10-Q 1 v412564_10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2014

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _________ to _________

Commission file number: 000-52904

ATTITUDE DRINKS INCORPORATED

(Exact name of registrant as specified on its charter)

Delaware		65-0109088
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

712 U.S. Highway 1, Suite #200, North Palm Beach, Florida 33408 USA

(Address of principal executive offices)

(561) 227-2727

(Registrant’s telephone number, including area code)

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

Yes ¨ No x

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

Yes ¨ No x

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

	Large accelerated filer	¨	Accelerated filer	¨
	Non-accelerated filer	¨	Smaller reporting company	x

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

Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the registrant's classes of common equity, as of the latest practicable date: 2,265,001,442 shares issued and outstanding as of June 12, 2015.

ATTITUDE DRINKS INCORPORATED AND SUBSIDIARY

INDEX

		PAGE #

PART I	FINANCIAL INFORMATION

Item 1 .	Condensed Consolidated Financial Statements:

	Condensed Consolidated Balance Sheets – September 30, 2014 (unaudited) and March 31, 2014	3

	Condensed Consolidated Statements of Operations – Three Months and Six Months Ended September 30, 2014 and 2013 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows – Six Months Ended September 30, 2014 and 2013 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43

Item 4.	Controls and Procedures	43

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	45

Item 2.	Unregistered Sales of Equity and Use of Proceeds	46

Item 3.	Defaults upon Senior Securities	47

Item 4.	Mine Safety Disclosures	48

Item 5.	Other Information	48
.
Item 6.	Exhibits	48

SIGNATURES		51

EXHIBITS

DOCUMENTS INCORPORATED BY REFERENCE: See Exhibits

PART I – FINANCIAL INFORMATION

ITEM 1. – CONDENSED FINANCIAL STATEMENTS

ATTITUDE DRINKS INCORPORATED AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEET

	September 30, 2014			March 31, 2014
	(unaudited)

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	25,681		$	20,615
Accounts receivable		10,428			1,422
Inventories less allowance for obsolescence of $44,107 at March 31, 2014		137,060			30,090
Prepaid expenses		1,065			2,873
TOTAL CURRENT ASSETS		174,234			55,000

FIXED ASSETS, NET		21,993			25,491

OTHER ASSETS:
Trademarks, net		4,685			4,834
Deposits and other		896			896
TOTAL OTHER ASSETS		5,581			5,730

TOTAL ASSETS	$	201,808		$	86,221

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES:
Accounts payable	$	1,801,859		$	1,667,615
Accrued liabilities		6,189,289			5,733,308
Derivative liabilities		1,431,341			1,993,393
Short-term bridge loans payable		115,000			115,000
Convertible notes payable		5,975,092			5,891,182
Less: Discount on convertible notes payable		(2,046,410	)		(3,511,738	)
Non-convertible notes payable		538,517			411,517
Loans payable to related parties		21,463			21,463
TOTAL CURRENT LIABILITIES		14,026,151			12,321,740

NON-CURRENT NOTES PAYABLE
Convertible notes payable		100,000			100,000
CONVERTIBLE NOTES PAYABLE - NET OF CURRENT PORTION		100,000			100,000

STOCKHOLDERS' (DEFICIT):
Series A and A-1 convertible preferred stock par value $0.00001 per share, 20,000,000 shares authorized, 9,000,051 shares issued and outstanding at September 30, 2014 and March 31, 2014, respectively		90			90
Common stock, par value $0.00001, 20,000,000,000 shares authorized and 690,277,229 and 181,714,134 shares issued and outstanding at September 30, 2014 and March 31, 2014, respectively		6,903			1,817
Additional paid-in capital		19,707,452			19,416,418
Deficit accumulated		(33,638,788	)		(31,753,844	)
TOTAL STOCKHOLDERS' (DEFICIT)		(13,924,343	)		(12,335,519	)

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)	$	201,808		$	86,221

See accompanying notes to condensed consolidated financial statements

ATTITUDE DRINKS INCORPORATED AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	Three			Three			Six			Six
	Months Ended			Months Ended			Months Ended			Months Ended
	September 30,			September 30,			September 30,			September 30,
	2014			2013			2014			2013
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

REVENUES:
Net revenues	$	11,909		$	69,991		$	33,816		$	145,191
Product and shipping costs		(23,007	)		(55,373	)		(43,856	)		(118,804	)
GROSS PROFIT		(11,098	)		14,618			(10,040	)		26,387

OPERATING EXPENSES:
Salaries, taxes and employee benefits		182,835			253,456			351,858			521,222
Marketing and promotion		4,477			25,882			13,941			22,557
Consulting fees		77,182			77,000			152,182			159,500
Professional and legal fees		13,140			66,220			45,015			103,534
Travel and entertainment		2,861			7,160			4,351			13,132
Product development costs		-			-			400			3,780
Stock compensation expense		-			26,997			-			26,997
Other operating expenses		42,097			62,711			89,018			114,685
Total Operating Expenses		322,592			519,426			656,765			965,407

LOSS FROM OPERATIONS		(333,690	)		(504,808	)		(666,805	)		(939,020	)

OTHER INCOME (EXPENSE):
Interest and other financing costs		(1,023,261	)		2,730,895			(1,218,139	)		2,860,011
Total Other Income (Expense)		(1,023,261	)		2,730,895			(1,218,139	)		2,860,011

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		(1,356,951	)		2,226,087			(1,884,944	)		1,920,991

Provision for income taxes		-			-			-			-

NET INCOME (LOSS)	$	(1,356,951	)	$	2,226,087		$	(1,884,944	)	$	1,920,991

Basic income (loss) per common share	$	-		$	0.05		$	-		$	0.05

Diluted income (loss) per common share	$	-		$	-		$	-		$	-

Weighted average common shares outstanding - basic		597,443,345			47,018,140			468,696,070			35,491,621

Weighted average common shares outstanding - diluted		597,443,345			3,226,292,862			468,696,070			3,214,766,343

See accompanying notes to consolidated financial statements

ATTITUDE DRINKS INCORPORATED AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months			Six Months
	Ended			Ended
	September 30,			September 30,
	2014			2013
	(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$	(1,884,944	)	$	1,920,991
Adjustment to reconcile net (loss)/income to net cash used in operating activities:
Depreciation and amortization		3,646			3,969
Compensatory stock and warrants		-			26,997
Issuance of convertible notes for past due services		150,000			187,000
Bad debt expense		-			(2,792	)
Fair value adjustment of convertible notes		(540,141	)		(3,674,948	)
Amortization of debt discount		1,546,601			637,967
Changes in operating assets and liabilities:
Accounts receivable		(9,006	)		(9,476	)
Prepaid expenses and other assets		1,808			(15,135	)
Inventories		(106,970	)		14,514
Accounts payable and accrued liabilities		631,872			412,760
Net cash (used) in operating activities		(207,134	)		(498,153	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		-			(3,910	)
Net cash (used) in investing activities		-			(3,910	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		87,700			550,000
Proceeds from short-term bridge loans payable		127,000			-
Other costs of financing		(2,500	)		(50,000	)
Net cash provided by financing activities		212,200			500,000

NET (DECREASE) IN CASH AND CASH EQUIVALENTS		5,066			(2,063	)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		20,615			7,415

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	25,681		$	5,352

See accompanying notes to condensed consolidated financial statements

ATTITUDE DRINKS INCORPORATED AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED SEPTEMBER 30, 2014

(Unaudited)

Note 1.

Organization, Basis of Presentation and Significant Accounting Policies

(a)

Organization:

Attitude Drinks Incorporated, a Delaware corporation, and subsidiary (“the Company”) is engaged in the development and sale of functional beverages, primarily in the United States. Attitude Drinks Incorporated was formed in Delaware on May 10, 1988 under the name of International Sportfest, Inc which later became Mason Hill Holdings, Inc. On September 19, 2007, the Company acquired Attitude Drink Company, Inc., a Delaware corporation (“ADCI”), under an agreement and Plan of Merger (“Merger Agreement”) among Mason Hill Holdings, Inc. (“MHHI”) and ADCI.

On September 19, 2007, the Company acquired Attitude Drink Company, Inc., a Delaware corporation (“ADCI”), under an Agreement and Plan of Merger (“Merger Agreement”) among Mason Hill Holdings, Inc. (“MHHI”) and ADCI. Pursuant to the Merger Agreement, each share of ADCI common stock was converted into 40 shares of Company common stock resulting in the issuance of 4,000,000 shares of Company common stock. The acquisition was accounted for as a reverse merger (recapitalization) with ADCI deemed to be the accounting acquirer, and the Company deemed to be the legal acquirer. On September 30, 2007, the Company changed its name to Attitude Drinks Incorporated. Its wholly owned subsidiary, ADCI, was incorporated in Delaware on June 18, 2007. The Company’s principal executive offices are located at 712 U. S. Highway 1, Suite #200, North Palm Beach, Florida 33408. The telephone number is 561-227-2727. The Company’s common stock shares (PINK:ATTD) began trading June 2008. The Company's fiscal year end is March 31. Its plan of operation during the next twelve months is to focus on the non-alcoholic single serving beverage business, developing and marketing products in two fast growing segments: sports recovery and functional dairy.

