Right On Brands, Inc 10-Q for FY2022 Q1

Right On Brands, Inc. (RTON)

10-Q 2021-08-13 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

Right On Brands, Inc filed this 10-Q on August 13, 2021, covering the quarter ended June 30, 2021 (FY2022 Q1).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $140.53K; up 1162.6% from $11.13K a year earlier
Net loss: $121.97K; compared with a net loss of $206.62K a year earlier

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

For the quarterly period ended June 30, 2021

☐	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission File Number: 000-55704

Nevada		45-1994478
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

		Page

PART I - FINANCIAL INFORMATION

Item 1:	Financial Statements	3
Item 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	8
Item 4:	Controls and Procedures	8

PART II - OTHER INFORMATION

Item 1:	Legal Proceedings	9
Item 1A:	Risk Factors	9
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3:	Defaults Upon Senior Securities	9
Item 4:	Mine Safety Disclosures	9
Item 5:	Other Information	9
Item 6:	Exhibits	10

F-1	Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and March 31, 2021;
F-2	Condensed Consolidated Statements of Operations for the three months ended June 30, 2021 and 2020 (unaudited);
F-3	Condensed Consolidated Statements of Stockholders' Deficit for the three months ended June 30, 2021 and 2020 (unaudited);
F-4	Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2021 and 2020 (unaudited);
F-5	Notes to Condensed Consolidated Financial Statements (unaudited).

	June 30,			March 31,
	2021			2021

Assets
Current assets
Cash	$	34,009		$	45,780
Inventory		138,541			73,553
Other current assets		3,221			3,221
Total current assets		175,771			122,554

Non-current assets
Property and equipment, net of depreciation		19,685			21,085
Right of use asset		87,000			93,000
Total non-current assets		106,685			114,085

Total assets	$	282,456		$	236,639

Liabilities and Stockholders' Deficit

Current liabilities
Accounts payable	$	105,023		$	126,798
Accrued interest payable		32,809			81,977
Accrued expenses		53,741			121,741
Lease liability, current portion		69,600			69,600
Notes payable		118,000			367,000
Convertible debt, net of discount		338,275			338,275
Derivative liability		447,300			472,471
Total current liabilities		1,164,748			1,577,862

Lease liability, non-current		51,000			69,000

Total liabilities		1,215,748			1,646,862

Commitments and contingencies (Note 11)

Stockholders' deficit
Series A Preferred stock; 10,000,000 shares authorized of $.001 par value; 5,000,000 shares issued, respectively		5,000			5,000
Common stock; par value $.001; 12,000,000,000 shares authorized, 5,909,426,193 and 5,474,978,826 shares issued, respectively		5,909,426			5,474,979
Additional paid-in capital		8,710,945			8,546,492
Common stock payable		51,820			51,820
Accumulated deficit		(15,634,920	)		(15,512,951	)
Total Right On Brands stockholders' deficit		(957,729	)		(1,434,660	)
Noncontrolling interest		24,437			24,437
Total stockholders' deficit		(933,292	)		(1,410,223	)

Total liabilities and stockholders' deficit	$	282,456		$	236,639

	For the three months ended
	June 30,
	2021			2020

Revenues	$	140,531		$	11,130
Cost of goods sold		26,346			8,628
Gross profit		114,185			2,502

Operating expenses
General and administrative		64,145			106,962
Advertising and promotion		5,469			807
Legal and professional		41,579			8,218
Depreciation and amortization		1,400			-
Impairment expense		-			91,200
Total operating expenses		112,593			207,187

Loss from operations		1,592			(204,685	)

Other income and (expense)
Interest expense		(10,592	)		(21,418	)
Amortization of debt discount		-			(146,879	)
Change in fair value of derivative liability		25,171			166,358
Loss on settlement of liabilities		(138,140	)		-
Total other income (expense)		(123,561	)		(1,939	)

Net loss including noncontrolling interest	$	(121,969	)	$	(206,624	)
Net loss attributable to noncontrolling interest		-			-
Net loss attributable to Right on Brands, Inc.	$	(121,969	)	$	(206,624	)

Loss per share	$	0.00		$	0.00

Weighted average shares outstanding - basic		5,565,567,412			1,464,856,280

	Preferred Stock				Common Stock				Additional Paid in			Common Stock		Accumulated			Noncontrolling
	Shares		Amount		Shares		Amount		Capital			Payable		Deficit			Interest		Total

Balances, March 31, 2020		5,000,000	$	5,000		999,515,530	$	999,516	$	10,382,366		$	66,820	$	(13,661,579	)	$	24,437	$	(2,183,440	)

Conversion of debt and interest		-		-		1,505,618,794		1,505,619		(995,555	)		-		-			-		510,064

Net loss		-		-		-		-		-			-		(206,624	)		-		(206,624	)

Balances, June 30, 2020		5,000,000	$	5,000		2,505,134,324	$	2,505,135	$	9,386,811		$	66,820	$	(13,868,203	)		24,437	$	(1,880,000	)

Balances, March 31, 2021		5,000,000	$	5,000		5,474,978,826	$	5,474,979	$	8,546,492		$	51,820	$	(15,512,951	)	$	24,437	$	(1,410,223	)

