UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

X ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act Of 1934

For the quarterly period ended ~~July~~October 31, 2019

☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act Of 1934

For the transition period from __________ to __________

Commission file number: 000-52825

STWC HOLDINGS, INC

(Exact name of registrant as specified in its charter)

Colorado	~~20-8980078~~	20-8980078
(State or other jurisdiction of	~~(I.R.S. Employer Identification No.)~~	(I.R.S. Employer
Incorporation or organization)		Identification No.)
1350 Independence St., Suite 300
Lakewood, CO	~~80215~~	80215
(Address of principal executive offices)	~~(Zip Code)~~	(Zip Code)

Securities Registered pursuant to section 12(b) of the Act: None

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

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

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

~~Indicate~~If an emerging growth company, indicate by check mark ~~whether~~if the registrant ishas aelected ~~shell~~not ~~company~~to ~~(as~~use ~~defined~~the inextended ~~Rule~~transition ~~12b-2~~period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act). ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 3334,~~976~~482,156 shares of common stock as of ~~September~~December 069, 2019.

Table of Contents

	Page
PART I - FINANCIAL INFORMATION
Part I - Financial Information
Item 1 - Financial Statements	3
Item 1 – Financial Statements	1
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3 – Quantitative and Qualitative disclosures about market risk	2624
Item 4 – Controls and Procedures	2624
PART II - OTHER INFORMATION
Part II - OTHER Information
Item 1 – Legal Proceedings	2624
Item 2 – Unregistered sales of equity securities and use of proceeds	2624
Item 3 – Defaults upon senior securities	2725
Item 6 – Exhibits	2725
SIGNATURES	28
Signatures	26

PART 1: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

STWC HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

		July 31, 2019		January 31, 2019
		October 31, 2019				January 31, 2019
ASSETS
Current assets:
Cash	$	~~75,020~~$	5,818	$	~~2,965~~	$	2,965
Accounts Receivable, net		~~80,517~~	17,016		~~56,459~~		56,459
Inventory		~~56,051~~	52,617		~~29,786~~		29,786
Prepaid expenses and other assets		~~7,571~~	5,381		~~19,675~~		19,675
Total current assets		~~219,159~~	80,832		~~108,885~~		108,885
Property and equipment, net		~~18,415~~	18,163		~~2,767~~		2,767
Intangible assets, net		~~8,898~~	8,678		~~9,452~~		9,452
Right-of-use asset		~~476,209~~	437,469		-		-
Notes receivable and equity-method investments, related parties		~~514,778~~	597,850		~~452,709~~		452,709
Total assets	$	~~1,237,459~~$	1,142,992	$	~~573,813~~	$	573,813
LIABILITIES AND STOCKHOLERS’ EQUITY (DEFICIT)
LIABILITIES
Current liabilities:
Accounts payable	$	~~324,065~~$	518,372	$	~~447,626~~	$	447,626
Accrued expenses		~~585,658~~	677,345		~~437,388~~		437,388
Accrued expenses, related party		~~353,905~~	384,011		~~218,165~~		218,165
Advance held in trust for related parties		~~38,245~~	32,745		-		-
Loan to related party		~~69,184~~	67,960		~~32,021~~		32,021
Deferred revenue		~~196,500~~	166,500		~~192,500~~		192,500
Lease liability		~~137,091~~	139,887		-		-
Notes payable, current, net of discount		~~647,471~~	818,856		~~274,282~~		274,282
Total current liabilities		~~2,352,119~~	2,805,676		~~1,601,982~~		1,601,982
Lease liability		~~339,664~~	300,497		-		-
Long-term loan from related party		-	-		~~48,240~~		48,240
Long-term notes payable		~~75,000~~	25,000		~~125,000~~		125,000
Total liabilities		~~2,766,783~~	3,131,173		~~1,775,222~~		1,775,222
Stockholders’ deficit
Common stock, par value $0.00001, 100,000,000 shares authorized, 34,455,876 and 33,792,589 issued and outstanding at July 31, 2019 and January 31, 2019, respectively.		345			338
Common stock, par value $0.00001, 500,000,000 shares authorized, 34,537,156 and 33,792,589 issued and outstanding at October 31, 2019 and January 31, 2019, respectively.			346				338
Additional Paid in Capital		~~8,055,388~~	8,242,010		~~7,238,361~~		7,238,361
Retained deficit		~~(9,566,200)~~	(10,204,683	)	~~(8,440,108)~~		(8,440,108	)
Parent’s Stockholder deficit		~~(1,510,467)~~	(1,962,327	)	~~(1,201,409)~~		(1,201,409	)
Non-controlling interest		~~(18,857)~~	(25,854	)	-		-
Total stockholders’ deficit		~~(1,529,324)~~	(1,988,181	)	~~(1,201,409)~~		(1,201,409	)
Total liabilities and stockholders’ deficit	$	~~1,237,459~~$	1,142,992	$	~~573,813~~	$	573,813

See accompanying notes.

STWC HOLDINGS, INC.

	For the three months ended		For the six months ended
	July 31,		July 31,
	2019	2018	2019	2018
Consulting Services	$ 41,224	$ 87,436	$ 61,769	$ 131,249
Product sales	13,589	-	23,411	-
Cost of consulting services	(13,174)	(2,443)	(24,641)	(12,443)
Gross profit	41,639	84,993	60,539	118,806
Operating costs and expenses
Rents and other occupancy	23,993	13,500	41,956	26,016
Compensation	146,577	138,281	309,469	284,485
Professional, legal and consulting	242,769	35,193	357,746	85,089
General and administrative	162,478	89,130	223,438	141,641
Depreciation and amortization	908	434	1,492	869
Total operating costs and expenses	576,725	276,538	934,101	538,100
Other income (expense)
Interest expense	(177,111)	(1,128)	(244,713)	(1,740)
Other expenses	4	-	4	-
Impairment on investment	-	-	(2,739)	-
Loss on investment in affiliate	(1,272)	-	(23,939)	-
Total other income (expense)	(178,379)	(1,128)	(271,387)	(1,740)
Loss from continuing operations, before provision for taxes on income	(713,465)	(192,673)	(1,144,949)	(421,034)
Provision for taxes on income	-	-	-	-
Net loss before non-controlling interest	(713,465)	(192,673)	(1,144,949)	(421,034)
Less: net loss attributable to non-controlling interest	(18,857)	-	(18,857)	-
Net loss attributable to parent	$ (694,608)	$ (192,673)	$(1,126,092)	$ (421,034)
Net loss attributable to common shareholders
Basic earnings and fully diluted loss per common share	$ (0.02)	$ (0.01)	$ (0.04)	$ (0.02)
Basic and fully diluted weighted average number of shares outstanding	31,203,755	27,140,550	31,272,320	27,140,550

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended						For the nine months ended
	October 31,						October 31,
	2019			2018			2019			2018

Consulting Services	$	168,650		$	12,500		$	230,419		$	143,749
Product sales		22,095			-			45,506			-
Cost of consulting services		(56,732	)		(12,500	)		(81,373	)		(24,943	)
Gross profit		134,013			-			194,552			118,806

Operating costs and expenses
Rents and other occupancy		19,108			13,500			61,064			39,516
Compensation		186,772			148,856			496,241			433,341
Professional, legal and consulting		111,739			335,429			469,485			420,518
General and administrative		164,339			79,885			387,777			221,536
Depreciation and amortization		472			435			1,964			1,304
Total operating costs and expenses		482,430			578,115			1,416,531			1,116,215

Other income (expense)
Interest expense		(283,704	)		-			(528,417	)		-
Other income/(expenses)		-			(114,986	)		4			(116,726	)
Impairment on investment		-			-			(2,739	)		-
Loss on investment in affiliate		(13,359	)		(10,129	)		(37,298	)		(10,129	)
Total other income (expense)		(297,063	)		(125,115	)		(568,450	)		(126,855	)

Loss from continuing operations, before provision for taxes on income		(645,480	)		(703,230	)		(1,790,429	)		(1,124,264	)
Provision for taxes on income		-			-			-			-
Net loss before non-controlling interest		(645,480	)		(703,230	)		(1,790,429	)		(1,124,264	)
Less: net loss attributable to non-controlling interest		(6,997	)		-			(25,854	)		-
Net loss attributable to parent	$	(638,483	)	$	(703,230	)	$	(1,764,575	)	$	(1,124,246	)

Net loss attributable to common shareholders
Basic earnings and fully diluted loss per common share	$	(0.02	)	$	(0.02	)	$	(0.06	)	$	(0.04	)

Basic and fully diluted weighted average number of shares outstanding		30,323,996			29,437,372			30,674,242			27,914,571

See accompanying notes.

STWC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	For the six months ended July 31,
		For the nine months ended October 31,
		2019			~~2018~~	2018
Cash flows from operating activities:
Net loss	$	~~(1,144,949)~~$	(1,790,429	$)	~~(421,034)~~	$	(1,124,264	)
Depreciation and amortization		~~1,492~~	1,964		~~868~~		755
Accretion of debt discount		~~182,189~~	424,311		-		-
Shares issued for services		188,500			-
Change in intangible assets			-				549
Loss from equity investment in unconsolidated subsidiary		23,939			-
Shares issued for services			244,500				-
Stock based compensation		23,067			-
Loss from equity investment in unconsolidated subsidiary			37,298				10,129
Changes in assets and liabilities
Stock based compensation			32,953				183,775
Accounts receivable		(8)			(12,257)
Changes in assets and liabilities
Inventory		(26,265)			(17,898)
Accounts receivable			63,493				(43,998	)
Right-of-use asset		546			-
Inventory			(22,831	)			(17,898	)
Notes receivable, related party		(215,185)			(9,999)
Right-of-use asset			2,915				-
Prepaid expenses and other assets		12,104			(7881)
Notes receivable, related party			(316,706	)			(409,272	)
Accounts payable		88,739			185,069
Prepaid expenses and other assets			14,294				(11,289	)
Accrued expenses		131,008			214,198
Accounts payable			307,152				543,152
Deferred revenue		4,000			45,000
Accrued expenses			207,695				-
Net cash flow used in operating activities		(730,823)			(23,934)
Deferred revenue			(26,000	)			26,000
Cash flows from investing activities:
Net cash flow used in operating activities			(819,701	)			(842,361	)
Purchase of fixed assets		(8,751)			-
Cash flows from investing activities:
Proceeds from consolidation of subsidiary		665			-
Purchase of fixed assets			(8,751	)			-
Net cash flow used in investing activities		(8,086)			-
Investment in Intangible assets			-				(2,250	)
Cash flows from financing activities:
Proceeds from consolidation of subsidiary			665				(152,983	)
Proceeds from issuance of stock		80,000			-
Net cash flow used in investing activities			(8,086	)			(155,233	)
Proceeds from debt		550,000			-
Cash flows from financing activities:
Proceeds from related party loans		31,048			8,765
Proceeds from issuance of stock			80,000				683,200
Payments to related party loans		(25,084)			(12,523)
Proceeds from warrant exchange			-				42,150
Proceeds from related party loans, restricted cash		175,000			-
Proceeds from debt			571,000				225,000
Net cash flows from financing activities		810,964			(3,758)
Proceeds from related party loans			31,048				49,562
Net cash flows		72,055			(27,692)
Payments to related party loans			(26,408	)			-
Cash and equivalent, beginning of period		2,965			27,925
Proceeds from related party loans, restricted cash			175,000				-
Cash and equivalent, end of period	$	75,020		$	233
Net cash flows from financing activities			830,640				999,912
Supplemental cash flow disclosures:
Net cash flows			2,853				2,318
Cash paid for interest	$	223		$	1,740
Cash and equivalent, beginning of period			2,965				27,925
Non-cash transaction
Cash and equivalent, end of period		$	5,818			$	30,243
Shares issued for services	$	188,500		$	-
Supplemental cash flow disclosures:
Cash paid for interest		$	223			$	6,477
Non-cash transaction
Shares issued for services		$	244,489			$	-
Conversion of related party advances			-			$	402,508
Acquisition of interest in unconsolidated affiliate			-			$	196,438

See accompanying notes.

STWC HOLDINGS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICT)

(Unaudited)

	~~Common Stock~~	Common Stock		~~Additional Capital in excess of par value~~				Additional Capital in excess of		Accumulated
	~~Shares~~	~~Amount~~Shares			~~Accumulated Deficit~~Amount		~~NCI~~	~~Total~~par value		Deficit			NCI			Total
Balance, January 31, 2018	~~27,140,550~~	~~$ 271~~	27,140,550	~~$5,325,413~~	$~~(6,164,832)~~	271	~~$ -~~	$ ~~(839,148)~~	5,325,413	$	(6,164,832	)	$	-		$	(839,148	)
Net loss	-	-	-	-	~~(228,361)~~	-	-	~~(228,361)~~	-		(228,361	)		-			(228,361	)
Balance, April 30, 2018	~~27,140,550~~	~~$ 271~~	27,140,550	~~5,325,413~~	~~(6,393,193)~~$	271	-	~~(1,067,509)~~	5,325,413		(6,393,193	)		-			(1,067,509	)
Net loss	-	-	-	-	~~(192,673)~~	-	-	~~(192,673)~~	-		(192,673	)		-			(192,673	)
Balance, July 31, 2018	~~27,140,550~~	~~$ 271~~	27,140,550	~~$5,325,413~~	$~~(6,585,866)~~	271	~~$ -~~	$~~(1,260,182)~~	5,325,413	$	(6,585,866	)	$	-		$	(1,260,182	)
Balance, January 31, 2019	33,792,589	$ 338		$7,238,361	$(8,440,108)		$ -	$(1,201,409)
Private share offering			3,416,000			34			683,166		-			-			683,200
Private share offering	80,000	1		41,352	-		-	41,353
Warrants			281,000			3			42,147		-			-			42,150
Warrants	-	-		38,647	-		-	38,647
Shares issued in exchange for debt			2,012,539			21			402,487		-			-			402,508
Stock based compensation	-	-		13,181	-		-	13,181
Investment in subsidiary			500,000			5			99,995		-			-			100,000
Net loss	-	-		-	(431,484)		-	(431,484)
Warrants issued for services			-			-			96,438		-			-			96,438
Balance, April 30, 2019	33,872,589	$ 339		$7,331,541	$(8,871,592)		$ -	$(1,539,712)
Beneficial conversion feature on convertible debt			-			-			225,000		-			-			225,000
Shares issued for services	583,287	6		188,494	-		-	188,500
Stock based compensation			-			-			76,000		-			-			76,000
Beneficial conversion feature on convertible debt	-	-		415,000	-		-	415,000
Net loss			-			-			-		(703,230	)		-			(703,230	)
Stock based compensation	-	-		9,886	-		-	9,886
October 31, 2018			33,350,089		$	334		$	6,950,646	$	7,289,096			-		$	(338,116	)
Investment in subsidiary	-	-		110,467	-		-	110,467
Balance, January 31, 2019			33,792,589		$	338		$	7,238,361	$	(8,440,108	)	$	-		$	(1,201,409	)
Net loss	-	-		-	(694,608)		(18,857)	(713,465)
Private share offering			80,000			1			41,352		-			-			41,353
Balance, July 31, 2019	34,455,876	$ 345		$8,055,388	$ (9,566,200)		$ (18,857)	$(1,529,324)
Warrants			-			-			38,647		-			-			38,647
Stock based compensation			-			-			13,181		-			-			13,181
Net loss			-			-			-		(431,484	)		-			(431,484	)
Balance, April 30, 2019			33,872,589		$	339		$	7,331,541	$	(8,871,592	)	$	-		$	(1,539,712	)
Shares issued for services			583,287			6			188,494		-			-			188,500
Beneficial conversion feature on convertible debt			-			-			415,000		-			-			415,000
Stock based compensation			-			-			9,886		-			-			9,886
Investment in subsidiary			-			-			110,467		-			-			110,467
Net loss			-			-			-		(694,608	)		(18,857	)		(713,465	)
Balance, July 31, 2019			34,455,876		$	345		$	8,055,388	$	(9,566,200	)	$	(18,857	)	$	(1,529,324	)
Shares issued for services			506,000			5			55,995		-			-			56,000
Shares issued in exchange for debt			75,280			1			17,999								18,000
Beneficial conversion feature on convertible debt			-			-			102,738		-			-			102,738
Stock based compensation			-			-			9,884		-			-			9,884
Investment in subsidiary			(500,000	)		(5	)		5		-			-			-
Net loss			-			-			-		(638,483	)		(6,997	)		(645,480	)
Balance, October 31, 2019			34,537,156		$	346		$	8,242,010	$	(10,204,683	)	$	(25,854	)	$	(1,988,181	)

See accompanying notes.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Note 1 – Organization

STWC HOLDINGS, INC., through its wholly-owned subsidiary, Strainwise, Inc., (identified in these footnotes as “STWC” “we” “us” or the “Company”) provides branding marketing, administrative, accounting, financial and compliance services (“Fulfillment Services”) to entities in the cannabis retail and production industry. The Company was originally incorporated in the State of Utah on April 25, 2007, and redomiciled to Colorado by merging into a Colorado corporation incorporated on June 7, 2016. Strainwise, Inc., a wholly owned subsidiary of the Company, was originally incorporated in the state of Colorado as a limited liability company on June 8, 2012, and subsequently converted to a Colorado corporation on January 16, 2014. On August 20, 2019 the Company adopted Colorado Bylaws which replace the bylaws formerly used by the Company and previously adopted by 4th Grade Films, a Utah corporation, prior to its change of domicile to Colorado.