Change in Business Model

On April 21, 2015, Attitude Beer Holding Co., a Delaware corporation (“ABH”), which the Company had the majority ownership and ABH’s other owners, Alpha Capital Anstalt, a company organized under the laws of Liechtenstein (“Alpha”) and Tarpon Bay Partners LLC, a Florida limited liability company (“Tarpon Bay”), (collectively all three companies as shareholders of ABH), entered into a Purchase Agreement with Harrison, Vickers and Waterman Inc. (HVCW) pursuant to which the shareholders of ABH sold to HVCW all of the outstanding shares of stock of ABH, and ABH thereupon became a wholly owned subsidiary of HVCW. In consideration for the purchase of the shares of common stock of ABH, HVCW issued: (i) to the Company 51 shares of a newly created Series B Preferred Stock of the Company (the “Series B Preferred Stock”) and a seven year warrant (the “B Warrant”) to purchase 5,000,000 shares of HVCW’s common stock, par value $.0001 per share (the “Common Stock”), at an exercise price of $0.075 per share (subject to customary anti-dilution adjustments); (ii) to Alpha, a secured convertible note due April 20, 2017 (the “Secured Convertible Note”) in the principal amount of $1,619,375, a seven year warrant (the “Alpha Warrant”), to purchase 1,295,500,000, shares of Common Stock at an exercise price of $0.0025 per share (subject to customary anti-dilution adjustments), and an additional investment right (“AIR”) to purchase up to $3,750,000 in additional notes (the “AIR Note”) and corresponding warrants (“the “AIR Warrant”); and (iii) to Tarpon, a Secured Convertible Note in the principal amount of $554,791.67, a seven year warrant (the “Tarpon Warrant”) to purchase 443,833,333 shares of Common Stock at an exercise price of $0.0025 per share (subject to customary anti-dilution adjustments), and an AIR to purchase up to $1,250,000 in additional notes and corresponding AIR Warrants. In addition, Alpha acquired 32,300 shares of the HVCW’s Series A Preferred Stock (convertible into 32,300,000 shares of HVCW’s Common Stock) from HVW Holdings LLC (an entity of which Mr. James Giordano, HVCW’s prior Chief Executive Officer and Chairman of the Board, is the managing member), subject to the terms of a Purchase Agreement (the “Series A Purchase Agreement”). The Company purchased 87,990,000 shares of Common Stock from HVW Holdings LLC at a price of $65,000, subject to the terms of a Purchase Agreement (the “Common Stock Purchase Agreement”) thereby making the Company the majority owner of HVCW.

Note 1.

Organization, Basis of Presentation and Significant Accounting Policies (Continued):

(a)

Organization (continued):

In December 2014, ABH entered into a joint venture with New England World of Beer and together opened a 4,000 sq. foot tavern in West Hartford, Connecticut that sells a selection of over 500 craft and imported beers along with tavern food and other spirits and cocktails. New England World of Beer holds franchise rights for all of Connecticut and Massachusetts. Similar taverns are currently open in 20 states, namely AL, AZ, CO, CT, FL, GA, IL, LA, MD, MI, NC, NJ, NY, OH, SC, TN, TX, VA, WA and WI.

(b)

Basis of Presentation/Going Concern:

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements of the Company contain all adjustments necessary to present fairly the Company’s financial position as of September 30, 2014 and 2013 and the results of its operations and cash flows for the six month periods ended September 30, 2014 and 2013. The significant accounting policies followed by the Company are set forth in Note 3 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended March 31, 2014. The accompanying unaudited interim financial statements have been prepared in accordance with instructions to Form 10-Q and therefore do not include all information and footnotes required by accounting principles generally accepted in the United States of America ("U.S. GAAP").

The results of operations for the six month period ended September 30, 2014 are not necessarily indicative of the results to be expected for the full year.

The Company’s consolidated financial statements include the accounts of Attitude Drinks Incorporated and its wholly-owned subsidiary, Attitude Drink Company, Inc. All material intercompany balances and transactions have been eliminated.

Note 1.

Organization, Basis of Presentation and Significant Accounting Policies (Continued):

(b)

Basis of Presentation/Going Concern (continued):

The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company had insignificant revenues for the six months period ended September 30, 2014, a working capital deficit of $13,851,917 as of September 30, 2014 and has incurred losses to date resulting in an accumulated deficit of $33,638,788, including derivative income and expense. These factors create substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and pay its liabilities when they come due. Management’s plan includes obtaining additional funds by debt and/or equity financings; however, there is no assurance of additional funding being available.

(c)

Inventories:

Inventories, as estimated by management, currently consist of finished goods and are stated at the lower of cost on the first in, first-out method or market. The inventory is comprised of the following:

	September 30, 2014		March 31, 2014
	(unaudited)

Finished goods	$	137,060	$	74,197
Less: Reserve for obsolescence		-		(44,107	)
Total inventories	$	137,060	$	30,090

(d)

Prepaid expenses:

Prepaid expenses of $1,065 consist mainly of travel advances for $900.

(e)

Trademarks:

Trademarks consist of costs associated with the acquisition and development of certain trademarks. Trademarks, when acquired, will be amortized using the straight-line method over 15 years. Amortization of trademarks for the six months ended September 30, 2014 was $148.

(f)

Financial Instruments:

Financial instruments, as defined in the FASB Accounting Standards Codification, consist of cash, evidence of ownership in an entity, and contracts that both (i) impose on one entity a contractual obligation to deliver cash or another financial instrument to a second entity, or to exchange other financial instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right (a) to receive cash or another financial instrument from the first entity, or (b) to exchange other financial instruments on potentially favorable terms with the first entity. Accordingly, our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, notes payable, derivative financial instruments, convertible debt and redeemable preferred stock that we have concluded that some of these items are more akin to debt than equity. We carry cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities at historical costs; their respective estimated fair values approximate carrying values due to their current nature.

Note 1.

Organization, Basis of Presentation and Significant Accounting Policies (Continued):

(f)

Financial Instruments (continued):

Derivative financial instruments, as defined in the FASB Accounting Standards Codification, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, prior to February 21, 2013, derivative financial instruments were measured at fair value and recorded as liabilities or, in rare instances, assets. Fair value represents the price at which the property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller acting at arm’s length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.

We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we have entered into certain other financial instruments and contracts, such as debt financing arrangements and freestanding warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by the FASB Accounting Standards Codification, these instruments, prior to February 21, 2013, were required to be carried as derivative liabilities, at fair value, in our financial statements as we were allowed to elect fair value measurement of the hybrid financial instruments, on a case-by-case basis, rather than bifurcate the derivative. We believed that fair value measurement of the various hybrid convertible promissory notes financing arrangements prior to February 21, 2013, provided a more meaningful presentation of that financial instrument.

At February 21, 2013, the Company consolidated all previous outstanding notes into a new consolidated note per debt holder as well as exchanged all applicable warrants through the issuance of new convertible notes. The language of the new convertible notes payable was changed which, based on input from an outside new valuation firm, required a new accounting treatment in which the embedded derivatives are separated from the debt host and recorded as derivative liabilities at fair value. These derivative liabilities will need to be marked-to market each quarter with the change in fair value recorded in the profit/loss statement. We used a lattice model that values the convertible notes based on a probability weighted scenario model and future projections of the various potential outcomes. In sum, all embedded derivatives were bundled and valued as a single, compound embedded derivative, bifurcated from the debt host and treated as a liability.

Fair Value of Financial Instruments - Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses. We believe that the carrying amounts of the financial instruments approximate their respective current fair values due to their relatively short maturities.

Measurements and Disclosures Topic of the FASB Codification, the Company’s financial assets and liabilities measured at fair value on a recurring basis are classified and disclosed in one of the following three categories:

Level 1: Financial instruments with unadjusted quoted prices listed on active market exchanges.

Level 2: Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over the counter traded financial instruments. The prices for the financial instruments are determined using prices for recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3: Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation techniques.

Note 1.

Organization, Basis of Presentation and Significant Accounting Policies (Continued):

(f)

Financial Instruments (continued):

All cash and cash equivalents are considered Level 1 measurements for all periods presented. We do not have any financial instruments classified as Level 2. We have recorded a conversion feature liability in regards to previous issued convertible notes which is Level 3 and further described below in note 4.

(g)

(Loss)/Income Per Common Share:

The basic (loss)/income per common share is computed by dividing the (loss)/income applicable to common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted (loss) per common share is computed similar to basic (loss) per common share, but diluted income per common share includes dilutive common stock equivalents, using the treasury stock method, and assumes that the convertible debt instruments were converted into common stock upon issuance, if dilutive. For the six months ended September 30, 2014, potential common shares arising from the Company’s stock warrants, stock options and convertible debt and preferred stock amounting to 5,885,759,386 shares were included in the computation of diluted income per share.

(h)

Recent Accounting Pronouncements Applicable to the Company:

In August, 2014, the Financial Accounting Standard Board issued an ASU that contained guidance for the disclosure of uncertainties about an entity’s ability to continue as a going concern. There is no impact on the Company through the adoption of this update as the Company has always provided such required disclosures on doubt about the entity’s ability to continue as a going concern with one year.

In November, 2014, the Financial Accounting Standard Board issued an ASU that contained guidance about derivatives and hedging and determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity. There are predominantly two methods used in current practice by issuers and investors in evaluating whether the nature of the host contract within a hybrid instrument issued in the form of a share is more akin to debt or to equity. This ASU is to eliminate the use of different methods in practice. As the Company utilizes the services of an outside professional specialty firm for such valuations, the Company believes there is no change needed for this update.

Note 2.

Accrued Liabilities:

Accrued liabilities consist of the following:

	September 30, 2014		March 31, 2014
	(unaudited)
Accrued payroll and related taxes	$	3,476,337	$	3,261,045
Accrued marketing program costs		580,000		580,000
Accrued professional fees		162,000		98,000
Accrued interest		1,621,775		1,456,904
Accrued board of directors' fees		224,792		206,792
Other expenses		124,385		130,567

Total	$	6,189,289	$	5,733,308

Note 3.

Short-term Bridge Loans:

Summary of short-term bridge loan balances is as follows:

	September 30, 2014		March 31, 2014
	(Unaudited)

April 14, 2008 (a)	$	60,000	$	60,000
August 5, 2008 (b)		55,000		55,000

Total	$	115,000	$	115,000

April 14, 2008 financing:

(a) On April 14, 2008, the Company entered into a financing arrangement that provided for the issuance of a $60,000 face value short-term bridge loan note payable due July 15, 2008. There are no outstanding warrants associated with this financing as the expiration dates have expired.

The Company entered into the following Modification and Waiver Agreements related to the April 14, 2008 financing:

Date	Terms	Consideration
June 2008	Extend maturity to July 19, 2008	Warrants indexed to 5 shares of common stock (warrants have expired)
September 2008	Extend maturity to December 15, 2008	12 shares of restricted stock
January 2009	Extend maturity date to April 30, 2009	1) Warrants indexed to 12 shares of common stock (warrants have expired) 2) 12 shares of restricted stock

Note 3.

Short-term Bridge Loans (continued):

April 14, 2008 financing (continued):

The modifications resulted in a loss on extinguishment of $171,622 in accordance with the Financial Accounting Standards Codification. On December 15, 2008, the Company was in default on the notes for non-payment of the required principal payment. The remedy for event of default was acceleration of principal and interest so they were recorded at face value. As of March 31, 2013, this April 14, 2008 note was considered in default for non-payment. The Company is trying to find the debt holder to extend the due date of the note as the previous address is no longer valid.

August 5, 2008 financing:

(b) On August 5, 2008, the Company entered into a financing arrangement that provided for the issuance of a $55,000 face value short term bridge loan, due September 5, 2008. There are no outstanding warrants associated with this financing as the expiration dates have expired. The due date of the loan was extended to December 15, 2008 with 11 restricted shares of common stock issued as consideration. On December 15, 2008, the Company was in default on the notes for non-payment of the required principal payment. Remedies for an event of default are acceleration of principal and interest. There were no incremental penalties for the event of default; however the notes were recorded at face value. Remedies for an event of default are acceleration of principal and interest.

On January 15, 2009, the Company extended the term on the note from December 15, 2008 to April 30, 2009. As of December 31, 2012, this note was considered in default for non-payment. The debt holder is a board director and will extend the note once we locate the debt holder of the above April 14, 2008 debt.

Note 4.

Convertible Notes Payable:

All convertible notes payable are recorded at fair value as prescribed by the FASB Accounting Standards Codification as see Note 6 for more details. Convertible debt carrying values consist of the following:

Original Face			Fair Value Amounts
Value			September 30,			March 31,
			2014			2014
$	6,259,771	Convertible Note Financing due February 21, 2015 (a), (1)	$	5,452,892		$	5,554,182
	550,000	Convertible Note Financing due December 31, 2014 (b), (2)		550,000			400,000
	37,000	Convertible Note Financing due June 7, 2014 (c), (3)		37,000			37,000
	35,200	Convertible Note Financing due May 13,2015 (d), (4)		35,200			-
		Less discount on convertible notes (5)		(2,046,410	)		(3,511,738	)
$	6,881,971	Total convertible notes payable	$	4,028,682		$	2,479,444

(1) All previous convertible notes prior to February 21, 2013 were surrendered to the Company through a February 21, 2013 exchange agreement whereas the Company issued new face value consolidated notes per debt holder for a total amount of $5,020,944, $350,000 face value in new notes for the surrender of 425,003 Class A warrants plus $121,327 in a new note for work rendered for this consolidated financing for a grand total of $5,492,271. Remaining balance of $767,500 represents issued allonges that are attached to the February 21, 2013 consolidated convertible notes.

(2) Monthly retainer fee of $25,000 face value for December, 2012 through September, 2014 (total of $550, 000)

(3) Retainer fee of $37,000 face value issued June 7, 2014

(4) Issued convertible promissory note for $35,300 on May 13, 2014

(5) The consolidated notes required a new lattice valuation model that required the recording of a discount that will be amortized (accretion) over the life of the convertible notes payable.

Note 4.

Convertible Notes Payable (continued):

Since these new consolidated notes contained new language as compared to the previous notes, the Company needed to use a different valuation model for applicable valuations, derivatives and fair market value. In order to determine the fair market value, the Company analyzed the various securities agreements and exchange agreements, compared the Company to comparable companies to determine industry factors for volatility, growth and future financing, developed a lattice model that valued the convertible notes on a probability weighted scenario model as well as future projections of the various potential outcomes and valued the convertible notes at issuance and at the end of the reporting period to account for the derivative liability. Based on the Company’s analysis in determining the proper accounting treatment and valuation as set forth in the Statement of Financial Accounting Standard ASC 820-10-35-37 (Fair Value in Financial Instruments), Statement of Financial Accounting Standard ASC 815 (Accounting for Derivative Instruments and Hedging Activities), Emerging Issues Task (“EITF”) For Issue No. 00-10 and EITF 07-05, the embedded derivatives will be bundled and valued as a single, compound embedded derivative, bifurcated from the debt host and treated as a liability. The single compound embedded derivative features valued include the variable conversion feature, and the value of these embedded derivatives for the convertible notes will be treated as a liability. These derivative liabilities will be marked-to-market each quarter with the change in fair value to be recorded in the Statement of Operations.

(a)

February 21, 2013 Consolidated Convertible Notes

On February 21, 2013, all previous convertible notes payable with outstanding balances totaling $5,020,944 were surrendered by the debt holders to the Company through exchange agreements whereas the Company issued one consolidated note to each debt holder for the total outstanding convertible note amounts. In addition and on the same date, all outstanding Class A warrants associated with these convertible note payables totaling 425,003 Class A warrants were surrendered by the debt holders to the Company in which the Company issued additional convertible notes payable for the total amount of $350,000. All applicable 364 Class B warrants were cancelled as well. Both the surrendered convertible notes payable for $5,020,944 and warrants for $350,000 were combined into one new convertible note payable per debt holder for a grand total of $5,370,944. All of these individual consolidated notes contain the same terms, maturity dates and conversion criteria and replace all terms, conditions and conversion criteria contained in the surrendered notes. These notes have a maturity date of February 21, 2015 and an interest rate of 4%. The conversion price per share is equal to seventy-five percent (75%) of the average of the three lowest closing bid prices for the common stock as reported by Bloomberg L.P. for the principal market for the twenty trading days preceding a conversion date but in no event greater than $.02. Each conversion submitted by a holder must be at least the lesser of (i) $10,000 of principal and interest or (ii) the balance due on the note. In addition, another new convertible note was issued for $121,327 to one of the accredited debt holders for their efforts in assisting the Company with these consolidated notes, warrants and modifications. The amount was determined at 5% of the then outstanding balance of all the convertible notes payable held by the debt holder. This note is identical to the above notes for the terms, conversion criteria and maturity date. No accrued interest payable amounts were added to these new notes. A total of $806,396 in principal and $193,214 in accrued interest were converted into shares of common stock from February 21, 2013 through September 30, 2014. In addition, additional allonge financings were added as follows:

Note 4.

Convertible Notes Payable (continued):

(a)

February 21, 2013 Consolidated Convertible Notes (continued)

TABLE FOR ADDED ALLONGES

	ALLONGE		$
DATE	#		AMOUNT

4/11/2013		8	$	71,500
6/5/2013		9		88,000
6/21/2013		10		88,000
7/23/2013		11		82,500
8/8/2013		12		110,000
9/18/2013		13		110,000
10/28/2013		14		55,000
11/15/2013		15		55,000
2/11/2014		16		55,000
5/2/2014		17		27,500
7/11/2014		18		25,000

		TOTAL	$	767,500

Southridge Partners II LP purchased from another debt- holder $100,000 on June 5, 2013 from these February 21, 2013 notes. This new replacement note contains the same terms as in the February 21, 2013 consolidated convertible notes. A conversion of $2,960 was made on September 9, 2014 resulting in a balance of $97,040 to be converted.

(b)

Monthly $25,000 Retainer Fee Convertible Notes

We issue each month a convertible note for $25,000 to SC Advisors/Southridge Partners II LP as part of their consulting fees. Previously issued convertible notes from August, 2012 through November, 2012 were consolidated in the above February 21, 2013 convertible note (Note 4 (a)). From December, 2012 through September, 2014, we issued $25,000 monthly convertible notes for a total of $550, 000 as all of these notes have maturity dates of December 31, 2014 to January 31, 2016. The notes can be converted into shares of Common Stock after six months of holding at a conversion price to equal the current market price multiplied by eighty percent (80%). Current market price means the average of the closing bid prices for the common stock for the five (5) trading days ending on the trading day immediately before the relevant conversion date. No conversions have been made on these notes.

(c)

June 7, 2013 Convertible Note

We issued a $37,000 convertible note on June 7, 2013 for past due services. The maturity date of this note is June 7, 2014. We are working with the debt holder to extend the maturity date. The note maybe converted into shares of common stock after a six month holding period at a conversion price to equal the current market price multiplied by eighty percent (80%). Current market price means the average of the closing bid prices for the common stock for the five (5) trading days ending on the trading day immediately before the relevant conversion date. No conversions have been made on these notes.

Note 4.

Convertible Notes Payable (continued):

(d)

May 13, 2014 Convertible Note

We issued a convertible promissory note to a new accredited investor for $35,200 with a maturity date of May 13, 2015 at an interest rate of 4%. The conversion price per share shall be equal to seventy-five percent (75%) of the average of the three lowest closing bid prices for the common stock as reported by Bloomberg L.P. for the principal market for the twenty trading days preceding a conversion date but in no event greater than $.02. Each conversion submitted by the holder must be at least the lesser of (i) $1,000 of principal and interest or (ii) the balance due on the note. Conversion will be calculated to the hundredth of a penny (e.g. $0.0001).

Note 5.

Non-convertible Notes payable:

For the period ended March 31, 2011, we paid $23,750 as part of a promissory note in the total principal amount of $34,000 as a final settlement amount for a previous license agreement. The remaining amount due of $10,250 was required to be settled through monthly payments of $4,250 through December, 2010. Although we did not make all payments at June 30, 2013, we anticipate making those payments in 2013 when additional capital is available.

On January 26, 2011, we entered into a promissory note with our previous landlord in the principal amount of $75,762. This amount was due June 30, 2011 together with interest of 10% computed on the basis of the actual number of days elapsed over a 360-day year on the unpaid balance. The default rate shall be a per annum interest rate equal to the maximum amount permitted by applicable law as we currently use 15%. Although we have not paid this note yet, we anticipate making a payment pending a future financing. On October 12, 2012, the previous landlord sold $20,000 of the promissory note to another accredited investor resulting in an outstanding amount of $55,762. The sold $20,000 note has since been fully converted into shares of common stock.

On June 14, 2012, we entered into two promissory notes for $100,000 and $40,000, respectively, with two current accredited investors. These notes are subject to an interest rate of ten percent (10%) and are due the sooner of (i) October 14, 2012 or (ii) from the proceeds of the next funding. We received the $100,000 payment on June 27, 2012 and the $40,000 payment on July 9, 2012. The amounts are still outstanding, and we accrue interest at the default interest rate of 18%. We expect to convert these notes into convertible notes payable later in 2015.

On June 26, 2012, we entered into a promissory note of $110,000 with a current accredited investor. We agreed to pay a finder’s fee of $10,000, and we received the net payment of $100,000 on June 28, 2012. The note is subject to an interest rate of ten percent (10%) and is due the sooner of (i) October 14, 2012 or (ii) from the proceeds of the next funding. The amount is still outstanding, and we accrue interest at the default interest rate of 18%. We expect to convert these notes into convertible notes payable later in 2015.

On December 23, 2013, we entered into promissory notes with four current investors in the total principal amount of $45,505. These amounts are due December 31, 2014 and are not subject to any interest rates. These notes are exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

On March 24, 2014, we entered into promissory notes with three current investors in the total principal amount of $50,000. These amounts are due February 28, 2015 and are not subject to any interest rates. These notes are exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

On April 30, 2014, we entered into a promissory note with one current investor in the total principal amount of $12,000. This amount is due March 31, 2015 and is not subject to any interest rates. This note is exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

Note 5.

Non-convertible Notes payable (continued):

On June 11, 2014, we entered into promissory notes with four current investors in the total principal amount of $40,000. These amounts are due February 28, 2015 and are not subject to any interest rates. These notes are exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

On July 31, 2014, we entered into a promissory note with a current investor in the total principal amount of $15,000. This amount is due May 31, 2015 and is not subject to any interest rates. This note is exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

On August 21, 2014, we entered into a promissory note with a current investor in the total principal amount of $10,000. This amount is due August 21, 2015 and is not subject to any interest rates. This note is exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

On August 29, 2014, we entered into a promissory note with a current investor in the total principal amount of $10,000. This amount is due August 31, 2015 and is not subject to any interest rates. This note is exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

On September 17 and 30, 2014, we entered into promissory notes with two current investors in the total principal amount of $40,000. These amounts are due as follows: $10,000 due September 30, 2015, $15,000 due August 31, 2015 and $15,000 due September 30, 2015 and are not subject to any interest rates. These notes are exchangeable for equal aggregate amounts of notes of different authorized denominations, as requested by the holder surrendering the same. No service charge will be made for such registration or transfer or exchange.

Note 6.

Derivative Liabilities:

Fair Value Measurement

Valuation Hierarchy

ASC 820, “Fair Value Measurements and Disclosures,” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Note 6.

Derivative Liabilities (continued):

The following table provides the liabilities carried at fair value measured on a recurring basis as of September 30, 2014:

Fair Value Measurement at September 30, 2014

Significant

Total

Quoted

Other

Significant

Carrying

Prices in

Observable

Unobservable

Value at

Active Markets

Inputs

September 30, 2014

(Level 1)

(Level 2)

(Level 3)

1,431,341

The carrying amounts of cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities approximate their fair value due to their short maturities. The Company measures the fair value of financial assets and liabilities based on 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. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the derivative liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting department, who reports to the Principal Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting department and are approved by the Principal Financial Officer.

Level 3 Valuation Techniques

Level 3 financial liabilities consist of the conversion feature liability for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. A significant decrease in the volatility or a significant decrease in the Company’s stock price, in isolation, would result in a significantly lower fair value measurement.

As of September 30, 2014, there were no transfers in or out of level 3 from other levels in the fair value hierarchy. Starting with the new consolidated convertible notes payable as of February 21, 2013, we used a new lattice valuation model which required the embedded derivatives to be bundled and valued as a single compound embedded derivative, bifurcated from the debt host and treated as a liability at fair value.

Note 7.

Transactions with Related Parties:

In connection with the reverse merger (see Note 1), we assumed $47,963 in advances payable to the officers of MHHI in which we paid $1,500 in January, 2009 and issued 50 shares of common at $500 per share or $25,000, resulting in an outstanding balance of $21,463 that is due. These advances are non-interest bearing and payable upon demand.

During the quarter ended September 30, 2009, 9,000,000 shares of Series A Preferred, convertible into 54,000,000 shares of common stock at the option of the holder, were granted to Roy Warren (see Note 7). During the quarter ended March, 31, 2013, 51 shares of Series A-1 Preferred, convertible into 306 shares of common stock at the option of the holder, were granted to Roy Warren for services rendered.

Note 7.

Transactions with Related Parties (continued):

H. John Buckman is a board director of the Company and is a debt holder of the Company whereas the Company issued him a note payable at the face value of $55,000. He also received 22 shares of restricted stock that related to this note payable, 3 shares of restricted stock for being a Director and 300 shares of restricted stock for his services related to a November, 2009 financing (total of 325 shares of restricted stock).

Note 8.

Stockholders’ Deficit:

(a) Series A and A-1 Preferred Stock:

The Company’s articles of incorporation authorize the issuance of 20,000,000 shares of preferred stock which the Company has designated as Series A and A-1 Preferred (“Series A” and “Series A-1”), $.00001 par value. Each share of Series A and A-1 is convertible into six shares of the Company’s common stock for a period of five years from the date of issue. The conversion basis is not adjusted for any stock split or combination of the common stock. The Company must at all times have sufficient common shares reserved to effect the conversion of all outstanding Series A and A-1 Preferred. The holders of the Series A and A-1 Preferred are entitled to receive common stock dividends when, as, if and in the amount declared by the directors of the Company to be in cash or in market value of the Company’s common stock. The Company is restricted from paying dividends or making distributions on its common stock without the approval of a majority of the Series A and A-1 holders. The Series A and A-1 are senior to the Common Stock and any other series or class of the Company’s Preferred Stock in the event of liquidations. In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, the holders of the Series A and A-1 then outstanding are entitled to be paid out of the assets of the Company available for distribution to its shareholders, before any payment or declaration and setting apart for payment of any amount is to be made in respect of any outstanding capital stock of the Company, an amount equal to $.00001 per share, The Company, at the option of its directors, may at any time or from time to time redeem the whole or any part of the outstanding Series A. Upon redemption, the Company shall pay for each share redeemed the amount of $2.00 per share, payable in cash, plus a premium to compensate the original purchaser(s) for the investment risk and cost of capital equal to the greater of (a) $2.00 per share, or (b) an amount per share equal to fifty percent (50%) of the market capitalization of the Company on the date of notice of such redemption divided by 2,000,000. We have evaluated our Series A and A-1 Preferred Stock and determined these shares required equity classification because the number of shares convertible into common stock is fixed and reserved. Redemption of these preferred shares cannot be affected because of the Company’s stockholders’ deficit.

During the quarter ended September 30, 2009, 9,000,000 shares of Series A Preferred were granted to Roy Warren. A non-cash expense for $1,620,000 was recorded based on the then market price of $0.03 per common share times the convertible stock equivalents (9,000,000 preferred shares x 6 = 54,000,000 common stock equivalents). These shares have specific voting power in that Roy Warren has voting rights for 54,000,000 common stock equivalents. The Board of Directors on September 4, 2009 approved an amendment to the certificate of designations whereas Section 2(A) of the Certificate of Designation is hereby declared in its entirety, and the following shall be substituted in lieu thereof- Rights, Powers and Preferences: The Series A shall have the voting powers, preferences and relative, participating, optional and other special rights, qualifications, limitations and restrictions as follows: Designation and Amount – Out of the Twenty Million (20,000,000) shares of the $0.00001 par value authorized preferred stock, all Twenty Million (20,000,000) shares shall be designated as shares of “Series A.”

Note 8.

Stockholders’ Deficit (continued):

(a) Series A and A-1 Preferred Stock (continued):

During the quarter ended March, 31, 2013, 51 shares of Series A-1 Preferred, convertible into 306 shares of common stock at the option of the holder, were granted to Roy Warren for services rendered. We recorded a non-cash expense for $0.09 which is based on the then market price of $0.0003 per common share times the convertible stock equivalents (51 preferred shares x 6 = 306 common stock equivalents).

(b) Common Stock Warrants

As of September 30, 2014, there were no outstanding warrants as the expiration date expired on all previous outstanding warrants.

(c) Common Stock Issued During the Six Months Ended September 30, 2014:

At September 30, 2014, we had issued and outstanding 690,277,229 shares of common stock of which 30,570 shares are owned by our officers and independent board directors. Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the shareholders. Holders of common stock have no cumulative voting rights. In the event of liquidation, dissolution or winding down of the Company, the holders of shares of common stock are entitled to share, pro rata, all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive rights to purchase our common stock. There are no conversion rights or redemption or sinking fund provisions with respect to the common stock. All of the outstanding shares of common stock are validly issued, fully paid and non-assessable.

COMMON STOCK ISSUED FROM APRIL 1, 2014 THROUGH SEPTEMBER 30, 2014

	# OF		$ DEBT		$ INTEREST		$
DATE OF	SHARES		AMOUNT		AMOUNT		CONVERSION
CONVERSION	ISSUED		CONVERTED		CONVERTED		PRICE

4/9/2014		15,912,500	$	6,365	$	-	$	0.0004
4/9/2014		8,000,000		3,200		-		0.0004
4/9/2014		12,000,000		4,800		-		0.0004
4/9/2014		9,067,500		-		3,627		0.0004
5/5/2014		10,000,000		5,000		-		0.0005
5/5/2014		10,000,000		5,000		-		0.0005
5/6/2014		22,441,780		6,925		4,296		0.0005
5/12/2014		11,312,000		-		5,656		0.0005
5/15/2014		9,600,000		4,800		-		0.0005
5/16/2014		26,628,740		13,250		64		0.0005
5/20/2014		12,000,000		6,000		-		0.0005
5/20/2014		12,000,000		6,000		-		0.0005
5/22/2014		12,000,000		-		4,800		0.0004
5/29/2014		14,000,000		5,600		-		0.0004
5/29/2014		14,000,000		5,600		-		0.0004
5/29/2014		14,000,000		5,600		-		0.0004
5/29/2014		14,000,000		5,600		-		0.0004
5/30/2014		26,644,475		11,200		70		0.0004
6/3/2014		14,000,000		5,600		-		0.0004
6/3/2014		15,000,000		6,000		-		0.0004
6/4/2014		15,800,000		-		6,320		0.0004
6/23/2014		18,136,000		-		9,068		0.0005
6/24/2014		20,000,000		10,000		-		0.0005
6/24/2014		26,642,000		13,300		-		0.0005
8/6/2014		26,655,000		5,310		21		0.0002
8/26/2014		56,546,850		11,275		341		0.0002
9/10/2014		22,061,200		4,405		7		0.0002
9/10/2014		40,115,050		2,960		5,063		0.0002

(d) Warrants Issued During the Six Months Ended September 30, 2014:

None

(e) Options Issued During the Six Months Ended September 30, 2014:

None

Note 9.

Commitments and Contingencies:

Lease of office

We entered into a new office lease for 3,333 square feet at our new office in North Palm Beach, Florida on January 3, 2013 with a lease term of three years with two years as renewable terms. Starting February 1, 2013, the minimum starting monthly base rent without sales tax was $1,602 plus monthly operating expense for $2,670 for a monthly total of $4,272. The lease provides for annual 3% increases throughout its term.

Future minimum rental payments for the new office lease, based on the current adjusted minimum monthly amount of $4,320 and excluding variable common area maintenance charges, as of September 30, 2014, are as follows:

Years ending March 31,	Amount

2015	$	26,020
2016		52,540
2017		53,146
2018		44,730

	$	176,436

Rental expense, which also includes maintenance and parking fees, for the six months period ended September 30, 2014 was $27,475.

Production and Supply Agreements

On December 16, 2008, we signed a manufacturing agreement with O-AT-KA Milk Products Cooperative, Inc. for the production of our current products. The manufacturer will manufacture, package and ship such products. All products will be purchased freight on board (F.O.B) with the Company paying for the shipping costs.

Note 10. Subsequent Events:

On October 1, 2014, we issued a convertible note to Southridge Partners II LP for $25,000 for their October, 2014 consulting services.

On November 1, 2014, we issued a convertible note to Southridge Partners II LP for $25,000 for their November, 2014 consulting services.

On November 19, 2014, we issued a promissory note payable to an accredited investor in the amount of $25,000 with no interest rate.

On December 1, 2014, we issued a convertible note to Southridge Partners II LP for $25,000 for their December, 2014 consulting services.

On December 19, 2014, we issued a convertible note to one of our debt holders for $20,000 with a 10% interest rate and maturity date of December 22,2015 for past due services.

Note 10. Subsequent Events (continued):

On December 19, 2014, we issued a promissory note to one of our debt holders for $31,500 with no interest rate and a maturity date of December 19, 2015.

On December 24, 2014, we formed a new subsidiary, ABH. On the same date, ABH and we entered into a joint venture with New England WOB, LLC to develop franchises for World of Beer Franchising in all of Connecticut and the greater Boston area. ABH paid $300,000 as part of the total $1,200,000 for a new franchise in West Hartford, Connecticut with $300,000 to be paid each month starting in January, 2015 until the remaining $900,000 amount is paid. ABH paid the first $300,000 through newly issued convertible notes to our key accredited investors under Attitude Beer Holding Co. ABH also has an option for two years to obtain 51% interest in the Stamford, Connecticut World of Beer franchise location for a total of $2,000,000. As part of the above $300,000 payment, Attitude Beer Holding Co. issued two convertible notes to two current accredited investors for a total of $337,250 to cover all costs associated with this joint venture and the first installment payment. In addition, ABH issued to these two accredited investors Class A Common Stock Purchase Warrants with an expiration date of December 4, 2021with the exercise price to be equal to the conversion price of the notes. The number of warrants will be equal to the number of shares the debt holder could acquire upon the complete conversion of the issued note from ABH. In addition, we issued 4,545,000 Class A Common Stock Purchase Warrants on December 24, 2014 to New England World of Beer LLC with an expiration date of December 24, 2019. The exercise price is $0.0005.

On January 1, 2015, we issued a convertible note to Southridge Partners II LP for $25,000 for their January, 2015 consulting services.

On January 2, 2015, we issued 62,500,000 shares of common stock pursuant to a conversion of the December 1, 2012 convertible note payable for $25,000 at a conversion price of $.0004.

On January 14 2015, we issued three convertible notes for a total of $58,500 to 3 accredited debt holders with an interest rate of 10% and a maturity date of January 15, 2017.

On January 22, 2015, ABH issued two convertible notes to two accredited investors for a total of $300,000 which the received funds were used to pay the second installment payments for the investment in the World of Beer franchise in West Hartford, Connecticut. In addition, these two accredited investors received Class A Common Stock Purchase Warrants of ABH with an expiration date of seven years for a number of shares equal to the number of shares the debt holder could acquire upon the complete conversion of the Notes issued to them. The purchase price shall be equal to the conversion price of the convertible note.

On January 23, 2015, we issued 58,680,556 shares of common stock pursuant to a conversion of the January 1, 2013 convertible note payable for $16,900 at a conversion price of $.000288.

On February 1, 2015, we issued a convertible note to Southridge Partners II LP for $25,000 for their February, 2015 consulting services.

On February 10, 2015, we issued 50,625,000 shares of common stock pursuant to a conversion of the January 1, 2013 convertible note payable for $8,100 at a conversion price of $.00016.

On February 10, 2015, we issued 19,687,500 shares of common stock pursuant to a conversion of the February 1, 2013 convertible note payable for $3,150 at a conversion price of $.00016.

On February 24, 2015, we issued 70,673,077 shares of common stock pursuant to a conversion of the February 1, 2013 convertible note payable for $14,700 at a conversion price of $.000208.

Note 10. Subsequent Events (continued):

On February 24, 2015, our subsidiary, ABH issued two convertible notes to two accredited investors for a total of $300,000 which the received funds were used to pay the third installment payments for the investment in the World of Beer franchise in West Hartford, Connecticut. In addition, these two accredited investors received Class A Common Stock Purchase Warrants of ABH with an expiration date of seven years for a number of shares equal to the number of shares the debt holder could acquire upon the complete conversion of the Notes issued to them. The purchase price shall be equal to the conversion price of the convertible note.

On March 1, 2015, we issued a convertible note to Southridge Partners II LP for $25,000 for their March, 2015 consulting services.

On March 3, 2015, we issued 44,687,500 shares of common stock pursuant to a conversion of the February 1, 2013 convertible note payable for $7,150 at a conversion price of $.00016.

On March 3, 2015, we issued 39,062,500 shares of common stock pursuant to a conversion of the March 1, 2013 convertible note payable for $6,250 at a conversion price of $.00016.

On March 5, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of March 5, 2016. The note bears no interest.

On March 13, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of March 13, 2016. The note bears no interest.

On March 19, 2015, we issued 43,750,000 shares of common stock pursuant to a conversion of the March 1, 2013 convertible note payable for $,000 at a conversion price of $.00016.

On March 19, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of March 19, 2016. The note bears no interest.

On March 24, 2015, ABH issued two convertible notes to two accredited investors for a total of $267,250 which the received funds were used to pay the fourth and final installment payments for the investment in the World of Beer franchise in West Hartford, Connecticut. In addition, these two accredited investors received Class A Common Stock Purchase Warrants with an expiration date of seven years for a number of shares equal to the number of shares the debt holder could acquire upon the complete conversion of the Notes issued to them. The purchase price shall be equal to the conversion price of the convertible note.

The remaining amount of $32,750 was paid to complete the full purchase of the West Hartford World of Beer from funds from Attitude Beer Holding Co.

On March 27, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of March 26, 2016. The note bears no interest.

On March 30, 2015, we issued 81,250,000 shares of common stock pursuant to a conversion of the March 1, 2013 convertible note payable for $6,500 at a conversion price of $.00008.

On April 1, 2015, we issued a convertible note to Southridge Partners II LP for $25,000 for their April, 2015 consulting services.

On April 3, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of April 3, 2016. The note bears no interest.

On April 9, 2015, we issued 65,625,000 shares of common stock pursuant to a conversion of the March 1, 2013 convertible note payable for $5,250 at a conversion price of $.00008.

Note 10. Subsequent Events (continued):

From April 16, 2015 through April 20, 2015, we issued 688,552,180 restricted shares of common stock as payments to previous employees and certain vendors for past due services.

On April 17, 2015, we issued 121,562,500 shares of common stock pursuant to a conversion of the April 1, 2013 convertible note payable for $9,725 at a

conversion price of $.00008.

On April 17, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of April 17, 2016. The note bears

no interest.

On April 21, 2015, Alpha Capital Anstalt , Tarpon Bay Partners LLC and we (all “shareholders” of ABH) entered into the Purchase Agreement with Harrison, Vickers and Waterman. Inc. (HVCW) pursuant to which the shareholders sold to HVCW all of the outstanding shares of stock of ABH, and ABH thereupon became a wholly owned subsidiary of HVCW. In consideration for the purchase of the shares of common stock of ABH, HVCW issued: (i) to us 51 shares of Series B Preferred Stock and the B Warrant to purchase 5,000,000 Common Stock, at an exercise price of $0.075 per share (subject to customary anti-dilution adjustments); (ii) to Alpha, the Secured Convertible Note in the principal amount of $1,619,375, the Alpha Warrant to purchase 1,295,500,000 shares of HVCW’s Common Stock at an exercise price of $0.0025 per share (subject to customary anti-dilution adjustments), and an AIR to purchase up to $3,750,000 in the AIR Note and the AIR Warrant; and (iii) to Tarpon, a Secured Convertible Note in the principal amount of $554,791.67, the Tarpon Warrant to purchase 443,833,333 shares of HVCW’s Common Stock at an exercise price of $0.0025 per share (subject to customary anti-dilution adjustments), and an AIR to purchase up to $1,250,000 in additional notes and corresponding AIR Warrants. In addition, Alpha acquired 32,300 shares of the HVCW’s Series A Preferred Stock (convertible into 32,300,000 shares of the HVCW’s Common Stock) from HVW Holdings LLC (an entity of which Mr. James Giordano, the Company’s prior Chief Executive Officer and Chairman of the Board, is the managing member), subject to the terms of a Purchase Agreement (the “Series A Purchase Agreement”). We purchased 87,990,000 shares of Common Stock from HVW Holdings LLC at a price of $65,000, subject to the terms of a Purchase Agreement (the “Common Stock Purchase Agreement”). We are now the majority owner of HVCW.

On April 24, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of April 24, 2016. The note bears no interest.

On April 30, 2015, we issued 121,250,000 shares of common stock pursuant to a conversion of the April 1, 2013 convertible note payable for $9,700 at a conversion price of $.00008.

On May 1, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of May 1, 2016. The note bears no interest.

On May 1, 2015, we issued a convertible note to Southridge Partners II LP for $25,000 for their May, 2015 consulting services.

On May 8, 2015, we issued a promissory note to a current accredited investor for $16,500 which has a maturity date of May 8, 2016. The note bears no interest.

On May 15, 2015, we issued a promissory note to a current accredited investor for $7,500 which has a maturity date of May 15, 2016. The note bears no interest.

On May 20, 2015, we issued 106,818,400 shares of common stock pursuant to a conversion of the April, 2014 note for $7,700 and accrued interest of $311 at a conversion price of $.000075.

On May 22, 2015, we received from a current accredited investor $7,500 as all parties are working to determine whether to treat this financing either as convertible debt or equity financing.

Note 10. Subsequent Events (continued):

On May 29, 2015, we received from a current accredited investor $7,500 as all parties are working to determine whether to treat this financing either as convertible debt or equity financing.

On June 1, 2015, we issued a convertible note to Southridge Partners II LP for $25,000 for their June, 2015 consulting services.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with our financial statements and the notes thereto which appear elsewhere in this report. The results shown herein are not necessarily indicative of the results to be expected for any future periods.

This discussion contains forward-looking statements, based on current expectations. All statements regarding future events, our future financial performance and operating results, our business strategy and our financing plans are forward-looking statements and involve risks and uncertainties. In many cases, you can identify forward-looking statements by terminology, such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. These statements are only predictions. Known and unknown risks, uncertainties and other factors could cause our actual results and the timing of events to differ materially from those projected in any forward-looking statements. In evaluating these statements, you should specifically consider various factors, including, but not limited to, those set forth in our Annual Report on Form 10-K for the year ended March 31, 2014 and in this report.

Recent Developments

On April 21, 2015, Attitude Beer Holding Co., a Delaware corporation (“ABH”), which we had the majority ownership and the other shareholders, Alpha Capital Anstalt, a company organized under the laws of Liechtenstein (“Alpha”) and Tarpon Bay Partners LLC, a Florida limited liability company (“Tarpon Bay”), collectively all three companies as shareholders of ABH, entered into a Purchase Agreement with Harrison, Vickers and Waterman Inc. (HVCW) pursuant to which the shareholders sold to HVCW all of the outstanding shares of stock of ABH, and ABH thereupon became a wholly owned subsidiary of HVCW. In consideration for the purchase of the shares of common stock of ABH, HVCW issued: (i) to us 51 shares of a newly created Series B Preferred Stock of HVCW (the “Series B Preferred Stock”) and a seven year warrant (the “B Warrant”) to purchase 5,000,000 shares of HVCW’s common stock, par value $.0001 per share (the “HVCW Common Stock”), at an exercise price of $0.075 per share (subject to customary anti-dilution adjustments); (ii) to Alpha, a secured convertible note due April 20, 2017 (the “Secured Convertible Note”) in the principal amount of $1,619,375, a seven year warrant (the “Alpha Warrant”), to purchase 1,295,500,000, shares of Common Stock at an exercise price of $0.0025 per share (subject to customary anti-dilution adjustments), and an additional investment right (“AIR”) to purchase up to $3,750,000 in additional notes (the “AIR Note”) and corresponding warrants (“the “AIR Warrant”); and (iii) to Tarpon, a Secured Convertible Note in the principal amount of $554,791.67, a seven year warrant (the “Tarpon Warrant”) to purchase 443,833,333 shares of HVCW’s Common Stock at an exercise price of $0.0025 per share (subject to customary anti-dilution adjustments), and an AIR to purchase up to $1,250,000 in additional notes and corresponding AIR Warrants. In addition, Alpha acquired 32,300 shares of the HVCW’s Series A Preferred Stock (convertible into 32,300,000 shares of HVCW’s Common Stock) from HVW Holdings LLC (an entity of which Mr. James Giordano, HVCW’s prior Chief Executive Officer and Chairman of the Board, is the managing member), subject to the terms of a Purchase Agreement (the “Series A Purchase Agreement”). We purchased 87,990,000 shares of Common Stock from HVW Holdings LLC at a price of $65,000, subject to the terms of a Purchase Agreement (the “Common Stock Purchase Agreement”) thereby making us the majority owner of HVCW.

In December 2014, ABH entered into a joint venture with New England World of Beer and together we opened a 4,000 sq. foot tavern in West Hartford, Connecticut that sells a selection of over 500 craft and imported beers along with tavern food and other spirits and cocktails. New England World of Beer holds franchise rights for all of Connecticut and Massachusetts. Similar taverns are currently open in 20 states, namely AL, AZ, CO, CT, FL, GA, IL, LA, MD, MI, NC, NJ, NY, OH, SC, TN, TX, VA, WA and WI.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Recent Developments (continued)

OVERVIEW

Our plan of operation during the next 12 months is to focus on the non-alcoholic single serving beverage business developing and marketing of milk based products in two fast growing segments; sports recovery and functional dairy. We do not directly manufacture our products but instead outsource the manufacturing process to third party bottlers and contract packers.

We have no assurance that we will be able to obtain additional funding to sustain our limited operations beyond twelve months based on available cash. If we do not obtain additional funding, we may need to cease operations until we do so and, in that event, may consider a sale of the rights to our product line(s) and intangible assets such as our trademarks or a joint venture partner that will provide funding to the enterprise, if at all possible. Our future operations are totally dependent upon obtaining additional funding. Past fundings have been subject to defaults by our inability to meet due dates for certain notes payable, thereby triggering anti-dilution rights which created the need to issue additional shares of common stock and/or additional warrants to purchase additional shares of common stock in order to extend the applicable due dates for certain notes payable. There can be no assurance that these defaults will not happen again in the future, thereby creating the potential need for additional issuances of shares of common stock and/or warrants assuming that the note holders agree to such extensions.

The Product

Milk, while the second highest beverage consumed in America in terms of overall volume, is still under-represented in the American single serve ready-to-drink beverage industry. While known for generations by nutritionists and more recently identified by sports, hydration, metabolism and protein professionals and scientists as “mother nature’s most perfect food,” we believe milk has yet to be successfully branded and commercialized.

Our current product is a dairy based product which is called “Phase III® Recovery” and is designed for the third phase of exercise, the “after phase” of before, during and after. This product is the first milk based protein drink ever to be produced in America and is shelf-stable with a twelve (12) month long shelf life. We started to sell this new product in February 2010. Our co-pack partner, O-AT-KA Milk Products, is the largest retort milk processor in America, located in Batavia, New York and has the most advanced retort processor and know-how to produce this product with state-of-the-art milk filtration systems as well as the packaging of this product in new Ball Container aluminum eco-friendly re-sealable bottles. The primary target for Phase III Recovery ® is active sports minded males and females from ages 15 to 35, but we will target active sports and exercise consumers at all levels. Gyms, sports teams, body builders and even high-endurance athletes are all beginning to focus on sports recovery drinks which we consider the “next generation” sports drink. Depending on available capital, we anticipate the development of other dairy based drink products in late 2015.

We organized a Scientific Advisory Board of three well known experts that have extensive experience in sports nutrition. We expect that this board will be helpful in communicating the scientific benefits of our sports recovery drink as well as new functional milk drinks. Their contacts in the world of sports are anticipated to be very important in our sales efforts, especially in the early days.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

The Product (continued)

We intend to focus on the largest markets in the eastern United States with further expansion in the fifteen largest markets of the country. We intend to pre-sell in four sales channels: grocery, convenience, drug and sports and gym specialty. We intend to develop key working partnerships with regional direct store delivery (DSD) beverage distributors in these markets.

Regional distributors have lost four major beverage lines in the last few years including Monster Energy (moved to Anheuser Busch), Fuze (purchased by Coca-Cola), Vitamin Water (purchased by Coca-Cola), and the V-8 brands (now distributed by Coca-Cola). We expect to develop regionally exclusive DSD agreements that are desperately needed by the distributors to replace these losses as well as shipping direct to our customers via our own warehouse system.

Certain accounts like chained convenience stores, grocery and drug stores will require warehouse distribution. The shelf-stable and long shelf life attributes of our products will accommodate any and all distribution and warehouse systems. To accommodate this business, we will employ beverage brokers and work with the “tobacco & candy” and food service warehouse distributors like McLane Company and Sysco Foods for this business.

The pricing and gross profit margin for the products will vary. Each product delivers different functionality and utilizes different types of packaging and package sizes. We believe these products will command premium pricing due to the functionality and value-added formulation and will therefore be priced according to the nearest competitive brands in their respective spaces. The functional milk drinks are also expected to command approximately the same percentage margin due to the premium pricing commanded by the experiential functionality. Clearly singles will command higher margin than multi-packs. We expect that the average gross margin for our products will be 55%-60% depending upon the consumer response and sales channel mix.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical estimates included in our financial statements are the following:

Financial Instrument Valuation

In estimating the fair value of our derivative financial instruments that are required to be carried as liabilities at fair value pursuant to the FASB Accounting Standards Codification for the six months period ended September 30, 2014, we use all available information and appropriate techniques including outside consultants to develop our estimates. However, actual results could differ from our estimates.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CRITICAL ACCOUNTING POLICIES (continued)

Derivative Financial Instruments

We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we have and will frequently enter into certain other financial instruments and contracts, such as debt financing arrangements and freestanding warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts or (iii) may be net-cash settled by the counterparty to a financing transaction. As required by the FASB Accounting Standards Codification, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements. However, in the past, we were allowed to elect fair value measurement of the hybrid financial instruments, on a case-by-case basis, rather than bifurcate the derivative for all of our previous convertible notes up to February 21, 2013 when we issued new consolidated exchange convertible notes under different terms and language. We believed that fair value measurement of the hybrid convertible promissory notes arising from our various financing arrangements provided a more meaningful presentation of that financial instrument; however, as just previously mentioned on February 21 2013, we consolidated all the past outstanding convertible notes into new consolidated exchange notes that contained different language and eliminated many of the toxic elements listed in the old convertible notes.

