ECOSCIENCES, INC. 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: February 28, 2018

[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number: 000-54525

ECOSCIENCES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		27-2692640
(State of Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification Number)

420 Jericho Turnpike, Suite 110
Jericho, NY 11753		11753
(Address of Principal Executive Offices)		(Zip Code)

(516) 465-3964

(Registrant’s Telephone Number, Including Area Code)

With a copy to:

Philip Magri, Esq.

Magri Law, LLC

2642 NE 9th Avenue

Fort Lauderdale, FL 33334

T: (646) 502-5900

F: (646) 826-9200

pmagri@magrilaw.com

www.magrilaw.com

N/A

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ ] No [X]

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

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)		Emerging growth company	[ ]

If an emerging growth company, indicate by checkmark if the registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date. As of April 16, 2018, there were 251,808,027 shares of Common Stock, $0.0001 par value per share, issued and outstanding.

Table of Contents

		Page

PART I - FINANCIAL INFORMATION		3
item 1. financial statements (unaudited)
item 2. management’s discussion and analysis of financial condition and results of operations		4
Forward Looking Statements		4
Corporate History
Overview		4
Product Development		5
Growth Strategy of the Company		5
Critical Accounting Policies, Estimates, and Judgments		5
Results of Operations		6
Financial Condition, Liquidity and Capital Resources		9
Working Capital		10
Cash and Cash Equivalents		10
Off-Balance Sheet Operations		10
item 3. quantitative and qualitative disclosures about market risk		10
item 4. controls and procedures		10
Evaluation of Disclosure Controls and Procedures.		10
Changes in Internal Control over Financial Reporting		10
PART II – OTHER INFORMATION		11
item 1. legal proceedings		11
item 1 risk factors		11
item 2. unregistered sale of equity securities and use of proceeds		11
item 3. defaults upon senior securities		13
item 5. other information		14
Subsequent Events		14
item 6. exhibits		15
SIGNATURES		16

Ecosciences, Inc.

Consolidated Financial Statements

(Unaudited)

		Index

Table of Contents

Unaudited Consolidated Balance Sheets		F-1

Unaudited Consolidated Statements of Operations		F-2

Unaudited Consolidated Statements of Cash Flows		F-3

Notes to the Unaudited Consolidated Financial Statements		F-4

Ecosciences, Inc.

Consolidated Balance Sheets

As of February 28, 2018 and May 31, 2017

(Unaudited)

	February 28, 2018			May 31, 2017

ASSETS

Current Assets

Cash	$	110,721		$	3,357
Accounts receivable, net of allowance of $2,600 and $379, respectively		8,313			6,967
Inventory		13,120			3,256
Prepaid expenses		–			29,700

Total Assets	$	132,154		$	43,280

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts payable	$	302,023		$	258,949
Accrued liabilities		557,625			447,140
Due to related parties		119,466			93,598
Notes payable		119,528			300,666
Convertible notes payable, net of discount		562,411			86,137
Derivative liabilities		704,948			596,743

Total Liabilities		2,366,001			1,783,233

Stockholders’ Deficit

Preferred Stock 50,000,000 shares authorized, $0.0001 par value;
Series A Redeemable and Convertible Preferred Stock: 3,000,000 shares authorized; 1,358,380 and 1,593,630 shares issued and outstanding, respectively		136			160
Series B Preferred Stock: 200,000 shares authorized, issued and outstanding		20			20
Series C Redeemable and Convertible Preferred Stock: 10,000,000 shares authorized; 4,700,000 shares issued and outstanding		470			470
Series D Convertible Preferred Stock: 10,000,000 shares authorized; 5,033,290 and 710,000 shares issued and outstanding, respectively		503			71
Common Stock 1,950,000,000 shares authorized, $0.0001 par value; 221,555,127 shares and 48,075,065 issued and outstanding, respectively		22,156			4,808
Additional paid-in capital		2,829,395			817,879
Accumulated deficit		(5,086,527	)		(2,563,361	)

Total Stockholders’ Deficit		(2,233,847	)		(1,739,953	)

Total Liabilities and Stockholders’ Deficit	$	132,154		$	43,280

See accompanying notes to the unaudited financial statements.

F-1

Ecosciences, Inc.

Consolidated Statements of Operations

For the Three and Nine Months Ended February 28, 2018 and 2017

(Unaudited)

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	February 28, 2018			February 28, 2017			February 28, 2018			February 28, 2017

Revenues	$	21,160		$	4,836		$	67,021		$	14,223
Cost of revenues		(5,320	)		(954	)		(22,621	)		(7,650	)

Gross Profit		15,840			3,882			44,400			6,573

Operating Expenses:
General and administrative		71,448			53,879			263,093			348,546
Professional fees		138,053			102,714			447,400			360,870
Research and development		2,532			–			8,186			–

Total Operating Expenses		212,033			156,593			718,679			709,416

Loss from Operations		(196,193	)		(152,711	)		(674,279	)		(702,843	)

Other Income (Expenses):
Interest expense		(1,264,596	)		(208,822	)		(1,839,938	)		(435,263	)
Gain on settlement of debt		4,931			–			21,467			–
Loss on settlement of related party debt		(274,895	)		–			(274,895	)		–
Change in fair value of derivative liabilities		946,324			79,207			244,479			98,436

Net Loss	$	(784,429	)	$	(282,326	)	$	(2,523,166	)	$	(1,039,670	)

Loss Per Common Share – Basic and Diluted	$	(0.00	)	$	(15.94	)	$	(0.03	)	$	(79.09	)
Weighted-average Common Shares Outstanding – Basic and Diluted		165,904,460			17,708			88,962,303			13,146

See accompanying notes to the unaudited financial statements.

F-2

Ecosciences, Inc.

Consolidated Statements of Cash Flows

For the Nine Months Ended February 28, 2018 and 2017

(Unaudited)

	Nine Months Ended February 28, 2018			Nine Months Ended February 28, 2017

Cash Flows from Operating Activities

Net loss	$	(2,523,166	)	$	(1,039,670	)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		473,341			101,971
Interest expense on derivative liability that exceeds notes payable		1,323,824			287,924
Change in fair value of derivative liabilities		(244,479	)		(98,436	)
Gain on settlement of debt		(21,467	)		–
Loss on settlement of related party debt		274,895			–
Shares issued for fees upon conversion of convertible debt		2,500			–
Stock-based compensation		–			252,260
Changes in operating assets and liabilities:
Accounts receivable		(1,346	)		–
Inventory		(9,864	)		(6,388	)
Prepaid expenses		29,700			(1,729	)
Accounts payable		43,074			106,732
Accrued liabilities		155,501			163,300

Net Cash Used in Operating Activities		(497,487	)		(234,036	)

Cash Flows from Financing Activities

Advances from related party, net		34,001			47,815
Proceeds from notes payable		55,100			48,250
Payment of notes payable		–			(41,068	)
Proceeds from convertible notes payable		515,750			189,000

Net Cash Provided by Financing Activities		604,851			243,997

Change in Cash		107,364			9,961

Cash - Beginning of Period		3,357			4,220

Cash - End of Period	$	110,721		$	14,181

Supplemental Disclosures of Cash Flow Information:

Interest paid	$	–		$	332
Income taxes paid	$	–		$	–

Non-Cash Investing and Financing Activities:

Common shares issued to settle convertible debt and accrued interest	$	1,624,960		$	123,484
Preferred shares issued upon conversions of convertible notes payable	$	7,403		$	–
Conversion of preferred stock to common stock	$	13,311		$	–
Recognition of derivative liabilities from embedded conversion feature	$	392,000		$	–
Reclassification of notes payable and accrued interest to convertible notes payable	$	240,963		$	–

See accompanying notes to the unaudited financial statements.