On December 13, 2018, the Company invested in Meridian A, LLC, an Oklahoma limited liability company, which owns a CBD retail store located in Oklahoma. The Company’s Chief Executive Officer is the managing member of the entity and STWC owns 75% of the legal entity. On May 15, 2019, the Company obtained full ownership of the HiLife JV entity. In accordance with Accounting Standards Codification 810 Consolidation, the Company has consolidated these entities.

Note 2 – Summary of significant accounting policies

Basis of presentation - The consolidated financial statements are prepared in accordance with accounting principles ~~generally~~ generally accepted in the United States of America ("“U.S. GAAP"”). The Company has elected a fiscal year ending on January 31. Certain balance sheet classifications have been made to prior period balances to reflect the current period’s presentation format. All intercompany balances and transactions have been eliminated in the consolidated financial statements.

Unaudited Interim Financial Statements - The accompanying unaudited financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Going Concern and Management’s Plan - Our Consolidated Financial Statements as of and for the period ended ~~July~~October 31, 2019 were prepared on the basis of a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. Accordingly, they do not give effect to adjustments that could be necessary should we be required to liquidate assets.

Our ability to continue as a going concern and raise capital for specific strategic initiatives could also depend on obtaining adequate capital to fund operating losses until it becomes profitable. We can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such financing will be obtainable on acceptable terms.

Use of estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period they are deemed to be necessary. Significant estimates made in the accompanying financial statements include but are not limited to following: those related to revenue recognition, allowance for doubtful accounts and notes receivable and unbilled services, lives and recoverability of equipment and other long-lived assets, realization of deferred tax assets, valuation of equity-based transactions, contingencies and litigation. The Company is subject to uncertainties, such as the impact of future events, economic, environmental and political factors, and changes in the business climate; therefore, actual results may differ from those estimates. When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, ~~the~~ the low end of the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company'’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company'’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in in estimates are disclosed in the notes to the consolidated financial statements.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Cash and cash equivalents – the company considers all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents. Cash balances may exceed federally insured limits. Management believes the financial risk associated with these balances is minimal and has not experienced any losses to date. For the periods presented no balances exceeded the federally insured limits.

~~Prepaid~~Accounts Receivable ~~expenses~~– ~~and~~Accounts ~~other~~receivable ~~assets~~are –recorded ~~Prepaid~~at ~~expenses~~the ~~and~~net ~~other~~value ~~current assets~~of ~~consist~~face ofamount ~~various~~less ~~payments~~an ~~the~~allowance for doubtful accounts. The Company ~~has~~evaluates ~~made~~its inaccounts ~~advance~~receivable periodically based on specific identification of any accounts receivable for ~~goods~~which the orCompany ~~services~~deems the net realizable value to be ~~received~~less inthan the ~~future.~~gross Asamount of ~~July~~accounts ~~31,~~receivable ~~2019~~recorded; in these cases, an ~~prepaid~~allowance ~~expenses~~for ~~were~~doubtful ~~comprised~~accounts ofis ~~advance~~established ~~payments~~for ~~made~~those tobalances. ~~third~~In ~~parties~~determining its need for ~~general~~an ~~expenses. Prepaid~~allowance for doubtful accounts, ~~general~~the ~~expenses~~Company ~~are~~considers ~~amortized~~historical ~~over~~experience, analysis of past due amounts, client creditworthiness and any other relevant available information. However, the ~~applicable~~Company’s ~~periods~~actual ~~which~~experience ~~approximate~~may vary from its estimates. If the ~~life~~financial condition of its clients were to deteriorate, resulting in their inability or unwillingness to pay the ~~contract~~Company’s fees, it may need to record additional allowances or ~~service~~write-offs ~~period~~in future periods.

~~Tenant~~The allowance ~~improvements~~for ~~and~~doubtful ~~office~~accounts, ~~equipment~~if –any, ~~Tenant~~is ~~improvements~~recorded ~~and~~as ~~office equipment~~an ~~are~~expense ~~recorded~~within atgeneral ~~cost~~ and ~~are~~administrative ~~depreciated~~expenses. ~~under~~As ~~straight~~of ~~line~~October ~~methods~~31, 2019, ~~over~~and ~~each~~January ~~item's~~31, ~~estimated~~2019, ~~useful life. Management reviews~~ the Company’s ~~tenant~~allowance ~~improvements and office equipment~~ for ~~impairment~~doubtful ~~whenever~~accounts ~~events~~was or$67,165 ~~changes in circumstances indicate that the carrying value of such assets may not be recoverable. Maintenance~~ and ~~repairs~~nil, ~~of property and equipment are charged to operations~~respectively. ~~Major~~The ~~improvements are capitalized. Upon retirement, sale or other disposition of~~Company ~~property~~recorded ~~and~~bad ~~equipment,~~debt ~~the~~expense ~~cost~~during ~~and accumulated depreciation are eliminated from~~ the ~~accounts~~three and ~~any~~nine ~~gain~~months orended ~~loss~~October is31, ~~included~~2019 inof ~~operations~~$67,165.

Prepaid expenses and other assets – Prepaid expenses and other current assets consist of various payments the Company has made in advance for goods or services to be received in the future. As of October 31, 2019, prepaid expenses were comprised of advance payments made to third parties for general expenses. Prepaid general expenses are amortized over the applicable periods which approximate the life of the contract or service period.

Tenant improvements and office equipment – Tenant improvements and office equipment are recorded at cost and are depreciated under straight line methods over each item’s estimated useful life. Management reviews the Company’s tenant improvements and office equipment for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Maintenance and repairs of property and equipment are charged to operations. Major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and any gain or loss is included in operations.

Tenant improvements and office equipment, net of accumulated amortization and depreciation are comprised of the following:

		July 31, 2019		January 31, 2019
		October 31, 2019			January 31, 2019
Leasehold improvements	$	~~10,951~~$	10,951	~~$ 2,200~~	$	2,200
Office equipment, furniture and fixtures		~~34,981~~	34,981	~~26,276~~		26,276
		~~45,932~~	45,932	~~28,476~~		28,476
Accumulated amortization and depreciation		~~(27,517)~~	(27,768	~~(25,709~~)		(25,709	)
	$	~~18,415~~$	18,163	~~$ 2,767~~	$	2,767

Tenant improvements are amortized over the term of the lease, and office equipment is depreciated over its useful lives, which has been deemed by management to be three years. Amortization and depreciation expense related to tenant improvements and office equipment for the three months ended ~~July~~October 31, 2019 and 2018 was $~~688~~252 and $~~251~~252, respectively. Amortization and depreciation expense related to tenant improvements and office equipment for the ~~six~~nine months ended ~~July~~October 31, 2019 and 2018 was $~~939~~1,191 and $~~502,~~755 respectively.

Investment in Unconsolidated Entity – The Company has a significant and non-controlling investment in several entities. The Company accounts for its investment using the equity method based on the ownership interest and ability to exert significant influence. Accordingly, investments are recorded at cost, and adjustments to the carrying amount of the investment are recognized in the period incurred. The Company’s share of the earnings or losses are reported in the other income and expense section of the income statement.

Long-Lived Assets – In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.6

Trademarks – Trademarks and other intangible assets are stated at cost and are amortized using the straight-line method over fifteen years. Amortization expense for the three months ended July 31, 2019 and 2018 was $220 and $183, respectively. Amortization expense for the six months ended July 31, 2019 and 2018 was $553 and $366, respectively.

Trademarks	July 31, 2019	January 31, 2019
Gross carrying amount	$ 13,260	$ 13,260
Accumulated amortization	4,362	3,809
Net intangible assets	$ 8,898	$ 9,451

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Long-Lived Assets – In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

Trademarks – Trademarks and other intangible assets are stated at cost and are amortized using the straight-line method over fifteen years. Amortization expense for the three months ended October 31, 2019 and 2018 was $220 and $183, respectively. Amortization expense for the nine months ended October 31, 2019 and 2018 was $773 and $549, respectively.

Trademarks	October 31, 2019		January 31, 2019
Gross carrying amount	$	13,260	$	13,260
Accumulated amortization		4,582		3,809
Net intangible assets	$	8,678	$	9,451

Comprehensive Income (Loss) – Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. Since the Company’s inception there have been no differences between the Company’s comprehensive loss and net loss.

Net income per share of common stock - We present earnings per share (“EPS”) in accordance with ASC 260 Earnings per Share, which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.

Revenue Recognition

Effective February 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers using the modified retrospective method. There was no adjustment required upon transition. Under ASC 606, the Company recognizes revenue applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured.

Consulting Services

We generate revenues from professional services consulting agreements. These arrangements are generally entered into: (1) on an hourly basis for an hourly fee; or, (2) on a fixed fee basis; or (3) a monthly fee basis. Generally, we require a complete or partial prepayment or retainer prior to performing services for hourly or fixed fee contracts.

For hourly based service contracts, we recognize revenue over time as services are performed and customers simultaneously consume such services. Any advances or retainers received from clients for hourly services are reflected in the Deferred revenue liability account until we recognize revenues as we incur and charge billable hours.

Our fixed fee basis engagements are recognized at a point in time. Generally, our fixed fee arrangements are for completion of a final deliverable or act which is significant to the arrangement as a whole. Although fees are typically collected in advance and the services provided have no alternative use to the Company, there is not a specific enforceable right to payment for the cost of services provided plus a reasonable profit margin. Accordingly, advances received at contract inception are reflected in the Deferred revenue liability account until the end of the contract when revenue is recognized and the customer takes control of the deliverable. These engagements do not generally exceed a one-year term.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Revenue recognition is affected by a number of factors that change the estimated amount of work required to complete the deliverable, such as changes in scope, timing, awaiting notification of license award from local government, and the level of client involvement. Losses, if any, on fixed-fee engagements are recognized in the period in which the loss first becomes probable and reasonably estimable. We believe if an engagement terminates prior to completion, we can recover the costs incurred related to the services provided.

Certain of our fixed fee contracts assisting customers with license applications include a success fee which is earned if the customer is awarded a license. We exclude such variable consideration from the transaction price and recognize the revenue when and if the license is awarded as the uncertainty of the application process creates a probability of significant revenue reversal.

Our monthly fee arrangements are billed on a monthly basis in arrears for a variety of services and are recognized over time as the customers simultaneously consume such services.

9The revenue by contract type for the periods ending October 31, 2019 and 2018 are listed in the table below:

STWC HOLDINGS, INC

	2019		2018
Hourly fee contracts	$	-	$	-
Fixed fee contracts		92,500		127,500
Monthly fee contracts		137,919		3,749
	$	230,419	$	131,249

~~Notes~~Deferred revenue as of October 31, 2019 and January 31, 2019 was $166,500 and $192,500, respectively. The Company is unable to ~~the~~determine timing ~~Unaudited~~for ~~Consolidated~~revenue ~~Financial~~recognition ~~Statements~~at this time for its deferred revenue due to state regulation changes.

The revenue by contract type for the periods ending July 31, 2019 and 2018 are listed in the table below:

	2019		2018
Hourly fee contracts	$ -	$ -
Fixed fee contracts	32,500	127,500
Monthly fee contracts	29,269	3,749
	$ 61,769	$ 131,249

Deferred revenue as of July 31, 2019 and January 31, 2019 was $196,500 and $192,500, respectively. The Company is unable to determine timing for revenue recognition at this time for its deferred revenue due to state regulation changes.

Product Sales

Revenue from product sales, including delivery fees, is recognized when an order has been obtained from the customer, the price is fixed and determinable when the order is placed, the product is shipped, title has transferred and collectability is reasonably assured. Given the facts that (1) our customers exercise discretion in determining the timing of when they place their product order; and, (2) the price negotiated in our product sales contracts is fixed and determinable at the time the customer places the order, we are not of the opinion that our product sales indicate or involve any significant financing that would materially change the amount of revenue recognized under the contract, or would otherwise contain a significant financing component for us or the customer under FASB ASC Topic 606. Product sales for the sales for the three and ~~six~~nine months ended ~~July~~October 31, 2019 was $1322,~~589~~095 and $2345,~~411~~506, respectively.

Reclassifications- Certain account reclassifications have been made to prior period balances to reflect the current period’s presentation format; such reclassifications had no impact on the Company’s consolidated statements of operations or consolidated statements of cash flows and had no material impact on the Company’s consolidated balance sheets.

Stock-Based Compensation – The Company records equity instruments at their fair value on the measurement date by utilizing the Black-Scholes option-pricing model. Stock Compensation for all share-based payments, is recognized as an expense over the requisite service period.

Significant assumptions utilized in determining the fair value of our stock options included the volatility rate, estimated term of the options, risk-free interest rate and forfeiture rate. The term of the options was assumed to be five years. The risk-free interest rate was determined utilizing the treasury rate with a maturity equal to the estimated term of the option grant. Finally, management assumed a 0% forfeiture rate in fiscal year 2018.

Non-employee share-based compensation charges generally are immediately vested and have no future performance requirements by the non-employee and the total share-based compensation charge is recorded in the period of the measurement date.

~~Recently Issued Accounting Pronouncements~~8

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and ensure that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below:

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases (“ASU 2016-02”). The guidance in this new standard requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to the current accounting and eliminates the current real estate-

specific provisions for all entities. The guidance also modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the standard effective February 1, 2019 by recording an immaterial transition adjustment and right of use assets and lease liabilities of approximately $500,000.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases (“ASU 2016-02”). The guidance in this new standard requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to the current accounting and eliminates the current real estate-specific provisions for all entities. The guidance also modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the standard effective February 1, 2019 by recording an immaterial transition adjustment and right of use assets and lease liabilities of approximately $500,000.

In July 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which among other things, these amendments require the measurement of all expected credit losses of financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for periods beginning after December 15, 2019, and interim periods within those fiscal years. The Company is in the process of evaluating the impact of the pronouncement.

In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-13, Fair Value Measurement (Topic 820), “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this Update modify certain disclosure requirements of fair value measurements and are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is in the process of evaluation the impact of the pronouncement.

Note 3 – Going concern:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Since inception, we have not achieved profitable operations, and have cumulative losses through ~~July~~October 31, 2019 of $910.52 million. The Company’s losses to date raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s achieving a sustainable level of profitability. The Company intends to continue financing its future development activities and its working capital needs largely from the private sale of the Company’s securities, with additional funding from other traditional financing sources, including convertible term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. However, the financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 – Fair value of financial instruments

The carrying amounts of cash and current liabilities approximate fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments in the management of our foreign exchange, commodity price or interest rate market risks.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

The FASB Codification clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Level 1:

Quoted prices in active markets for identical assets or liabilities.

Level 2:

Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

Level 3:

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Note 5 – Commitments and contingencies

The Company entered into a right-of-use operating lease agreement with an affiliate for the Company’s corporate office needs, consisting of 4,000 square feet of office space. The lease is for a 4-year period ending October 31, 2021. This lease to the Company is on the same terms and conditions as is the direct lease between the affiliate and the independent lessor. The office space lease includes in-substance fixed lease payments, and does not provide an implicit rate, the remaining lease term for the office space is 30 months. The Company also leases commercial retail space for the benefit of its investments in Oklahoma under an agreement ending August 31, 2023.

