties

consistent with Mr.

Guarino has been a consultant to our company.

On May 1, 2019, we appointed Ronald DaVella as our Executive Vice President of Finance.

Effective as of January 1, 2020, Mr.

DaVella resigned as our Executive Vice President of Finance.

Employment Agreement with Richard A.

On March 30, 2016, we entered into an employment agreement dated effective March 1, 2016 with Richard A.

Wright, our vice-president, secretary, treasurer and director, pursuant to which Mr.

Wright agreed to perform such duties as are regularly and customarily performed by the vice president, secretary and treasurer of a corporation, and any other duties consistent with Mr.

Wright's position in our company.

Pursuant to the terms of

the employment agreement, we have agreed to (i) pay Mr.

Wright $14,000 per month

or such other amount as may be determined by our board of directors from time to

Pursuant to the terms of the employment agreement, we have agreed to (i) pay Mr.

Wright $14,000 per month or such other amount as may be determined by our board of directors from time to time;

and (ii) issue to Mr.

Wright 1,500,000 shares of our Series C Preferred

Stock (issued effective as of March 31, 2016).

We also agreed that each of the

following events constitute a Negotiated Trigger Event as defined in the

Certificate of Designation for the Series C Preferred Stock:

(i) the occurrence

of a change of control event;

Wright 1,500,000 shares of our Series C Preferred Stock (issued effective as of March 31, 2016).

We also agreed that each of the following events constitute a "Negotiated Trigger Event" as defined in the Certificate of Designation for the Series C Preferred Stock:

(i) the occurrence of a change of control event;

(ii) the death of Mr.

and (iii) the

termination of the employment agreement for any reason.

In addition, we may (i) grant awards under our 2018 stock

option plan to Mr.

and (iii) the termination of the employment agreement for any reason.

In addition, we may (i) grant awards under our 2018 stock option plan to Mr.

Wright from time to time and (ii) pay to Mr.

Wright an annual

discretionary performance bonus in an amount to be determined by our board of

directors in its sole discretion.

Wright will also be eligible to

participate in other bonus programs offered by our company to our senior staff

from time to time.

Wright an annual discretionary performance bonus in an amount to be determined by our board of directors in its sole discretion.

Wright will also be eligible to participate in other bonus programs offered by our company to our senior staff from time to time.

In addition, Mr.

Wright will be entitled to participate in all

of our employee benefit plans provided by our company to our senior officers.

we do not provide such plans at any time, we agreed to reimburse Mr.

the reasonable cost of any such plans obtained privately.

We also agreed to (i)

Wright with vehicle leased in our companys name, with lease

payments not exceeding $700/month or such other amount as may be determined by

our board of directors;

Wright an allowance of $5,000 per month or

such other amount as may be determined by our board of directors, which may be

Wright as he sees fit, including without limitation, the funding of

non-qualified retirement plans;

Wright will be entitled to participate in all of our employee benefit plans provided by our company to our senior officers.

If we do not provide such plans at any time, we agreed to reimburse Mr.

Wright for the reasonable cost of any such plans obtained privately.

We also agreed to (i) provide Mr.

Wright with vehicle leased in our company's name, with lease payments not exceeding $700/month or such other amount as may be determined by our board of directors;

Wright an allowance of $5,000 per month or such other amount as may be determined by our board of directors, which may be used by Mr.

Wright as he sees fit, including without limitation, the funding of non-qualified retirement plans;

(iii) reimburse Mr.

Wright for any expenses that

he incurs in connection with his duties under his employment agreement.

Wright will be entitled in each year to five weeks paid vacation, in addition

to weekends and statutory holidays, to be taken in installments of no more than

three consecutive weeks of paid time off.

The initial term of the employment agreement is three years

and, on the third anniversary of the effective date of the employment and on

each annual anniversary date thereafter, the term of the employment agreement

will automatically be extended by one additional year unless either party gives

90 days written notice to the other of its intention not to renew the

employment agreement.

Wright for any expenses that he incurs in connection with his duties under his employment agreement.

Wright will be entitled in each year to five weeks' paid vacation, in addition to weekends and statutory holidays, to be taken in installments of no more than three consecutive weeks of paid time off.

The initial term of the employment agreement with Mr.

Wright is three years and, on the third anniversary of the effective date of the employment and on each annual anniversary date thereafter, the term of the employment agreement will automatically be extended by one additional year unless either party gives 90 days' written notice to the other of its intention not to renew the employment agreement.

Provided that Mr.

Wright has acted within the scope of his

authority, we agreed to indemnify and save harmless Mr.

Wright (including his

heirs and legal representatives) against any and all costs, claims and expenses

(including any amounts paid to settle any actions or satisfy any judgments)

he may suffer or incur by reason of any matter or thing which he may in

good faith do or have done or caused to be done as an employee, officer or

director of our company, any of its subsidiaries or of any of their respective

or was reasonably incurred by him in respect of any civil, criminal

or administrative action or proceeding to which he is made a party by reason of

being or having been an employee, officer or director of our company, any of its

subsidiaries or of any of their respective affiliates;

provided that, the

foregoing indemnification will apply only if:

he acted honestly and in good

faith with a view to the best interests of our company, any of its subsidiaries

or any of their respective affiliates;

and in the case of a criminal or

administrative action or proceeding that is enforced by a monetary penalty, he

had reasonable grounds for believing that his conduct was lawful.

Wright agreed to indemnify and save harmless our company

against, and agree to hold it harmless from, any and all damages, injuries,

claims, demands, actions, liability, costs and expenses (including reasonable

legal fees) incurred or made against our company arising from or connected with

the performance or non-performance of his employment by him or the beach of any

warranty, representation or covenant herein by him, other than claims by him

pursuant to his employment agreement.

If and to the extent we maintain directors and officers

liability insurance for the protection of our executives in connection with acts

and omissions occurring during their employment with our company, we agreed that

Wright will be included as an officer and director who is covered by such

policy on a basis no less favorable than made available to other executives of

Wright has acted within the scope of his authority, we have agreed to indemnify and save harmless Mr.

Wright (including his heirs and legal representatives) against any and all costs, claims and expenses (including any amounts paid to settle any actions or satisfy any judgments) which:

he may suffer or incur by reason of any matter or thing which he may in good faith do or have done or caused to be done as an employee, officer or director of our company, any of its subsidiaries or of any of their respective affiliates;

or was reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been an employee, officer or director of our company, any of its subsidiaries or of any of their respective affiliates;

provided that, the foregoing indemnification will apply only if:

he acted honestly and in good faith with a view to the best interests of our company, any of its subsidiaries or any of their respective affiliates;

and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

Wright has agreed to indemnify and save harmless our company against, and agree to hold it harmless from, any and all damages, injuries, claims, demands, actions, liability, costs and expenses (including reasonable legal fees) incurred or made against our company arising from or connected with the performance or non-performance of his employment by him or the beach of any warranty, representation or covenant herein by him, other than claims by him pursuant to his employment agreement.

If and to the extent we maintain directors' and officers' liability insurance for the protection of our executives in connection with acts and omissions occurring during the course of their employment with our company, we agreed that Mr.

Wright will be included as an officer and director who is covered by such policy on a basis no less favorable than made available to other executives of our company.

On August 28, 2016, our board of directors appointed Mr.

as chief operating officer of our company.

On April 7, 2017, our board of

directors appointed Mr.

Wright as chief operating officer of our company.

On April 7, 2017, our board of directors appointed Mr.

Wright as president of our company.

On April 28, 2017,

Wright resigned as the secretary and treasurer of our company and our board

of directors appointed Mr.

On April 28, 2017, Mr.

Wright resigned as the secretary and treasurer of our company and our board of directors appointed Mr.

Wright as the chief executive officer of our company.

On April 3, 2020, we granted 250,000 stock options to Mr.

The stock options are exercisable at the exercise price of $0.53 per share until April 2, 2030 and vest as to 50% on the date of grant and 50% on the one year anniversary of the date of grant.

On April 30, 2020, we granted an award of 200,000 shares of our common stock to Mr.

We granted these shares as "restricted awards" under our 2020 Equity Incentive Plan.

These shares vest on the one year anniversary of the grant date.

The grantees have no rights or privileges as a stockholder of our company with respect to the unvested shares including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares.

We pay David A.

Guarino $14,000 per month for his services and

a $750 monthly car allowance.

Effective April 28, 2017, we issued 130,000 shares

of common stock to Mr.

Guarino, who was appointed as the chief financial

officer, secretary, treasurer and a director of our company on the same

Grant of Series D Convertible Preferred Stock

On May 3, 2017, we designated 3,000,000 shares of the

authorized and unissued preferred stock of our company as Series D Preferred

Stock by filing a Certificate of Designation with the Secretary of State of the

State of Nevada.

2, 2017, we increased the number of authorized shares of Series

D Preferred Stock in our company to 5,000,000 shares by filing an Amendment to

the foregoing Certificate of Designation with the Secretary of State of the

State of Nevada.