F-3

Ecosciences, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

1.	Nature of Operations

Ecosciences, Inc. (the “Company”) was incorporated in the State of Nevada on May 26, 2010. The Company’s principal business is focused on the development, production and sale of environmentally focused wastewater products. It currently produces organic tablets and powders to be used regularly and in lieu of harmful chemical cleaning products in grease trap and septic tank systems. The Company intends to generate revenue through the sale of tablets and powders to domestic and international customers in the food and sanitation industries as well as residential consumers.

The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

2.	Going Concern

These unaudited consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenue since inception and has not generated significant earnings. As of February 28, 2018, the Company has accumulated losses of $5,086,527 and a working capital deficit of $2,233,847. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These unaudited consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Inventory

Inventory consists of the following:

	February 28, 2018		May 31, 2017

Raw Materials	$	-	$	22
Finished Goods		12,776		3,187
Packaging Supplies		344		47

Total	$	13,120	$	3,256

4.	Related Party Transactions

	a)	During the nine months ended February 28, 2018 and 2017, the Company incurred management services fees of $63,000 and $284,360, respectively, to the President of the Company.

	b)	During the nine months ended February 28, 2018 and 2017, the Company incurred management services fees of $65,333 and $36,900, respectively, to the Chief Operating Officer of the Company.

	c)	During the nine months ended February 28, 2018 and 2017, the Company incurred rent fees of $6,750 and $3,000, respectively, to a company controlled by the President of the Company.

	d)	At February 28, 2018, and May 31, 2017, the Company was indebted to the President of the Company and a company controlled by the President of the Company for $119,466 and $83,098, respectively. The amount is unsecured, non-interest bearing and due on demand.

	e)	At February 28, 2018, and May 31, 2017, the Company was indebted to the Chief Operating Officer of the Company for $nil and $10,500, respectively. The amount is unsecured, non-interest bearing and due on demand.

F-4

Ecosciences, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

5.	Notes Payable

Notes payable consist of the following:		February 28, 2018			May 31, 2017

a)	Notes payable that are unsecured, non-guaranteed, non-interest bearing and due on demand.	$	5,528		$	5,528
b)	Note payable which is unsecured, non-guaranteed, and non-interest bearing. The note was due on February 12, 2014.		8,000			8,000
c)	Note payable which is unsecured, non-guaranteed, and bears interest at 10% per annum and 16% when in default. The note is due 60 days following demand.		13,000			13,000
d)	Notes payable which are unsecured, non-guaranteed, and bear interest at 8% per annum. The notes were due from May 2015 to August 2015.		–	⁽ⁱ⁾		65,000	⁽ⁱ⁾
e)	Note payable which is unsecured, non-guaranteed, and bears interest at 8% per annum. The note was due on August 26, 2015.		2,500			2,500
f)	Notes payable which are unsecured, non-guaranteed, and bear interest at 8% per annum. The notes were due in May 2016 ($12,000) and October 2016 ($20,000).		32,000	⁽ⁱⁱ⁾		46,000
g)	Note payable which is unsecured, non-guaranteed, and bears interest at 10% per annum. The note was due on July 15, 2016.		1,300			1,300
h)	Note payable which is unsecured, non-guaranteed, and bears interest at 10% per annum. The note was due on August 1, 2016.		1,000			1,000
i)	Note payable which is unsecured, non-guaranteed, and bears interest at 10% per annum. The note was due on August 12, 2016.		1,200			1,200
j)	Notes payable which are unsecured, non-guaranteed, and bear interest at 8% per annum. The notes are due from November 2017 to April 2018.		–	⁽ⁱⁱⁱ⁾		42,750
k)	Notes payable which are unsecured, non-guaranteed, and bear interest at 8% per annum. The note was due on January 2018.		5,000			5,000
l)	Notes payable which are unsecured, non-guaranteed, and non-interest bearing. The notes are due on demand.		–	⁽ⁱⁱⁱ⁾		98,388
m)	Note payable which is unsecured, non-guaranteed, and bears interest at 8% per annum. The note is due on May 8, 2018.		–	⁽ⁱⁱⁱ⁾		11,000
n)	Note payable which is unsecured, non-guaranteed, and bears interest at 8% per annum. The note is due on June 1, 2018.		25,000			–
o)	Note payable which is unsecured, non-guaranteed, and bears interest at 8% per annum. The note is due on April 23, 2018.		5,000			–
p)	Note payable which is unsecured, non-guaranteed, and bears interest at 8% per annum. The note is due on November 23, 2018.		20,000			–

		$	119,528		$	300,666

On May 9, 2014, the Company entered into a Master Loan Agreement (the “Loan Agreement”), whereby the lender agreed, from time to time, to purchase from the Company one or more Promissory Notes for the account of the Company, provided, however, that the aggregate principal amount of all Promissory Notes then outstanding shall not exceed $500,000 and that no Event of Default has occurred and remains uncured. Amounts borrowed under the Loan Agreement are evidenced by an unsecured, non-recourse Promissory Note, bearing interest at a rate of 8% per annum, maturing on the first anniversary date thereof, and may be prepaid by the Company before the maturity date. Amounts borrowed under the Loan Agreement and repaid or prepaid may not be re-borrowed. The Loan Agreement will automatically terminate and be of no further force and effect upon the earlier to occur of (i) the satisfaction of all indebtedness, including the promissory notes and any additional indebtedness issued thereafter, between the Company and the lender and (ii) written termination notice is delivered by the Company or the lender to the other party. Several notes matured in 2015 and were not repaid. Therefore, under the default terms of the Loan Agreement, all remaining promissory notes immediately become due and payable.

During the nine months ended February 28, 2018, the lender assigned a total of $65,000 of promissory notes payable and accrued expense of $18,725 to a third-party lender. The Company agreed to add conversion rights (Notes 6(f) and 6(g)). During the nine months ended February 28, 2018, a total of $27,940 was converted to shares of common stock.

ii)

In September 2017, the Company agreed to add conversion rights to notes payable of $14,000, whereby the principal and accrued interest of each note is convertible into shares of common or preferred stock at 0.0127. Upon entering into the Debt Conversion Agreement, the terms of the note were determined to be substantially different and debt extinguishment accounting under ASC 470-50 Modifications and Extinguishments was required. There was no difference between the reacquisition price of the debt and the net carrying amount of the extinguished debt. As a result, there was no gain or loss on extinguishment of debt recognized. The Company recognized debt discount of $14,000 from beneficial conversion feature. The $14,000 convertible notes payable was converted into 1,148,631 shares of common stock in December 2017.

iii)

During the nine months ended February 28, 2018, the Company entered into Promissory Note Addendum Agreements to add conversion rights to notes payable of $42,750 (Note 6 (m), (o), (p), (t), (x)), $98,388 (Note 6 (l), (n), (u)), and $11,000 (Note 6(z)), whereby the principal and accrued interest of each note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized between the Company and the holder within 48 hours of the conversion request.

As of February 28, 2018, $69,528 and $124,000 of notes payable were in default, respectively. At February 28, 2018 and May 31, 2017, the Company owed accrued interest on notes payable of $17,420 and $28,975, respectively.

F-5

Ecosciences, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

6.	Convertible Notes Payable

Convertible notes payable consist of the following:

	Original Issuance Date	Maturity Date	Interest Rate (Per Annum)			Principal Outstanding as at February 28, 2018		Principal Outstanding as at May 31, 2017		Carrying Value as at February 28, 2018			Carrying Value as at May 31, 2017

a)	December 22, 2011	Due 60 days following demand		10	%	$	4,000	$	4,000	$	4,000	⁽ⁱ⁾	$	4,000
b)	December 22, 2011	Due 60 days following demand		10	%		1,177		1,177		1,177	⁽ⁱⁱ⁾		1,177
c)	October 23, 2012	Due 60 days following demand		10	%		1,000		1,000		1,000	⁽ⁱⁱⁱ⁾		1,000
d)	April 12, 2013	Due on demand		16	%		7,000		7,000		7,000	^(v)		7,000
e)	May 9, 2014	May 9, 2015		8	%		–		6,825		–			6,825
f)	May 19, 2014	May 19, 2015		8	%		30,359		–		30,359	^(vi)		–
g)	August 18, 2014	August 18, 2015		8	%		25,426		–		25,426	^(vi)		–
h)	August 25, 2014	August 25, 2015		8	%		5,100		–		5,100	^(iv)		–
i)	March 16, 2015	March 16, 2016		8	%		1,325		1,325		1,325	^(vi)		1,325
j)	July 19, 2016	April 19, 2017		12	%		–		5,266		–			5,266
k)	August 25, 2016	August 25, 2017		8	%		10,000		10,000		10,000	^(iv)		10,000
l)	October 1, 2016	Due on demand		0	%		73,388		–		73,388	^(iv)		–
m)	November 1, 2016	November 1, 2017		8	%		10,500		–		10,500	^(iv)		–
n)	December 1, 2016	Due on demand		0	%		10,000		–		10,000	^(iv)		–
o)	January 13, 2017	January 13, 2018		8	%		7,500		–		7,500	^(iv)		–
p)	January 17, 2017	January 17, 2018		8	%		5,000		–		5,000	^(iv)		–
r)	January 31, 2017	January 31, 2018		8	%		–		50,000		–			3,901
s)	February 10, 2017	November 10, 2017		8	%		–		69,500		–	^(x)		27,249
t)	February 21, 2017	February 21, 2018		8	%		5,750		–		5,750	^(iv)		–
u)	March 1, 2017	Due on demand		0	%		15,000		–		15,000	^(iv)		–
v)	March 30, 2017	March 30, 2018		12	%		–		52,250		–			7,610
w)	May 1, 2017	March 30, 2018		12	%		–		29,150		–			5,984
x)	May 3, 2017	May 3, 2018		8	%		7,000		–		7,000	^(iv)		–
y)	May 5, 2017	Due on demand		0	%		4,800		4,800		4,800	^(ix)		4,800
z)	May 8, 2017	May 8, 2018		8	%		11,000		–		11,000	^(iv)		–
aa)	June 5, 2017	March 30, 2018		12	%		29,150		–		23,728	^(viii)		–
bb)	July 3, 2017	July 3, 2018		8	%		7,500		–		7,500	^(iv)		–
cc)	July 25, 2017	March 30, 2018		12	%		58,300		–		45,582	^(viii)		–
dd)	July 26, 2017	July 26, 2018		12	%		29,150		–		22,767	^(viii)		–
ee)	August 22, 2017	August 22, 2018		8	%		5,000		–		5,000	^(iv)		–
ff)	August 29, 2017	March 30, 2018		12	%		29,150		–		21,599	^(viii)		–
gg)	August 31, 2017	August 31, 2018		8	%		10,000		–		10,000	^(iv)		–
hh)	September 1, 2017	Due on demand		0	%		30,000		–		30,000	^(iv)		–
ii)	September 12, 2017	March 30, 2018		12	%		29,150		–		21,182	^(viii)		–
jj)	September 22, 2017	September 22, 2018		8	%		15,000		–		15,000	^(iv)		–
kk)	October 17, 2017	March 30, 2018		12	%		29,150		–		19,957	^(viii)		–
ll)	October 31, 2017	October 31, 2018		8	%		5,000		–		5,000	^(iv)		–
mm)	November 1, 2017	March 30, 2018		12	%		29,150		–		19,193	^(viii)		–
nn)	January 4, 2018	January 4, 2019		8	%		14,000		–		14,000	^(iv)		–
oo)	January 11, 2018	July 26, 2018		12	%		58,300		–		15,986	^(viii)		–
pp)	January 12, 2018	January 12, 2019		8	%		6,250		–		6,250	^(iv)		–
qq)	February 2, 2018	February 2, 2019		8	%		20,000		–		20,000	^(iv)		–
rr)	February 15, 2018	February 15, 2019		8	%		11,000		–		11,000	^(iv)		–
ss)	February 27, 2018	February 27, 2019		12	%		165,000		–		13,342	^(viii)		–

						$	815,575	$	242,293	$	562,411		$	86,137

F-6

Ecosciences, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

6.	Convertible Notes Payable (continued)

	i)	The notes are convertible into shares of common stock of the Company’s subsidiary, Eco-logical Concepts, Inc., at $0.01 per share.

	ii)	The notes are convertible into shares of common stock of the Company’s subsidiary, Eco-logical Concepts, Inc., at $0.01 per share. In addition, as a condition precedent to the right to convert the debt to common stock of the Company, the holder must purchase 3,000,000 shares of common stock of the Company’s subsidiary at $0.01 per share.

	iii)	The note is convertible into shares of common stock of the Company’s subsidiary, Eco-logical Concepts, Inc., at $0.001 per share

	iv)	The note is convertible into shares of common stock at a conversion price to be mutually finalized between the Company and the holder within 48 hours of the conversion request.

	v)	The note is convertible into shares of common stock at a conversion price equal to $0.0043 per share.

	vi)	The note is convertible into shares of common stock at a conversion price equal to $0.0127 per share.

	vii)	The Convertible Promissory Note is convertible into shares of common stock at any time at a conversion price equal to 50% of the lowest trading price of the common stock for the twenty-five prior trading days ending on the last complete trading day prior to the conversion date. If at any time while the note is outstanding the lowest trading price of the Company’s common stock is equal to or lower than $30 per share, then an additional 10% discount shall be factored into the conversion price until the note is no longer outstanding. In addition, at any time the trading price of the Company’s common stock is equal to or lower than $10 per share, additional $10,000 shall be immediately added to the balance of the note. See Note 7.

	viii)	The note is convertible into shares of common stock at any time at a conversion price equal to 50% of the average of the lowest trading price of the common stock for the twenty days, including the day upon which a notice of conversion is received by the Company, prior to conversion. The embedded conversion option qualifies for derivative accounting and bifurcation. See Note 7.

	ix)	The note is convertible into shares of common stock at a conversion price equal to $0.225 per share.