Settlement of accounts payable		-		-		13,000,000		13,000		16,900			-		-			-		29,900

Settlement of warrant dispute		-		-		38,114,035		38,114		41,886			-		-			-		80,000

Settlement of debt dispute		-		-		83,333,333		83,333		341,667			-		-			-		425,000

Issuance of common stock for cash		-		-		299,999,999		300,000		(236,000	)		-		-			-		64,000

Net loss		-		-		-		-		-			-		(121,969	)		-		(121,969	)

Balances, June 30, 2021		5,000,000	$	5,000		5,909,426,193	$	5,909,426	$	8,710,945		$	51,820	$	(15,634,920	)	$	24,437	$	(933,292	)

	·	Humbly Hemp, Inc.
	·	Endo Brands, Inc.
	·	Humble Water Company

Balance at March 31, 2021	$	472,471
Change in fair value		(25,171	)
Balance at June 30, 2021	$	447,300

	June 30, 2021		March 31, 2021

Finished goods		138,541		73,553
	$	138,541	$	73,553

	June 30, 2021			March 31, 2021

Website development	$	88,965		$	88,965
Automobile		31,596			31,596
Studio and office equipment		11,910			11,910
Tenant improvements		11,135			11,135
Intangible assets		1,024			1,024
		144,630			144,630
Accumulated depreciation and amortization		(124,945	)		(123,545	)
	$	19,685		$	21,085

Noteholder	Origination	Maturity	Interest rate			Variable conversion discount			Principal balance		Debt discount		Net amount of liabilities presented		Corresponding derivative balance
Noteholder 2	11/1/2018	8/1/2019		12.00	%		35.00	%	$	21,487	$	-	$	21,487	$	69,521
Noteholder 8	11/21/2017	5/21/2018		6.00	%	See below				20,000		-		20,000		114,782
Noteholder 10	2/27/2020	2/26/2021		10.00	%		40.00	%		131,788		-		131,788		248,338
									$	173,275	$	-	$	173,275	$	432,641

Noteholder	Origination	Maturity	Interest rate			Fixed conversion rate			Principal balance		Debt discount		Net amount of liabilities presented		Corresponding derivative balance
Noteholder 9	7/7/2016	9/30/2019		6.00	%	$0.10/Share			$	25,000	$	-	$	25,000	$	-
Noteholder 13	2/16/2021	8/16/2021		6.00	%	$0.015/Share				140,000		-		140,000		14,659
									$	165,000	$	-	$	165,000	$	14,659

Years ending
March 31,	Amount
2022	$	452,475
2023		3,800
	$	456,275

	For the three months ended
	June 30,
	2021			2020
OPERATING ACTIVITIES
Net loss	$	(121,969	)	$	(206,624	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,400			-
Right of use asset impairment		-			91,200
Amortization of debt discount		-			146,879
Change in fair value of derivative liability		(25,171	)		(166,358	)
Loss on settlement of liabilities		138,140			-
Changes in operating assets and liabilities:
Prepaid expenses		-			34,862
Inventory		(64,988	)		-
Accounts payable		(13,775	)		(32,641	)
Accrued interest payable		10,592			18,825
Accrued expenses		-			7,541
Lease liability		-			(11,400	)
NET CASH USED IN OPERATING ACTIVITIES		(75,771	)		(117,716	)

INVESTING ACTIVITIES
NET CASH USED IN INVESTING ACTIVITIES		-			-

FINANCING ACTIVITIES
Proceeds from notes payable		-			68,000
Repayment of convertible debt		-			(1,379	)
Proceeds from issuance of common stock		64,000			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		64,000			66,621

NET DECREASE IN CASH	$	(11,771	)	$	(51,095	)
CASH, BEGINNING OF YEAR		45,780			67,153
CASH, END OF YEAR	$	34,009		$	16,058

CASH PAID FOR INCOME TAXES	$	-			-
CASH PAID FOR INTEREST	$	-		$	2,565

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for conversion of debt and interest		-		$	1,505,619
Principal and interest settled	$	308,760		$	-

	June 30, 2021		March 31, 2021
Preferred stock		25,000,000		25,000,000
Warrants		14,750,000		14,750,000
Options		8,000,000		8,000,000
Convertible debt		141,358,793		152,763,705
Total		189,108,693		200,513,705

	Shares		Weighted Avg Exercise Price
Outstanding, March 31, 2021		22,750,000	$	0.04
Granted		-	$	-
Exercised		-	$	-
Expired		-	$	-
Outstanding, June 30, 2021		22,750,000	$	0.04
Exercisable, June 30, 2021		22,750,000	$	0.04

Year Ending March 31,	Amount
2022	$	16,800
2023		25,900
2024		26,600
2025		27,300
	$	96,600

Exhibit Number		Description of Exhibit

31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		Materials from the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2021 formatted in Extensible Business Reporting Language (XBRL)

	Right On Brands, Inc.

Date: August 12, 2021	By:	/s/ Jerry Grisaffi
	Name:	Jerry Grisaffi
	Title:	Chief Executive Officer

Date: August 12, 2021	By:	/s/ A. David Youssefyeh
	Name:	A. David Youssefyeh
	Title:	Chief Financial Officer

	1.	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented.