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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"><i>Principles of Consolidation</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">The consolidated financial
statements have been prepared in accordance with generally accepted accounting principles in the United States. The consolidated
financial statements include the accounts of the Company, its wholly-owned and controlled subsidiaries. All intercompany balances
and transactions have been eliminated.</p>
<p style="font: 11pt Times New Roman, Times, Serif; margin: 0.3pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 4.6pt 0 0 6pt; text-align: justify"><i>Use of Estimates</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 6pt; text-align: justify">The preparation of the financial
statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual
results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including
those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect
on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of
its accounting estimates at least quarterly based on these conditions and record adjustments when necessary.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><i>Cash</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">The Company considers all short-term
highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"> </p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"> </p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0 5.95pt; text-align: justify"><i>Revenue Recognition</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.7pt 0 5.95pt; text-align: justify">The Company
follows the guidance of the Accounting Standards Codification (“ASC”) Topic 605, “Revenue
Recognition.” It records revenue from the sale of its products when persuasive evidence of an arrangement exists,
product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue
is reasonably assured. The Company has not experienced any significant returns from customers and accordingly, in
management’s opinion, no reserve for returns has been provided. Payments received prior to shipment of goods are
recorded as deferred revenue.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><i>Accounts Receivable and Allowance
for Doubtful Accounts Receivable</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.9pt 0 6pt; text-align: justify">The Company has a policy
of reserving for uncollectible accounts based on the best estimate of the amount of probable credit losses in our existing accounts
receivable. We extend credit to customers based on an evaluation of their financial condition and other factors. The Company generally
does not require collateral or other security to support accounts receivable and perform ongoing credit evaluations of customers
and maintain an allowance for potential bad debts if required.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">It is determined whether an
allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have
an inability to meet financial obligations. In these cases, <font style="letter-spacing: -0.15pt">we </font>use assumptions and
judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts
due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as
additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. The Company
may also record a general allowance as necessary.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.95pt 0 6pt; text-align: justify">Direct write-offs are
taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances
that indicate the collectability of receivables.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><i>Inventories</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.35pt 0 6pt; text-align: justify">Inventories, which consist
only of the Company’s finished products held for resale, are stated at the lower of cost, determined using the first-in,
first-out, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less
estimated costs to dispose of the product.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0 6pt; text-align: justify">If the Company identifies excess,
obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is
first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales
in the Company’s statements of operations.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0 6pt; text-align: justify"><i>Fair Value Measurements</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">The Company adopted the provisions
of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting
pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.</p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 4.6pt 0 0 6pt; text-indent: 268.45pt"><u></u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 5.85pt 0 7.95pt; text-align: justify">The estimated fair
value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
The carrying amounts of our short and long-term credit obligations approximate fair value because the effective yields on these
obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants
and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 7.95pt; text-align: justify">ASC 820 defines fair value
as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC
820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the
use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair
value:</p>
<p style="font: 5.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/11.4pt Times New Roman, Times, Serif; margin-top: 4.7pt; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 26pt"></td><td style="width: 12pt"><font style="font-size: 10pt; letter-spacing: -0.25pt">•</font></td><td><font style="font-size: 10pt">Level 1 — quoted prices in active markets for identical assets or liabilities.</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/11.3pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 26pt"></td><td style="width: 12pt"><font style="font-size: 10pt; letter-spacing: -0.25pt">•</font></td><td><font style="font-size: 10pt">Level 2 — quoted prices for similar assets and liabilities in active markets or inputs
that are observable.</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/11.4pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 26pt"></td><td style="width: 12pt"><font style="font-size: 10pt; letter-spacing: -0.25pt">•</font></td><td><font style="font-size: 10pt">Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on
assumptions).</font></td></tr></table>
<p style="font: 7.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 5.9pt 0 7.95pt; text-align: justify">The derivative liability,
which relates to the conversion feature of convertible debt and common stock warrants and options, is classified as a Level 3 liability,
and is the only financial liability measure at fair value on a recurring basis.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify">The change in the Level 3 financial
instruments is as follows:</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%">Balance, June 30, 2015</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">11,504,057</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the year ended June 30, 2016</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,887,618</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Converted during the year ended June 30, 2016</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(2,102,681</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">(11,071,250</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, June 30, 2016</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">2,217,744</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the year ended June 30, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">1,383,650</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercises/Conversions</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(479,834</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">1,951,019</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, June 30, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">5,072,579</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the six months ended December 31, 2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,017,623</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Converted during the six months ended December 31, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(5,276,018</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">1,795,205</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, December 31, 2017</td><td> </td>
<td style="border-bottom: Black 2.5pt double; text-align: right">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,609,389</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify">The estimated fair value
of the derivative instruments were valued using the Black-Scholes option pricing model, using the following assumptions as of December
31, 2017, June 30, 2017, and June 30, 2016:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2017</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">June 30, 2016</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Estimated dividends</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">None</font></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">None</font></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">None</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 46%">Expected volatility</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">165%</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">114%</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">45%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Risk free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.39%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">.84%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">.12%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Expected term</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><p style="font: 10pt/11.2pt Times New Roman, Times, Serif; margin: 0 0 0 38.2pt; text-align: center">.1 to 4.8</p> <p style="font: 10pt/11.4pt Times New Roman, Times, Serif; margin: 0 0 0 38.35pt; text-align: center">years</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt; line-height: 97%">1 to 2.0 years</font></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">1 to 5.5 years</font></td></tr>
</table>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify"><i>Property and Equipment</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 7.95pt; text-align: justify">Property and equipment is
stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the
assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify"><i>Impairment of Long-Lived Assets</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify">The Company
evaluates intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an
asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash
flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of
the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the
asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value
based on a discounted cash flow approach or, when available and appropriate, to comparable market values. During the six
months ended December 31, 2017 the Company recorded an impairment charge on the goodwill related to the acquisition of Rocky
Mountain High Water Company in the amount of $59,163. As of December 31, 2017 the goodwill related to this acquisition is
fully impaired. No impairment charges were recorded during the year ended June 30, 2017 or the six months ended December 31,
2016. During the year ended June 30, 2016 the Company recorded a 100% impairment of $166,000 on its investment in Dollar
Shots Club when it was determined that the Company would not likely recover its investment.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.2pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 4.6pt 0 0 6pt; text-align: justify"><i>Share-based Payments</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">Share-based payments to
employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based
on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee
is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">The Company issued restricted stock
to consultants and employees for various services. Cost for these transactions are measured at the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock
is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity
instruments is reached or (ii) the date at which the counterparty's performance is complete.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"><i>Convertible Instruments</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 5.95pt; text-align: justify">The Company evaluates and
accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.”
Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding
derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics
and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of
the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not
re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument
with the same terms as the embedded derivative instrument would be considered a derivative instrument.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0 5.95pt; text-align: justify"><i>Preferred Stock</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">We apply the guidance enumerated
in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred
stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair
value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption
rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely
within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity.
Our preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features
not within our control. Accordingly, unless otherwise noted, all issuances of preferred stock are presented as a component of consolidated
stockholders’ equity (deficit).</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"><i>Advertising and Marketing</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">Advertising and marketing expenses
are charged to operations as incurred.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"><i>Income Taxes</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.9pt 0 5.95pt; text-align: justify">The Company uses the
asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this
method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred
tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements
or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation
allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative
evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.</p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 6.85pt 0 5.95pt; text-align: justify">ASC Topic 740.10.30
clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. The Company has no material uncertain tax positions.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0 5.95pt; text-align: justify"><i>Recently Issued Accounting
Pronouncements</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6.3pt 0 5.95pt; text-align: justify">Unless otherwise noted,
we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1)
of the JOBS Act. This allows us to delay the adoption of new or revised accounting standards that have different effective dates
for public and private companies until those standards apply to private companies. As a result of our election, our financial statements
may not be comparable with other public companies.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6.5pt 0 5.95pt; text-align: justify">In May 2014, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, <i>Revenue from
Contracts with Customers</i>, which will replace most existing revenue recognition guidance in U.S. GAAP and is intended to improve
and converge with international standards the financial reporting requirements for revenue from contracts with customers. The core
principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that
it expects to be entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature,
timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in
judgments. ASU 2014-09 allows for adoption either on a full retrospective basis to each prior reporting period presented or on
a modified retrospective basis with the cumulative effect of initially applying the new guidance recognized at the date of initial
application, which will be effective for the Company beginning January 1, 2019. The Company is currently evaluating the impact
of ASU 2014-09, including the transition method, on its consolidated financial statements.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6.75pt 0 5.95pt; text-align: justify">In February 2016, the FASB
issued ASU 2016-02, <i>Leases</i>, which requires lessees to recognize on the balance sheet a right-of-use asset, representing
their right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months.