As of ~~July~~October 31, 2019, maturities of the lease liabilities are as follows:

For the Fiscal Year Ending January 31,
2020		81,727
Remaining 2019	$	34,972
2021		140,000
2020		139,887
2022		130,350
2021		125,865
2023		87,600
2022		83,796
2024		51,100
2023		55,863
Thereafter		—
Total minimum lease payments	$	440,384
Total minimum lease payments	$	490,777

During the three months ended ~~July~~October 31, 2019 and 2018, rent expense was $2419,~~266~~108 and $13,500, respectively. During the ~~six~~nine months ended October ~~July~~ 31, 2019 and 2018, rent expense was $4161,~~956~~064 and $2639,~~016~~516, respectively.

Note 6 – Notes Receivable-Related Parties

The Company has management and licensing agreements with a private entity in Puerto Rico 39% owned by the Company’s CEO, Erin Phillips, to operate four dispensaries and one cultivation operation in Puerto Rico. In conjunction with these agreements, the Company has begun providing funds to operate the Puerto Rico operations, which will be evidenced by a promissory note. The terms have not been finalized on this note and currently there is no specified terms to the agreement. Through ~~July~~October 31, 2019 the Company has advanced $280,607 related to the note.

The Company has management and licensing agreements with two private entities in Oklahoma. STWC has a 25% ownership in 2600 ~~Meridian~~ Meridian LLC, and an option to acquire 25% interest in HWH Farms, LLC. In conjunction with these agreements, the Company has begun providing funds for start-up and development costs, which will be evidenced by a promissory note. The terms have not been finalized on these notes and currently there is no specified terms to the agreement. Through ~~July~~October 31, 2019 the Company has advanced $84121,~~959~~655 to 2600 Meridian, LLC and recognized a loss on investment of $2231,~~821~~988. The Company has advanced $~~158~~197,~~153~~ 669 to HWH Farms, LLC related to the notes.

~~Note 7 – Related Party~~10

The Company has entered into separate management and licensing contracts with STWC Sorrento Valley, LLC which is partially owned by the Company's CEO, Erin Phillips. Ms. Phillips owns 27.5% of the STWC Sorrento Valley, LLC. Ms. Phillips allocated $200,000 of the Green Acres note to fund the related project in California as directed by the note agreement which reduced the liability to Ms. Phillips for loan advances received as of July 31, 2019.

The Company manages its cash flow by utilizing related party loans. During the six months ended July 31, 2019 and 2018 the company borrowed $31,048 and $12,523, respectively, from related parties to fund operations. The loans do not carry any interest. The Company converted an accrued expense with a related party to a note payable in the amount of $60,300 in January 2019. As of July 31, 2019, the Company reflected current loans payable to related parties of $69,184.

The Company received $125,000 for the benefit of the Puerto Rico entities and is disbursing these funds to operate the Puerto Rico operations, the balance as of July 31, 2019 was $38,245. In addition, the Company received $50,000 for the benefit of 2600 Meridian LLC; all the funds have been used to cover start-up and development costs. The funds held for related party entities are included as advances held in trust liabilities on the balance sheet.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Note 7 – Related Party

The Company has entered into separate management and licensing contracts with STWC Sorrento Valley, LLC which is partially owned by the Company’s CEO, Erin Phillips. Ms. Phillips owns 27.5% of the STWC Sorrento Valley, LLC. Ms. Phillips allocated $200,000 of the Green Acres note to fund the related project in California as directed by the note agreement which reduced the liability to Ms. Phillips for loan advances received as of October 31, 2019.

The Company manages its cash flow by utilizing related party loans. During the nine months ended October 31, 2019 and 2018 the company had net borrowings of $35,939 and $106,139, respectively, from related parties to fund operations. The loans do not carry any interest. The Company converted an accrued expense with a related party to a note payable in the amount of $60,300 in January 2019. As of October 31, 2019, the Company reflected current loans payable to related parties of $67,960.

The Company received $125,000 for the benefit of the Puerto Rico entities and is disbursing these funds to operate the Puerto Rico operations, the balance as of October 31, 2019 was $32,745. In addition, the Company received $50,000 for the benefit of 2600 Meridian LLC; all the funds have been used to cover start-up and development costs. The funds held for related party entities are included as advances held in trust liabilities on the balance sheet.

Note 8 – Notes Payable

Note purchase and security agreement – On August 29, 2018, the Company entered into a Note Purchase and Security Agreement ~~with~~ with Richland Fund, LLC., a Delaware limited liability company. Pursuant to the Agreement, Richland agreed to purchase Convertible Promissory Notes of the Company in the aggregate principal amount of $225,000, funded in three tranches, (i) $100,000.00 (the " “First Note"”), (ii) $67,000.00 (the "“Second Note"”), and (iii) the balance of $58,000.00 (the "“Third Note"”). The Notes bear 12% interest per annum, with the last payment under the Notes due December 15, 2020. The Notes are secured by all ~~assets~~ assets of the Company and guarantees from Shawn and Erin Phillips. Principal and interest payments are to commence on August 1, 2019, no payments were made during the three months ended October 31, 2019.

The Notes are convertible into common stock of the Company. The conversion price will be equal to the lower of (i) $0.15 cents per share (ii) or the average of the closing bid price of the Company'’s common stock taken over the three trading days prior to conversion or (iii) upon any issuance by the Company of common stock, or a security that is convertible into common stock, at a price lower than a net receipt to the Company of $0.15 per share, at such price that shall be at the same discount ratio as on the funding date. The conversion price of the Notes will be further subject to proportional adjustment for stock splits, reverse stock splits or combinations of shares, stock dividends, and the like. There are penalties for failure to timely deliver conversion shares. The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $225,000. The company has recognized $40,909 in interest expense for the amortization of the debt discount for the three months ending October 31, 2019 and $122,727 during the nine months ending October 31, 2019.

prior to conversion or (iii) upon any issuance by the Company of common stock, or a security that is convertible into common stock, at a price lower than a net receipt to the Company of $0.15 per share, at such price that shall be at the same discount ratio as on the funding date. The conversion price of the Notes will be further subject to proportional adjustment for stock splits, reverse stock splits or combinations of shares, stock dividends, and the like. There are penalties for failure to timely deliver conversion shares. The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $225,000. The company has recognized $40,909 in interest expense for the amortization of the debt discount for the three months ending July 31, 2019 and $81,818 during the six months ending July 31, 2019.

In connection with the funding agreement, the Company agreed to form and organize a subsidiary. The Company and lender are in discussions regarding the assets to be held in the subsidiary; nothing has been finalized as of the issuance date.

Loan Agreement – On April 6, 2018, the Company entered into a loan agreement with Green Acres Partners A, LLC, (the “lender”) whereby the lender agreed to loan to the Company $205,000. The loan proceeds are to be used specifically for the capital needs of two related party projects in San Diego, California. The interest rate on the notes is 12% per annum and monthly interest payments are due the first day beginning no later than August 1, 2019; thereafter the Company shall pay interest and principal on 60% of the Company’s ownership percentage of the available profits from the San Diego projects. The loan is personally guaranteed by Shawn Phillips, the husband of Erin Phillips, CEO. No payments were made during the three months ended October 31, 2019.

Secured Promissory Note – On December 7, 2018, the Company entered into a 15% Secured Promissory Note with Richland Fund, LLC, (the “lender”) whereby the lender agreed to loan to the Company $126,100. The interest rate on the note is 15% per annum and monthly interest payments are due the first day each month beginning January 1, 2019. If any interest payment remains unpaid and the lender has not declared the entire principal and unpaid accrued interest due and payable, the interest rate on that amount only will be increased to 20% per annum, until the past due interest amount is paid in full. The note originally matured on March 7, 2019 but was extended to a maturity date of August 1, 2019, no payments were made during the three months ended October 31, 2019.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Securities Purchase Agreements (SPA)

Power Up Lending - On February 13, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd. pursuant to which Power Up agreed to purchase a convertible promissory note in the face amount of $103,000. On February 15, 2019, the Company issued the Note. The Note matures on February 13, 2020, and bears interest at 12% per annum, increasing to 22% after maturity.

On March 18, 2019, the Company entered into the second tranche of the potential $1,000,000 funding with Power Up. The Company entered into a second Securities Purchase Agreement pursuant to which Power Up agreed to purchase a convertible promissory note in the face amount of $53,000. On March 18, 2019, the Company issued the Note. The Note matures on March 18, 2020, and bears interest at 12% per annum, increasing to 22% after maturity.

Under the Note, Power Up may convert all or a portion of the outstanding principal of the Note into shares of common stock of the Company beginning on the date which is 180 days from the date of the Note, at a price equal to 61% of the lowest trading price during the 20 trading day period ending on the last complete trading date prior to the date of conversion; provided, however, that Power Up may not convert the Note to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock. The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $102,738. The company has recognized $42,761 in interest expense for the amortization of the debt discount for the three and nine months ending October 31, 2019.

13If the Company prepays the Note within 30 days of the date of the Note, the Company must pay all of the principal at a cash redemption premium of 110%; if the prepayment is made between the 31st day and the 60th day after the date of the Note, then the redemption premium is 115%; if the prepayment is made from the 61st to the 90th day after date of the Note, then the redemption premium is 120%; if the prepayment is made from the 91st to the 120th day after the date of the Note, then the redemption premium is 125%; if the prepayment is made from the 121st to the 150th day after the date of the Note, then the redemption premium is 130%; and if the prepayment is made from the 151st to the 180th day after the date of the Note, then the redemption premium is 135%. The Note cannot be prepaid after the 180th day following the date of the Note.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

If the Company prepays the Note within 30 days of the date of the Note, the Company must pay all of the principal at a cash redemption premium of 110%; if the prepayment is made between the 31st day and the 60th day after the date of the Note,

then the redemption premium is 115%; if the prepayment is made from the 61st to the 90th day after date of the Note, then the redemption premium is 120%; if the prepayment is made from the 91st to the 120th day after the date of the Note, then the

redemption premium is 125%; if the prepayment is made from the 121st to the 150th day after the date of the Note, then the redemption premium is 130%; and if the prepayment is made from the 151st to the 180th day after the date of the Note, then the redemption premium is 135%. The Note cannot be prepaid after the 180th day following the date of the Note.

The Company is required to reserve for issuance upon conversion of the Note, six times the number of shares that would be issuable upon full conversion of the Note, assuming the 4.99% limitation were not in effect. In connection with the Note, the Company has caused its transfer agent to reserve initially 1,494,276 shares of Common Stock. The Company received a net amount of $150,000, with $6,000 paid for Power Up’s legal and due diligence expenses.

Crown Bridge - On May 1, 2019 the Company received funds from Crown Bridge Partners, LLC under a Securities Purchase Agreement dated April 18, 2019. Under the terms of the SPA, the Company received a total of $95,000, after an original issue discount of $5,000, and issued a convertible promissory note in the principal amount of $100,000. In addition, the Company reimbursed Crown Bridge $2,000 for its legal fees. The Company also issued warrants to purchase 60,606 shares of the company’s common stock associated with this transaction.

The maturity date of the Note is 12 months from April 18, 2019. The Note bears interest at 12% per annum at its face amount, with a default rate of 15% per annum (or the maximum amount permitted by law). If the Company prepays the Note through the 180^th day following the date thereof, the Company must pay all of the principal and interest with a prepayment penalty ranging from 135% to 150%. After the 180^th day the Company has no further right of prepayment.

Crown Bridge may, at any time, convert all or any part of the outstanding principal of the Note into shares of our common stock at a price per share equal to 60% (representing a 40% discount rate) of the lowest trading price of the common stock during the 20 trading day period ending on the last complete trading day prior to the date of conversion. If the conversion price is equal to or lower than $0.35 per share, an additional 15% discount will be applied (resulting in a 55% discount rate, assuming no other adjustments); if the Company is unable to deliver converted shares via DWAC, an additional 10% discount will be applied (resulting in a discount rate of 50%, assuming no other adjustments); if the Company fails to comply with our reporting requirements under the Exchange Act, an additional 15% discount will be applied (resulting in a discount rate of 55%, assuming no other adjustments); and if the Company fails to maintain our status as "“DTC Eligible"” or if at any time the conversion price is lower than $0.10, an additional 10% discount will be applied (resulting in a discount of 65%, assuming no other adjustments except for the 15% discount due to the conversion price below $0.35). Crown Bridge may not convert the Note to the extent that such conversion would result in beneficial ownership by Crown Bridge and its affiliates of more than 4.99% of our issued and outstanding common stock. The Company has also granted piggy-back registration rights for the shares issuable upon conversion of the Note. The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $100,000. The company has recognized $2425,~~863~~137 in interest expense for the amortization of the debt discount for the ~~period~~three months ending ~~July~~October 31, 2019 and $50,000 during the nine months ending October 31, 2019.

The Note contains certain representations, warranties, covenants (both affirmative and negative), and events of default, including if our common stock is suspended or delisted for trading, or if the Company is delinquent in our periodic report filings with the SEC. In the event of a default, at the option of Crown Bridge, it may consider the Note immediately due and payable and the amount of repayment increases to 150% of the outstanding balance of the Note. The Note also grants Crown Bridge a right of first refusal for any future capital raises or financings by us. It also contains a most favored nations provision for any more favorable terms in future financing transactions by us.12

The Warrant may be exercised at any time through the second anniversary date of the Note. The exercise price per share of common stock under the Warrant is $1.65 per share, subject to adjustment, including cashless exercise. The Warrant also contains a most favored nations provision. As a result of granting the Warrant to FirstFire, see below, with an exercise price of $1.00, Crown Bridge Partners, LLC, the holder of warrants to purchase 60,606 shares of the Company’s common stock at a stated exercise price of $1.65 per share, has the option to reduce the exercise price to $1.00 per share and to increase the number of shares issuable upon exercise of the warrant to 100,000 shares.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

Tangiers - On June 20, 2019 the Company entered into a 10% Fixed Convertible Promissory Note with Tangiers Global, LLC in the aggregate principal amount of up to $550,000. The initial principal amount of the Tangiers Note is $165,000, for which Tangiers paid a purchase price of $150,000 on June 24, 2019, representing approximately a 10% original issue discount, due six months from the effective date of each payment by Tangiers. Upon Company request, subject to certain conditions, Tangiers will pay up to an additional $400,000 consideration, subject to a 10% original issue discount, and in such event, the maturity date for the additional payment would be six months from the effective date of such payment. The sum that the Company must repay to Tangiers would be prorated based on the consideration actually paid by Tangiers, such that the Company is only required to repay the amount funded (plus the original issue discount, interest and other fees, as applicable), and the Company is not required to repay any unfunded portion of the Tangiers Note.

The Tangiers Note is convertible at the option of Tangiers at a conversion price of $0.65 per share, subject to adjustment in the event of a forward split, stock dividend, or the like, but not adjusted in the event of a reverse split, recombination, or the like. If a prepayment is made within 90 days, the Company must pay an amount equal to 110% of the principal amount so paid; from 91 to 120 days, the Company must pay an amount equal to 120% of the principal amount so paid; and from 121 to 180 days, the Company must pay an amount equal to 130% of the principal amount so paid. Upon the occurrence of an event of default, as such term is defined under the Tangiers Note, at the holder’s election, the Note will be immediately due and payable in cash at an amount equal to the principal amount due, plus an additional amount equal to 30% of the principal amount. In addition, five days following acceleration of the repayment of the Note, interest will accrue at the rate of 20% per annum or the maximum legal rate. The Company has also caused their transfer agent to reserve not less than 7,500,000 shares of the Company’s common stock for issuance upon conversion. The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $165,000. The company has recognized $3682,~~967~~951 in interest expense for the amortization of the debt discount for the ~~period~~ three months ending ~~July~~October 31, 2019 and $119,918 during the nine months ending October 31, 2019.

In the even the Note is not repaid on or before the maturity date, the holder may convert in whole or in part the outstanding principal amount of the Note into shares of our common stock at a conversion price equal to the lower of initial conversion price of $0.65 per share or 60% of the lowest trading price of our common stock during the 15 consecutive trading days prior conversion.

For a period of 45 days following the initial funding under the Note, the Company has agreed not to enter into any convertible debt financing transaction with another party. Further, the Company has granted a right of first refusal to Tangiers in connection future financings by us so long as the Note is outstanding.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

With respect to the above loan transaction with Tangiers, the Company issued Tangiers a stock purchase warrant allowing for the purchase of 1,100,000 shares of our common stock at $1.25 per share on a cashless basis for a period of five years.

In addition to the loan transaction with Tangiers, the Company has entered into an Investment Agreement with Tangiers whereby Tangiers has agreed to purchase shares of our common stock up to an aggregate of $10,000,000 under certain terms and conditions. The purchase price for the shares is 80% of the lowest trading price of the stock during the five consecutive trading days prior to receipt by Tangiers of the notice from us requiring purchase by them. The maximum number of shares the Company can require Tangies to purchase is restricted to 200% of the average daily trading volume during 10 consecutive trading days, provided the amount is at least $5,000 and does not exceed $500,000.

FirstFire - On June 21, 2019 the Company received funds from FirstFire Global Opportunities Fund. Under the terms of the SPA, the Company received a total of $135,000, after an original issue discount of $15,000, and issued a convertible promissory note, in the principal amount of $150,000. The Company also issued to FirstFire immediately exercisable five-year warrants to purchase 150,000 shares of our common stock at $1.00, subject to adjustment in the event the Company issues shares at less than the current exercise price. The Warrant also contains a cashless exercise provision and a most favored nations provision.

The maturity date of the Note is nine months from June 18, 2019. The Note bears interest at 10% per annum at its face amount, with a default rate of 15% per annum (or the maximum amount permitted by law). If the Company prepays the Note through the 90^th day following the date thereof, the Company must pay an amount equal to 125% of the principal amount of the Note and any accrued but unpaid interest thereon, plus any default interest. If the Company prepays the Note from the 91^st day through the 180^th day following the date thereof, the Company must pay an amount equal to 135% of the principal amount of the Note and any accrued but unpaid interest thereon, plus any default interest. After the 180^th day the Company has no further right of prepayment.

15FirstFire may, at any time, convert all or any part of the outstanding principal and interest, including default interest, of the Note into shares of the company’s common stock at the lower of $0.75 per share or a price per share equal to 55% (representing a 45% discount rate) of the lowest trading price of the common stock during the 20 trading day period prior to the date of conversion. FirstFire may not convert the Note to the extent that such conversion would result in beneficial ownership by FirstFire and its affiliates of more than 4.99% of our issued and outstanding common stock, or up to 9.99% at the option of FirstFire. The Company has agreed to reserve for issuance the greater of 25,000,000 shares or the number of shares equal to 3.5 times the number of shares issuable upon conversion of the Note. The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $150,000. The company has recognized $50,365 in interest expense for the amortization of the debt discount for the three months ending October 31, 2019 and $73,905 during the nine months ending October 31, 2019.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

FirstFire may, at any time, convert all or any part of the outstanding principal and interest, including default interest, of the Note into shares of the company’s common stock at the lower of $0.75 per share or a price per share equal to 55% (representing a 45% discount rate) of the lowest trading price of the common stock during the 20 trading day period prior to the date of conversion. FirstFire may not convert the Note to the extent that such conversion would result in beneficial ownership by FirstFire and its affiliates of more than 4.99% of our issued and outstanding common stock, or up to 9.99% at the option of FirstFire. The Company has agreed to reserve for issuance the greater of 25,000,000 shares or the number of shares equal to 3.5 times the number of shares issuable upon conversion of the Note. The company recognized a beneficial conversion feature on the notes as a discount and additional paid in capital of $150,000. The company has recognized $23,540 in interest expense for the amortization of the debt discount for the period ending July 31, 2019.

The debt evidenced by the Note ranks senior to any other debt incurred as of or following the date of the Note. So long as any obligations under the Note remain outstanding, the Company cannot incur or guarantee any indebtedness that is senior to or pari passu with the debt evidenced by the Note, and cannot, without prior consent, pay or declare any dividends or other distributions to shareholders.

For a period of 18 months, FirstFire has a right of first refusal to purchase up to $150,000 of equity, debt, or equity equivalent securities offered by us during the 18-month period. The Company is required to provide FirstFire 10 business days’ notice of a proposed transaction, which, if accepted, is required to be completed by FirstFire within 10 business days following the notice period. The terms of the acceptance by FirstFire must not be more favorable to FirstFire or less favorable to the Company than those set forth in the offer notice.

So long as the Note is outstanding, the Company cannot enter into any variable rate transaction whereby the Company issues any securities convertible into shares of its common stock at a price based on trading or quotation prices of the Company’s common stock.

Within 60 calendar days following funding, the Company is required to obtain director and officer insurance for a period of at least 18 months, with two years of tail coverage. The Company has also agreed to indemnify FirstFire against any actions arising under the SPA. Under the terms of the SPA, the Company also granted piggyback registration rights to FirstFire to register for resale shares issuable upon conversion of the Note or exercise of the Warrant.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

The Note contains certain representations, warranties, covenants (both affirmative and negative), and events of default. In the event of a default, the Note will be immediately due and payable, and the amount of repayment increases to 150% of the outstanding balance of the Note. The Company has also authorized FirstFire to appear ex parte without notice to the Company to confess judgment against the Company for the unpaid amount of the Note following an event of default.

The SPA also grants FirstFire a right of first refusal for any future capital raises or financings by the Company. It also contains a most favored nations provision for any more favorable terms in future financing transactions.

Note 9 – Stockholders Equity

Common Stock

On February 4, 2019, the Company initiated a private equity offering to accredited investors (the "“Offering"”) in accordance with Regulation D under the Securities Act of 1933 ("“Securities Act"”). The Offering consisted of 2,000,000 units with each unit consisting of one share of the Company'’s Common Stock and a warrant to purchase an additional share of common for $2.00 at any time prior to January 31, 2022. During the period ended ~~July~~October 31, 2019, 80,000 units were sold at a price per unit of $1.00, for offering proceeds of $80,000. The company allocated proceeds at the estimated fair value of the common shares and warrants for value of $41,353 and $38,647, respectively.

The Company entered into an Advisor Agreement with Matthew Willer, pursuant to the terms of the advisor agreement, on February 22, 2019, the Company issued 500,000 shares of its common stock to Mr. Willer for services performed.

The Company engaged Hayden IR, LLC and Tysadco Partners LLC to provide investor relations services under an Investor Relations Consulting Agreement. Pursuant to the IR Agreement, the Company issued a total of 25,000 shares of its common stock on February 22, 2019.

16From time to time the Company offers shares in-lieu of cash for consulting, investor relations and legal services. During the three months ended October 31, 2019 the Company issued 506,000 shares of its common stock for services performed.

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

From time to time the Company offers shares in-lieu of cash for consulting, investor relations and legal services. During the three months ended July 31, 2019 the Company issued 58,287 shares of its common stock for services performed.

Warrants

	Number of Warrants		~~Exercise Price~~	~~Wtgd~~Exercise ~~Avg Calculation~~Price		~~Wtgd Avg Remining Life~~	Wtgd Avg Calculation			Wtgd Avg Remining Life
Balance at 1/31/2018	~~2,224,700~~	2,224,700	~~$ 5.00~~	$ ~~11,123,500~~	5.00	~~1.00~~	$	11,123,500			1.00
Granted	~~2,000,000~~	2,000,000	~~0.16~~	~~$ 322,000~~	0.16		$	322,000
Exercised	~~(311,000)~~	(311,000	~~0.16~~)	~~$ (49,650)~~	0.16		$	(49,650	)
Cancelled	~~(2,013,700)~~	(2,013,700	~~5.00~~)	~~$ (11,091,850)~~	5.00		$	(11,091,850	)
Balance at 1/31/2019	~~1,900,000~~	1,900,000	~~$ 0.16~~	$ ~~304,000~~	0.16	~~1.71~~	$	304,000			1.71
Granted	~~1,430,000~~	1,430,000	~~1.25~~	~~$ 1,785,000~~	1.25		$	1,785,000
Exercised	-	-	-	-	-			-
Cancelled	-	-	-	-	-			-
Balance at 7/31/19	3,330,000		$ 0.63	$ 2,089,000		2.64
Balance at 10/31/19		3,330,000		$	0.63		$	2,089,000			2.39

Stock Options

The Company has 250,000 stock options outstanding at ~~July~~October 31, 2019 and recognized $9,~~886~~887 for the three months ended and ~~July~~ October 31, 2019, and $2332,~~066~~953 for the ~~six~~nine months ended ~~July~~ October 31, 2019 in stock compensation. The Company has $~~174~~164,~~652~~765 in unrecognized stock compensation expense.

The Company accounts for unit-based compensation using the Black-Scholes model to estimate the fair value of unit-based awards at the date of grant. The Black-Scholes model requires the use of highly subjective assumptions, including value of the enterprise, expected life, expected volatility, and expected risk-free rate of return. Other reasonable assumptions could provide differing results.15

period corresponding with the estimated expected life of the award. The Company bases the risk-free interest rate used in the Black-Scholes model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent term equal to the expected life of the award. The Company uses historical data to estimate pre-vesting option forfeitures and record unit-based compensation for those awards that are expected to vest. The Company adjusts unit-based compensation

for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed.

The assumptions used in the fair value calculations are as follows for the period ended July 31, 2019:

Expected term (years)	5
Risk-free interest rate	2.73%
Volatility	218%
Expected dividend yield	0.00%

STWC HOLDINGS, INC

Notes to the Unaudited Consolidated Financial Statements

The Company amortizes the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, expected time to a liquidity event, exercise patterns, and post-vesting forfeitures. The Company estimates volatility based on the historical volatility of comparable company’s common stock over the most recent period corresponding with the estimated expected life of the award. The Company bases the risk-free interest rate used in the Black-Scholes model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent term equal to the expected life of the award. The Company uses historical data to estimate pre-vesting option forfeitures and record unit-based compensation for those awards that are expected to vest. The Company adjusts unit-based compensation for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed.

The assumptions used in the fair value calculations are as follows for the period ended October 31, 2019:

Expected term (years)	5
Risk-free interest rate	2.73	%
Volatility	218	%
Expected dividend yield	0.00	%

Note 10 – Subsequent Events

GAAP requires an entity to disclose events that occur after the balance sheet date but before financial statements are issued or are available to be issued (“subsequent events”) as well as the date through which an entity has evaluated subsequent events. There are two types of subsequent events. The first type consists of events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, (“recognized subsequent events”). The second type consists of events that provide evidence about conditions that did not exist at the date of the balance sheet but arose subsequent to that date (“non-recognized subsequent events”).

The Company has not paid any interest or principal on the note purchase and security agreement dated August 29, 2018, with Richland Fund, LLC. Commencing August 2, 2019 the interest rate on the unpaid interest and principal increased to 18% per annum, until the past due interest amount is paid in full. As of the filing date of this report, we owe approximately $7687,~~241~~143 for the principal and past due interest.

The Company has failed to make the required monthly interest payments on the loan agreement dated April 6, 2018, with Green Acres Partners A, LLC. As of the filing date of this report, we owe approximately $1622,~~704~~703 for this past due interest.

The Company has not paid any interest or principal on the secured promissory note dated December 7, 2018, with Richland Fund, LLC. Commencing August 2, 2019 the interest rate on the unpaid interest and principal increased to 20% per annum, until the past due interest amount is paid in full. As of the filing date of this report, we owe approximately $~~140~~148,~~815~~226 for the principal and past due interest.

OnIn November ~~August 6,~~ 2019 ~~the~~Power ~~Company~~Up ~~cancelled~~Lending ~~500~~converted $8,000 ~~shares~~of ~~issued~~the principal amounts due in ~~connection~~accordance with the ~~joint-venture~~conditions ~~entity~~of ~~Volume~~the 2,convertible note ~~LLC~~into ~~which~~260,586 ~~held~~shares ~~the~~of ~~HiLife~~our ~~Creative~~common ~~intellectual~~stock, ~~property acquisition in September 2018~~respectively. The ~~company~~remaining ~~assumed~~principal ~~full~~balance ~~control~~under of the ~~entity~~note onis ~~May 15~~$77, ~~2019~~000.

OnIn November ~~August~~2019 ~~20,~~Crown ~~2019~~Bridge Partners, ~~the~~LLC ~~Company~~converted ~~amended~~$5,250 of the ~~Articles~~principal ofamounts ~~Incorporation.~~due ~~The~~in ~~amendment~~accordance ~~increases~~with the ~~authorized~~conditions ~~number~~ of ~~shares~~the convertible tonote ~~500~~into 150,000~~,000~~ shares of our common stock, respectively. The remaining principal balance under the note is $95,500.

On August 20, 2019 the Company adopted Colorado Bylaws which replace the bylaws formerly used by the Company and previously adopted by 4th Grade Films, a Utah corporation, prior to its change of domicile to Colorado.16

InITEM ~~August~~2. ~~2019~~MANAGEMENT’S ~~Power~~DISCUSSION UpAND ~~Lending~~ANALYSIS ~~converted~~OF ~~$10,000~~FINANCIAL ~~and~~CONDITION ~~$8,000~~AND ofRESULTS ~~the~~OF principal amounts due in accordance with the conditions of the convertible note into 24,839 and 50,441 shares of our common stock, respectively. The remaining principal balance under the note is $85,000.OPERATIONS

On September 9, 2019, the Company filed a Certificate of Amendment increasing the number of authorized common shares, par value $0.00001 per share, from 100,000,000 to 500,000,000. The amendment will be effective on September 30, 2019.Overview

OnWe ~~September~~were ~~10,~~established ~~2019,~~to ~~the~~provide ~~Company’s~~sophisticated fulfillment ~~registration~~services ~~statement~~to onmedical ~~Form~~and ~~S-1~~retail ~~was~~stores, ~~declared effective by the Securities~~ and ~~Exchange~~cultivation ~~Commission~~facilities ~~registering~~in ~~2,000,000 shares of~~ the ~~Company’s~~regulated ~~common~~cannabis ~~stock~~industry ~~for~~throughout ~~possible resale, from time to time, by~~ the United ~~Tangiers~~States ~~Global,~~and ~~LLC~~its ~~(“Tangiers”),~~territories. ~~the~~Such ~~selling~~fulfillment ~~stockholder. These~~services ~~shares~~would ~~may~~only be ~~issued~~provided ~~by the Company pursuant~~ to ~~the~~stores ~~Investment~~and ~~Agreement~~facilities ~~dated~~located ~~June~~in ~~20,~~geographical areas ~~2019,~~where ~~with~~the ~~Tangiers~~governing ~~(see~~state ~~Note~~and 8local –ordinances ~~Notes~~allow ~~Payable). The~~for ~~shares~~the ~~may~~unfettered beprovisions ~~sold~~of bysuch ~~Tangiers at prevailing market or privately negotiated prices~~services.

18The fulfillment services that we currently are able to provide are summarized, as follows:

~~ITEM~~● 2.Opportunity ~~MANAGEMENT'S~~Assessment: ~~DISCUSSION~~For ~~AND~~a ~~ANALYSIS~~standard OFfee, ~~FINANCIAL~~we ~~CONDITION~~will ~~AND~~complete ~~RESULTS~~an OFOpportunity ~~OPERATIONS~~Assessment for a client, which would include financial modeling, completed with our proprietary assessment software.

~~Overview~~● Application Filing Assistance: Based upon our knowledge of the various rules and regulations of respective state and local jurisdictions, we will provide turn-key application preparation and submission services for a client, and/or provide consulting assistance to a client who is self-preparing their application.

We● ~~were~~Branding, ~~established~~Marketing toand ~~provide~~Administrative ~~sophisticated~~Consulting ~~fulfillment~~Services: ~~services~~Customers may contract with us to ~~medical~~use ~~and~~the ~~retail~~Strainwise ~~stores~~name, logo and ~~cultivation~~affinity ~~facilities~~images in ~~the~~their ~~regulated~~retail ~~cannabis~~store ~~industry~~locations. ~~throughout~~A ~~the United~~monthly ~~States~~fee ~~and~~will ~~its~~permit ~~territories.~~a ~~Such~~branding ~~fulfillment~~customer ~~services~~to ~~would~~use ~~only~~the beStrainwise ~~provided~~brand toat ~~stores~~a ~~and~~specific ~~facilities~~location. ~~located~~In addition, we will assist operators in ~~geographical~~marketing ~~areas~~and ~~where~~managing ~~the~~their ~~governing~~businesses, ~~state~~setting up new retail locations and ~~local~~general ~~ordinances~~business ~~allow~~planning ~~for~~and ~~the~~execution ~~unfettered~~at ~~provisions~~an ofhourly ~~such~~rate. This includes services to establish an efficient, predictable production process, as well as, nutrient recipes for consistent and appealing marijuana strains.

~~The~~● ~~fulfillment~~Accounting ~~services~~and ~~that~~Financial Services: For a monthly fee, we ~~currently~~will ~~are~~provide ~~able~~customers with a fully implemented general ledger system, with an industry centric chart of accounts, which enables management to readily monitor and manage all facets of a marijuana medical dispensary and cultivation facility. We will provide ~~are~~bookkeeping, ~~summarized~~accounts payable processing, ascash ~~follows:~~management, general ledger processing, financial statement preparation, state and municipal sales tax filings, and state and federal income tax compilation and filings.

•● ~~Opportunity~~Compliance ~~Assessment~~Services: ~~For~~The arules, ~~standard~~regulations ~~fee~~and state laws governing the production, wedistribution ~~will~~and ~~complete~~retail ansale ~~Opportunity~~of ~~Assessment~~marijuana ~~for~~can abe ~~client~~complex, ~~which~~and ~~would~~compliance ~~include~~may ~~financial~~prove ~~modeling~~cumbersome. Thus, ~~completed~~customers may contract with ~~our~~us ~~proprietary~~to ~~assessment~~implement ~~software~~a compliance process, based upon the number and type of licenses and permits for their specific business. We will provide this service on both an hourly rate and stipulated monthly fee.

•● ~~Application Filing Assistance~~Lending: ~~Based~~We ~~upon our knowledge of the various rules and regulations of respective state and local jurisdictions, we~~ will provide ~~turn-key~~loans ~~application~~to ~~preparation~~individuals and ~~submission~~businesses ~~services~~in ~~for~~the acannabis ~~client, and/or provide consulting assistance to a client who is self-preparing their application~~industry.

•We do ~~Branding,~~NOT ~~Marketing~~grow ~~and~~marijuana ~~Administrative Consulting Services: Customers may contract with us to use the Strainwise name~~plants, ~~logo~~produce ~~and~~marijuana ~~affinity~~infused ~~images in their retail store locations. A monthly fee will permit a branding customer to use the Strainwise brand at a specific location. In addition~~products, wesell ~~will~~marijuana ~~assist~~plants ~~operators in marketing~~ and/or ~~managing~~sell ~~their~~marijuana ~~businesses,~~infused products ~~setting~~of upany ~~new~~nature ~~retail~~in ~~locations~~any ~~and~~jurisdiction ~~general~~were ~~business~~such ~~planning~~activity ~~and~~has ~~execution~~not atbeen ~~an hourly rate~~legalized. ~~This includes services to establish an efficient, predictable production process, as well as, nutrient recipes for consistent and appealing marijuana strains.~~

•Historical Accounting and Financial Services: For a monthly fee, we will provide customers with a fully implemented general ledger system, with an industry centric chart of accounts, which enables management to readily monitor and manage all facets of a marijuana medical dispensary and cultivation facility. We will provide bookkeeping, accounts payable processing, cash management, general ledger processing, financial statement preparation, state and municipal sales tax filings, and state and federal income tax compilation and filings.Overview

•Since ~~Compliance~~the ~~Services:~~change ~~The~~in ~~rules,~~our ~~regulations~~business ~~and~~operations in ~~state laws governing the production~~2017, ~~distribution~~we ~~and~~have ~~retail~~secured ~~sale~~debt ~~of marijuana can be complex,~~ and ~~compliance~~equity ~~may~~funding ~~prove~~for ~~cumbersome.~~operations ~~Thus,~~from ~~customers~~various ~~may contract with us to implement a compliance process~~sources, ~~based~~including ~~upon~~ the ~~number and type of licenses and permits for their specific business. We will provide this service on both an hourly rate and stipulated monthly fee.~~following:

•Equity ~~Lending: We will provide loans to individuals and businesses in the cannabis industry.~~Funding

WeOn doFebruary ~~NOT~~4, ~~grow~~2019, ~~marijuana~~the ~~plants,~~Company ~~produce~~initiated a ~~marijuana~~private ~~infused~~equity ~~products~~offering to accredited investors (the “Offering”) in accordance with Regulation D under the Securities Act of 1933 (“Securities Act”). The Offering consisted of 2,000,000 ~~sell~~units ~~marijuana~~with ~~plants~~each unit consisting of one share of the Company’s Common Stock and~~/or~~ ~~sell~~a ~~marijuana~~warrant ~~infused~~to ~~products~~purchase an additional share of common for $2.00 at any time prior to January 31, 2022. ~~nature~~During inthe ~~any~~nine ~~jurisdiction~~months ended October 31, 2019 80,000 units were ~~such~~sold ~~activity~~at ~~has~~a ~~not~~price ~~been~~per ~~legalized~~unit of $1.00, for offering proceeds of $80,000. The company allocated proceeds at the estimated fair value of the common shares and warrants for value of $41,353 and $38,647, respectively.

~~Historical Overview~~17

~~Since~~Power Up ~~the~~Convertible ~~change~~Debt ~~in our business operations in 2017, we have secured debt and equity funding for operations from various sources, including the following:~~Funding

~~Equity~~In ~~Funding~~February 2019 we secured funding through a Securities Purchase Agreement with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased a convertible promissory note (the “First Tranche Note”) in the face amount of $103,000. The First Tranche Note matures on February 13, 2020, and bears interest at 12% per annum, increasing to 22% after maturity. Power Up may convert all or a portion of the outstanding principal of the First Tranche Note into shares of our common stock beginning on the date which is 180 days from the date of the First Tranche Note, at a price equal to 61% of the lowest trading price during the 20 trading day period ending on the last complete trading date prior to the date of conversion; provided, however, that Power Up may not convert the Note to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of our outstanding common stock. During the first months of the First Tranche Note we can prepay the note at premiums ranging from 110% to 135%. The First Tranche Note cannot be prepaid after the 180th day following the date thereof. We are required to reserve for issuance upon conversion of the First Tranche Note, six times the number of shares that would be issuable upon full conversion thereof, assuming the 4.99% limitation were not in effect. In connection with the First Tranche Note, we have caused our transfer agent to reserve initially 880,969 shares of Common Stock. We received a net amount of $100,000, with $2,500 paid for Power Up’s legal counsel and $500 for Power Up’s due diligence fee.

On ~~February~~March 418, 2019, we ~~the~~entered ~~Company~~into ~~initiated~~ a ~~private~~second ~~equity~~funding ~~offering~~arrangement towith ~~accredited~~Power ~~investors~~Up ~~(the~~under ~~"Offering")~~terms inidentical ~~accordance~~to ~~with~~the ~~Regulation~~first Dtransaction. The ~~under~~second note (the ~~Securities~~“Second ~~Act~~Tranche ofNote”) ~~1933 ("Securities~~is ~~Act").~~in ~~The~~the ~~Offering~~face ~~consisted~~amount of 2$53,000~~,000~~ ~~units~~and ~~with~~matures ~~each~~on ~~unit~~March ~~consisting~~18, of2020. ~~one~~In ~~share~~connection ofwith the Second ~~Company's~~Tranche ~~Common~~Note, ~~Stock~~we ~~and~~caused aour ~~warrant~~transfer agent to ~~purchase~~reserve aninitially ~~additional~~613,307 ~~share~~shares of ~~common~~Common ~~for $2~~Stock.00 atWe ~~any~~received ~~time prior to January 31, 2022. During the six months ended July 31, 2019 80,000 units were sold at~~ a ~~price~~net ~~per unit~~ amount of $~~1.00~~50,000, ~~for~~with ~~offering proceeds of~~ $803,000~~. The~~ ~~company~~paid ~~allocated~~for ~~proceeds~~Power atUp’s ~~the~~legal ~~estimated fair value of the common shares~~ and ~~warrants~~due ~~for~~diligence ~~value of $41,353 and $38,647, respectively~~expenses.

19Crown Bridge Partners Convertible Debt Funding

~~Power~~On UpMay ~~Convertible~~1, ~~Debt~~2019 we ~~Funding~~received funding from Crown Bridge Partners, LLC (“Crown Bridge”) under a Securities Purchase Agreement dated April 18, 2019 (the “SPA”). Under the terms of the SPA, we received a total of $95,000, after an original issue discount of $5,000, and issued a convertible promissory note dated April 18, 2019, in the principal amount of $100,000 (the “Note”). In addition, we reimbursed Crown Bridge $2,000 for its legal fees. We also issued warrants to purchase 60,606 shares of our common stock (the “Warrant”) associated with this transaction. The Warrant may be exercised at any time through the second anniversary date of the Note. The exercise price per share of common stock under the Warrant is $1.65 per share, subject to adjustment, including cashless exercise. The Warrant also contains a most favored nations provision.

InThe ~~February~~maturity ~~2019 we secured funding through a Securities Purchase Agreement with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased a convertible~~date ~~promissory~~of ~~note (~~the ~~“First Tranche~~ Note”) inis ~~the~~12 ~~face~~months ~~amount~~from ofApril ~~$103~~18,~~000~~ 2019. The ~~First Tranche~~ Note ~~matures on February 13, 2020, and~~ bears interest at 12% per annum, ~~increasing~~at toits ~~22%~~face ~~after~~amount, ~~maturity. Power~~with ~~Up may convert all or~~ a ~~portion~~default ~~of the~~rate ~~outstanding principal~~ of ~~the~~15% ~~First~~per ~~Tranche~~annum ~~Note~~(or ~~into shares of our common stock beginning on~~ the ~~date~~maximum ~~which~~amount ispermitted ~~180~~by ~~days~~law). ~~from~~If ~~the~~we ~~date~~prepay of the ~~First Tranche~~ Note, atthrough ~~a price equal to 61% of~~ the ~~lowest trading price during the 20 trading~~ 180th day ~~period~~following ~~ending on~~ the ~~last complete trading~~ date ~~prior to the date of conversion; provided~~thereof, ~~however,~~we ~~that~~must ~~Power~~pay Upall ~~may~~of ~~not convert~~ the ~~Note~~principal ~~to the extent that such conversion would result in beneficial ownership by Power Up~~ and ~~its~~interest ~~affiliates~~with ofa ~~more~~prepayment ~~than 4.99%~~penalty ~~of our outstanding common stock. During the first six months of the First Tranche Note we can prepay the note at premiums~~ ranging from ~~110~~135% to ~~135~~150%. ~~The~~After ~~First Tranche Note cannot be prepaid after~~ the 180th day following the date thereof. We are required to reserve for issuance upon conversion of the First Tranche Note, six times the number of shares that would be issuable upon full conversion thereof, assuming the 4.99% limitation were not in effect. In connection with the First Tranche Note, we have ~~caused~~no ~~our~~further ~~transfer~~right ~~agent to reserve initially 880,969 shares~~ of ~~Common Stock~~prepayment. ~~We received a net amount of $100,000, with $2,500 paid for Power Up’s legal counsel and $500 for Power Up’s due diligence fee.~~

OnCrown ~~March~~Bridge 18may, at ~~2019~~any time, weconvert ~~entered~~all or any part of the outstanding principal of the Note into ashares ~~second~~of ~~funding~~our ~~arrangement~~common ~~with~~stock ~~Power~~at Upa ~~under~~price ~~terms~~per ~~identical~~share equal to 60% (representing a 40% discount rate) of the ~~first~~lowest ~~transaction. The~~trading ~~second~~price ~~note~~of (the ~~“Second~~common ~~Tranche~~stock ~~Note”)~~during isthe 20 trading day period inending on the ~~face~~last ~~amount~~complete trading day prior to the date of conversion. If the conversion price is equal to or lower than $530.35 per share,~~000~~ ~~and~~an ~~matures~~additional on15% ~~March~~discount ~~18,~~will ~~2020. In~~be ~~connection~~applied ~~with~~(resulting ~~the~~in ~~Second~~a ~~Tranche~~55% ~~Note~~discount rate, weassuming ~~caused~~no ~~our~~other ~~transfer~~adjustments); ~~agent~~if we are unable to ~~reserve~~deliver ~~initially~~converted ~~613~~shares via DWAC,~~307~~ ~~shares~~an ofadditional ~~Common~~10% ~~Stock.~~discount Wewill ~~received~~be applied (resulting in a ~~net~~discount ~~amount~~rate of $50%,~~000,~~ assuming no other adjustments); if we fail to comply with our reporting requirements under the Exchange Act, an additional 15% discount will be applied (resulting in a discount rate of 55%, assuming no other adjustments); and if we fail to maintain our status as “DTC Eligible” or if at any time the conversion price is lower than $30.10,~~000~~ ~~paid~~an additional 10% discount will be applied (resulting in a discount of 65%, assuming no other adjustments except for the 15% discount due to the conversion price below $0.35). ~~Power~~Crown ~~Up’s~~Bridge ~~legal~~may not convert the Note to the extent that such conversion would result in beneficial ownership by Crown Bridge and its ~~due~~affiliates ~~diligence~~of ~~expenses~~more than 4.99% of our issued and outstanding common stock. We have also granted piggy-back registration rights for the shares issuable upon conversion of the Note.

~~Crown~~Tangiers ~~Bridge~~Global ~~Partners~~LLC Convertible Debt Funding

On ~~May~~June 120, 2019 we ~~received~~entered ~~funding~~into ~~from~~a ~~Crown~~10% ~~Bridge~~Fixed ~~Partners,~~Convertible ~~LLC~~Promissory ~~("Crown~~Note ~~Bridge")~~with ~~under~~Tangiers aGlobal, ~~Securities~~LLC ~~Purchase~~in ~~Agreement~~the ~~dated~~aggregate ~~April~~principal ~~18,~~amount ~~2019~~of ~~(the~~up ~~“SPA”)~~to $550,000. ~~Under~~ The ~~the~~initial ~~terms~~principal amount of the ~~SPA,~~Tangiers weNote ~~received~~is ~~a total of~~ $95165,000, ~~after~~for anwhich ~~original~~Tangiers ~~issue~~paid ~~discount~~a purchase price of $5150,000 on June 24, 2019, ~~and~~representing ~~issued~~approximately a ~~convertible~~10% ~~promissory~~original ~~note~~issue ~~dated~~discount, ~~April~~due ~~18,~~six ~~2019,~~months infrom the ~~principal~~effective ~~amount~~date of ~~$100,000~~each ~~(the~~payment ~~"Note")~~by Tangiers. In Upon ~~addition~~Company request, wesubject ~~reimbursed~~to ~~Crown~~certain ~~Bridge~~conditions, Tangiers will pay up to an additional $2400,000 ~~for~~ ~~its~~consideration, ~~legal~~subject ~~fees. We~~to ~~also~~a 10% ~~issued~~original ~~warrants~~issue todiscount, ~~purchase~~and ~~60,606~~in ~~shares~~such ofevent, ~~our~~the ~~common~~maturity ~~stock~~date (for the ~~“Warrant”)~~additional ~~associated~~payment ~~with~~would ~~this~~be ~~transaction~~six months from the effective date of such payment. The ~~Warrant~~sum ~~may~~that bewe ~~exercised~~must atrepay ~~any~~to ~~time~~Tangiers ~~through~~would ~~the~~be ~~second~~prorated ~~anniversary~~based ~~date~~on of the ~~Note.~~consideration ~~The~~actually ~~exercise~~paid by Tangiers, ~~price~~such ~~per~~that ~~share~~we ofare ~~common~~only ~~stock~~required ~~under~~to repay the ~~Warrant~~amount isfunded ~~$1.65~~(plus ~~per~~the ~~share~~original issue discount, ~~subject~~interest toand ~~adjustment~~other fees, ~~including~~as ~~cashless~~applicable), and ~~exercise. The~~we ~~Warrant~~are ~~also~~not ~~contains~~required ato ~~most~~repay ~~favored~~any ~~nations~~unfunded ~~provision~~portion of the Tangiers Note.

~~The maturity date of the Note is 12 months from April~~ 18, 2019. The Note bears interest at 12% per annum at its face amount, with a default rate of 15% per annum (or the maximum amount permitted by law). If we prepay the Note through the 180th day following the date thereof, we must pay all of the principal and interest with a prepayment penalty ranging from 135% to 150%. After the 180th day we have no further right of prepayment.

~~Crown~~The ~~Bridge~~Tangiers ~~may,~~Note is convertible at ~~any time, convert all or any part of~~ the ~~outstanding~~option ~~principal~~ of ~~the~~Tangiers ~~Note into shares of our common stock~~ at a conversion price of $0.65 per share, ~~equal~~subject to ~~60%~~adjustment ~~(representing a~~in ~~40% discount rate) of~~ the ~~lowest~~event ~~trading price~~ of ~~the~~a ~~common~~forward split, stock ~~during~~dividend, or the 20like, ~~trading~~but ~~day~~not ~~period~~adjusted ~~ending~~in on the ~~last~~event ~~complete~~of ~~trading~~a ~~day~~reverse ~~prior~~split, torecombination, or the ~~date of conversion~~like. If ~~the~~a ~~conversion price~~ prepayment is ~~equal~~made towithin or90 ~~lower~~days, ~~than~~we ~~$0.35~~must ~~per~~pay ~~share,~~ an ~~additional~~ ~~15%~~amount ~~discount~~equal ~~will~~to ~~be applied (resulting in a 55~~110% ~~discount~~of ~~rate,~~the ~~assuming~~principal noamount ~~other~~so ~~adjustments)~~paid; iffrom we91 ~~are unable~~ to ~~deliver~~120 ~~converted~~days, ~~shares~~we ~~via~~must ~~DWAC,~~pay an amount ~~additional~~equal 10to 120% ~~discount~~of ~~will~~the beprincipal ~~applied~~amount ~~(resulting~~so inpaid; aand ~~discount~~from ~~rate~~121 ofto ~~50%~~180 days, ~~assuming~~ nowe ~~other~~must ~~adjustments);~~pay ifan weamount ~~fail~~equal to ~~comply~~130% ~~with~~of ~~our~~the ~~reporting~~principal amount ~~requirements~~so ~~under~~paid. Upon the ~~Exchange~~occurrence ~~Act,~~of an ~~additional~~event ~~15%~~of ~~discount~~default, ~~will~~as besuch ~~applied~~term ~~(resulting~~is indefined aunder ~~discount~~the ~~rate~~Tangiers ~~of 55%~~Note, ~~assuming~~at nothe ~~other~~holder’s election, ~~adjustments);~~the ~~and~~Note ifwill webe ~~fail~~immediately todue ~~maintain our~~and ~~status~~payable asin ~~"DTC~~cash ~~Eligible"~~at oran ifamount atequal ~~any~~to ~~time~~ the ~~conversion~~principal ~~price~~amount ~~is lower than $0.10~~due, plus an additional amount ~~10%~~equal ~~discount~~to ~~will~~30% beof ~~applied~~the ~~(resulting~~principal inamount. In ~~a discount of 65%~~addition, ~~assuming~~five nodays ~~other~~following ~~adjustments~~acceleration ~~except~~of ~~for~~ the ~~15%~~repayment ~~discount~~of ~~due to~~ the ~~conversion~~Note, ~~price~~interest ~~below~~will ~~$0.35). Crown~~accrue ~~Bridge~~at ~~may not convert~~ the ~~Note~~rate toof ~~the~~20% ~~extent~~per ~~that~~annum ~~such~~or ~~conversion~~the ~~would~~maximum ~~result~~legal inrate. We ~~beneficial~~have ~~ownership~~also bycaused ~~Crown~~their ~~Bridge~~transfer ~~and~~agent ~~its~~to reserve ~~affiliates~~not ofless ~~more~~ than ~~4.99%~~7,500,000 shares of our ~~issued and outstanding~~ common stock~~. We~~ ~~have also granted piggy-back registration rights~~ for ~~the~~issuance ~~shares issuable~~ upon conversion ~~of the Note~~.

~~Tangiers~~In ~~Global~~the ~~LLC~~event ~~Convertible~~the Note ~~Debt~~is ~~Funding~~not repaid on or before the maturity date, the holder may convert in whole or in part the outstanding principal amount of the Note into shares of our common stock at a conversion price equal to the lower of initial conversion price of $0.65 per share or 60% of the lowest trading price of our common stock during the 15 consecutive trading days prior conversion.

OnFor ~~June 20, 2019 we entered into~~ a ~~10%~~period ~~Fixed~~of 45 ~~Convertible~~days ~~Promissory~~following ~~Note with Tangiers Global, LLC in~~ the ~~aggregate principal amount of up to $550,000. The~~ initial ~~principal amount~~funding ofunder the ~~Tangiers~~ Note ~~is $165~~,~~000,~~ ~~for~~we ~~which~~have ~~Tangiers~~agreed ~~paid~~not ato ~~purchase~~enter ~~price~~into ofany ~~$150,000~~convertible ondebt ~~June~~financing ~~24,~~transaction with ~~2019,~~another ~~representing approximately a 10% original issue discount, due six months from the effective date of each payment by Tangiers~~party. ~~Upon Company request~~ Further, ~~subject~~we tohave ~~certain~~granted ~~conditions, Tangiers will pay up to an additional $400,000 consideration, subject to~~ a ~~10%~~right ~~original issue discount, and in such event, the maturity date for the additional payment would be six months from the effective date~~ of ~~such~~first ~~payment.~~refusal ~~The sum that we must repay~~ to Tangiers ~~would~~in beconnection ~~prorated~~future ~~based~~financings ~~on the consideration actually paid~~ by ~~Tangiers,~~us ~~such that we are only required to repay the amount funded (plus the original issue discount, interest and~~so ~~other~~long ~~fees,~~ as ~~applicable), and we are not required to repay any unfunded portion of~~ the ~~Tangiers~~ Note is outstanding.

20With respect to the above loan transaction with Tangiers, we issued Tangiers a stock purchase warrant allowing for the purchase of 1,100,000 shares of our common stock at $1.25 per share on a cashless basis for a period of five years.

~~The~~In ~~Tangiers~~addition ~~Note is convertible at the option of Tangiers at a conversion price of $0.65 per share, subject~~ to ~~adjustment in the event of a forward split, stock dividend, or~~ the ~~like,~~loan ~~but~~transaction ~~not~~with ~~adjusted in the event of a reverse split~~Tangiers, ~~recombination,~~we orhave ~~the~~entered ~~like.~~into Ifan aInvestment ~~prepayment~~Agreement iswith ~~made~~Tangiers ~~within~~whereby 90Tangiers ~~days,~~has weagreed ~~must pay an amount equal~~ to ~~110%~~purchase shares of ~~the~~our ~~principal~~common ~~amount~~stock soup ~~paid; from 91~~ to ~~120 days, we must pay~~ an ~~amount~~aggregate ~~equal to 120%~~ of ~~the~~$10,000,000 ~~principal~~under ~~amount~~certain soterms ~~paid;~~ and ~~from~~conditions. The ~~121~~purchase toprice ~~180~~for ~~days,~~the shares weis ~~must pay an amount equal to 130~~80% of the ~~principal~~lowest ~~amount~~trading soprice ~~paid.~~of ~~Upon~~ the ~~occurrence~~stock ofduring anthe ~~event~~five ofconsecutive ~~default,~~trading asdays ~~such~~prior ~~term~~to isreceipt ~~defined~~by ~~under the~~ Tangiers ~~Note, at~~ of the ~~holder’s election,~~notice ~~the~~from ~~Note~~us ~~will~~requiring bepurchase ~~immediately~~by ~~due~~them. The ~~and~~maximum ~~payable~~number inof ~~cash~~shares atwe ancan ~~amount~~require ~~equal~~Tangies to ~~the~~purchase ~~principal~~is ~~amount due, plus an additional amount equal~~ restricted to 30200% of the ~~principal~~average ~~amount. In~~daily ~~addition,~~trading ~~five~~volume ~~days~~during ~~following~~10 ~~acceleration~~consecutive oftrading ~~the~~days, ~~repayment~~provided of the ~~Note,~~ ~~interest~~amount ~~will~~is ~~accrue~~ at ~~the~~least ~~rate~~$5,000 ofand ~~20% per annum or the maximum legal rate. We have also caused their transfer agent to reserve~~ does not ~~less~~exceed ~~than 7,~~$500,000 ~~shares of our common stock for issuance upon conversion~~.

~~In the event the Note is not repaid on or before the maturity date, the holder may convert in whole or in part the outstanding principal amount of the Note into shares of our~~FirstFire ~~common~~Global ~~stock~~Opportunities atFund aConvertible ~~conversion~~Debt ~~price equal to the lower of initial conversion price of $0.65 per share or 60% of the lowest trading price of our common stock during the 15 consecutive trading days prior conversion.~~Funding

~~For~~On aJune ~~period~~21, of2019 we 45received ~~days~~funds ~~following~~from ~~the~~FirstFire ~~initial~~Global ~~funding~~Opportunities ~~under~~Fund. Under the ~~Note,~~terms of the SPA we ~~have~~received ~~agreed~~a ~~not~~total toof ~~enter~~$135,000, ~~into~~after an ~~any~~original issue discount of $15,000, and issued a convertible ~~debt~~promissory ~~financing~~note, ~~transaction~~in ~~with~~the ~~another~~principal ~~party~~amount of $150,000. ~~Further,~~We wealso ~~have~~issued ~~granted~~to aFirstFire ~~right~~immediately exercisable five-year warrants to purchase 150,000 shares of ~~first~~our ~~refusal~~common stock at $1.00, subject to ~~Tangiers~~adjustment in ~~connection~~the ~~future~~event ~~financings~~we byissue usshares soat ~~long~~less asthan the ~~Note~~current isexercise ~~outstanding~~price. The Warrant also contains a cashless exercise provision and a most favored nations provision.

~~With~~The ~~respect~~maturity todate of the ~~above~~Note ~~loan~~is ~~transaction~~nine months from June 18, 2019. The Note bears interest at 10% per annum at its face amount, with ~~Tangiers~~a default rate of 15% per annum (or the maximum amount permitted by law). If we prepay the Note through the 90th day following the date thereof, we ~~issued~~must ~~Tangiers~~pay aan ~~stock~~amount ~~purchase~~equal ~~warrant~~to ~~allowing~~125% ~~for~~of the ~~purchase~~principal amount of 1the Note and any accrued but unpaid interest thereon,~~100~~ plus any default interest. If we prepay the Note from the 91st day through the 180th day following the date thereof,~~000~~ ~~shares~~we must pay an amount equal to 135% of ~~our~~the ~~common~~principal ~~stock~~amount atof the Note and any accrued but unpaid ~~$1.25~~interest ~~per~~thereon, ~~share~~plus onany adefault ~~cashless~~interest. ~~basis~~After ~~for~~the a180th day ~~period~~we ofhas ~~five~~no ~~years~~further right of prepayment.

InFirstFire ~~addition~~may, at toany ~~the~~time, ~~loan~~convert ~~transaction~~all ~~with~~or ~~Tangiers,~~any wepart ~~have~~of ~~entered~~the ~~into~~outstanding anprincipal ~~Investment~~and ~~Agreement~~interest, ~~with~~including ~~Tangiers~~default ~~whereby~~interest, ~~Tangiers~~of ~~has~~the ~~agreed~~Note tointo ~~purchase~~ shares of our common stock upat tothe anlower ~~aggregate~~ of $~~10,000,000~~0.75 ~~under~~per ~~certain~~share ~~terms~~or ~~and~~a ~~conditions. The~~price ~~purchase~~per ~~price~~share ~~for~~equal ~~the~~to ~~shares~~55% is(representing 80a 45% discount rate) of the lowest trading price of the common stock during the ~~five~~20 ~~consecutive~~ trading ~~days~~day period prior to ~~receipt~~the bydate ~~Tangiers~~ of ~~the~~conversion. ~~notice~~FirstFire ~~from~~may not convert usthe ~~requiring~~Note ~~purchase~~to the extent that such conversion would result in beneficial ownership by ~~them. The~~FirstFire ~~maximum~~and ~~number~~its affiliates of ~~shares~~more wethan ~~can~~4.99% of ~~require~~our ~~Tangies~~issued toand ~~purchase~~outstanding iscommon ~~restricted~~stock, or up to ~~200~~9.99% ofat the ~~average~~option ~~daily~~of ~~trading~~FirstFire. We ~~volume~~have ~~during~~agreed 10to ~~consecutive~~reserve ~~trading~~for ~~days~~issuance the greater of 25,000,000 ~~provided~~shares or the ~~amount~~number isof atshares ~~least~~equal $to 3.5~~,000~~ ~~and~~times ~~does~~the ~~not~~number ~~exceed~~of shares issuable upon conversion of the ~~$500,000~~Note.

~~FirstFire Global Opportunities Fund Convertible Debt Funding~~19

OnThe ~~June~~debt ~~21,~~evidenced by ~~2019~~the weNote ~~received~~ranks ~~funds~~senior ~~from~~to ~~FirstFire~~any ~~Global~~other ~~Opportunities~~debt ~~Fund. Under~~incurred ~~the~~as ~~terms~~ of ~~the~~or ~~SPA~~following wethe ~~received~~date ~~a total~~ of ~~$135,000,~~the ~~after~~Note. So anlong ~~original~~as ~~issue~~any ~~discount~~obligations ofunder ~~$15,000,~~the ~~and~~Note ~~issued~~remain ~~a convertible promissory note~~outstanding, inwe ~~the~~cannot ~~principal~~incur ~~amount~~or ofguarantee ~~$150,000. We~~any ~~also~~indebtedness ~~issued~~that tois ~~FirstFire~~senior ~~immediately exercisable five-year warrants~~ to ~~purchase~~or ~~150,000~~pari ~~shares~~passu ofwith ~~our~~the ~~common~~debt ~~stock at $1.00, subject to adjustment in the~~evidenced ~~event~~by ~~we issue shares at less than~~ the ~~current~~Note, ~~exercise~~and ~~price. The~~cannot, ~~Warrant~~without ~~also~~prior ~~contains~~consent, apay ~~cashless~~or ~~exercise~~declare ~~provision~~any ~~and~~dividends aor ~~most~~other ~~favored~~distributions ~~nations~~to ~~provision~~shareholders.

~~The~~For ~~maturity~~a ~~date~~period of 18 ~~the Note is nine~~ months ~~from June 18~~, ~~2019.~~FirstFire ~~The~~has ~~Note~~a ~~bears~~right ~~interest~~of atfirst ~~10%~~refusal ~~per~~to ~~annum~~purchase atup ~~its~~to ~~face amount~~$150,000 ~~with a default rate~~ of ~~15%~~equity, ~~per~~debt, ~~annum (~~or ~~the maximum~~equity ~~amount~~equivalent ~~permitted~~securities offered by ~~law).~~us Ifduring ~~we prepay~~ the ~~Note~~18-month ~~through~~period. We ~~the~~are ~~90th day~~required ~~following~~to ~~the~~provide ~~date~~FirstFire ~~thereof,~~10 webusiness ~~must~~days’ ~~pay~~notice anof ~~amount~~a ~~equal~~proposed totransaction, which, ~~125%~~if ofaccepted, ~~the~~is ~~principal~~required ~~amount~~to ofbe ~~the~~completed ~~Note~~by ~~and~~FirstFire ~~any~~within ~~accrued~~10 ~~but~~business ~~unpaid~~days ~~interest~~following ~~thereon,~~the ~~plus~~notice ~~any default interest~~period. IfThe weterms of ~~prepay~~ the ~~Note~~acceptance ~~from~~by ~~the~~FirstFire ~~91st day through the 180th day following the date thereof, we~~ must ~~pay~~not anbe ~~amount~~more ~~equal~~favorable to ~~135%~~FirstFire ofor ~~the~~less ~~principal~~favorable ~~amount~~to of the ~~Note~~Company ~~and~~than ~~any~~those ~~accrued~~set ~~but~~forth ~~unpaid interest thereon,~~in ~~plus any default interest. After~~ the ~~180th day~~offer ~~we has no further right of prepayment~~notice.

~~FirstFire~~So ~~may,~~long atas ~~any~~the Note ~~time~~is outstanding, ~~convert~~we ~~all~~cannot orenter into any ~~part~~variable ofrate ~~the~~transaction ~~outstanding~~whereby ~~principal~~we ~~and~~issue ~~interest,~~any ~~including~~securities ~~default~~convertible ~~interest, of the Note~~ into shares of ~~our~~its common stock at ~~the lower of $0.75 per share or~~ a price ~~per~~based ~~share~~on ~~equal to 55% (representing a 45% discount rate) of the lowest~~ trading ~~price~~or ofquotation ~~the~~prices ~~common stock during the 20 trading day period prior to the date~~ of ~~conversion. FirstFire may not convert the Note to the extent that such conversion would result in beneficial ownership by FirstFire and its affiliates of more than 4.99% of~~ our ~~issued and outstanding~~ common stock~~, or up to 9~~.99% at the option of FirstFire. We have agreed to reserve for issuance the greater of 25,000,000 shares or the number of shares equal to 3.5 times the number of shares issuable upon conversion of the Note.