During the nine months ended February 28, 2018, lenders converted approximately $244,931 convertible notes payable and the related accrued interest of $25,426 into 40,376,511 shares of common stock. The Company recognized $21,467 gain from settlement of debt upon conversion. See Note 8 (a).

During the nine months ended February 28, 2018, a lender converted approximately $7,000 convertible notes payable and the related accrued interest of $403 into 7,403,290 shares of Series D Preferred Stock. See Note 9 (c).

At February 28, 2018 and May 31, 2017, the Company owed accrued interest on convertible notes payable of approximately $45,000 and $35,000, respectively. As of February 28, 2018, the Company had approximately $103,000 of convertible notes payable in default.

7.	Derivative Liabilities

The embedded conversion options of the Company’s convertible debentures described in Note 6 contain conversion features that qualify for embedded derivative classification. The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities:

	Nine Months Ended February 28, 2018			Nine Months Ended February 28, 2017

Balance at the beginning of the period	$	596,743		$	–

Addition of new derivative liabilities		1,715,824			359,571
Change due to conversion of debt		(1,363,140	)		–
Change in fair value of embedded conversion option		(244,479	)		(98,436	)

Balance at the end of the period	$	704,948		$	261,135

The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option liabilities as their fair values were determined by using the Black-Scholes option pricing model based on various assumptions. The model incorporates the price of a share of the Company’s common stock (as quoted on the Over the Counter Bulletin Board), volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

	Expected Volatility	Risk-free Interest Rate	Expected Dividend Yield			Expected Life (in years)

At issuance	241% - 363%	1.08% - 2.08%		0	%	0.41 – 1.00
At February 28, 2018	242% - 396%	1.50% - 2.07%		0	%	0.08 – 1.00

F-7

Ecosciences, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

8.	Common Stock

	a)	During the nine months ended February 28, 2018, the Company issued 40,376,511 shares of common stock in aggregate pursuant to the conversion of $244,931 of convertible notes payable, $1,363,140 of related derivative liabilities from embedded conversion feature, $25,427 of accrued interest and $2,500 of share transfer fees upon conversion. The Company recognized gain from settlement of debt of $21,467 for the nine months ended February 28, 2018.

	b)	During the nine months ended February 28, 2018, the Company issued 4,705,000 shares of common stock in aggregate pursuant to the conversion of 235,250 shares of Series A preferred stock.

	c)	During the nine months ended February 28, 2018, the Company issued 97,596,600 shares of common stock in aggregate pursuant to the conversion of 8,133,050 shares of Series C preferred stock.

	d)	During the nine months ended February 28, 2018, the Company issued 30,800,000 shares of common stock in aggregate pursuant to the conversion of 3,080,000 shares of Series D preferred stock.

	e)	On June 22, 2017, the Company issued 1,951 shares to a third party free of charge due to the round-up feature of the Company’s 1 for 10,000 reverse stock split completed on May 19, 2017.

9.	Preferred Stock

	a)	Pursuant to the certificate of designation, the Company’s preferred stock may be converted into common stock based on the following ratio: Series A Preferred stock – 1 to 20 share of common stock Series B Preferred stock – Not convertible Series C Preferred stock – 1 to 12 share of common stock Series D Preferred stock – 1 to 10 share of common stock For shares of Series A convertible preferred stock issued prior to September 11, 2015, the holders shall have the right to convert the shares from the first anniversary date of issuance. For shares of Series A convertible preferred stock issued on or after September 11, 2015, the holders shall have the right to convert the shares from October 1, 2016. The Company may also redeem all, or any portion of, the outstanding shares of Series A convertible preferred stock for $0.40 per share. Each share of Series D convertible preferred stock is convertible into 10 shares of common stock of the Company; provided, however, that the holder is prohibited from converting such number of shares of Series D convertible preferred stock that would result in the stockholder beneficially owning more than 4.99% of the common stock of the Company.

	b)	On December 14, 2017, the Company issued 8,133,050 shares of Series C Convertible Preferred stock with a fair value of $283,028 to the President of the Company to settle payable to the President of $8,133, resulting in a loss on settlement of related party debt of $274,895. The Company issued 97,596,600 shares of common stock on the same date pursuant to the conversion of 8,133,050 shares of Series C preferred stock. See note 8 (c).

	c)	During the nine months ended February 28, 2018, the Company issued 7,403,290 shares of Series D Preferred stock in aggregate pursuant to the conversion of $7,000 of convertible notes payable, and $403 of accrued interest.

F-8

Ecosciences, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

10.	Commitments

On June 4, 2015, the Company entered into a Management Services Agreement with the President, CEO, Secretary and Treasurer of the Company. In consideration for his services, the Company agreed to pay $31,200 per year and to issue an aggregate of 1,000,000 shares of the Company’s Series D convertible preferred stock, of which 100,000 shares were issued upon the execution of the Management Services Agreement, and the remaining 900,000 shares of which shall vest in increments upon the achievement by the Company of the milestones set forth in the Management Services Agreement, including the completion of product line expansion, and signing distributors nationally and internationally. The term of the Management Services Agreement is for one year, commencing on the date of the agreement, and is automatically renewable for successive one year terms unless mutually agreed to in writing.

On November 2, 2016, the Company and the President amended the Management Service Agreement. As amended, the Company agreed to pay $84,000 per year and to issue an aggregate of 900,000 shares of the Company’s Series D convertible preferred stock, which shall vest in increments upon the achievement by the Company of the milestones set forth in the Amended and Restated Management Services Agreement, including the completion of product line expansion, and signing distributors nationally and internationally. In addition, the Company agreed to pay a signing bonus of $31,200, convertible or payable into shares of common stock at $0.001 per share. The Company also agreed to determine a commission structure within 90 days of the agreement, and shall reimburse the President for a health insurance plan beginning January 1, 2017. The term of the amendment agreement is for one year, commencing on the date of the agreement, and is automatically renewable for successive one year terms unless mutually agreed to in writing. As of February 28, 2018, the Company had issued 100,000 shares of the Company’s Series D convertible preferred stock. The executive continues to work on achieving milestones.