The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash
flows arising from leases. ASU 2016-02 is effective for the Company beginning January 1, 2020. The Company is currently evaluating
the impact that ASU 2016-02 will have on its consolidated financial statements.</p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 5.7pt 0 8pt; text-align: justify">In June 2016, the FASB
issued ASU 2016-13, <i>Financial Instruments-Measurement of Credit Losses on Financial Instruments</i>, which requires measurement
and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning January
1, 2021 and the Company is currently evaluating the impact that ASU 2016-13 will have on its consolidated financial statements.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.65pt 0 8pt; text-align: justify">In January 2017, the FASB
issued ASU 2017-01, <i>Business Combinations: Clarifying the Definition of a Business</i>, which clarifies the definition of a
business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for
as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is required to be applied prospectively and will be effective
for the Company beginning January 1, 2019. The impact on our consolidated financial statements will depend on the facts and circumstances
of any specific future transactions.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 8pt; text-align: justify">The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The Company has a shareholders’ deficit of
$7,041,899, an accumulated deficit of $31,662,414, and a working capital deficit of $7,106,673 as of December 31, 2017, and
has generated operating losses since inception. These factors, among others, raise substantial doubt about the ability of the
Company to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to
generate revenues and its ability to continue raising capital from third parties.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify">On October 12, 2017, the
Company entered into an Equity Financing Agreement (“EFA”) with GHS Investments, LLC (“GHS”), which provides
for GHS to purchase up to $12,000,000 of the Company’s common stock over a 24-month period based on a contractually agreed
upon market discount. In February 2018 the Company began sales of common stock to GHS under the EFA. Management believes the EFA
will provide sufficient cash flows until cash flows from operations become consistently positive.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify"><b>NOTE 4 – Inventory</b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify"><b> </b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify">As of December 31,
2017, June 30, 2017, and June 30, 2016, inventory consists of the following:</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0.05pt"></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0.05pt"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 5.5pt 1.5pt 0 4.65pt; text-align: center"><b>December
31,</b></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 1.5pt 0 4.65pt; text-align: center"><b>2017</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 5.5pt 4.75pt 0 4.7pt; text-align: center"><b>June 30,</b></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 4.7pt; text-align: center"><b>2017</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 5.5pt 4.75pt 0 4.7pt; text-align: center"><b>June 30,</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 43%">Finished inventory</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 15%; text-align: right">77,517</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 15%; text-align: right">216,711</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 15%; text-align: right">290,368</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Raw materials and packaging</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,795</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,984</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><b>Total</b></td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">82,312</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">224,695</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">290,368</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify">As of December 31, 2017, June 30,
2017, and June 30, 2016, prepaid expenses and other current assets consists of the following:</p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 13pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">December 31, 2017</td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">June 30, 2017</td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">June 30, 2016</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 53%; text-align: left">Prepaid officers’ compensation</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">445,149</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">521,916</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">1,334,261</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Prepaid directors’ compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">147,207</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">206,090</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">323,855</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Prepaid marketing expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,750</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">19,250</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">33,000</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Other prepaid expenses and current assets</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">28,616</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">27,082</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">25,435</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 1pt">Total</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">634,722</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">774,338</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">1,716,551</td></tr>
</table>
<p style="font: 6pt Times New Roman, Times, Serif; margin: 0.2pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 5.95pt; text-align: justify">On September 18, 2015, the
Company, through a series of transactions acquired 5,000,000 shares of Dollar Shots Club, Inc. (“DSC”) in exchange
for 2,000,000 shares of common stock. The shares of DSC are being carried on the accompanying balance sheet based on the value
of the shares of stock given in exchange for the investment. The Company is accounting for the investment on the cost basis of
accounting being that the shares represent approximately 5% of the total outstanding shares of DSC and the Company does not have
any significant influence in DSC.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify">As of June 30, 2016, the
Company concluded that the investment was impaired and recorded a 100% impairment on this investment of <font style="font-weight: normal">$166,000</font>.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8pt; text-align: justify">As of December 31, 2017, June 30, 2017,
and June 30, 2016, accounts payable and accrued liabilities consists of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td> </td>
<td colspan="3" style="text-align: center"><b>December 31, 2017</b><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin: 0 16.05pt 0 42.35pt; text-align: center"><b></b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2017</b></p></td><td> </td>
<td colspan="2" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 53%; text-align: left">Accounts payable</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">373,882</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">231,429</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: center">$</td><td style="width: 12%; text-align: right">130,368</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">215,026</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">55,416</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center"> </td><td style="text-align: right">—  </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Other accrued expenses</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">161,899</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">154,345</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center"> </td><td style="border-bottom: Black 1pt solid; text-align: right">207,498</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; padding-bottom: 1pt">Total</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">750,807</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">441,190</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">337,866</td></tr></table>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">As of December 31, 2017, June 30,
2017, and June 30, 2016, the Company’s convertible notes payable consisted of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.45pt 0 0.05pt"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="3" style="font-size: 11pt"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: center">Interest Rates</td><td style="font-size: 11pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 11pt; font-weight: bold; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.35pt; text-align: center; margin-bottom: 0"> </p><p style="font: 10pt/10.55pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Term</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 20%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Convertible
notes <br />payable</font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; font-size: 11pt; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">6%
- 10%</font></p></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 12%; font-size: 11pt; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">0
- 2 years</font></p></td><td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 12%; font-size: 11pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,026,995</font></td><td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 12%; font-size: 11pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,115,000</font></td><td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 12%; font-size: 11pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">597,500</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Discount</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt; font-size: 11pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(349,297</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(381,747</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt; font-size: 11pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">677,698</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">733,253</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">597,500</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 5.7pt 0 7.95pt; text-align: justify">The convertible notes are convertible
to shares of the Company’s common stock at $.005 to 50% of the market price, as defined in the agreements. For the six months
ended <font style="letter-spacing: -0.05pt">December 31</font>, 2017 and 2016, interest expense on these notes, including amortization
of the discount, was $543,164 and $77,743, respectively. For the years ended June 30, 2017 and 2016, interest expense on these
notes, including amortization of the discount, was $172,594 and $26,762, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 2pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 2pt 0 7.95pt; text-align: justify">The Company has determined
that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes
a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded
to the associated debt. The excess of the derivative value over the face amount of the note is recorded immediately to interest
expense at inception. The Company recorded $1,179,140 and $0 of interest expense for the six months ended December 31, 2017 and
2016, respectively, at the inception of the notes relating to the excess of derivative value over the face of the notes. The Company
recorded $222,127 and $0 of interest expense for the years ended June 30, 2017 and 2016, respectively, at the inception of the
notes relating to the excess of derivative value over the face of the notes.</p>
<p style="font: 10pt/11.4pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/11.4pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">During the six
months ended December 31, 2017, the Company recorded a gain on extinguishment of debt of $1,200,092. This gain consists of
the gain on the extinguishment of debt related to the legal settlement with a debt holder of $1,811,714, the gain on the
assignment and subsequent amendment of a convertible note payable of $333,899, the loss on conversion of certain convertible
notes payable involving derivative liabilities into stock, and the loss of $15,256 arising from the amendments of two notes
payable with GHS, which eliminated the conversion features of both notes. During the six months ended December 31, 2016 there
was no gain or loss on extinguishment of debt.</p>
<p style="font: 10pt/11.4pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/11.4pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">All tangible and intangible
assets of the Company are pledged as security.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify">As of December 31, 2017, June 30,
2017, and June 30, 2016, the Company’s notes payable consists of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.45pt 0 0.05pt"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 11pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 10pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 10pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Interest
Rates</font></td><td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-weight: bold; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.35pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/10.55pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Term</b></font></p></td><td style="font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-size: 10pt; text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 9.5pt 0 15.15pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td style="font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-size: 10pt; text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 7.95pt 0 12.75pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td style="font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 10pt; text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin: 0 7.95pt 0 12.8pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 16%; font-size: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Notes
<br />payable</font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 15%; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">6%
- 10%</font></p></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 13%; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">.5
– 1.5 years</font></p></td><td style="width: 1%; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 13%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">549,936</font></td><td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 13%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">26,130</font></td><td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 13%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td></tr>
</table>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 5.95pt; text-align: justify"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 5.95pt; text-align: justify">On September
1, 2016, the Company purchased used office furniture and equipment from its landlord. The Company executed a note payable in
the amount of $40,122 at an interest rate of 0% and with monthly payments of $1,115. The Company imputed interest on the note
and recorded a discounted note balance of $36,634 on September 1, 2016. The term of the note is three years. The balance on
the note was $19,936, $26,130, and $0 on December 31, 2017, June 30, 2017, and June 30, 2016, respectively. For the six
months ended December 31, 2017 and 2016, interest expense on this note was $493 and $710, respectively. For the year ended
June 30, 2017, interest expense on this note was $1,755.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 5.95pt; text-align: justify">On November 30,
2017 the Company amended two notes payable to GHS in the aggregate principal amount of $500,000. The notes, which were
originally made on October 12 and November 2, 2017 and included conversion prices at 20% discount off market price, as
defined in the agreements. The amendments removed the conversion features in the notes, totalling $500,000. Upon amendment,
the Company recorded a loss on extinguishment of these notes of $15,256. As of December 31, 2017 the notes, which were
previously included in Convertible Notes Payable are included in Notes Payable.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 5.95pt; text-align: justify">Notes
Payable also includes two non-interest bearing notes totalling $30,000 that originated prior to the Company’s 2014
bankruptcy proceedings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 5.85pt 0 5.95pt; text-align: justify">In June 2015, the Company entered
into an exclusive manufacture and supply agreement with Rodney Peterson (an unrelated third party) or his designee, Rocky Mountain
High Canada, Inc. (RMHC) for distribution rights to RMHC. Under the agreement, RMHC was required to pay the Company $500,000 before
June 30, 2015 and submit an additional $150,000 prior to a production run of 1,000,000 cans of product covered under the agreement.
The Company received $200,000 on July 29, 2015 and $300,000 on August 28, 2015, which was recorded as deferred revenue as of June
30, 2016. The additional $150,000 was not received. The Company filed a breach of contract lawsuit with the objective of recovering
outstanding obligations. During the year ended June 30, 2017 the Company settled the case with RMHC and issued 6,800,000 shares
of common stock in exchange for the $500,000 already received.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"><b><i>Common Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.3pt 0 0"><b><i> </i></b></p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.95pt 0 6pt; text-align: justify">As of June 30, 2016
the Company has 800,000,000 shares of common stock authorized. On March 14, 2017 the Board of Directors and the holders of a
majority of the voting capital stock of the Company increased this authorization to 950,000,000 and on September 19, 2017 the
authorization was increased to 4,000,000,000 shares. As of December 31, 2017 there are 1,159,706,457 common shares issued and
outstanding.</p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.95pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.95pt 0 6pt; text-align: justify">During the six months ended
December 31, 2017 the Company issued 373,181,339 shares of common stock, including 321,291,865 for convertible notes payable conversions,
45,000,000 as part of a legal settlement, 789,474 for the conversion from Series E Preferred Shares, 5,600,000 for services rendered,
and 500,000 for cash. During the six months ended December 31, 2016 the Company issued 197,090,550 shares of common stock for convertible
notes payable conversions, warrant exercises, compensation, cash purchases, services rendered, and a legal settlement.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">During the year ended June
30, 2017 the Company issued 248,535,354 shares of common stock, including 77,800,687 for convertible notes payable conversions,
46,908,834 for warrant exercises, 29,724,139 for services rendered, 21,634,107 for compensation, 6,800,000 as part of a legal settlement,
and 65,667,587 for cash. During the year ended June 30, 2016 the Company issued 101,495,350 shares of common stock for convertible
notes payable conversions, the acquisition of Dollar Shots Club, cash purchases, and services rendered.</p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.95pt 0 6pt; text-align: justify">  </p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.95pt 0 6pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.25pt 0 5.95pt; text-align: justify">On March 17, 2017, our Board
of Directors approved the Rocky Mountain High Brands, Inc. 2017 Incentive Plan (the “2017 Incentive Plan”). The purpose
of the Incentive Plan is to provide a means for the Company to continue to attract, motivate and retain management, key employees,
consultants and other independent contractors, and to provide these individuals with greater incentive for their service to the
Company by linking their interests in the Company’s success with those of the Company and its shareholders. Initially, the
Board authorized 35,000,000 shares of the Company’s common stock to be included in the Plan. The Board of Directors awards
these shares at its sole discretion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">On July 14, 2017 the Board of Directors
increased the authorized shares in the 2017 Incentive Plan to 65,000,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">On December 19, 2017 the
Board of Directors increased the authorized shares in the 2017 Incentive Plan to 100,000,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i>Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">As of December 31, 2017
the Company has 20,000,000 shares of Preferred Stock authorized and 10,789,474 designated through the various Series described
below. The remaining 9,210,526 remain undesignated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i>Series A Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0 6pt"><b><i> </i></b></p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">The Company has 1,000,000
shares of Series A Preferred Stock authorized and outstanding as of December 31, 2017 and June 30, 2017. LSW Holdings LLC (“LSW”),
holds all of these shares. LSW’s Managing Member is Lily Li, RMHB’s Executive Vice President. In that capacity, Ms.
Li has the authority to direct voting and investment decisions with regard to LSW’s interests in the Company.</p>
<p style="font: 10pt/12.85pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">On March 13, 2017, our Board
of Directors approved a Certificate of Designation for our Series A Preferred Stock. This document revises and restates the rights,
preferences and features of our Series A Preferred Stock, which consists of 1,000,000 shares, all of which are issued and outstanding.
Holders of our Series A Preferred Stock were formerly entitled to cast 400 votes for every share held, and shares of Series A Preferred
Stock were convertible to common stock at a rate of 100 shares of common stock for every share of Series A Preferred Stock. Following
the filing of the Certificate of Designation, holders of Series A Preferred Stock are now entitled to cast 1,200 votes for every
share held, and shares of Series A Convertible Preferred Stock are convertible to common stock at a rate of 1,200 shares of common
stock for every share of Series A Preferred Stock.</p>
<p style="font: 10pt/12.85pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">On March 14, 2017, the board
of directors and holders of a majority of the voting capital stock of the Company approved an amendment to the Company’s
Articles of Incorporation to increase its authorized shares of preferred stock by 10,000,000. The Board of Directors fixed March
14, 2017 as the record date for determining the holders of its voting capital stock entitled to notice of these actions and receipt
of this Information Statement. The increase in the authorization was effective in May 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.7pt 0 5.95pt; text-align: justify">On July 5, 2017, the Company
amended the Certificate of Designation for our Series A Preferred Stock. The amendment changed the conversion ratio of our Series
A Preferred Stock from 1,200 shares of common stock for every share of Series A Preferred stock to 100 shares of common stock for
every share of Series A Preferred Stock. The amendment was approved by the Company’s Board of Directors and LSW, the holder
of our Series A Preferred Stock.</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.4pt 0 6pt; text-align: justify">On July 24, 2017, the Company’s
Board of Directors approved an amendment to the Certificate of Designation for the Series A Preferred Stock that changed the voting
rights back to 400 votes from 1,200 for every share of Series A Preferred Stock.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.4pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.4pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.4pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.4pt 0 6pt; text-align: justify">The Series A Preferred Stock
is the subject of the lawsuit filed by the Company, <u>Rocky Mountain High Brands, Inc. f/k/a Republic of Texas Brands, Inc. Plaintiff,
vs. Jerry Grisaffi, et al,</u> which is disclosed in NOTE 18 – Legal Proceedings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i>Series B Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">The Company has 5,000,000 shares of
Series B Preferred Stock authorized and none outstanding as of December 31, 2017 and June 30, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i>Series C Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i> </i></b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">The Company amended its
Articles of Incorporation as of November 13, 2015 to authorize 2,000,000 shares of Series C Preferred Stock, which are 12% interest
bearing, cumulative, exchangeable, non-voting, convertible preferred stock of the Company. Each Series C Preferred share is convertible
50 shares of common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">On November 16, 2015, the
holder of a convertible note aggregating $1,107,607 of principal and accrued interest, agreed to a dollar for dollar exchange for
same number of Series C Preferred Stock shares. As of June 30, 2017, there were 1,107,607 shares of Series C Preferred shares outstanding
and the related redemption value of these shares was classified as a current liability. On October 6, 2017, the Company and the
holder reached a legal settlement whereby the Company agreed to an exchange of the Preferred C Stock back to the originating note
payable in accordance with the terms of the Exchange Agreement. The holder then assigned the note to GHS in exchange for $1,000,000
consideration paid to him by GHS. As of December 31, 2017, there are no Series C Preferred Stock shares outstanding.</p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.85pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><b><i>Series D Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i> </i></b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">The Company amended its Articles
of Incorporation as of March 21, 2016 to authorize 2,000,000 shares of Series D Preferred Stock, a non-voting, non-interest bearing
convertible preferred stock. Each Series C preferred share is convertible to 100 shares of common stock. As of December 31, 2017
and June 30, 2017, there are no Series D preferred shares outstanding.</p>
<p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 0 5.85pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><b><i>Series E Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">On September 19, 2017, the Board
of Directors approved a new Series E Preferred Stock. Holders of Series E Preferred Stock are entitled to cast 2,000 votes per
share of Series E Preferred Stock on any proposal to increase our authorized capital stock, with no other voting rights. Series
E Preferred Stock is convertible to common stock on a 1:1 basis. On the same day, the Board granted Michael Welch, Chairman of
the Board 789,474 shares of Series E Preferred stock as payment for his deferred compensation. On October 31, 2017, Mr. Welch converted
his 789,474 shares of Series E Preferred Stock to 789,474 shares of common stock. As of December 31, 2017, there are no shares
of Series E Preferred Stock outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0 4.5pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify"><b><i>Warrants</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"><b><i> </i></b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">During the six months ended
December 31, 2017, the Company granted no common stock warrants and none were exercised. As part of a legal settlement, 55,096,825
warrants were returned to the Company and cancelled on October 6, 2017. During the six months ended December 31, 2016, the Company
granted 9,037,500 common stock warrants and 38,026,204 were exercised. As of December 31, 2017 and June 30, 2017, there are 650,000
and 55,746,825 warrants outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 5.95pt 0 4.5pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">During the year ended June
30, 2017 the Company granted 9,725,000 warrants to purchase common stock and 47,008,834 were exercised. During the year ended June
30, 2016 the Company granted 39,000,000 warrants to purchase common stock and 3,658,914 were exercised. As of June 30, 2017 and
2016, there were 56,934,325 and 94,218,159 warrants outstanding.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt"> </p>
<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify">Options</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0"><b><i> </i></b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">During the six months ended December
31, 2017, the Company issued 39,440,000 options to purchase common stock. The options have an exercise price ranging from $.001
and $.003 and vested immediately. The Company recognized an expense of $203,045 at the grant dates as the options immediately vested.
There were no options granted or outstanding during the six months ended December 31, 2016. As of December 31, 2017 and June 30,
2017, there are 67,790,000 and 28,350,000 options outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 5.85pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.85pt 0 6pt; text-align: justify">During the year ended
June 30, 2017, the Company issued 27,000,000 options to purchase common stock to two new directors. The options have an exercise
price ranging from $.035 and $.045 and vested immediately. The Company recognized $1,459,134 as compensation expense. The Company
also granted 350,000 options to a vendor at an exercise price of $.045. None of these options had been exercised as of June 30,
2017. There were no options granted or outstanding during fiscal year 2016. The options were valued using the Black-Scholes model
using an expected volatility of 114%, expected terms of 2 years, a risk-free interest rate of</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 5.85pt 0 6pt; text-align: justify">.84%, and no estimated dividends.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.7pt 0 5.95pt; text-align: justify">The reconciliation of income
tax benefit at the U.S. statutory rate of 34% to the Company’s effective rate for the six months ended December 31, 2017
and 2016 and the years ended June 30, 2017 and 2016 is as follows:</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.55pt 0 0"></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.55pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr>
<td style="text-align: left"><b> </b></td><td><b> </b></td>
<td style="text-align: left"><b> </b></td><td style="text-align: center"><b>Six Months Ended December 31, 2017</b></td><td><b> </b></td>
<td style="text-align: left"><b> </b></td>
<td style="text-align: center"><b>Six Months Ended December 31, 2016</b></td>
<td><b> </b></td>
<td style="text-align: center"><b>Year Ended June 30, 2017</b></td>
<td><b> </b></td><td style="text-align: center"><b>Year Ended June 30, 2016</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 57%; text-align: left">U.S federal statutory rate</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 6%; text-align: right">(34%)</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 6%; text-align: right">(34%)</td>
<td style="width: 6%"> </td>
<td style="width: 6%; text-align: right">(34%)</td>
<td style="width: 5%"> </td><td style="width: 6%; text-align: right">(34%)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">State income tax, net of federal benefit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.0%)</td><td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(0.0%)</td>
<td> </td>
<td style="text-align: right">(0.0%)</td>
<td> </td><td style="text-align: right">(0.0%)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Increase in valuation allowance</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">34%</td><td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">34%</td>
<td> </td>
<td style="text-align: right">34%</td>
<td> </td><td style="text-align: right">34%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Income tax provision (benefit)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.0%</td><td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">0.0%</td>
<td> </td>
<td style="text-align: right">0.0%</td>
<td> </td><td style="text-align: right">0.0%</td></tr>
</table>
<p style="font: 11pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6pt 0 5.95pt; text-align: justify">The tax effects of temporary
differences that give rise to the Company’s net deferred tax liability as of December 31, 2017, June 30, 2017 and June 30,
2016 consist of the following:</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6pt 0 5.95pt; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: justify"><b> </b></td><td><b> </b></td>
<td style="text-align: center"><b> </b></td><td style="text-align: center"><b>December 31, 2017</b></td><td style="text-align: center"><b> </b></td><td><b> </b></td>
<td style="text-align: center"><b> </b></td><td style="text-align: center"><b>June 30, 2017</b></td>
<td><b> </b></td>
<td><b> </b></td>
<td style="text-align: center"><b>June 30, 2016	</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: justify">Deferred Tax Assets</td><td> </td>
<td style="text-align: center"> </td><td style="text-align: right"> </td><td style="text-align: center"> </td><td> </td>
<td style="text-align: center"> </td><td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 54%; text-align: justify">Net Operating Losses</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: center">$</td><td style="width: 12%; text-align: right">3,360,000</td><td style="width: 1%; text-align: center"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: center">$</td><td style="width: 12%; text-align: right">4,482,000</td>
<td style="width: 2%"> </td>
<td style="text-align: right">$<b></b></td>
<td style="width: 12%; text-align: right">2,227,000</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:  Valuation
Allowance<font style="color: #FF6600">	</font></font></td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(3,360,000)</td><td style="padding-bottom: 1pt; text-align: center"></td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(4,482,000)</td>
<td> </td>
<td style="border-bottom: Black 1pt solid; text-align: center">$<b></b></td>
<td style="border-bottom: Black 1pt solid; text-align: right">(2,227,000)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; text-align: justify; padding-bottom: 1pt">Deferred Tax Assets – Net</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">—  </td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">—  </td>
<td> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">—  </td></tr>
</table>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 5.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> <b> </b></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 5.95pt; text-align: justify">As of December 31, 2017,
the Company had approximately $16,000,000 of federal and state net operating loss carryovers (“NOLs”), which begin
to expire in 2028. Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there
be a greater than 50% ownership change as determined under regulations.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 5.95pt; text-align: justify">In assessing the realization
of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets
will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during
the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management
has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is
more likely than not that all of the deferred tax asset will not be realized.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">The Company’s deferred tax assets and
liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 34% to 21%, resulting in a deferred
tax expense of approximately $2,000,000 for the six months ended December 31, 2017 that is still fully valued against as of December
31, 2017. This expense is attributable to the Company being in a net deferred tax asset position at the time of remeasurement.
As the company maintains fully valuation allowance, this amount can be seen on the rate reconciliation as an adjustment to deferred
tax asset and corresponding valuation allowance.</p>
<p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">On December 22, 2017, the Tax Cuts and Jobs
Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include,
but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017,
the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax
on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the
Tax Act and guidance available as of the date of this filing but have kept the full valuation allowance. As a result have recorded
no income tax expense during the six months ended December 31, 2017, the period in which the legislation was enacted.</p>
<p style="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">On December 22, 2017, Staff Accounting Bulletin
No. 118 (“SAB 118”) was issued to address the application of US GAAP in situations when a registrant does not have
the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting
for certain income tax effects of the Tax Act. The deferred tax expense recorded in connection with the remeasurement of deferred
tax assets is a provisional amount and a reasonable estimate at December 31, 2017 based upon the best information currently available.
The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis,
changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions
the Company may take as a result of the Tax Act. Any subsequent adjustment to these amounts will be recorded to current tax expense
in the quarter of 2018 when the analysis is complete. The accounting is expected to be complete when the 2017 U.S. corporate income
tax return is filed in 2018.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">Between January 1 and March
30, 2018, the Company issued 349,469,321 shares of common stock, including 168,805,244 for convertible notes payable
conversions, 10,597,405 for director and employee compensation, 29,096,402 for option exercises, 5,821,256 for services
rendered, and 135,149,014 for cash.</p>
<p style="font: 9.5pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">Between January 1 and March 30,
2018, the Company issued convertible notes payable in the amount of $300,000 and amended two notes payable to GHS in the aggregate
amount of $500,000 to include a conversion feature of $.005. Holders of convertible notes payable converted $308,727 of outstanding
principal during that same period.</p>
<p style="font: 9.5pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify"><font style="letter-spacing: -0.2pt">On
January 5, 2018 the Company entered into a $300,000 secured convertible promissory note with GHS. On January 9, 2018 the Company
amended two $250,000 secured promissory notes payable </font><font style="font-size: 9.5pt; line-height: 97%">with GHS to include
a $.005 conversion feature.</font></p>
<p style="font: 9.5pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">On February 9, 2018 the Company
received a notice of effectiveness from the Securities and Exchange Commission on its Registration Statement on Form S-1/A. The
registration statement registered 250,000,000 shares of common stock for resale by GHS. Subsequent to the effective date, the Company
sold 94,826,433 shares of stock to GHS in accordance with the EFA.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 6pt; text-align: justify">Rocky Mountain High Brands,
Inc. (“RMHB” or the “Company”) was incorporated under the laws of the State of Nevada. On July 17, 2014,
the Company changed its name from Republic of Texas Brands Incorporated to Totally Hemp Crazy, Inc and on October 23, 2014, the
Company changed its name to Rocky Mountain High Brands, Inc.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/9.35pt Times New Roman, Times, Serif; margin: 0 6.5pt 0 5.95pt; text-align: justify">RMHB currently operates
four wholly-owned subsidiaries and one 49% owned subsidiary, which the Company controls. All subsidiaries
are consolidated for financial reporting purposes.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0 5.95pt; text-align: justify">RMHB is a consumer goods
company that specializes in developing, manufacturing, marketing, and distributing high-quality, health conscious, cannabidiol
(“CBD”) and hemp- infused products that span various categories including beverage, food, fitness, skin care and more.
RMHB also markets a naturally high alkaline spring water as part of our brand portfolio.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0 5.95pt; text-align: justify">In March 2018, the Company
launched the HEMPd brand with tinctures, gummies, water soluble drops, capsules, lotions, salves, and E-juice liquids and cartridges.
The Company plans to introduce CBD-infused waters and additional HEMPd product offerings during the remainder of 2018. HEMPd products
are marketed through the Company’s Rocky Mountain Hemp Company subsidiary. Customer shipments of HEMPd products began in
late March 2018.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 2pt 0 5.95pt; text-align: justify"><font style="font-weight: normal">The
Company continues to market its lineup of four naturally flavored hemp-infused functional beverages (Citrus Energy, Black Tea,
Mango Energy and Lemonade) and a low-calorie Coconut Lime Energy drink, as well as hemp-infused 2oz. Mango Energy Shots and Mixed
Berry Energy Shots. RMHB also bottles and distributes its naturally high alkaline spring water under the name Eagle Spirit
Spring Water.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 2pt 0 5.95pt; text-align: justify"><font style="font-weight: normal"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8pt; text-align: justify">As of December 31, 2017, June 30, 2017,
and June 30, 2016, property and equipment consists of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td> </td>
<td colspan="3" style="text-align: center; vertical-align: bottom"><b>December 31, 2017</b><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin: 0 16.05pt 0 42.35pt; text-align: center"></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2017</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 53%">Vehicles</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">29,598</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">29,598</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">112,817</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Furniture and equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">42,538</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">41,042</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">343</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Personal computers</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,379</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,315</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,170</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 11pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">74,515</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73,955</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">114,330</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Less:  accumulated depreciation</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">38,834</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">25,822</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">22,122</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; padding-bottom: 1pt">Total</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">35,681</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">48,133</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">92,208</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><i>Rocky Mountain High Water Company
LLC</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"><i></i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0 5.95pt; text-align: justify">In July 2016, the Company
entered into a business alliance with Poafpybitty Family, LLC to launch Eagle Spirit Spring Water, a line of purified, high-alkaline
spring water sourced from Native American tribal land in Oklahoma. The agreement calls for the Company to pay a royalty on each
gallon of water collected at the spring. Production of filtered spring water filled bottles commenced in August 2016 and sales
began in October 2016.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0pt 5.95pt; text-align: justify"> </p>
<p style="font: 11pt Times New Roman, Times, Serif; margin: 0.05pt 0 0"></p>
<p style="font: 11pt Times New Roman, Times, Serif; margin: 0.05pt 0 0"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 5.7pt 0pt 6pt; text-align: justify">In consideration for the
20-year water and surface rights, and a related 10-year renewal option, the Company paid Poafpybitty Family, LLC cash payments
of $22,500 and issued a warrant for 500,000 shares of the Company’s common stock exercisable at $.03 per share over a three-year
period beginning July 27, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 5.95pt; text-align: justify">The agreement grants the
Company an exclusive right to develop land adjacent to the spring for commercial purposes as agreed to by both parties. Additionally,
the Company has agreed to grow hemp for experimental or commercial purposes on the land within three years.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 5.95pt; text-align: justify">On November 12, 2016, the agreement
with the Poafpybitty Family was amended to give the Company a controlling voting interest of 75% of WaterCo, while the Poafpybitty
Family received 51% of the equity interest. The amended agreement is being accounted for as a step-acquisition, with the resulting
goodwill of $59,163 included in other assets. During the six months ended December 31, 2017, the Company obtained an outside valuation
of the rights to use the land and obtain the water described in the agreement. As a result of that analysis and the continued operating
losses by the Company’s spring water business, the Company determined that its investment, including the related goodwill,
was fully impaired. The Company recorded an impairment expense of $59,163 as of November 12, 2017. As a result of the step-acquisition,
beginning on November 12, 2016 the operations of WaterCo are consolidated in the financial statements of RMHB.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">As of December 31, 2017, June 30,
2017, and June 30, 2016, the Company’s related party convertible notes payable consists of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.5pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Interest
Rate</font></td><td style="font-size: 11pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-size: 11pt; font-weight: bold; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.35pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/10.55pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Term</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 36%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Related
party convertible <br />notes payable</font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 9%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">6%</font></td><td style="width: 1%; font-size: 11pt; text-align: center"></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 9%; text-align: center"><p style="font: 10pt/10.95pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">0
- .1</font></p> <p style="font: 10pt/9.65pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">year</font></p></td><td style="width: 1%; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 9%; font-size: 11pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">179,000</font></td><td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 9%; font-size: 11pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">493,450</font></td><td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="width: 9%; font-size: 11pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">298,332</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Discount</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,544</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(227,203</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(277,602)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">174,456</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">266,247</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20,730</font></td></tr>
</table>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">As of December 31, 2017,
the related party convertible notes represent two notes payable to LSW in the amounts of $79,000 and $100,000. They are convertible
to shares of the Company’s common stock at 50% of market price, as defined in the notes payable agreements.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">The Company has determined that
the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes
a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded
to the associated debt. The excess of the derivative value over the face amount of the note is recorded immediately to interest
expense at inception. The Company recorded no interest expense for the six months ended December 31, 2017 and December 31, 2016
at the inception of the notes relating to the excess of derivative value over the face of the notes. The Company recorded $44,901
and $0 of interest expense for the years ended June 30, 2017 and 2016, respectively, at the inception of the notes relating to
the excess of derivative value over the face of the notes.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">As of June 30, 2017, Jerry
Grisaffi, our former Chairman of the Board, held two notes payable with principal amounts of $200,150 and $184,300. The $200,150
note, which was due on December 19, 2017, converts at 50% of the average of the 3 lowest bid prices of the common stock during
the 10 days prior to the conversion. The $184,300 note, which was renewed through December 30, 2017, is convertible at $.01 with
an anti-dilutive clause that becomes effective with any dilution of the Company’s common stock greater than 1% of the shares
outstanding at the time of split. Both notes accrue interest at 6%. As of December 31, 2017, these notes are reclassified to Convertible
Notes Payable as Mr. Grisaffi is no longer a related party. Both of Mr. Grisaffi’s convertible notes payable are subject
to a lawsuit brought by the Company against Mr. Grisaffi.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.55pt 0 0; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">For the six months ended
December 31, 2017 and December 31, 2016, interest expense on these notes, including amortization of the discount, was $262,613
and $160,089, respectively. For the years ended June 30, 2017 and 2016, interest expense on these notes, including amortization
of the discount, was $337,852 and $16,308, respectively.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.6pt 0 5.95pt; text-align: justify">During the six months ended
December 31, 2017, the Company’s two largest customers each accounted for approximately 6% of sales. During the six months
ended December 31, 2016, the Company’s two largest customers accounted for approximately 75% and 1% of sales, respectively.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.6pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.6pt 0 5.95pt; text-align: justify">During the year ended June
30, 2017, the Company’s two largest customers accounted for approximately 50% and 7% of sales, respectively. During the year
ended June 30, 2016, the Company’s two largest customers accounted for approximately 27% and 26% of sales, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"><i>Office Leases</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.25pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">The Company has a
three-year lease for corporate office space. The lease commenced on September 1, 2016 with monthly payments of $7,715 in year
one, $7,972 in year two, and $8,229 in year three. The lease is being accounted for on a straight-line basis over its term.
The related straight-line rent liability is included in Accounts Payable and Accrued Liabilities.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">On January 18, 2018, the RMHC entered
into a 12-month office use agreement for office space in Denver, Colorado. Monthly payments are $91.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify"> </p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0 5.95pt; text-align: justify"><i>Other Leases</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.3pt 0 0"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">The Company rents storage space
from various third parties on a month-to-month basis.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0 5.95pt; text-align: justify"><i>Employee Agreements</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.05pt 0 0 5.95pt; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">The Company has entered into employment
agreements with the following Board members and officers:</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.45pt 0 6pt; text-align: justify">In 2014, the Company entered
into a five-year employment agreement with David M. Seeberger, Vice President and General Counsel. Under the agreement, <font style="letter-spacing: -0.25pt">we
</font>agreed to compensate Mr. Seeberger at a rate of $120,000 per year and to bonus obligations based on the profitability of
the Company. We also agreed to grant Mr. Seeberger an option to purchase 2,000,000 shares of common stock for par value at any
time after January 1, 2015. On February 1, 2018, the Company entered into a new three-year employment agreement with Mr. Seeberger.
The new agreement includes base compensation of $120,000 per year and discretionary bonuses as approved by the Board of Directors.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.65pt 0 6pt; text-align: justify">In January 2016, the Company
entered into a five-year employment agreement with Michael Welch, Chief Financial Officer. Under the agreement, <font style="letter-spacing: -0.25pt">we
</font>agreed to compensate Mr. Welch at a rate of $120,000 per year and to pay a bonus based on the profitability of the Company.
Mr. Welch also became Chief Executive Officer on March 1, 2016. His salary was increased to $150,000 per year. In addition, Mr.
Welch received 10,000,000 warrants for common stock at a price of $.001 on January 4, 2016 that were exercisable on July 25, 2016.
On February 1, 2018, the Company entered into a new three-year employment agreement with Mr. Welch. The new agreement includes
base compensation of $150,000 per year and discretionary bonuses as approved by the Board of Directors.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.65pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.65pt 0 6pt; text-align: justify">On December 18, 2017, the
Company entered into a five-year employment agreement with John Blackington, Chief Commercialization Officer. The agreement includes
base compensation of $140,000 per year, 7,000,000 common stock options, an annual bonus of up to 30%, and discretionary bonuses
as approved by the Board of Directors.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.65pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.65pt 0 6pt; text-align: justify">On February 1, 2018, the
Company entered into a three-year employment agreement with Jens Mielke, Chief Financial Officer. The agreement includes base compensation
of $140,000 per year and discretionary bonuses as approved by the Board of Directors.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.65pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 12.65pt 0 6pt; text-align: justify">On February 1, 2018, the
Company entered into a three-year employment agreement with Charles Smith, Chief Operating Officer. The agreement includes base
compensation of $120,000 per year and discretionary bonuses as approved by the Board of Directors.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt"><u>Arbitration Claim of Roy J. Meadows Against Rocky Mountain
High Brands, Inc. dated February 24, 2016</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 5.95pt; text-align: justify">On October 6, 2017 the
Company executed a Release and Settlement Agreement with Roy Meadows (“Meadows Settlement”) regarding the litigation
between the parties. As part of the Meadows Settlement, the Company agreed to issue 45 million shares of the Company’s common
stock, including 20 million shares issued immediately and 25 million shares to be issued upon the effectiveness of the Company’s
increased common share authorization, which occurred on October 31, 2017. Mr. Meadows is subject to a “leak-out” formula
whereby he is limited in the number of shares he can re-sell if the stock price is below $.06 per share. In connection with this
settlement, the Company agreed to an exchange of the Preferred C Stock back to the originating note payable in accordance with
the terms of the Exchange Agreement. Mr. Meadows assigned the note to GHS Investments, LLC, (“GHS”) an outside investment
group, in exchange for $1,000,000 in consideration paid to him by GHS. Mr. Meadows released the Company from all claims and returned
55,096,825 stock warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify"><u>Claims Against Donna Rayburn</u></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 0 0 5.95pt">On October 6, 2017 the Company executed a Release
and Settlement Agreement with Donna Rayburn regarding the litigation between the Company and Ms. Rayburn. Ms. Rayburn released
the Company from all claims and returned 10 million stock warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 0 0 6pt"><u>Rocky Mountain High Brands, Inc. v Lyonpride Music,
LLC, United States District Court Northern District of Texas, 3:18-cv-00045-C</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 0 0 6pt">The Company filed suit against Lyonpride Music, LLC
(“Lyonpride”) for fraud and for declaratory relief with respect to a contract between the parties. The Company is seeking
monetary damages against Lyonpride. The case is currently in the discovery phase.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 0 0 6pt"><u>Los Angeles Superior Court, BC669367, filed July
24, 2017. Statewide Beverage Company, Inc. v. Rocky Mountain High Brands, Inc.</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 6pt">Statewide Beverage Company, Inc. filed a breach of contract
claim, and the Company has filed counterclaims for breach of contract, common law fraud and declaratory relief. The case is currently
in the discovery phase.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6.6pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify"><u>Dallas County Texas, Case
Number DC-17-15441 filed November 8, 2017. Rocky Mountain High Brands, Inc. f/k/a Republic of Texas Brands, Inc. Plaintiff, vs.
Jerry Grisaffi, Joe Radcliffe, LSW Holdings, LLC, Lily Li, Epic Group One, LLC, Kenneth Radcliffe, Dennis Radcliffe, Phil Uhrik,
Michael Radcliffe, Frank Izzo, Morgan Albright, John Garrison, BB Winks, LLC, Crackerjack Classic, LLC, and Universal Consulting,
LLC.</u></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 0 0 5.95pt">The Company is seeking the return of Series A
Preferred Stock and common stock issued to certain defendants or later obtained by certain other defendants for little or no
consideration paid to the Company. The Company alleges that RMHB’s former Chairman of the Board breached his fiduciary
duty to the Company by issuing these shares to himself and others. RMHB is also seeking to void the Indemnification and
Release Agreement between the parties that was executed in June 2017. The Company is awaiting response from discovery
requests at the current time. A trial date has been set for December 2018.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">The consolidated financial
statements have been prepared in accordance with generally accepted accounting principles in the United States. The consolidated
financial statements include the accounts of the Company, its wholly-owned and controlled subsidiaries. All intercompany balances
and transactions have been eliminated.</p>
<p style="font: 11pt Times New Roman, Times, Serif; margin: 0.3pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 4.6pt 0 0 6pt; text-align: justify"><i>Use of Estimates</i></p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 6pt; text-align: justify">The preparation of the financial
statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual
results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including
those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect
on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of
its accounting estimates at least quarterly based on these conditions and record adjustments when necessary.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">The Company considers all short-term
highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.7pt 0 5.95pt; text-align: justify">The Company
follows the guidance of the Accounting Standards Codification (“ASC”) Topic 605, “Revenue
Recognition.” It records revenue from the sale of its products when persuasive evidence of an arrangement exists,
product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue
is reasonably assured. The Company has not experienced any significant returns from customers and accordingly, in
management’s opinion, no reserve for returns has been provided. Payments received prior to shipment of goods are
recorded as deferred revenue.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.9pt 0 6pt; text-align: justify">The Company has a policy
of reserving for uncollectible accounts based on the best estimate of the amount of probable credit losses in our existing accounts
receivable. We extend credit to customers based on an evaluation of their financial condition and other factors. The Company generally
does not require collateral or other security to support accounts receivable and perform ongoing credit evaluations of customers
and maintain an allowance for potential bad debts if required.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">It is determined whether an
allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have
an inability to meet financial obligations. In these cases, <font style="letter-spacing: -0.15pt">we </font>use assumptions and
judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts
due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as
additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. The Company
may also record a general allowance as necessary.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.95pt 0 6pt; text-align: justify">Direct write-offs are
taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances
that indicate the collectability of receivables.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.35pt 0 6pt; text-align: justify">Inventories, which consist
only of the Company’s finished products held for resale, are stated at the lower of cost, determined using the first-in,
first-out, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less
estimated costs to dispose of the product.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.8pt 0 6pt; text-align: justify">If the Company identifies excess,
obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is
first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales
in the Company’s statements of operations.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 6pt; text-align: justify">The Company adopted the provisions
of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting
pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.</p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 4.6pt 0 0 6pt; text-indent: 268.45pt"><u></u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 5.85pt 0 7.95pt; text-align: justify">The estimated fair
value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
The carrying amounts of our short and long-term credit obligations approximate fair value because the effective yields on these
obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants
and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 7.95pt; text-align: justify">ASC 820 defines fair value
as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC
820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the
use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair
value:</p>
<p style="font: 5.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/11.4pt Times New Roman, Times, Serif; margin-top: 4.7pt; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 26pt"></td><td style="width: 12pt"><font style="font-size: 10pt; letter-spacing: -0.25pt">•</font></td><td><font style="font-size: 10pt">Level 1 — quoted prices in active markets for identical assets or liabilities.</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/11.3pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 26pt"></td><td style="width: 12pt"><font style="font-size: 10pt; letter-spacing: -0.25pt">•</font></td><td><font style="font-size: 10pt">Level 2 — quoted prices for similar assets and liabilities in active markets or inputs
that are observable.</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/11.4pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 26pt"></td><td style="width: 12pt"><font style="font-size: 10pt; letter-spacing: -0.25pt">•</font></td><td><font style="font-size: 10pt">Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on
assumptions).</font></td></tr></table>
<p style="font: 7.5pt Times New Roman, Times, Serif; margin: 0.2pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 5.9pt 0 7.95pt; text-align: justify">The derivative liability,
which relates to the conversion feature of convertible debt and common stock warrants and options, is classified as a Level 3 liability,
and is the only financial liability measure at fair value on a recurring basis.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify">The change in the Level 3 financial
instruments is as follows:</p>
<p style="font: 9pt Times New Roman, Times, Serif; margin: 0.15pt 0 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%">Balance, June 30, 2015</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">11,504,057</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the year ended June 30, 2016</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,887,618</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Converted during the year ended June 30, 2016</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(2,102,681</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">(11,071,250</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, June 30, 2016</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">2,217,744</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the year ended June 30, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">1,383,650</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercises/Conversions</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(479,834</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">1,951,019</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, June 30, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">5,072,579</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the six months ended December 31, 2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,017,623</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Converted during the six months ended December 31, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(5,276,018</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">1,795,205</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, December 31, 2017</td><td> </td>
<td style="border-bottom: Black 2.5pt double; text-align: right">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,609,389</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify">The estimated fair value
of the derivative instruments were valued using the Black-Scholes option pricing model, using the following assumptions as of December
31, 2017, June 30, 2017, and June 30, 2016:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2017</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">June 30, 2016</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Estimated dividends</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">None</font></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">None</font></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">None</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 46%">Expected volatility</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">165%</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">114%</td><td style="width: 2%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 15%; text-align: right">45%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Risk free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.39%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">.84%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">.12%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Expected term</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><p style="font: 10pt/11.2pt Times New Roman, Times, Serif; margin: 0 0 0 38.2pt; text-align: center">.1 to 4.8</p> <p style="font: 10pt/11.4pt Times New Roman, Times, Serif; margin: 0 0 0 38.35pt; text-align: center">years</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt; line-height: 97%">1 to 2.0 years</font></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">1 to 5.5 years</font></td></tr>
</table>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 7.95pt; text-align: justify"><i> </i></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 7.95pt; text-align: justify">Property and equipment is
stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the
assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.85pt 0 7.95pt; text-align: justify">The Company
evaluates intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an
asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash
flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of
the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the
asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value
based on a discounted cash flow approach or, when available and appropriate, to comparable market values. During the six
months ended December 31, 2017 the Company recorded an impairment charge on the goodwill related to the acquisition of Rocky
Mountain High Water Company in the amount of $59,163. As of December 31, 2017 the goodwill related to this acquisition is
fully impaired. No impairment charges were recorded during the year ended June 30, 2017 or the six months ended December 31,
2016. During the year ended June 30, 2016 the Company recorded a 100% impairment of $166,000 on its investment in Dollar
Shots Club when it was determined that the Company would not likely recover its investment.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">Share-based payments to
employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based
on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee
is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.4pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.95pt; text-align: justify">The Company issued restricted stock
to consultants and employees for various services. Cost for these transactions are measured at the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock
is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity
instruments is reached or (ii) the date at which the counterparty's performance is complete.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.75pt 0 5.95pt; text-align: justify">The Company evaluates and
accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.”
Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding
derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics
and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of
the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not
re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument
with the same terms as the embedded derivative instrument would be considered a derivative instrument.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.9pt 0 5.95pt; text-align: justify">We apply the guidance enumerated
in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred
stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair
value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption
rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely
within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity.
Our preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features
not within our control. Accordingly, unless otherwise noted, all issuances of preferred stock are presented as a component of consolidated
stockholders’ equity (deficit).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 5.95pt; text-align: justify">Advertising and marketing expenses
are charged to operations as incurred.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0.05pt 5.9pt 0 5.95pt; text-align: justify">The Company uses the
asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this
method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred
tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements
or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation
allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative
evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.</p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 6.85pt 0 5.95pt; text-align: justify">ASC Topic 740.10.30
clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. The Company has no material uncertain tax positions.</p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6.3pt 0 5.95pt; text-align: justify">Unless otherwise noted,
we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1)
of the JOBS Act. This allows us to delay the adoption of new or revised accounting standards that have different effective dates
for public and private companies until those standards apply to private companies. As a result of our election, our financial statements
may not be comparable with other public companies.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"></p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6.5pt 0 5.95pt; text-align: justify">In May 2014, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, <i>Revenue from
Contracts with Customers</i>, which will replace most existing revenue recognition guidance in U.S. GAAP and is intended to improve
and converge with international standards the financial reporting requirements for revenue from contracts with customers. The core
principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that
it expects to be entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature,
timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in
judgments. ASU 2014-09 allows for adoption either on a full retrospective basis to each prior reporting period presented or on
a modified retrospective basis with the cumulative effect of initially applying the new guidance recognized at the date of initial
application, which will be effective for the Company beginning January 1, 2019. The Company is currently evaluating the impact
of ASU 2014-09, including the transition method, on its consolidated financial statements.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 6.75pt 0 5.95pt; text-align: justify">In February 2016, the FASB
issued ASU 2016-02, <i>Leases</i>, which requires lessees to recognize on the balance sheet a right-of-use asset, representing
their right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months.
The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash
flows arising from leases. ASU 2016-02 is effective for the Company beginning January 1, 2020. The Company is currently evaluating
the impact that ASU 2016-02 will have on its consolidated financial statements.</p>
<p style="font: 10.5pt Times New Roman, Times, Serif; margin: 0.45pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 4.8pt 5.7pt 0 8pt; text-align: justify">In June 2016, the FASB
issued ASU 2016-13, <i>Financial Instruments-Measurement of Credit Losses on Financial Instruments</i>, which requires measurement
and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning January
1, 2021 and the Company is currently evaluating the impact that ASU 2016-13 will have on its consolidated financial statements.</p>
<p style="font: 9.5pt Times New Roman, Times, Serif; margin: 0.35pt 0 0"> </p>
<p style="font: 10pt/97% Times New Roman, Times, Serif; margin: 0 5.65pt 0 8pt; text-align: justify">In January 2017, the FASB
issued ASU 2017-01, <i>Business Combinations: Clarifying the Definition of a Business</i>, which clarifies the definition of a
business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for
as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is required to be applied prospectively and will be effective
for the Company beginning January 1, 2019. The impact on our consolidated financial statements will depend on the facts and circumstances
of any specific future transactions.</p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%">Balance, June 30, 2015</td><td style="width: 10%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 18%">11,504,057</td><td style="text-align: left; width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the year ended June 30, 2016</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,887,618</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Converted during the year ended June 30, 2016</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(2,102,681</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">(11,071,250</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, June 30, 2016</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">2,217,744</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the year ended June 30, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">1,383,650</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercises/Conversions</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(479,834</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">1,951,019</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, June 30, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">5,072,579</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Issued during the six months ended December 31, 2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,017,623</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Converted during the six months ended December 31, 2017</td><td> </td>
<td style="text-align: left"></td><td style="text-align: right">(5,276,018</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"></td><td style="border-bottom: Black 1pt solid; text-align: right">1,795,205</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Balance, December 31, 2017</td><td> </td>
<td style="border-bottom: Black 2.5pt double; text-align: right">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,609,389</td><td style="text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2017</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="2" style="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">June 30, 2016</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 46%">Estimated dividends</td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%"> </td><td style="text-align: right; width: 15%"><font style="font-size: 10pt">None</font></td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%"> </td><td style="text-align: right; width: 15%"><font style="font-size: 10pt">None</font></td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%"> </td><td style="text-align: right; width: 15%"><font style="font-size: 10pt">None</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Expected volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">165%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">114%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">45%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Risk free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.39%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">.84%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">.12%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Expected term</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><p style="font: 10pt/11.2pt Times New Roman, Times, Serif; margin: 0 0 0 38.2pt; text-align: center">.1 to 4.8</p> <p style="font: 10pt/11.4pt Times New Roman, Times, Serif; margin: 0 0 0 38.35pt; text-align: center">years</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt; line-height: 97%">1 to 2.0 years</font></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">1 to 5.5 years</font></td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 5.5pt 1.5pt 0 4.65pt; text-align: center"><b>December
31,</b></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 1.5pt 0 4.65pt; text-align: center"><b>2017</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 5.5pt 4.75pt 0 4.7pt; text-align: center"><b>June 30,</b></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 4.7pt; text-align: center"><b>2017</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/11.3pt Times New Roman, Times, Serif; margin: 5.5pt 4.75pt 0 4.7pt; text-align: center"><b>June 30,</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 43%">Finished inventory</td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 15%">77,517</td><td style="text-align: left; width: 1%"> </td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 15%">216,711</td><td style="text-align: left; width: 1%"> </td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 15%">290,368</td><td style="text-align: left; width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Raw materials and packaging</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,795</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,984</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><b>Total</b></td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">82,312</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">224,695</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">290,368</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">December 31, 2017</td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center">June 30, 2017</td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">June 30, 2016</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; width: 53%">Prepaid officers’ compensation</td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">445,149</td><td style="text-align: left; width: 1%"> </td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">521,916</td><td style="text-align: left; width: 1%"> </td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">1,334,261</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Prepaid directors’ compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">147,207</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">206,090</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">323,855</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Prepaid marketing expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,750</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">19,250</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">33,000</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Other prepaid expenses and current assets</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">28,616</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">27,082</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">25,435</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 1pt">Total</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">634,722</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">774,338</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">1,716,551</td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td> </td>
<td colspan="3" style="text-align: center; vertical-align: bottom"><b>December 31, 2017</b><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin: 0 16.05pt 0 42.35pt; text-align: center"></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2017</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 53%">Vehicles</td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">29,598</td><td style="text-align: left; width: 1%"> </td><td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">29,598</td><td style="text-align: left; width: 1%"> </td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">112,817</td><td style="text-align: left; width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Furniture and equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">42,538</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">41,042</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">343</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Personal computers</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,379</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,315</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,170</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 11pt"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">74,515</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73,955</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">114,330</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Less:  accumulated depreciation</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">38,834</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">25,822</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">22,122</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; padding-bottom: 1pt">Total</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">35,681</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">48,133</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">92,208</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td> </td>
<td colspan="3" style="text-align: center"><b>December 31, 2017</b><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin: 0 16.05pt 0 42.35pt; text-align: center"><b></b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2017</b></p></td><td> </td>
<td colspan="2" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>June
30, 2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; width: 53%">Accounts payable</td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">373,882</td><td style="text-align: left; width: 1%"> </td><td style="width: 2%"> </td>
<td style="text-align: left; width: 1%">$</td><td style="text-align: right; width: 12%">231,429</td><td style="text-align: left; width: 1%"> </td><td style="width: 2%"> </td>
<td style="text-align: center; width: 1%">$</td><td style="text-align: right; width: 12%">130,368</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">215,026</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">55,416</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: center"> </td><td style="text-align: right">—  </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt">Other accrued expenses</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">161,899</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">154,345</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center"> </td><td style="border-bottom: Black 1pt solid; text-align: right">207,498</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; padding-bottom: 1pt">Total</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">750,807</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">441,190</td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">$</td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">337,866</td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 11pt"> </td><td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Interest
Rate</font></td><td style="font-size: 11pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-size: 11pt; font-weight: bold; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.35pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/10.55pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Term</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; width: 36%"><font style="font: 10pt Times New Roman, Times, Serif">Related
party convertible <br />notes payable</font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center; width: 9%"><font style="font: 10pt Times New Roman, Times, Serif">6%</font></td><td style="font-size: 11pt; text-align: center; width: 1%"></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: center; width: 9%"><p style="font: 10pt/10.95pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">0
- .1</font></p> <p style="font: 10pt/9.65pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">year</font></p></td><td style="text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="font-size: 11pt; text-align: right; width: 9%"><font style="font: 10pt Times New Roman, Times, Serif">179,000</font></td><td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="font-size: 11pt; text-align: right; width: 9%"><font style="font: 10pt Times New Roman, Times, Serif">493,450</font></td><td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="font-size: 11pt; text-align: right; width: 9%"><font style="font: 10pt Times New Roman, Times, Serif">298,332</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Discount</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,544</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(227,203</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(277,602)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">174,456</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">266,247</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20,730</font></td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="3" style="font-size: 11pt"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: center">Interest Rates</td><td style="font-size: 11pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 11pt; font-weight: bold; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.35pt; text-align: center; margin-bottom: 0"> </p><p style="font: 10pt/10.55pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Term</b></p></td><td> </td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; width: 20%"><font style="font: 10pt Times New Roman, Times, Serif">Convertible
notes <br />payable</font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 12%"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">6%
- 10%</font></p></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; text-align: center; width: 12%"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">0
- 2 years</font></p></td><td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="font-size: 11pt; text-align: right; width: 12%"><font style="font: 10pt Times New Roman, Times, Serif">1,026,995</font></td><td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="font-size: 11pt; text-align: right; width: 12%"><font style="font: 10pt Times New Roman, Times, Serif">1,115,000</font></td><td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="font-size: 11pt; text-align: right; width: 12%"><font style="font: 10pt Times New Roman, Times, Serif">597,500</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Discount</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt; font-size: 11pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(349,297</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(381,747</font></td><td style="padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td><td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt; font-size: 11pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 11pt; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="padding-bottom: 1pt; font-size: 11pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">677,698</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">733,253</font></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">597,500</font></td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr>
<td style="text-align: left; width: 57%"><b> </b></td><td style="width: 3%"><b> </b></td>
<td style="text-align: left; width: 1%"><b> </b></td><td style="text-align: center; width: 6%"><b>Six Months Ended December 31, 2017</b></td><td style="width: 3%"><b> </b></td>
<td style="text-align: left; width: 1%"><b> </b></td>
<td style="text-align: center; width: 6%"><b>Six Months Ended December 31, 2016</b></td>
<td style="width: 6%"><b> </b></td>
<td style="text-align: center; width: 6%"><b>Year Ended June 30, 2017</b></td>
<td style="width: 5%"><b> </b></td><td style="text-align: center; width: 6%"><b>Year Ended June 30, 2016</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">U.S federal statutory rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(34%)</td><td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(34%)</td>
<td> </td>
<td style="text-align: right">(34%)</td>
<td> </td><td style="text-align: right">(34%)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">State income tax, net of federal benefit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.0%)</td><td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(0.0%)</td>
<td> </td>
<td style="text-align: right">(0.0%)</td>
<td> </td><td style="text-align: right">(0.0%)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Increase in valuation allowance</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">34%</td><td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">34%</td>
<td> </td>
<td style="text-align: right">34%</td>
<td> </td><td style="text-align: right">34%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Income tax provision (benefit)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.0%</td><td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">0.0%</td>
<td> </td>
<td style="text-align: right">0.0%</td>
<td> </td><td style="text-align: right">0.0%</td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: justify; width: 54%"><b> </b></td><td style="width: 2%"><b> </b></td>
<td style="text-align: center; width: 1%"><b> </b></td><td style="text-align: center; width: 12%"><b>December 31, 2017</b></td><td style="text-align: center; width: 1%"><b> </b></td><td style="width: 2%"><b> </b></td>
<td style="text-align: center; width: 1%"><b> </b></td><td style="text-align: center; width: 12%"><b>June 30, 2017</b></td>
<td style="width: 2%"><b> </b></td>
<td><b> </b></td>
<td style="text-align: center; width: 12%"><b>June 30, 2016	</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: justify">Deferred Tax Assets</td><td> </td>
<td style="text-align: center"> </td><td style="text-align: right"> </td><td style="text-align: center"> </td><td> </td>
<td style="text-align: center"> </td><td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Net Operating Losses</td><td> </td>
<td style="text-align: center">$</td><td style="text-align: right">3,360,000</td><td style="text-align: center"> </td><td> </td>
<td style="text-align: center">$</td><td style="text-align: right">4,482,000</td>
<td> </td>
<td style="text-align: right">$<b></b></td>
<td style="text-align: right">2,227,000</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:  Valuation
Allowance<font style="color: #FF6600">	</font></font></td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(3,360,000)</td><td style="padding-bottom: 1pt; text-align: center"></td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(4,482,000)</td>
<td> </td>
<td style="border-bottom: Black 1pt solid; text-align: center">$<b></b></td>
<td style="border-bottom: Black 1pt solid; text-align: right">(2,227,000)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; text-align: justify; padding-bottom: 1pt">Deferred Tax Assets – Net</td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">—  </td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">—  </td>
<td> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td>
<td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">—  </td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 11pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="font-size: 10pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 10pt; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Interest
Rates</font></td><td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-weight: bold; text-align: center"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.35pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/10.55pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Term</b></font></p></td><td style="font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-size: 10pt; text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 9.5pt 0 15.15pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td style="font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font-size: 10pt; text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.35pt Times New Roman, Times, Serif; margin: 0 7.95pt 0 12.75pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></p></td><td style="font-size: 10pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 10pt; text-align: center"><p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>June
30,</b></font></p> <p style="font: 10pt/10.9pt Times New Roman, Times, Serif; margin: 0 7.95pt 0 12.8pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; width: 16%"><font style="font: 10pt Times New Roman, Times, Serif">Notes
<br />payable</font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center; width: 15%"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif">6%
- 10%</font></p></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="text-align: center; width: 13%"><p style="font: 9pt Times New Roman, Times, Serif; margin-top: 0.5pt; text-align: center; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p><p style="font: 10pt/9.75pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">.5
– 1.5 years</font></p></td><td style="text-align: center; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; width: 13%"><font style="font: 10pt Times New Roman, Times, Serif">549,936</font></td><td style="text-align: left; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; width: 13%"><font style="font: 10pt Times New Roman, Times, Serif">26,130</font></td><td style="text-align: left; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td><td style="width: 2%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td><td style="text-align: right; width: 13%"><font style="font: 10pt Times New Roman, Times, Serif">—  </font></td></tr>
</table>
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26988875
100
2014-07-17
2014-10-23
5072579
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5609389
5072579
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4795
7984
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82321
224695
290368
445149
521916
1334261
147207
206090
323855
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28616
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343
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3315
1170
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130368
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179000
493450
298332
0.06
0
P1Y
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266247
44
16308
200150
184300
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2017-12-19
2017-12-30
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P1Y6M
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188023
189455
143600
166000
3889083
442633
504736
5276018
318125
352625
2102681
4017622
659150
$1,512,606
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180163
407447
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318332
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789474
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0.50
0.27
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0.07
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0.3400
0.0000
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3360000
4482000
2227000
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2000000
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6020
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1.14
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0
222127
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1200092
1811714
333899
930265
15256