Each share of the Series D Preferred Stock will be convertible,

without the payment of any additional consideration by the holder and at the

option of the holder, into one fully paid and non-assessable share of our common

stock at any time after (i) we achieve the consolidated revenue of our company

and all of its subsidiaries equal to or greater than $40,000,000 in any 12 month

period, ending on the last day of any quarterly period of our fiscal year;

(ii) a Negotiated Trigger Event, defined as an event upon which the Series D

Preferred Stock will be convertible as may be agreed by our company and the

holder in writing from time to time.

Effective May 3, 2017, we issued 1,000,000 shares of our Series

D Preferred Stock to Richard Wright and 1,000,000 shares of our Series D

Preferred Stock to Mr.

Guarino $14,000 per month for his services and a $750 monthly car allowance.

Effective April 28, 2017, we issued 130,000 shares of common stock to Mr.

Guarino, who was appointed as the chief financial officer, secretary, treasurer and a director of our company on the same date.

On April 3, 2020, we granted 150,000 stock options to Mr.

The stock options are exercisable at the exercise price of $0.53 per share until April 2, 2030 and vest as to 50% on the date of grant and 50% on the one year anniversary of the date of grant.

On April 30, 2020, we granted an award of 100,000 shares of our common stock to Mr.

We granted these shares as "restricted awards" under our 2020 Equity Incentive Plan.

These shares vest on the one year anniversary of the grant date.

Ronald DaVella

On May 1, 2019, we appointed Ronald DaVella as our Executive Vice President of Finance.

On April 25, 2019, we entered into an employment agreement with Ronald DaVella pursuant to which Mr.

DaVella agreed to act as our Executive Vice President of Finance and to perform such duties as are regularly and customarily performed by the executive vice president of finance of a corporation, and any other duties consistent with Mr.

Da Vella's position in our company.

Pursuant to the terms of the employment agreement we agreed to:

DaVella $14,000 per month or such other amount as may be determined by our board of directors from time to time, (ii) pay a monthly car allowance of $800, and (iii) pay a monthly cell phone allowance of $150.

In addition, we agreed to grant Mr.

DaVella (i) 75,000 shares of restricted common stock, with 50,000 shares vesting on the six month anniversary of the effective date of his employment agreement and 25,000 shares vesting on the one year anniversary of the effective date of his employment agreement and (ii) 200,000 stock options vesting over three years, with one-third vesting on each yearly anniversary date of his employment agreement.

In addition, Mr.

DaVella was entitled to participate in all of our employee benefit plans provided by our company to our senior officers.

If we did not provide such plans at any time, we agreed to reimburse Mr.

DaVella for the reasonable cost of any such plans obtained privately.

We also agreed to reimburse Mr.

DaVella for any expenses that he incurred in connection with his duties under his employment agreement.

Effective as of January 1, 2020, Mr.

DaVella resigned as our Executive Vice President of Finance.

In addition, effective as of January 1, 2020, we entered into a separation agreement & release of all claims with Mr.

DaVella, pursuant to which the parties agreed that Mr.

Davella's employment with Alkaline 88, LLC ended effective January 1, 2020 and the employment agreement dated April 25, 2019 between Mr.

DaVella and The Alkaline Water Company Inc.

is terminated effective January 1, 2020.

Pursuant to the separation agreement & release of all claims, we agreed to pay Mr.

Davella five full months of severance at his then compensation level of $14,000 monthly plus $950 per month for auto and cell phone allowance, less all applicable deductions and withholdings.

We also agreed to maintain Mr.

Davella and his family on our corporate health plan until June 30, 2020 at our sole cost and expense.

In addition, we agreed to issue Mr.

Davella 50,000 shares of our common stock (issued on April 30, 2020).

Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide

retirement or similar benefits for our directors or executive officers.

Resignation, Retirement, Other Termination, or Change in

Control Arrangements

There are no arrangements or plans in which we provide retirement or similar benefits for our directors or executive officers.

Resignation, Retirement, Other Termination, or Change in Control Arrangements

Other than the provisions of the employment agreement with Mr.

Wright described below, we have no contract, agreement, plan or arrangement,

whether written or unwritten, that provides for payments to our directors or

executive officers at, following, or in connection with the resignation,

retirement or other termination of our directors or executive officers, or a

change in control of our company or a change in our directors or executive

officers responsibilities following a change in control.

If, within 90 days of the occurrence of a change of control

Wright resigns from his employment relationship with our company or

our company terminates his employment agreement for any reason other than for

just cause, then we agreed to pay Mr.

Wright severance in an amount equal to the

Wright described below, we have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or named executive officers at, following, or in connection with the resignation, retirement or other termination of our named directors or executive officers, or a change in control of our company or a change in our directors' or named executive officers' responsibilities following a change in control.

If, within 90 days of the occurrence of a change of control event, Mr.

Wright resigns from his employment relationship with our company or our company terminates his employment agreement for any reason other than for just cause, then we agreed to pay Mr.

Wright severance in an amount equal to the following:

36 months' salary plus an amount, if any, equal to the following:

months salary multiplied by the number of calendar years, starting on the

effective date of the employment agreement, that Mr.

Wright is employed by our

company under his employment agreement.

one month's salary multiplied by the number of calendar years, starting on the effective date of the employment agreement, that Mr.

Wright is employed by our company under his employment agreement.

We may terminate Mr.

Wrights employment at any time for other

than just cause by delivering to Mr.

Wright's employment at any time for other than just cause by delivering to Mr.

Wright written notice of termination.

such a case, we agreed to pay Mr.

Wright severance in an amount equal to the

In such a case, we agreed to pay Mr.

Wright severance in an amount equal to the following:

36 months' salary plus an amount, if any, equal to the following:

months salary multiplied by the number of calendar years, starting on the

effective date of the employment, that Mr.

Wright is employed by our company

under his employment agreement.

Subject to applicable employment laws or similar legislation,

we may terminate Mr.

Wrights employment in the event he has been unable to

perform his duties for a period of eight consecutive months or a cumulative

period of 12 months in any consecutive 24 month period, because of a physical or

mental disability.

Wrights employment will automatically terminate on his

one month's salary multiplied by the number of calendar years, starting on the effective date of the employment, that Mr.

Wright is employed by our company under his employment agreement.

Subject to applicable employment laws or similar legislation, we may terminate Mr.

Wright's employment in the event he has been unable to perform his duties for a period of eight consecutive months or a cumulative period of 12 months in any consecutive 24-month period, because of a physical or mental disability.

Wright's employment will automatically terminate on his death.

In the event Mr.

Wrights employment with our company terminates by

reason of Mr.

Wrights death or disability, then upon and immediately effective

on the date of termination we agreed to promptly pay and provide Mr.

in the event of Mr.

Wright's employment with our company terminates by reason of Mr.

Wright's death or disability, then upon and immediately effective on the date of termination we agreed to promptly pay and provide Mr.

Wright (or in the event of Mr.

Wright's death, Mr.

Wright's estate);

any unpaid salary and

any outstanding and accrued regular and special vacation pay through the date of

reimbursement for any unreimbursed expenses incurred through to the

date of termination;

and any outstanding amounts due under any awards which will

be dealt with in accordance with our 2013 equity incentive plan or 2018 stock

option plan and the award agreement.

any unpaid salary and any outstanding and accrued regular and special vacation pay through the date of termination;

reimbursement for any unreimbursed expenses incurred through to the date of termination;

and any outstanding amounts due under any awards which will be dealt with in accordance with our 2013 equity incentive plan or 2018 stock option plan and the award agreement.

In the event Mr.

Wrights employment is

terminated due to a disability, we agreed to pay to Mr.

Wright the severance

referred to above.

Wright's employment is terminated due to a disability, we agreed to pay to Mr.

Wright the severance referred to above.

We may terminate Mr.

Wrights employment for just cause at any

time by delivering to Mr.

Wright's employment for just cause at any time by delivering to Mr.

Wright written notice of termination.

Wrights employment with our company is terminated by our company for

just cause, Mr.

Wright will not be entitled to any additional payments or

benefits (except as otherwise provided in his employment agreement), other than

for amounts due and owing to Mr.

Wright by our company as of the date of

termination, except for any awards under our 2013 equity incentive plan or 2018

stock option plan will be dealt with in accordance with the plan and award

In the event that Mr.

Wright's employment with our company is terminated by our company for just cause, Mr.

Wright will not be entitled to any additional payments or benefits (except as otherwise provided in his employment agreement), other than for amounts due and owing to Mr.

Wright by our company as of the date of termination, except for any awards under our 2013 equity incentive plan or 2018 stock option plan will be dealt with in accordance with the plan and award agreement.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer

certain information concerning the outstanding equity awards as of March 31,

Option awar ds

Stock awa rds

The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of March 31, 2020:

Option awards

unexercisable

Richard Wright

unearned shares,

Ronald DaVella

Compensation of Directors

The particulars of compensation paid to our directors who are

not named executive officers for the fiscal year ended March 31, 2019 are set

out in the following director compensation table:

Brian Sudano (1)

Brian Sudano was elected as a director of our company on

September 14, 2018.

We have no formal plan for compensating our directors for their

services in their capacity as directors.

Our directors are entitled to

reimbursement for reasonable travel and other out-of-pocket expenses incurred in

connection with attendance at meetings of our board of directors.

directors may award special remuneration to any director undertaking any special

services on their behalf other than services ordinarily required of a director.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of June 28, 2019, certain

information with respect to the beneficial ownership of our common stock by each

stockholder known by us to be the beneficial owner of more than 5% of any class

of our voting securities and by each of our directors, our executive officers

and by our executive officers and directors as a group.

The particulars of compensation paid to our directors who are not named executive officers for the fiscal year ended March 31, 2020 are set out in the following director compensation table:

On April 3, 2020, we granted 10,000 stock options to Bruce Leitch, a director of our company.

These stock options are exercisable at the exercise price of $0.53 per share until April 2, 2030 and will vest as to one third on each anniversary of the grant date.

On April 3, 2020, we granted 100,000 stock options to Brian Sudano, a director of our company.

These stock options are exercisable at the exercise price of $0.53 per share until April 2, 2030 and will vest as to one third on the grant date and one third will vest on each anniversary of the grant date.

On April 3, 2020, we granted 250,000 stock options to Aaron Keay, a director of our company.

These stock options are exercisable at the exercise price of $0.53 per share until April 2, 2030 and vest as to 50% on the date of grant and 50% on the one-year anniversary of the date of grant.

On April 30, 2020, we granted an award of 25,000 shares of our common stock to Bruce Leitch, a director of our company.

These shares vested on the grant date.

On April 30, 2020, we granted an award of 25,000 shares of our common stock to Brian Sudano, a director of our company.

50% of these shares vest on the one-year anniversary of grant and 50% of these shares vest on the second year anniversary of the grant date.

On April 30, 2020, we granted an award of 200,000 shares of our common stock to Aaron Keay, a director of our company.

These shares vest on the one-year anniversary of the grant date.

We granted these shares as "restricted awards" under our 2020 Equity Incentive Plan.

We have no formal plan for compensating our directors for their services in their capacity as directors.

Our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors.

Our board of directors may award special remuneration to any director undertaking any special services on their behalf other than services ordinarily required of a director.

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

The following table sets forth, as of July 17, 2020, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of any class of our voting securities and by each of our directors and our named executive officers (as defined in the "Executive Compensation") and by our current executive officers and directors as a group.

Name of Beneficial Owner

1 unchanged sentence

Amount and Nature of

Ownership (1)

Percentage of

Richard Wright

Preferred Stock (3)

Preferred Stock (4)

David Guarino

Preferred Stock (4)

3,825,000 (3)

1,984,300 (4)

Ronald DaVella

All executive officers and

directors as a group (6 persons)

All executive officers and directors as a group (5 persons)

* Less than 1%.

Except as otherwise indicated, we believe that the

beneficial owners of the common stock listed above, based on information

furnished by such owners, have sole investment and voting power with

respect to such shares, subject to community property laws where

Beneficial ownership is determined in accordance with the

rules of the Securities and Exchange Commission and generally includes

voting or investment power with respect to securities.

subject to options or warrants currently exercisable or exercisable within

60 days, are deemed outstanding for purposes of computing the percentage

ownership of the person holding such option or warrants, but are not

deemed outstanding for purposes of computing the percentage ownership of

any other person.

Percentage of common stock is based on 41,347,512 shares

of our common stock issued and outstanding as of June 28, 2019.

of Series C Preferred Stock is based on 1,500,000 shares of Series C

Preferred Stock issued and outstanding as of June 28, 2019.

Percentage of

Series D Preferred Stock is based on 3,800,000 shares of Series D

Preferred Stock issued and outstanding as of June 28, 2019.

Each share of the Series C Preferred Stock will be

convertible, without the payment of any additional consideration by the

holder and at the option of the holder, into one fully paid and

non-assessable share of our common stock at any time after (i) we achieve

the consolidated revenue of our company and all of its subsidiaries equal

to or greater than $15,000,000 in any 12 month period, ending on the last

day of any quarterly period of our fiscal year;

or (ii) a Negotiated

Trigger Event, defined as an event upon which the Series C Preferred Stock

will be convertible as may be agreed by our company and the holder in

writing from time to time.

Each share of the Series D Preferred Stock will be

convertible, without the payment of any additional consideration by the

holder and at the option of the holder, into one fully paid and

non-assessable share of our common stock at any time after (i) we achieve

the consolidated revenue of our company and all of its subsidiaries equal

to or greater than $40,000,000 in any 12 month period, ending on the last

day of any quarterly period of our fiscal year;

or (ii) a Negotiated

Trigger Event, defined as an event upon which the Series D Preferred Stock

will be convertible as may be agreed by our company and the holder in

writing from time to time.

Consists of 262,500 stock options exercisable within 60

Consists of 75,000 stock options exercisable within 60

(1) Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

Common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(2) Percentage of common stock is based on 59,724,339 shares of our common stock issued and outstanding as of July 17, 2020.

(3) Includes 125,000 stock options that are exercisable within 60 days of the date of this annual report.

(4) Includes 75,000 stock options that are exercisable within 60 days of the date of this annual report.

(5) Consists of 475,000 stock options that are exercisable within 60 days of the date of this annual report.

(6) Includes 100,000 stock options that are exercisable within 60 days of the date of this annual report.

(7) Consists of 33,333 stock options that are exercisable within 60 days of the date of this annual report.

Changes in Control

We are unaware of any contract or other arrangement the

operation of which may at a subsequent date result in a change in control of our

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE

Other than as disclosed below, there has been no transaction,

since April 1, 2017, or currently proposed transaction, in which our company was

or is to be a participant and the amount involved exceeds $80,165, being the

lesser of $120,000 or one percent of the average of our total assets at year end

for the last two completed fiscal years, and in which any of the following

persons had or will have a direct or indirect material interest:

Any director or executive officer of our

Any person who beneficially owns, directly or indirectly,

more than 5% of any class of our voting securities;

Any person who acquired control of our company when it

was a shell company or any person that is part of a group, consisting of

two or more persons that agreed to act together for the purpose of

acquiring, holding, voting or disposing of our common stock, that acquired

control of our company when it was a shell company;

Any member of the immediate family (including spouse,

parents, children, siblings and in- laws) of any of the foregoing

Grant of Series C Convertible Preferred Stock

On August 17, 2017, we issued 1,500,000 shares of our common

stock to Steven P.

Nickolas, a former stockholder who beneficially owned,

directly or indirectly, more than 5% of a class of our voting securities and a

former officer and director of our company, upon conversion of 1,500,000 shares

of our Series C Preferred Stock held by Mr.

The shares of our Series C

Preferred Stock became convertible into shares of our common stock without the

payment of any additional consideration by Mr.

Nickolas and at the option of Mr.

Nickolas because the termination of the employment agreement between our company

Nickolas was an event constituting a Negotiated Trigger Event as

defined in the Certificate of Designation for our Series C Preferred Stock.

During the year ended March 31, 2018, we paid Steven P.

Nickolas a salary of $3,072.

On October 31, 2017, our company and its subsidiaries entered

into a Settlement Agreement and Mutual Release of Claims (the Settlement

Agreement ) with Steven P.

Nickolas, the Nickolas Family Trust, Water

Engineering Solutions, LLC and Enhanced Beverages, LLC, companies and trust that

are controlled or owned by Mr.

Nickolas, (collectively, the Nickolas

Parties ) and McDowell 78, LLC and Wright Investments Group, LLC, a company

controlled or owned by Richard Wright, (collectively, Wright/McDowell ).

The Settlement Agreement provides, among other things, the

Simultaneous with the full execution of the Settlement

Agreement, we agreed to pay Mr.

Nickolas $110,000 in one lump sum

From the date of the Settlement Agreement, we agreed to

waive the application of our Insider Trading Policy as to Mr.

thereby removing any black-out periods for all future sales of our common

Within three business date of the full execution of the

Settlement Agreement, we agreed to instruct our transfer agent to issue

Nickolas 700,000 shares of our common stock (issued);

Within 10 business days of the full execution of the

Settlement Agreement, we agreed to issue Mr.

Nickolas 300,000 shares of

our Series D Preferred Stock (issued);

In exchange of 700,000 shares of our common stock and

300,000 shares of our Series D Preferred Stock

described above, Mr.

Nickolas forfeited his 10,000,000 shares of

our Series A Preferred Stock, to be cancelled for no further

consideration;

Upon the full execution of the Settlement Agreement, Mr.

Nickolas and our company agreed to file the stipulations to dismiss the

complaints and counterclaim filed by each of them with prejudice, with

each side to bear its own costs and attorneys fees.

In addition, our

company and Wright/McDowell agreed that they will effectuate the dismissal

of an arbitration proceeding against the Nickolas Parties with prejudice,

with each side to bear its own attorneys fees and costs;

Nickolas surrendered all right, interest or claim to

the shares of our common stock owned by WIN Investments, LLC and Lifewater

Industries, LLC for no additional consideration;

Nickolas acknowledged and agreed that the employment

agreement between Mr.

Nickolas and our company was terminated as of April

7, 2017 and no further amounts are owed to Mr.

Nickolas under the

employment agreement and we agreed to waive restrictive covenants set out

in the employment agreement;

We agreed to assume financial responsibility for the

federal tax obligations in the total amount of $45,738.68 owed by Mr.

Nickolas and certain outstanding invoice in the amount of

Nickolas acknowledged and agreed that 1,500,000 stock

options with an exercise price of $0.52 issued to Mr.

Nickolas on or about

March 1, 2016 has expired and a total of 148,000 stock options issued to

Nickolas before 2016 will automatically expire 90 days from October 6,

2017, the date Mr.

Nickolas ceased being a director of our company

We agreed that Mr.

Nickolas will have access to a

reasonable amount of Alkaline88 water, not to exceed 30 cases at the time

of pickup at our facility, for his personal consumption only at no cost

Nickolas is a direct stockholder of our company and Mr.

will be limited to an average of 20 cases per month for his personal

The parties also agreed to mutual release of

On November 8, 2017, we entered into an Exchange Agreement and

Mutual Release of Claims (the Exchange Agreement ) with Richard Wright,

our president, chief executive officer and director.

The Exchange Agreement provides, among other things, the

Within five business date of the full execution of the

Exchange Agreement, we agreed to instruct our transfer agent to issue Mr.

Wright 700,000 shares of our common stock (issued on November 9,

Within 10 business days of the full execution of the

Exchange Agreement, we agreed to issue 300,000 shares of our Series D

Preferred Stock (issued on November 9, 2017);

In exchange of 700,000 shares of our common stock and

300,000 shares of our Series D Preferred Stock described above, Mr.

forfeited his 10,000,000 shares of our Series A Preferred Stock, to be

cancelled for no further consideration;

The parties also agreed to mutual release of

On November 8, 2017, Richard Wright and Sharon Wright, Mr.

Wrights spouse, executed a Stock Option Forfeiture & General Release (the

Stock Option Forfeiture Agreement ).

The Stock Option Forfeiture Agreement provides, among other

things, the following:

In exchange for, among other things, receipt of 200,000

shares of our Series D Preferred Stock (issued on November 9, 2017), Mr.

Wright agreed that Mr.

Wrights stock options to purchase 1,500,000 shares

of our common stock at an exercise price of $0.52 per share were

forfeited, terminated and otherwise cancelled as of November 8, 2017;

Wright also agreed to release of claims against our

On September 14, 2017, Wright Investment Group LLC, an entity

controlled by Richard Wright, our president, chief executive officer and

director, advanced $200,000 to our company.

On October 17, 2017, Wright

Investment Group LLC advanced $400,000 to our company.

On November 22, 2017,

Wright Investment Group LLC advanced $400,000 to our company.

The $1,000,000 in

advancements were repaid to Wright Investment Group, LLC on March 2, 2018.

On February 14, 2018 and December 31, 2018, David A.

our chief financial officer, secretary, treasurer and director, entered into two

separate guarantee agreements with CNH Specialty Finance in order for CNH

Specialty Finance to agree to provide our company two separate $400,000

temporary order advance under the credit facility agreement.

Under the guarantee

agreements, Mr.

Guarino personally, absolutely, and unconditionally, jointly and

severally, guaranteed the prompt, complete and full payment of our obligations

to repay each of the temporary order advances only, under the credit agreement,

with CNH Specialty Finance.

On May 25, 2016, we entered into an agreement with BMC

Strategic Associates ( BMCSA ), a division of Beverage Marketing

Corporation, with regard to a possible strategic transaction relationship

involving the Alkaline88 brand and all assets related to such brand.

Sudano, a director nominee, is Managing Partner of Beverage Marketing

Corporation and BMC Strategic Associates.

During the term of the agreement,

BMCSA has the exclusive right to represent our company in the developing a

strategic relationship (defined as any investment, joint venture, etc.

the Alkaline88 brand and all assets related to such brand and a strategic party

who is more than a mere financier).

The agreement provides that if our company

consummates a strategic relationship during the term of the agreement with any

party, licensor, joint venture partner, etc., or within 18 months of the date of

termination of the agreement, then we must pay BMCSA, at closing of such

strategic relationship, a commission based upon the value of the strategic

relationship as follows:

5% for the first $2 million, 4% for next $2 million, 3%

for next $2 million, 2% for next $2 million and 1% of the total amount above $8

million, provided however, in no event will the commission be less than

We agreed to reimburse BMCSA on a monthly basis for all reasonable

out-of-pocket expenses incurred by BMCSA in connection with the performance of

services provided under the agreement.

The agreement continues in force until

terminated by either party in writing upon at least 30 days written notice.

Since April 1, 2017, we paid BMCSA an aggregate of $25,145 in consideration of

the consulting services provided by BMCSA under the agreement.

Effective April 28, 2017, we granted 350,000 stock options to

Aaron Keay, a director of our company.