	b)	On June 4, 2015, the Company entered into service agreements with four third parties. In consideration for services rendered, the Company agreed to pay an aggregate $96,000 per year and issue an aggregate 4,000,000 shares of the Company’s Series D convertible preferred stock, of which 400,000 shares were issued upon the execution of the agreements and the remaining 3,600,000 shares shall vest in increments upon the achievement by the Company of the milestones set forth in the agreements, including the completion of product line expansion, and signing distributors nationally and internationally. The terms of the agreements are for one year, commencing on the date of the agreements, and are automatically renewable for successive one year terms unless mutually agreed to in writing. As of February 28, 2018, the Company had issued 400,000 shares of the Company’s Series D convertible preferred stock. The third parties continue to work on achieving milestones.

	c)	On June 11, 2015, the Company entered into a Services Agreement with a third party. In consideration for services rendered, the Company agreed to pay $60,000 annual fee and issue 500,000 shares of the Company’s Series D convertible preferred stock, of which 50,000 shares were issued upon the execution of the Services Agreement, and the remaining 450,000 shares of which shall vest in increments upon the achievement by the Company of the milestones set forth in the Services Agreement, including the completion of product line expansion, and signing distributors nationally and internationally. The terms of the Services Agreement is for one year, commencing on the date of the agreement, and is automatically renewable for successive one year terms unless mutually agreed to in writing. As of February 28, 2018, the Company had issued 50,000 shares of the Company’s Series D convertible preferred stock. The third party continues to work on achieving milestones.

	d)	On June 11, 2015, the Company entered into Services Agreements with two third parties. In consideration for these services, the Company agreed to issue an aggregate 600,000 shares of the Company’s Series D convertible preferred stock, of which 60,000 shares were issued upon the execution of the Services Agreements, and the remaining 540,000 shares of which shall vest in increments upon the achievement by the Company of the milestones set forth in the Services Agreements, including the completion of product line expansion, and signing distributors nationally and internationally. The terms of the Services Agreements are for one year, commencing on the date of the agreements, and are automatically renewable for successive one year terms unless mutually agreed to in writing. As of February 28, 2018, the Company had issued 60,000 shares of the Company’s Series D convertible preferred stock. The third parties continue to work on achieving milestones.

F-9

Ecosciences, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

10.	Commitments (continued)

On November 1, 2016, the Company entered into a Management Services Agreement with the Chief Operating Officer of the Company. In consideration for his services, the Company agreed to pay $84,000 per year and commission of 3% of all gross sales and issue an aggregate of 1,000,000 shares of the Company’s Series D convertible preferred stock, of which 100,000 shares were issued upon the execution of the Management Services Agreement, and the remaining 900,000 shares of which shall vest in increments upon the achievement by the Company of the milestones set forth in the Management Services Agreement, including the completion of product line expansion, and signing distributors nationally and internationally. The Company also agreed to reimburse the Chief Operating Officer for a health insurance plan beginning January 1, 2017. The term of the Management Services Agreement is for six months, commencing on the date of the agreement, and is automatically renewable for successive one year terms unless mutually agreed to in writing. As of February 28, 2018, the Company had issued 100,000 shares of the Company’s Series D convertible preferred stock. The executive continues to work on achieving milestones.

11.	Concentrations

The Company’s revenues were concentrated among three customers for the nine months ended February 28, 2018, and 2017:

The Company’s receivables were concentrated among four customers as at February 28, 2018, and two customers as at May 31, 2017:

* not greater than 10%

12.	Subsequent Events

Conversions of convertible notes payable

In March 2018 and April 2018, the Company issued 6,980,733 shares of common stock in aggregate pursuant to the conversion of approximately $29,150 of convertible notes payable.

Issuances of notes payable

On March 1, 2018, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $4,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On April 3, 2018, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $10,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

Other issuances

In March 2018 and April 2018, the Company issued 25,332,900 shares of common stock in aggregate pursuant to the conversion of approximately 2,533,290 of Series D convertible preferred stock.

In April 10, 2018, the Company received a conversion notice. The Company will convert 1,000,000 of Series D convertible preferred stock to 10,000,000 shares common shares. As of the issuance date of these financial statements, the common shares have not been issued.

F-10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion together with our unaudited consolidated financial statements and the related notes included elsewhere in this report. This discussion contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ materially from those we currently anticipate as a result of many factors, including the factors we describe in this report and our other reports filed with the Securities and Exchange Commission.

Forward Looking Statements

Some of the information in this section contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. You should read statements that contain these words carefully because they:

	●	discuss our future expectations;

	●	contain projections of our future results of operations or of our financial condition; and

	●	state other “forward-looking” information.

We believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth elsewhere in this Report.

Unless stated otherwise, the words “we,” “us,” “our,” the “Company” or “Ecosciences” in this section collectively refer to Ecosciences, Inc. and its wholly-owned subsidiary, Eco-Logical Concepts, Inc., a Delaware corporation.

The following discussion highlights Ecosciences’ results of operations and the principal factors that have affected our consolidated financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of our consolidated financial condition and results of operations presented herein. The following discussion and analysis is based on Ecosciences’ unaudited consolidated financial statements contained in this Report, which have been prepared in accordance with generally accepted accounting principles in the United States. You should read the discussion and analysis together with such financial statements and the related notes thereto.

Overview

Located in Jericho, New York, the Company provides bio-remediation products for septic tanks, drains and pipes, grease traps, lift and pump stations, sewers, ponds, lakes, lagoons, farms, car washes, portable sanitation facilities, boats, RVs, and wastewater treatment facilities. We provide a suite of tablet-based products that can be added to waste systems. The active ingredients in our tablets oxygenate wastewater, remove hydrogen sulfide odors, prevent corrosion in wastewater systems, and initiate aerobic biological breakdown of organic solids, waste, as well as fats, oils, and grease. The tablets are non-hazardous, environmentally friendly, and biodegradable. . The product is simple to use directly by the end consumer or commercial customer.

The Company’s bioremediation products are sold under the product names Trap-Eze, Waste-Eze, Septic Oxy-Tabs and Drain & Pipe Oxy-Tabs. The Company also recently re-branded the products under the brand EcoNow to better create consumer brand awareness and to align with the company’s mission of solving ecological issues that affect our environment.

The Company has formulated a business model that management believes can help it grow and achieve economies of scale over time. We have undertaken the necessary due diligence and prepared a business that will enable us to compete in the market for bio-remediation products.

The Company is focused on building, acquiring and investing in businesses around ecological and life sciences. From waste water remediation to healthcare and more, the Company is committed to building a better living environment for all people.

Product Development

The Company plans in this quarter or the next fiscal quarter to begin testing new formulations designed to address and remediate other water pollution problems.

Growth Strategy of the Company

Our mission is to maximize stockholder value through expanding the scope of products offered. We intend to conduct research and development to bring new, improved products to market to ensure we are competitive in our market space. We intend to focus on growing our distribution channels using master-distributor relationships, full-line distributors, sales representatives and other similar sales channels. We intend to build product and brand awareness through a direct retail channel using online marketing and info-commercials, which we believe will provide a feedback benefit for the growth of our other distribution channels as well as to establish opportunities for retail sales channels, such as through chain stores and small retailers.

We have been working to set up sales representatives and distributors in several different market segments, such as the consumer retail market, foodservice industry, and wastewater industry. Our revenues for this fiscal year have primarily been in the United States. All sales were completed in US dollars and have not been subject to any foreign taxes.

During the fourth quarter ended May 31, 2017, we commenced developing additional eco-based products in order to introduce a retail product line. These products included Septic Oxy-Tabs to treat and maintain Septic Systems and Drain & Pipe Oxy-Tabs to remove build-up in drains, sinks pipes and traps, garbage disposals and main lines leading to sewers. The Company will soon begin testing new formulations designed to address and remediate other significant water pollution problems. We also intend to develop a line of eco-friendly certified green cleaning solutions.

Critical Accounting Policies, Estimates, and Judgments

Our unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments, our commitments to strategic alliance partners and the timing of the achievement of collaboration milestones. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known. Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our financial statements and related disclosures. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

Results of Operations

Three Months Ended February 28, 2018 Compared to the Three Months Ended February, 28, 2017

The following table presents the Company’s results of operations for the periods indicated and as a percentage of total revenue. Historical results are not necessarily indicative of results for future periods.

	Three-Month Period Ended
	February 28, 2018						February 28, 2017
	$			% of Revenue			$			% of Revenue

Revenues	$	21,160			100	%	$	4,836			100	%
Cost of revenues		(5,320	)		25	%		(954	)		20	%
Gross profit		15,840			75	%		3,882			80	%

Operating expenses:
General and administrative		71,448			338	%		53,879			1,114	%
Research and development		2,532			12	%		-			-	%
Professional fees		138,053			652	%		102,714			2,124	%
Total expenses		212,033			1,002	%		156,593			3,238	%

Net loss before other expenses:		(196,193	)		(927	)%		(152,711	)		(3158	)%

Other income (expenses):

Interest expense		(1,264,596	)		(5,976	)%		(208,822	)		(4,318	)%
Gain on settlement of debt		4,931			23	%		-			-	%
Loss on settlement of related party debt		(274,895	)		(1,299	)%		-			-	%
Change in fair value of derivative liabilities		946,324			4,472	%		79,207			1,638	%

Net loss	$	(784,429	)		(3,707	)%	$	(282,326	)		(5,838	)%

The following tables present our revenue and operating expenses for the periods indicated.

Revenue

	Three-Month Period Ended
	February 28, 2018		February 28, 2017		% Change

Revenue	$	21,160	$	4,836		338	%

Our revenue increased by $16,324, or 338%, for the three months ended February 28, 2018 as compared to the three months ended February 28, 2017. The increase is attributed to increased marketing efforts.

Costs and Expenses

Costs of Sales

	Three-Month Period Ended
	February 28, 2018		February 28, 2017		% Change

Cost of Sales	$	5,320	$	954		458	%

Our costs of sales increased $4,366, or 458%, for the three months ended February 28, 2018 as compared to the three months ended February 28, 2017. The increase is mainly due to increase in sales. The change in our gross margin is mainly because of the increase in purchase price of inventory.

Operating Expenses

	Three-Month Period Ended
	February 28, 2018		February 28, 2017		% Change

Operating Expenses	$	212,033	$	156,593		35	%

Our operating expenses increased 55,440, or 35%, for the three months ended February 28, 2018 as compared to the three months ended February 28, 2017. The increase is mainly due to the increase in marketing expenses.

Other Income (Expenses)

	Three-Month Period Ended
	February 28, 2018			February 28, 2017			% Change

Interest Expense	$	(1,264,596	)	$	(208,822	)		506	%
Gain on settlement of debt	$	4,931		$	-			100	%
Loss on settlement of related party debt	$	(274,895	)	$	-			100	%
Change in fair value of derivative liabilities	$	946,324		$	79,207			1,095	%

Our interest expense increased $1,055,774, or 506%, for the three months ended February 28, 2018 as compared to the three months ended February 28, 2017. The increase is attributable to the issuance of additional promissory notes and convertible notes payable to finance operations and the recognitions of interest expenses on derivative liabilities that exceed convertible notes payable at issuance of debts.

Our net loss from settlement of debt increased approximately $270,000 for the three months ended February 28, 2018 as compared to the three months ended February 28, 2017. The increase is attributable to the issuance of preferred stock to settle accounts payable to our Chief Executive Officer.

Our gain from change in fair value of derivative liabilities increased $867,117, or 1,095%, for the three months ended February 28, 2018 as compared to the three months ended February 28, 2017. The derivative liabilities are affected by factors including the Company’s stock price that are subject to significant fluctuations and are not under the Company’s control.

Nine Months Ended February 28, 2018 Compared to the Nine Months Ended February 28, 2017

	Nine-Month Period Ended
	February 28, 2018						February 28, 2017
	$			% of Revenue			$			% of Revenue

Revenues	$	67,021			100	%	$	14,223			100	%
Cost of revenues		(22,621	)		34	%		(7,650	)		54	%
Gross profit		44,400			66	%		6,573			46	%

Operating expenses:
General and administrative		263,093			393	%		348,546			2,451	%
Research and development		8,186			12	%
Professional fees		447,400			668	%		360,870			2,537	%
Total Expenses		718,679			1,072	%		709,416			4,988	%

Net loss before other expenses:		(674,279	)		(1,006	)%		(702,843	)		(4,942	)%

Other income (expenses):

Interest expense		(1,839,938	)		(2,745	)%		(435,263	)		(3,060	)%
Gain on settlement of debt		21,467			32	%		-			-	%
Loss on settlement of debt		(274,895	)		(410	)%		-			-	%
Change in fair value of derivative liabilities		244,479			365	%		98,436			692	%

Net loss	$	(2,523,166	)		(3,764	)%	$	(1,039,670	)		(7,310	)%

The following tables present our revenue and operating expenses for the periods indicated.

Revenues

		Nine-Month Period Ended
		February 28, 2018		February 28, 2017	% Change

Revenue	$	67,021	$	14,223	371	%

Our revenue increased by $52,798, or 371%, for the nine months ended February 28, 2018 as compared to the nine months ended February 28, 2017. The increase is attributed to increased marketing efforts.

Costs and Expenses

Costs of Sales

	Nine-Month Period Ended
	February 28, 2018		February 28, 2017		% Change

Cost of Sales	$	22,621	$	7,650		196	%

Our costs of sales increased $14,971, or 196%, for the nine months ended February 28, 2018 as compared to the nine months ended February 28, 2017. The increase is mainly due to increase in sales.

Operating Expenses

	Nine-Month Period Ended
	February 28, 2018		February 28, 2017		% Change

Operating Expenses	$	718,679	$	709,416		1	%

Our operating expenses increased 9,263, or 1%, for the nine months ended February as compared to the nine months ended February. The change is mainly resulted from the increase in marketing expenses offsetting by the decrease in management service fees.

Other Income (Expenses)

	Nine-Month Period Ended
	February 28, 2018			February 28, 2017			% Change

Interest Expense	$	(1,839,938	)	$	(435,263	)		323	%
Gain on settlement of debt	$	21,467		$	-			100	%
Loss on settlement of related party debt	$	(274,895	)	$	-			100	%
Change in fair value of derivative liabilities	$	244,479		$	98,436			148	%

Our interest expense increased $1,404,675, or 323%, for the nine months ended February 28, 2018 as compared to the nine months ended February 28, 2017. The increase is attributable to the issuance of additional promissory notes and convertible notes payable to finance operations and the recognitions of interest expenses on derivative liabilities that exceed convertible notes payable at issuance of debts.

Our net loss from settlement of debt increased approximately $270,000 for the nine months ended February 28, 2018 as compared to the nine months ended February 28, 2017. The increase is attributable to the issuance of preferred stock to settle accounts payable to our Chief Executive Officer.

Our loss from change in fair value of derivative liabilities increased $146,043, or 148%, for the nine months ended February 28, 2018 as compared to the nine months ended February 28, 2017. The derivative liabilities are affected by factors including the Company’s stock price that are subject to significant fluctuations and are not under the Company’s control.

Financial Condition, Liquidity and Capital Resources

At February 28, 2018, we had $110,721 in cash on hand and an accumulated deficit of $5,086,527. We had $67,021 in revenues for the nine-month period ended February 29, 2018. For the nine months ended February 28, 2018, we had net cash used in operating activities of $497,487 and net cash provided from financing activities of $604,851. Our auditors have expressed that there is substantial doubt as to our ability to continue as a going concern in their report for the fiscal year ended May 31, 2017,

Since inception, we have financed our operations primarily through the issuance of notes payable and convertible notes payable and the issuances and sales of equity securities for cash consideration.

We expect to incur losses and negative operating cash flows for the foreseeable future and may never become profitable. We also expect to continue to incur significant operating and capital expenditures for the next several years and anticipate that our expenses will increase substantially in the foreseeable future. We also expect to experience negative cash flow for the foreseeable future as we fund our operating losses and capital expenditures.

As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.

We have no agreements to obtain funds through bank loans, lines of credit or any other traditional sources. Since we have no financing committed, our inability to realize financing to maintain operations and grow our business would materially restrict our business operations. Previous convertible debt financing the Company has accepted have not been on favorable terms and has been significantly dilutive to our existing common equity and as a result the Company executed a consolidation of its common stock on May 19, 2017 to attract financing and maintain its business. Future financing may not be available upon acceptable terms, or at all. Should we be successful in securing future financing new issuances of equity or convertible debt would dilute our current shareholders, possibly significantly, might require a significant increase to our authorized stock, and might have rights, preferences, or privileges senior to our common or preferred stock. If financing is not available to us on favorable terms, such severe limitation might cause us to consider another consolidation of existing common equity at any time as a means to attract financing and maintain our business.

Working Capital

As of February 28, 2018, we had a working capital deficit of $2,233,847, an accumulated deficit of $5,086,527.

At February 28, 2018, the Company was indebted to the President and CEO of the Company and a company controlled by the President of the Company for $119,466. The amount is unsecured, non-interest bearing and due on demand.

We do not believe our cash resources are sufficient to implement our current business plan, support operations, and meet current obligations for the next 12 months. We expect that our working capital requirements will be funded over this period by a combination of revenue, issuances of promissory notes or private equity placements of our securities and, if available, shareholder loans. Our business plan does anticipate increases in operating expenses and capital expenditures over the next twelve months in relation to: (i) product development; (ii) research and development to enhance existing products and innovate new ones (iii) employee salaries and professional fees; and (iv) marketing expenses. The company expects to continue to realize cash flow from financing activities until such time as it can increase revenue to the point at which it can maintain operations and fund business growth.

We plan to raise additional capital to finance our operations. There can be no assurance that financing will be available when required in sufficient amounts, on acceptable terms or at all. In the event that the necessary additional financing is not obtained, we may be required to reduce our discretionary overhead costs substantially, including research and development, general and administrative and sales and marketing expenses or otherwise curtail operations.

Cash and Cash Equivalents

The following table summarizes the sources and uses of cash for the periods stated. The Company held no cash equivalents for any of the periods presented.

	For the Nine Months Ended
	February 28, 2018			February 28, 2017
Cash, beginning of period	$	3,357		$	4,220
Net cash used in operating activities		(497,487	)		(234,036	)
Net cash provided by investing activities		—			—
Net cash provided by financing activities		604,851			243,997
Cash, end of period	$	110,721		$	14,181

Off-Balance Sheet Operations

The Company does not have any off-balance sheet transactions.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

N/A

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of February 28, 2018. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:

The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements would not be prevented or detected on a timely basis.

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended February 28, 2018 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

N/A

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

Issuances of convertible notes payable

On June 2, 2017, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $25,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On July 3, 2017, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $7,500, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On August 22, 2017, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $5,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On August 31, 2017, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $10,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On July 26, 2017, the Company entered a Securities Purchase Agreement whereby the Company agreed to issue three Convertible Redeemable Back End Notes for an aggregate of $87,450. The principal amount and any interest thereon are due on July 26, 2018. The notes bear interest at 12% per annum and contain a 10% original issue discount, such that the purchase price of each note is $26,500. On July 26, 2017, in consideration for the first note, the Company received cash proceeds of $25,000. The proceeds for the two remaining notes will be funded on April 26, 2018 and May 26, 2018. The closing of the two remaining notes shall be contingent on the following condition: (i) the Company must maintain a bid of $0.001 per share over 5 consecutive trading days. Pursuant to the agreements, the notes are convertible into shares of common stock at any time at a conversion price equal to 50% of the average of the three lowest trading prices of the common stock for the twenty prior trading days including the day upon which a notice of conversion is received by the Company. During the first six months that the first note is in effect, the Company may redeem the first note at 140% of the par value plus accrued interest. The notes may not be prepaid except if the first note is redeemed by the Company.

On September 1, 2017 the Company entered into a Promissory Note for $30,000 with a vendor to convert amounts owing for services to a convertible promissory note. The note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request. The Promissory Note is unsecured, non-interest bearing and due on demand.

On September 22, 2017, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $15,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On October 31, 2017, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $5,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On January 4, 2018, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $14,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On January 12, 2018, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $6,250, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On February 1, 2018, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $20,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On February 15, 2018, the Company sold a Promissory Note to an unaffiliated lender for the aggregate principal amount of $11,000, bearing interest at a rate of 8% per annum and maturing the first year anniversary of the date of issuance. The Company may prepay the principal and accrued interest at any time without penalty. Pursuant to the agreement, the note is convertible into shares of common or preferred stock at a conversion price to be mutually finalized within 48 hours of the conversion request.

On February 27, 2018, the Company entered a Securities Purchase Agreement with a lender whereas the Company agreed to issue seven convertible notes for an aggregate of $495,000 with the first note being in the amount of $165,000 and the rest of the eight notes being in the amount of $55,000. The notes bear interest at 12% per annum commencing on February 27, 2018, and contain a 10% original issue discount, such that the purchase price of the first note is $150,000 and the rest of the six notes (or “Back-End Notes”) is $50,000. The proceeds for the Back-End Notes will be funded one at a time in 30-day increments commencing September 27, 2018 through February 27, 2019. However, the Company must maintain a bid of $0.001 per common stock share over 5 consecutive trading days before the closing of each Back-End Notes.