21Within 60 calendar days following funding, we are required to obtain director and officer insurance for a period of at least 18 months, with two years of tail coverage. We have also agreed to indemnify FirstFire against any actions arising under the SPA. Under the terms of the SPA, we also granted piggyback registration rights to FirstFire to register for resale shares issuable upon conversion of the Note or exercise of the Warrant.

The ~~debt~~Note ~~evidenced~~contains certain byrepresentations, ~~the~~warranties, ~~Note~~covenants ~~ranks~~(both ~~senior~~affirmative toand ~~any~~negative), ~~other~~and ~~debt~~events ~~incurred as~~ of ordefault. ~~following~~In the ~~date~~event of a default, the Note~~. So~~ ~~long~~will asbe ~~any~~immediately ~~obligations~~due ~~under~~and payable, and the ~~Note~~amount ~~remain~~of ~~outstanding, we~~repayment ~~cannot~~increases ~~incur~~to or150% ~~guarantee~~of ~~any~~the ~~indebtedness~~outstanding ~~that~~balance isof ~~senior~~the toNote. We orhave ~~pari~~also ~~passu~~authorized ~~with~~FirstFire ~~the~~to ~~debt~~appear ~~evidenced~~ex byparte without notice to the ~~Note,~~Company ~~and~~to ~~cannot,~~confess ~~without~~judgment ~~prior~~against ~~consent,~~the ~~pay~~Company orfor the ~~declare~~unpaid ~~any~~amount ~~dividends~~of orthe ~~other~~Note ~~distributions~~following toan ~~shareholders~~event of default.

~~For~~The aSPA ~~period~~also ~~of 18 months,~~ grants FirstFire ~~has~~ a right of first refusal tofor ~~purchase~~any upfuture tocapital ~~$150,000~~raises ~~of equity, debt,~~ or ~~equity~~financings ~~equivalent securities offered~~ by ~~us during~~ the ~~18-month period~~Company. WeIt ~~are~~also ~~required~~contains ~~to provide FirstFire 10 business days’ notice of~~ a ~~proposed~~most ~~transaction, which, if accepted, is required to be completed by FirstFire within 10 business days following the notice period. The terms of the acceptance by~~favored ~~FirstFire~~nations ~~must~~provision ~~not~~for beany more favorable toterms ~~FirstFire or less favorable to the Company than those set forth~~ in ~~the~~future ~~offer~~financing ~~notice~~transactions.

So long as the Note is outstanding, we cannot enter into any variable rate transaction whereby we issue any securities convertible into shares of its common stock at a price based on trading or quotation prices of our common stock.20

~~Within~~Results ~~60 calendar days following funding, we are required to obtain director and officer insurance for a period~~ of at least 18 months, with two years of tail coverage. We have also agreed to indemnify FirstFire against any actions arising under the SPA. Under the terms of the SPA, we also granted piggyback registration rights to FirstFire to register for resale shares issuable upon conversion of the Note or exercise of the Warrant.Operations

~~The~~Comparison ~~Note contains certain representations, warranties, covenants (both affirmative and negative), and events~~ of ~~default. In~~ the ~~event~~three ofmonths aended ~~default~~October 31, ~~the~~2019 ~~Note will be immediately due~~ and payable, and the amount of repayment increases to 150% of the outstanding balance of the Note. We have also authorized FirstFire to appear ex parte without notice to the Company to confess judgment against the Company for the unpaid amount of the Note following an event of default.2018

	For the three months ended
	October 31,
	2019			2018			Change

Consulting Services	$	168,650		$	12,500		$	156,150		1249	%
Product sales		22,095			-			22,095
Cost of consulting services		(56,732	)		(12,500	)		(44,232	)	354	%
Gross profit		134,013			-			134,013

Operating costs and expenses
Rents and other occupancy		19,108			13,500			5,608		42	%
Compensation		186,772			148,856			37,916		25	%
Professional, legal and consulting		111,739			335,429			(223,690	)	-67	%
General and administrative		164,339			79,895			84,444		106	%
Depreciation and amortization		472			435			37		9	%
Total operating costs and expenses		482,430			578,115			(95,685	)	-17	%

Other income (expense)
Interest expense		(283,704	)		-			(283,704	)	100	%
Other income/(expenses)		-			(114,986	)		114,986		100	%
Impairment on investment		-			-			-		0	%
Loss on debt conversion		-			-			-		0	%
Loss on investment in affiliate		(13,359	)		(10,129	)		(3,230	)	100	%
Total other income (expense)		(297,063	)		(125,115	)		(171,948	)	137	%

Loss from continuing operations, before provision for taxes on income		(645,480	)		(703,230	)		57,750		-8	%
Provision for taxes on income		-			-			-		0	%
Net loss before noncontrolling interest		(645,480	)		(703,230	)		57,750		-8	%
Less: net loss attributable to noncontrolling interest		(6,997	)		-			(6,997	)	100	%
Net loss attributable to parent	$	(638,483	)	$	(703,230	)	$	64,747		-9	%

22Material changes in line items in our Statement of Operations for the three months ended October 31, 2019 as compared to the same period last year, are discussed below:

~~Results~~● Product sales – the Company recognized product sales of ~~Operations~~merchandise and sale of CBD products from its consolidated subsidiary, Meridian A, LLC.

~~Comparison~~● ofProfessional, legal, and consulting – Professional legal and accounting/consulting services decreased during the year due to a decrease in consultants used during the three months ended ~~July~~October 31, 2019 ~~and 2018~~.

	For the three months ended
	July 31,
	2019	2018	Change
Consulting Services	$ 41,224	$ 87,436	$ (46,212)	-53%
Product sales	13,589	-	13,589
Cost of sales and services	(13,174)	(2,443)	(10,731)	439%
Gross profit	41,639	84,993	(43,354)	-51%
Operating costs and expenses
Rents and other occupancy	23,993	13,500	10,493	78%
Compensation	146,577	138,281	8,296	6%
Professional, legal and consulting	242,769	35,193	207,576	590%
General and administrative	162,478	89,130	73,348	82%
Depreciation and amortization	908	434	474	109%
Total operating costs and expenses	576,725	276,538	300,187	109%
Other income (expense)
Interest expense	(177,111)	(1,128)	(175,983)	15601%
Other income/(expenses)	4	-	4	100%
Impairment on investment	-	-	-	0%
Loss on debt conversion	-	-	-	0%
Loss on investment in affiliate	(1,272)	-	(1,272)	100%
Total other income (expense)	(178,379)	(1,128)	(177,251)	15714%
Loss from continuing operations, before provision for taxes on income	(713,465)	(192,673)	(520,792)	270%
Provision for taxes on income	-	-	-	0%
Net loss before noncontrolling interest	(713,467)	(192,673)	(520,792)	270%
Less: net loss attributable to noncontrolling interest	(18,857)	-	(18,857)	100%
Net loss attributable to parent	$ (694,608)	$ (192,673)	$ (501,935)	261%

●

General and administrative – Investor relations expenses increased during the period due to a new agreement entered into for approximately $40,000; the company also recognized bad debt expense during the period of $67,165.

~~Material~~● ~~changes~~Interest inexpense ~~line~~– ~~items~~Interest inincreased ~~our~~as ~~Statement~~a result of ~~Operations~~new ~~for~~debt ~~the~~arrangements ~~three~~over ~~months~~the ~~ended~~prior ~~July 31~~period, ~~2019~~in asaddition ~~compared~~ to the ~~same~~amortization ~~period~~of ~~last~~the ~~year,~~debt ~~are~~discount ~~discussed~~in ~~below:~~the amount of $242,122.

~~• Product sales – the Company recognized product sales of merchandise and sale of CBD products from its consolidated subsidiary, Meridian A, LLC.~~21

•Comparison ~~Professional,~~of ~~legal, and consulting – Professional legal and accounting/consulting services increased during~~ the ~~year~~nine ~~due~~months toended ~~additional~~October ~~resources~~31, ~~used~~2019 ~~for compliance~~ and ~~the issuance of shares in-lieu of cash in the amount of $100,000.~~2018

• General and administrative – Investor relations expenses increased during the period due to issuances of shares in-lieu of cash in the amount of $79,500.

	For the nine months ended
	October 31,
	2019			2018			Change

Consulting Services	$	230,419		$	143,749		$	86,670		60	%
Product sales		45,506			-			45,506		100	%
Cost of consulting services		(81,373	)		(24,943	)		(56,430	)	226	%
Gross profit		194,552			118,806			75,746		64	%

Operating costs and expenses
Rents and other occupancy		61,064			39,516			21,548		55	%
Compensation		496,241			433,341			62,900		15	%
Professional, legal and consulting		469,485			420,518			48,967		12	%
General and administrative		387,777			221,536			166,241		75	%
Depreciation and amortization		1,964			1,304			660		51	%
Total operating costs and expenses		1,416,531			1,116,215			300,316		27	%

Other income (expense)
Interest expense		(528,417	)		-			(528,417	)	100	%
Other income/(expenses)		4			(116,726	)		116,730		100	%
Impairment on investment		(2,739	)		-			(2,739	)	0	%
Loss on debt conversion		-			-			-		0	%
Loss on investment in affiliate		(37,298	)		(10,129	)		(27,169	)	100	%
Total other income (expense)		(568,450	)		(126,855	)		(441,595	)	348	%

Loss from continuing operations, before provision for taxes on income		(1,790,429	)		(1,124,264	)		(666,165	)	59	%
Provision for taxes on income		-			-			-		0	%
Net loss before noncontrolling interest		(1,790,429	)		(1,124,264	)		(666,165	)	59	%
Less: net loss attributable to noncontrolling interest		(25,854	)		-			(25,854	)	100	%
Net loss attributable to parent	$	(1,764,575	)	$	(1,124,264	)	$	(640,311	)	57	%

•Material ~~Interest~~changes in ~~expense~~line –items ~~Interest~~in ~~increased~~our asStatement aof ~~result~~Operations offor ~~new~~the ~~debt~~nine ~~arrangements~~months ~~during~~ended ~~the~~October ~~periods~~31, in2019 ~~addition~~as compared to the ~~amortization~~same ofperiod ~~the~~last ~~debt~~year, are ~~discount~~discussed ~~in the amount of $141,280.~~below:

23● Consulting services – the company entered into two new consutlting agreements and recognized $100,000 revenue during the period.

~~Comparison~~● ofProduct sales – the ~~six~~Company ~~months~~recognized ~~ended~~product ~~July~~sales ~~31,~~of ~~2019~~merchandise and ~~2018~~sale of CBD products from its consolidated subsidiary, Meridian A, LLC. In correlation the company recognized cost of sales related to products.

	For the six months ended
	July 31,
	2019	2018	Change
Consulting Services	$ 61,769	$ 131,249	$ (69,480)	-53%
Product sales	23,411	-	23,411	100%
Cost of sales and services	(24,641)	(12,443)	(12,198)	98%
Gross profit	60,539	118,806	(58,267)	-49%
Operating costs and expenses
Rents and other occupancy	41,956	26,016	15,940	61%
Compensation	309,469	284,485	24,984	9%
Professional, legal and consulting	357,746	85,089	272,657	320%
General and administrative	223,438	141,641	81,797	58%
Depreciation and amortization	1,492	869	623	72%
Total operating costs and expenses	934,101	538,100	396,001	74%
Other income (expense)
Interest expense	(244,713)	(1,740)	(242,973)	13964%
Other income/(expenses)	4	-	4	100%
Impairment on investment	(2,739)	-	(2,739)	0%
Loss on debt conversion	-	-	-	0%
Loss on investment in affiliate	(23,939)	-	(23,939)	100%
Total other income (expense)	(271,387)	(1,740)	(269,647)	15497%
Loss from continuing operations, before provision for taxes on income	(1,144,949)	(421,034)	(723,915)	172%
Provision for taxes on income	-	-	-	0%
Net loss before noncontrolling interest	(1,144,949)	(421,034)	(723,915)	172%
Less: net loss attributable to noncontrolling interest	(18,857)	-	(18,857)	100%
Net loss attributable to parent	$ (1,126,092)	$ (421,034)	$ (705,058)	167%

●

Rents and other occupancy – increased during the period as the company entered into a commercial retail space lease for it’s investment in Oklahoma.

~~Material~~● ~~changes~~General inand ~~line~~administrative ~~items~~– inInvestor ~~our~~relations ~~Statement~~expenses ofincreased ~~Operations~~during ~~for~~ the ~~six~~period ~~months~~due ~~ended~~to ~~July~~new 31agreements of approximately $163,000; ~~2019~~the ascompany ~~compared~~also torecognized ~~the~~bad ~~same~~debt ~~period~~expense ~~last~~during ~~year,~~the ~~are~~period ~~discussed~~of ~~below:~~$67,165.

•● ~~Product~~Interest ~~sales~~expense – ~~the~~Interest ~~Company~~increased ~~recognized~~as ~~product~~a ~~sales~~result of ~~merchandise~~new ~~and~~debt ~~sale~~arrangements ofduring ~~CBD~~the ~~products~~periods, ~~from~~in ~~its~~addition ~~consolidated~~to ~~subsidiary,~~the ~~Meridian~~amortization A,of ~~LLC.~~the Indebt ~~correlation~~discount in the ~~company~~amount ~~recognized cost~~ of ~~sales related to products~~$434,311.

• Professional, legal, and consulting – Professional legal and accounting/consulting services increased during the year due to additional resources used for compliance and the issuance of shares in-lieu of cash in the amount of $100,000.22

•Liquidity ~~General~~ and ~~administrative~~Capital –Resources ~~Investor relations expenses increased during the period due to issuances of shares in-lieu of cash in the amount of $79,500.~~

~~• Interest expense – Interest increased as a result of new debt arrangements during the periods, in addition to the amortization of the debt discount in the amount of $182,189.~~Overview

24We have incurred operating losses, accumulated deficit and negative cash flows from operations since inception. As of October 31, 2019, we had an accumulated deficit of $10,204,683 from operating activities. The Company had total cash on hand of approximately $6,000 as of October 31, 2019. The Company utilizes credit from vendors, borrowings from related parties, and secured third party financing to manage its cash flow. Management believes the change in focus along with our substantial industry knowledge, defined growth strategy, and minimal expense structure will allow us to ultimately achieve profitability. We have restructured our operating expenses sufficiently and believe that our planned sources of revenue will be sufficient to cover these expenses for the foreseeable future.

~~Liquidity~~Our Consolidated Financial Statements as of and ~~Capital~~for ~~Resources~~the three and nine months ended October 31, 2019 were prepared on the basis of a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. Accordingly, they do not give effect to adjustments that could be necessary should we be required to liquidate assets.

~~Overview~~Our ability to continue as a going concern and raise capital for specific strategic initiatives could also depend on obtaining adequate capital to fund operating losses until it becomes profitable. We can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such financing will be obtainable on acceptable terms.

WeOur ~~have~~net ~~incurred operating losses, accumulated deficit and negative~~ cash flows ~~from~~are ~~operations since inception. As of July 31, 2019, we had an accumulated deficit of $9,432,696 from operating activities. The Company had total cash on hand of approximately $75,000~~ as of July 31, 2019. The Company utilizes credit from vendors, borrowings from related parties, and secured third party financing to manage its cash flow. Management believes the change in focus along with our substantial industry knowledge, defined growth strategy, and minimal expense structure will allow us to ultimately achieve profitability. We have restructured our operating expenses sufficiently and believe that our planned sources of revenue will be sufficient to cover these expenses for the foreseeable future.follows:

Our Consolidated Financial Statements as of and for the three and six months ended July 31, 2019 were prepared on the basis of a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. Accordingly, they do not give effect to adjustments that could be necessary should we be required to liquidate assets.

	For the nine months ended October 31,
	2019			2018
Consolidated Statements of Cash Flows Data:
Net cash used in operating activities	$	(819,701	)	$	(842,361	)
Net cash used in investing activities		(8,086	)		(155,233	)
Net cash provided by financing activities		830,640			999,912
Net change in cash	$	2,853		$	2,318

~~Our~~Operating ability to continue as a going concern and raise capital for specific strategic initiatives could also depend on obtaining adequate capital to fund operating losses until it becomes profitable. We can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such financing will be obtainable on acceptable terms.Activities

~~Our~~During ~~net~~the nine months ended October 31, 2019, the Company used $819,701 in cash ~~flows~~for ~~are~~operations ascompared ~~follows:~~to cash used of $842,361 for operations during the nine months ended October 31, 2018. This decrease in cash used for operating activities was due to less cash loaned to affiliates and an increase in accounts payable.