These stock options are exercisable at

the exercise price of $1.29 per share for a period of ten years from the date of

grant and vest as follows:

(i) 87,500 upon the date of grant;

and (ii) 87,500 on

each anniversary date of grant.

Effective April 28, 2017, we granted 100,000 stock options to

Bruce Leitch, a director of our company.

These stock options are exercisable at

the exercise price of $1.29 per share for a period of ten years from the date of

grant and vest as follows:

(i) 25,000 upon the date of grant;

and (ii) 25,000 on

each anniversary date of grant.

On May 1, 2019, we appointed Ronald DaVella as our Executive

Vice President of Finance.

On April 25, 2019, we entered into an employment

agreement with Ronald DaVella pursuant to which Mr.

DaVella agreed to act as our

Executive Vice President of Finance and to perform such duties as are regularly

and customarily performed by the executive vice president of finance of a

corporation, and any other duties consistent with Mr.

Da Vellas position in our

Pursuant to the terms of the employment agreement we have agreed to:

DaVella $14,000 per month or such other amount as may be determined

by our board of directors from time to time, (ii) pay a monthly car allowance of

$800, and (iii) pay a monthly cell phone allowance of $150.

In addition, we agreed to grant Mr.

DaVella (i) 75,000 shares

of restricted common stock, with 50,000 shares vesting on the six month

anniversary of the effective date of his employment agreement and 25,000 shares

vesting on the one year anniversary of the effective date of his employment

agreement and (ii) 200,000 stock options vesting over three years, with

one-third vesting on each yearly anniversary date of his employment agreement.

In addition, Mr.

DaVella will be entitled to participate in all

of our employee benefit plans provided by our company to our senior officers.

we do not provide such plans at any time, we agreed to reimburse Mr.

the reasonable cost of any such plans obtained privately.

We also agreed to

reimburse Mr.

DaVella for any expenses that he incurs in connection with his

duties under his employment agreement.

DaVella will be entitled in each year

to five weeks paid vacation, in addition to weekends and statutory holidays, to

be taken in installments of no more than three consecutive weeks of paid time

The initial term of the employment agreement is three years

and, on the third anniversary of the effective date of the employment and on

each annual anniversary date thereafter, the term of the employment agreement

will automatically be extended by one additional year unless either party gives 90

days written notice to the other of its intention not to renew the employment

If, within 90 days of the occurrence of a change of control

DaVella resigns from his employment relationship with our company or

our company terminates his employment agreement for any reason other than for

just cause, then we agreed to pay Mr.

DaVella severance in an amount equal to

the following:

5 months salary plus an amount, if any, equal to the following:

one months salary multiplied by the number of calendar years, starting on the

effective date of the employment agreement, that Mr.

DaVella is employed by our

company under his employment agreement.

We may terminate Mr.

DaVellas employment at any time for other

than just cause by delivering to Mr.

DaVella written notice of termination.

such a case, we agreed to pay Mr.

DaVella severance in an amount equal to the

5 months salary plus an amount, if any, equal to the following:

months salary multiplied by the number of calendar years, starting on the

effective date of the employment, that Mr.

DaVella is employed by our company

under his employment agreement.

Subject to applicable employment laws or similar legislation,

we may terminate Mr.

DaVellas employment in the event he has been unable to

perform his duties for a period of eight consecutive months or a cumulative

period of 12 months in any consecutive 24 month period, because of a physical or

mental disability.

DaVellas employment will automatically terminate on his

In the event Mr.

DaVellas employment with our company terminates by

reason of Mr.

DaVellas death or disability, then upon and immediately effective

on the date of termination we agreed to promptly pay and provide Mr.

in the event of Mr.

DaVellas death, Mr.

DaVellas estate);

any unpaid salary

and any outstanding and accrued regular and special vacation pay through the

date of termination;

reimbursement for any unreimbursed expenses incurred

through to the date of termination;

and any outstanding amounts due under any

awards which will be dealt with in accordance with our equity incentive plan and

the award agreement.

In the event Mr.

DaVellas employment is terminated due to

a disability, we agreed to pay to Mr.

DaVella the severance referred to above.

We may terminate Mr.

DaVellas employment for just cause at any

time by delivering to Mr.

DaVella written notice of termination.

DaVellas employment with our company is terminated by our company for

just cause, Mr.

DaVella will not be entitled to any additional payments or

benefits (except as otherwise provided in his employment agreement), other than

for amounts due and owing to Mr.

DaVella by our company as of the date of

termination, except for any awards under our equity incentive plan will be dealt

with in accordance with the plan and award agreement.

Provided that Mr.

DaVella has acted within the scope of his

authority, we agreed to indemnify and save harmless Mr.

DaVella (including his