On February 27, 2018, the first note was funded. The note bears interest at 12% per annum and matures on February 27, 2019. The note contains an original issue discount of $15,000 so the purchase price of the note is $150,000. Pursuant to the agreement, the note is convertible into shares of common stock at any time at a conversion price equal to 50% of the lowest trading price of the common stock for the twenty days, including the day upon which a notice of conversion is received by the Company, prior to conversion. During the first six months, the Company may redeem the first note at 140% of the par value plus accrued interest. The Company also incurred financing costs of $8,000, which has been recorded as a discount.

Conversion of convertible notes payable

During June through August 2017, the Company issued 278,959 shares of common stock pursuant to the conversion of $75,604 of convertible notes payable.

In September and October 2017, the Company issued 2,469,740 shares of common stock in aggregate pursuant to the conversion of $59,344 of convertible notes payable.

In November 2017, the Company issued 4,442,131 shares of common stock in aggregate pursuant to the conversion of $40,940 of convertible notes payable.

On September 22, 2017, the Company received a notice of conversion to issue 1,539,449 shares of common stock pursuant to the conversion of $19,551 of convertible note payables, the shares have been approved to be issued by the Board of Directors of the Company but have not been issued as of October 23, 2017.

On September 27, 2017, the Company received a notice of conversion to issue 624,102 shares of common stock pursuant to the conversion of $7,926 of convertible note payables, the shares have been approved to be issued by the Board of Directors of the Company but have not been issued as of October 23, 2017.

On September 28, 2017, the Company received a notice of conversion to issue 306,189 shares of common stock pursuant to the conversion of $3,889 of convertible note payables, the shares have been approved to be issued by the Board of Directors of the Company but have not been issued as of October 23, 2017.

In December 2017 and January 2018, the Company issued 21,838,612 shares of common stock in aggregate pursuant to the conversion of approximately $46,865 of convertible notes payable and accrued interest of $14,307.

In February 2018 the Company issued 9,976,596 shares of common stock in aggregate pursuant to the conversion of approximately $42,360 of convertible notes payable.

Conversion of Series A Convertible Preferred Stock

In November 2017, the Company issued 420,000 shares of common stock pursuant to the conversion of 21,000 shares of Series A Convertible Preferred Stock.

In February 2018, the Company issued 2,500,000 shares of common stock pursuant to the conversion of 125,000 shares of Series A Convertible Preferred Stock.

The Company issued the foregoing securities pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company under Section 4(a)(2) promulgated thereunder due to the fact that such issuances did not involve a public offering of securities, the shares were issued to a small group of persons and no solicitation or advertisement was made in connection therewith.

Conversion of Series C Convertible Preferred Stock

On December 14, 2017, the Company issued 8,133,050 shares of Series C Convertible Preferred stock to the President of the Company to settle payable to the President of $8,133. On December 15, 2017, the Company issued 97,596,600 shares of common stock to the President of the Company pursuant to the conversion of 8,133,050 shares of Series C preferred stock.

Conversion of Series D Convertible Preferred Stock

On December 13, 2017, a lender of the Company assigned a $5,000 note payable to a third-party lender. On December 14, 2017, the Company entered into a Debt Conversion Agreement with the third-party lender, whereby $2,500 of the loan principal became convertible into Series D convertible preferred stock of the Company at a conversion price equal to $0.001 per share.

On December 14, 2017, the Company entered into a Debt Conversion Agreement with a third-party lender, whereby $2,000 of the loan principal became convertible into 2,000,000 shares of Series D convertible preferred stock of the Company.

On December 15, 2017, the Company entered into an Amendment to Debt Conversion Agreement with a third-party lender, whereby $3,912 of the loan principal became convertible into 3,911,550 shares of Series D convertible preferred stock of the Company.

On December 15, 2017, the Company entered into an Amendment to Debt Conversion Agreement with a third-party lender, whereby $3,000 of the loan principal became convertible into 3,000,000 shares of Series D convertible preferred stock of the Company.

In December 2017, January 2018 and February 2018, the Company issued 30,800,000 shares of common stock pursuant to the conversion of 3,080,000 shares of Series D Convertible Preferred Stock.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Subsequent Events

Conversions of convertible notes payable

In March 2018 and April 2018, the Company issued 6,980,733 shares of common stock in aggregate pursuant to the conversion of approximately $29,150 of convertible notes payable.

Issuances of notes payable

Other issuances

In March 2018 and April 2018, the Company issued 25,332,900 shares of common stock in aggregate pursuant to the conversion of approximately 2,533,290 of Series D Convertible Preferred Stock.

Item 6. Exhibits

Index to Exhibits

10.1		2018-02-27 Adar Bays LLC Securities Purchase Agreement

10.2		2018-02-27 Adar Bays LLC Convertible Redeemable Note (144)

10.3		2018-02-27 Adar Bays LLC Convertible Redeemable Back End Note (1 of 6)

10.4		2018-02-27 Adar Bays LLC Convertible Redeemable Back End Note (2 of 6)

10.5		2018-02-27 Adar Bays LLC Convertible Redeemable Back End Note (3 of 6)

10.6		2018-02-27 Adar Bays LLC Convertible Redeemable Back End Note (4 of 6)

10.7		2018-02-27 Adar Bays LLC Convertible Redeemable Back End Note (5 of 6)

10.8		2018-02-27 Adar Bays LLC Convertible Redeemable Back End Note (6 of 6)

10.9		2018-02-27 Adar Bays LLC Collateralized Secured Promissory Note (1 of 6)

10.10		2018-02-27 Adar Bays LLC Collateralized Secured Promissory Note (2 of 6)

10.11		2018-02-27 Adar Bays LLC Collateralized Secured Promissory Note (3 of 6)

10.12		2018-02-27 Adar Bays LLC Collateralized Secured Promissory Note (4 of 6)

10.13		2018-02-27 Adar Bays LLC Collateralized Secured Promissory Note (5 of 6)

10.14		2018-02-27 Adar Bays LLC Collateralized Secured Promissory Note (6 of 6)

31.1*		Rule 13(a)-14(a)/15(d)-14(a) Certification

32.1*		Section 1350 Certification

101.SCH**		XBRL Taxonomy Extension Schema Document

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB**		XBRL Taxonomy Extension Labels Linkbase Document

101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document

101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith
**	Furnished herewith. Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.

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.

Date: April 17, 2018	By:	/s/ JOEL FALITZ
	Name:	Joel Falitz
	Title:	President, Chief Executive Officer, Secretary and Treasurer
		(Principal Executive Officer)
		(Principal Financial and Accounting Officer)

Revenue for the
Nine Months Ended
February 28, 2018

Revenue for the
Nine Months Ended
February 28, 2017