	For the six months ended July 31,
	2019		2018
Consolidated Statements of Cash Flows Data:
Net cash used in operating activities	$	(730,823)	$	(23,934)
Net cash used in investing activities		(8,086)		-
Net cash provided by financing activities		810,964		(3,758)
Net change in cash	$	72,055	$	(27,692)

Investing Activities

~~Operating~~During ~~Activities~~the nine months ended October 31, 2019, the Company invested $8,086 in fixed assets, there were $155,233 invested in the prior period primarily an invetmnst in unconsolidated affiliate.

~~During~~Financing the six months ended July 31, 2019, the Company used $730,823 in cash for operations compared to cash used of $23,934 for operations during the six months ended July 31, 2018. This increase in cash used for operating activities was due to the significant investment in affiliates and loans to affiliates.Activities

~~Investing~~Our ~~Activities~~cash provided by financing for the nine months ended October 31, 2019 was $830,640 compared to cash provided of $999,912 for the same period in 2018.

During the ~~six~~period ~~months~~ ended ~~July~~October 31, 2019, the ~~Company~~company ~~invested~~entered into convertible debt funding totaling $8571,~~086~~000 incompared ~~fixed~~to ~~assets,~~the ~~there~~prior ~~were~~period noof ~~investments~~$225,000. ~~during~~As of the ~~six~~date ~~months~~of filing, ~~ended~~all ~~July~~debt ~~31,~~is ~~2018~~convertible into the Company’s common shares.

~~Financing~~During ~~Activities~~the period ended October 31, 2018 the company launched a non-public equity offering and raised $683,200 and $42,150 from the corresponding issuance of warrants.

~~Our~~In ~~cash~~February ~~provided~~2019 bythe ~~financing~~Company ~~for~~launched ~~the~~a non-public ~~six~~equity ~~months~~offering ~~ended~~at ~~July~~$1.00 ~~31,~~per ~~2019~~unit. ~~was~~We raised cash proceeds of $~~810~~80,~~964~~000 ~~compared~~and toissued ~~cash~~80,000 ~~used~~shares of $3common stock and 80,~~758~~000 warrants ~~for~~to ~~the~~purchase ~~same~~common ~~period~~stock inat ~~2018~~an exercise price of $2.00 per share.

~~During the period ended July 31, 2019 the company entered into convertible debt funding totaling $550,000. As of the date of filing, all debt is convertible into the Company’s common shares.~~23

The Company received $31125,~~048~~000 for the benefit of the Puerto Rico entities and ~~$8,765~~is ~~during~~disbursing these funds to operate the ~~six~~Puerto ~~months~~Rico operations, ~~ended~~the ~~July~~balance as of October 31, 2019 ~~and~~was ~~2018~~$32,745. ~~respectively~~In addition, ~~from~~the ~~related~~Company ~~party~~received ~~loans~~$50,000 ~~and~~for ~~made~~the ~~corresponding~~benefit ~~payments~~ of ~~$25,084~~2600 ~~and~~Meridian ~~$12~~LLC,~~523~~ ~~during~~all the ~~six~~funds ~~months~~have ~~ended~~been ~~July~~used ~~31,~~to ~~2019,~~cover ~~respectively~~start-up and development costs. The funds held for related party entities are included as advances held in trust liabilities on the balance sheet.

InOff ~~February~~Balance ~~2019~~Sheet the Company launched a non-public equity offering at $1.00 per unit. We raised cash proceeds of $80,000 and issued 80,000 shares of common stock and 80,000 warrants to purchase common stock at an exercise price of $2.00 per share.Arrangements

~~The~~During ~~Company received $125,000 for~~ the ~~benefit~~quarter ofended ~~the~~October ~~Puerto Rico entities and is disbursing these funds to operate the Puerto Rico operations, the balance as of July~~ 31, 2019 ~~was $38~~,~~245. In~~ we did ~~addition,~~not ~~the~~have ~~Company~~any ~~received~~off-balance ~~$50,000~~sheet ~~for~~arrangements ~~the~~that ~~benefit~~have ofor ~~2600~~are ~~Meridian~~reasonably ~~LLC,~~likely ~~all~~to ~~the funds~~ have ~~been~~a ~~used~~current toor ~~cover~~future ~~start-up~~effect ~~and~~on ~~development~~our ~~costs. The~~financial condition, ~~funds~~changes ~~held~~in ~~for~~financial ~~related~~condition, ~~party entities~~revenues ~~are~~or ~~included~~expenses, asresults ~~advances~~of ~~held~~operations, inliquidity, ~~trust~~capital ~~liabilities~~expenditures onor ~~the balance sheet~~capital resources.

25Critical Accounting Policies and New Accounting Pronouncements

~~Off~~See ~~Balance~~Note ~~Sheet~~2 ~~Arrangements~~to the financial statements included as part of this report for a description of the Company’s significant accounting policies.

~~As of July 31, 2019, and July 31, 2018, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a~~ITEM ~~current~~3. orQUANTITATIVE ~~future~~& ~~effect~~QUALITATIVE onDISCLOSURES ~~our~~ABOUT ~~financial~~MARKET ~~condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.~~RISK

~~Critical~~We are ~~Accounting~~a ~~Policies~~smaller reporting Company and ~~New~~are ~~Accounting~~not ~~Pronouncements~~required to provide the information required under this item.

~~See~~ITEM 4. ~~Note~~CONTROLS 2AND ~~to the financial statements included as part of this report for a description of the Company’s significant accounting policies.~~PROCEDURES

~~ITEM~~Disclosure 3.Controls ~~QUANTITATIVE~~and ~~& QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Procedures

WeUnder the ~~are~~direction aand ~~smaller~~with ~~reporting~~the ~~Company~~participation of our management, we carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of October 31, 2019. We maintain disclosure controls and procedures that are ~~not~~designed to ensure that information required to ~~provide~~be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to our management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required ~~under~~disclosure. our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based upon this ~~item~~evaluation, management concluded that our disclosure controls and procedures were not effective as of October 31, 2019 primarily based on these criteria, due to material weaknesses resulting from our failure to 1) provide correct responsibilities to adequately segregate activity in the area of cash receipts and cash disbursements, 2) effectively implement comprehensive entity level internal controls, and 3) adequately segregate duties within the accounting department due to an insufficient number of staff.

~~ITEM~~Changes 4.in ~~CONTROLS~~Internal ~~AND PROCEDURES~~Controls

~~Disclosure~~There ~~Controls~~were ~~and~~no ~~Procedures~~changes in the Company’s internal control over financial reporting during the quarter ended October 31, 2019, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

~~Under~~PART the direction and with the participation of our management, we carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of July 31, 2019II. WeOTHER maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and regulations, and that such information is accumulated and communicated to our management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based upon this evaluation, management concluded that our disclosure controls and procedures were not effective as of July 31, 2019 primarily based on these criteria, due to material weaknesses resulting from our failure to 1) provide correct responsibilities to adequately segregate activity in the area of cash receipts and cash disbursements, 2) effectively implement comprehensive entity level internal controls, and 3) adequately segregate duties within the accounting department due to an insufficient number of staff.INFORMATION

~~Changes~~Item in1. ~~Internal~~Legal ~~Controls~~Proceedings

~~There~~In ~~were~~connection with nothe ~~changes~~Settlement inAgreement ~~the~~with ~~Company’s~~Headgate ~~internal~~II, ~~control~~LLC, ~~over~~William ~~financial~~A. ~~reporting~~Shopneck, ~~during~~and Christopher Shopneck (collectively, the ~~quarter~~“Plaintiffs”) disclosed ~~ended~~under ~~July~~Item ~~31,~~3 ~~2019,~~of ~~that~~our ~~materially~~annual ~~affected,~~report oron ~~are~~Form ~~reasonably~~10-K ~~likely~~for ~~to materially~~the ~~affect~~year ended January 31, ~~its~~2019, ~~internal~~we ~~control~~are ~~over~~current ~~financial~~in ~~reporting~~our settlement payments to the Plaintiffs.

~~PART~~Item II2. ~~OTHER~~Unregistered ~~INFORMATION~~Sales of Equity Securities and Use of Proceeds

~~Item~~In 1August we issued 506,000 shares to two consultants for services provided. ~~Legal~~The ~~Proceedings~~shares were issued under Rule 701 Promulgated by the SEC for compensatory services.

In connection with the Settlement Agreement with Headgate II, LLC, William A. Shopneck, and Christopher Shopneck (collectively, the "Plaintiffs") disclosed under Item 3 of our annual report on Form 10-K for the year ended January 31, 2019, we are current in our settlement payments to the Plaintiffs.24

~~Item~~During 2.the ~~Unregistered~~quarter ~~Sales~~ended October 31, 2109, Power Up Lending converted $10,000 and $8,000 of ~~Equity~~the ~~Securities~~principal amounts due in accordance with the conditions of the convertible note into 24,839 and ~~Use~~50,441 shares of ~~Proceeds~~our common stock, respectively. The remaining principal balance under the note is $85,000.

In ~~June~~November 2019 wePower ~~issued~~Up 25Lending converted $8,000 ~~common~~of ~~shares to Tangiers Global LLC as a commitment fee for granting~~ the ~~equity~~principal ~~line~~amounts ~~financing~~due toin ~~us.~~accordance ~~The~~with ~~securities were issued without registration under~~ the ~~Securities~~conditions ~~Act by reason~~ of the ~~exemption~~convertible ~~from~~note ~~registration~~into ~~afforded~~260,586 byshares ~~the provisions~~ of ~~Section~~our ~~4(a)(2) thereof~~common stock, ~~and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving any public offering~~respectively. AtThe ~~the time~~remaining ofprincipal ~~the~~balance ~~issuance~~under of the ~~shares,~~note weis ~~reasonably believed that Tangiers was an accredited investor as defined in Regulation D~~$77,000. ~~No underwriting discounts or commissions were paid in connection with the transactions.~~

26In November 2019 Crown Bridge Partners, LLC converted $5,250 of the principal amounts due in accordance with the conditions of the convertible note into 150,000 shares of our common stock, respectively. The remaining principal balance under the note is $95,500.

InThe ~~July~~above wenote ~~issued~~conversions ~~33,287~~were ~~shares~~made pursuant to ~~two~~the ~~consultants~~exemption ~~for~~from ~~services~~registreation provided~~. The~~ ~~shares~~by ~~were~~Section ~~issued~~3(a)(9) ~~under~~of ~~Rule 701 Promulgated by~~ the ~~SEC~~Securities ~~for~~Act ~~compensatory~~of ~~services~~1933.

~~During~~Item ~~the quarter ended July 31, 2019, we issued 42,500 shares to an individual in exchange for debt in the amount of $8,500 owed by the Company to the party~~3. ~~The~~Defaults ~~shares~~Upon ~~were issued~~Senior ~~without registration under the~~ Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(2) thereof as a transaction by an issuer not involving any public offering. No underwriting discounts or commissions were paid in connection with the sale of the shares.

InWe have a note purchase and security agreement dated August ~~2019~~29, ~~Power~~2018, Upwith ~~Lending~~Richland ~~converted~~Fund, ~~$10~~LLC.,~~000~~ ~~and~~in the aggregate principal amount of $8225,000. ofThe Notes bear 12% interest per annum, with the ~~principal~~last ~~amounts~~payment under the Notes due inDecember ~~accordance~~15, ~~with~~2020. ~~the~~The ~~conditions~~Notes are secured by all assets of the ~~convertible~~Company ~~note~~and ~~into~~guarantees from ~~24,839~~Shawn and ~~50,441~~Erin ~~shares of~~Phillips. ~~our~~Principal ~~common~~and ~~stock~~interest payments were to commence on August 1, ~~respectively~~2019. The ~~remaining~~Company has not paid any interest or principal ~~balance~~on ~~under~~the loan. Commencing August 2, 2019 the ~~note~~interest rate on the unpaid interest and principal increased to 18% per annum, until the past due interest amount is paid in full. As of the filing date of this report, we owe approximately $8587,~~000~~143 for the principal and past due interest.

~~Item~~We 3have a loan agreement dated April 6, 2018, with Green Acres Partners A, LLC, in the amount of $205,000 repayable in installments and maturing not later than September 1, 2020. ~~Defaults~~The ~~Upon~~note ~~Senior~~evidencing ~~Securities~~the loan is guaranteed by Shawn and Erin Phillips. Monthly interest payments are due the first day beginning no later than August 1, 2019; thereafter we are required to pay interest and principal on 60% of our ownership percentage of the available profits from the San Diego projects. We failed to make the required monthly interest payments. As of the filing date of this report, we owe approximately $22,703 for this past due interest.

We have a ~~note~~secured ~~purchase~~promissory ~~and~~note ~~security agreement~~ dated December ~~August 29~~7, 2018, with Richland Fund, LLC., in the ~~aggregate principal~~ amount of $~~225~~126,~~000~~100 which matured on August 1, 2019. The ~~Notes~~Note ~~bear 12~~bears 15% interest per annum, and ~~with~~monthly ~~the~~interest ~~last~~payments ~~payment~~were ~~under~~due the ~~Notes~~first ~~due~~day ~~December~~each 15month beginning January 1, ~~2020~~2019. The note ~~Notes~~originally ~~are~~matured ~~secured~~on byMarch ~~all~~7, ~~assets~~2019 ofbut ~~the~~was ~~Company~~extended ~~and~~to ~~guarantees~~a ~~from~~maturity ~~Shawn~~date ~~and~~of ~~Erin Phillips. Principal and interest payments were to commence on~~ August 1, 2019. The Company has not paid any interest or principal on the loan. Commencing August 2, 2019 the interest rate on the unpaid interest and principal increased to 1820% per annum, until the past due interest amount is paid in full. As of the filing date of this report, we we owe approximately $76148,~~241~~226 for the principal and past due interest.

~~We have a loan agreement dated April 6, 2018, with Green Acres Partners A, LLC, in the amount of $205,000 repayable in installments and maturing not later than September 1,~~Item ~~2020~~6. ~~The~~ note evidencing the loan is guaranteed by Shawn and Erin Phillips. Monthly interest payments are due the first day beginning no later than August 1, 2019; thereafter we are required to pay interest and principal on 60% of our ownership percentage of the available profits from the San Diego projects. We failed to make the required monthly interest payments. As of the filing date of this report, we owe approximately $16,704 for this past due interest.Exhibits

We have a secured promissory note dated December 7, 2018, with Richland Fund, LLC, in the amount of $126,100 which matured on August 1, 2019. The Note bears 15% interest per annum, and monthly interest payments were due the first day each month beginning January 1, 2019. The note originally matured on March 7, 2019 but was extended to a maturity date of August 1, 2019. The Company has not paid any interest or principal on the loan. Commencing August 2, 2019 the interest rate on the unpaid interest and principal increased to 20% per annum, until the past due interest amount is paid in full. As of the filing date of this report, we owe approximately $140,815 for the principal and past due interest.

31.1		Rule 13a-14(d) Certification by Principal Executive Officer
31.2		Rule 13a-14(d) Certification by Principal Financial Officer
32.1		Section 1350 Certification of Principal Executive and Financial Officer

101.INS		XBRL Instance Document*
101.SCH		XBRL Taxonomy Extension Schema Document*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB		XBRL Taxonomy Extension Label Linkbase Document*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document*

~~Item~~SIGNATURE 6.PAGE ~~Exhibits~~FOLLOWS

~~31.1 Rule 13a-14(d) Certification by Principal Executive Officer~~25

~~31.2 Rule 13a-14(d) Certification by Principal Financial Officer~~SIGNATURES

~~32.1~~Pursuant ~~Section~~to ~~1350~~the ~~Certification~~requirements of ~~Principal~~the Securities ~~Executive~~Exchange ~~and~~Act ~~Financial~~of ~~Officer~~1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

101.INS XBRL Instance Document*

	STWC HOLDINGS, INC.

December 23, 2019	By:	/s/ Erin Phillips
		Erin Phillips, CEO
		(Principal Executive, Financial and Accounting Officer)

101.SCH XBRL Taxonomy Extension Schema Document*26

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB XBRL Taxonomy Extension Label Linkbase Document*

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document*

SIGNATURE PAGE FOLLOWS

SIGNATURES

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

STWC HOLDINGS, INC.

September 13, 2019 By: /s/ Erin Phillips

Erin Phillips, CEO

(Principal Executive, Financial and Accounting Officer)

Filing Compare · STWC. Holdings, Inc.