We estimate fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective measuring of fair values. In selecting the appropriate technique(s), we consider, among other factors, the nature of the instrument, the market risks that such instruments embody and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, we generally use the Black-Scholes-Merton option valuation technique, since it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to fair value these instruments. For complex hybrid instruments, such as convertible promissory notes that include embedded conversion options, puts and redemption features embedded in them, we generally use techniques that embody all of the requisite assumptions (including credit risk, interest-rate risk, dilution and exercise/conversion behaviors) that are necessary to fair value these more complex instruments. For forward contracts that contingently require net-cash settlement as the principal means of settlement, we project and discount future cash flows applying probability-weightage to multiple possible outcomes. After consulting with a new outside valuation firm, we found that many companies are using other valuation models, primarily the lattice model to bifurcate the derivative and record the derivatives at fair value. We elected to use this new valuation model for the new consolidated notes because that model would value all convertible notes based on a probability weighted scenario model and future projections of the various potential outcomes on all assumptions, observable inputs and inherent valuation of risk, The embedded derivatives that were analyzed and incorporated into our model included the conversion feature with the variable market based conversion and the default provisions. This lattice model analyzed the underlying economic factors that influenced which of these events would occur, when they were likely to occur and the specific terms that would be in effect at the time (i.e. interest rates, stock price, conversion price, etc.). Projections were then made on these underlying factors which led to a set of potential scenarios. Probabilities were assigned to each of these scenarios based on management projections. This led to a cash flow projection and a probability associated with that cash flow. A discounted weighted average cash flow over the various scenarios was completed, and it was compared to the discounted cash flow of the 2 year 4% instrument without the embedded derivatives, thus determining a value for the compound embedded derivatives at the point of issue. These derivative liabilities need to be marked-to-market each reporting period with the change in fair value to be recorded in the profit/loss statement. Fair value is defined as the amount for which an asset (or liability) could be exchanged in a current transaction between knowledgeable, unrelated willing parties when neither party is acting under compulsion.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Derivative Financial Instruments (continued)

Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility.

GOING CONCERN

Our operating losses since inception and negative working capital raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts or classification of liabilities that might be necessary should we be unable to continue as a going concern. For the foreseeable future, we will have to fund all our operations and capital expenditures from the net proceeds of equity or debt offerings. Although we plan to pursue additional financing, there can be no assurance that we will be able to secure financing when needed or to obtain such financing on terms satisfactory to us, if at all. If we are unable to secure additional financing in the future on acceptable terms, or at all, we may be unable to complete the development of our new products. In addition, we could be forced to reduce or discontinue product development, reduce or forego sales and marketing efforts and forego attractive business opportunities in order to improve our liquidity to enable us to continue operations.

RESULTS OF OPERATIONS

Our plan during the next few months is to continue the implementation of market and sales promotion programs to gain awareness of our “Phase III® Recovery” drink in new markets and to increase customers as this is our only revenue producing product at this time.

For the six months ended September 30, 2014 Compared to the six Months Ended September 30, 2013:

For the six months ended September 30, 2014, our primary expenses related to salaries and consulting fees. Total operating expenses for the six months ended September 30, 2014 were $656,765 which were $308,642 less than last year’s similar expenses for $965,407. This decrease was caused by fewer employees and consultants and related reduction of expenses due to decreased revenues.

Interest expense was $1,218,139 which was mainly caused by the recording of the changes in the fair value measurements of our convertible notes payable. These figures are different with the results for last year’s year-to-date results due to the changes and volatility in the price of the Company’s stock price. As a result, we reported a net loss for the six months ended September 30, 2014 of $1,884,944 leading to a basic and diluted loss per share of $.00 as compared to a net income for the six months ended September 30, 2013 of $1,920,991 which includes the recognition of $2,860,011 net interest income. The weighted average number of common shares outstanding for the basic and diluted loss per share calculation for the six months ended September 30, 2014 was 468,696,070. The basic income per share was $.05 and the diluted income per share was $.00 for the six months ended September 30, 2013 based on a weighted average number of common shares outstanding of 35,491,621 for the basic income per share and 3,214,766,343 for the diluted income per share.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

RESULTS OF OPERATIONS (continued)

Three Months Ended September, 30, 2014 Compared to Three Months Ended September 30, 2013:

For the three months ended September 30, 2014, our primary expenses related to salaries and consulting fees. Total operating expenses for the three months ended September 30, 2014 were $322,592 which were $196,834 less than last year’s similar expenses for $519,426. This decrease was caused by fewer employees and consultants and related reduction of expenses due to decreased revenues.

Interest expense was $1,023,261 which was mainly caused by the recording of the changes in the fair value measurements of our convertible notes payable. These figures are different with the results for last year’s quarterly results due to the changes and volatility in the price of the Company’s stock price. As a result, we reported a net loss for the three months ended September 30, 2014 of $1,356,951 leading to a basic and diluted loss per share of $.00 as compared to a net income for the three months ended September 30, 2013 of $2,226,087 which includes the recognition of $2,730,895 net interest income. The weighted average number of common shares outstanding for the basic and diluted loss per share calculation for the three months ended September 30, 2014 was 597,443,345. The basic and diluted income per share was $.05 and $.00, respectively, for the three months ended September 30, 2013 based on a weighted average number of common shares outstanding of 47,018,140 for the basic income per share and 3,226,292,862 for the diluted income per share.

LIQUIDITY AND CAPITAL RESOURCES

We have not yet begun to generate significant revenues, and our ability to continue as a going concern will be dependent upon receiving additional third party financings to fund our business for at least the next twelve months. We do not have any meaningful comparable financial information with prior periods. We anticipate that, depending on market conditions and our plan of operations, we may incur operating losses in the future based mainly on the fact that we may not be able to generate enough gross profits from our sales to cover our operating expenses and to increase our sales and marketing efforts. There is no assurance that further funding will be available at acceptable terms, if at all, or that we will be able to achieve profitability or receive adequate funding for new product research and development activities.

For the six months ended September 30, 2014 compared to six months ended September 30, 2013:

Net cash used in operating activities for the six months ended September 30, 2014 was $207,134 which was mainly the effect of changes in our operating assets. Our loss of $1,884,944 is offset by non-cash items of $(540,141) for the changes in the fair values of our convertible notes payable and $1,546,601 for the amortization (accretion) of the debt discount and $631,872 for changes in accounts payable and accrued expenses. Net cash used in operating activities for the six months ended September 30, 2013 was $498,153 which was mainly the effect of changes in our operating assets. Our profit of $1,920,991was offset by non-cash items of $(3,674,948) for the changes in the fair values of our convertible notes payable, $637,967 for the amortization (accretion) of the debt discount and $412,760 for changes in accounts payable and accrued expenses.

Net cash flows generated by operating activities for the six months ended September 30, 2014 as well as for the six months ended September 30, 2013 were inadequate to cover our working capital needs. We had to rely on a new convertible debt financing as well as a short term promissory notes to cover operating expenses.

Net cash used in investing activities for the six months ended September 30, 2013 was $3,910 which were used to purchase vending machines as there were no similar expenditures for the three months ended September 30, 2014.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

LIQUIDITY AND CAPITAL RESOURCES (continued)

Net cash provided by our financing activities was $212,200 for the six months ended September 30, 2014 as compared to $500,000 for the six months ended September 30, 2013. The decrease of $287,800 was attributed to fewer financings in 2014.

Comparison of the six months ended September 30, 2014 to the six months ended September 30, 2013:

The major variances in the Condensed Consolidated Statements of Cash Flows for the six months of September 30, 2014 as compared to the six months of September 30, 2013 related to items that are affected by the changes in the prices of the Company’s common stock such as changes in fair value of our convertible notes payable which impact the following line items: “net income (loss), derivative expense (income) and fair value adjustment of convertible notes”. Changes in our accounts payable and accrued liabilities in the Cash Flows from Operating Activities for the six months ended September 30, 2014 for $631,872 as compared to the six months ended September 30, 2013 for $412,760 were the result of paying more accounts payable related items in 2013. Proceeds from convertible notes payable and short-term bridge loans as shown in the Cash Flows From Financing Activities section for the six months ended September 30, 2014 were the result of two allonge convertible note financings for $52,500, one new convertible note financing for $35,200 and several promissory notes for $127,000 in 2014 for a total of $214,700 compared to higher new financings of $550,000 for the six months ended September 30, 2013.

External Sources of Liquidity:

For the six months ended September 30, 2014:

On April 30, 2014, we issued a promissory note with no interest to Southridge Partners II LP in which we received $12,000.

On May 2, 2014, we executed a $27,500 allonge #17 with Alpha Capital Anstalt to an original secured convertible note for $175,000 dated February 22, 2012 in which we received $25,000 as $2,500 was paid as a finder’s fee.

On May 13, 2014, we issued a convertible promissory note with an interest rate of 4% to LG Capital Funding, LLC in we received $35,200.

On June 11, 2014, we issued four promissory notes ($10,000 for each note) with no interest for a total receipt of $40,000 to Southridge Partners II LP, Alpha Capital Anstalt, Centaurian Fund LP and Whalehaven Capital Fund Ltd.

On July 11, 2014, we executed a $25,000 allonge #18 with Alpha Capital Anstalt to an original secured convertible note for $175,000 dated February 22, 2012 in which we received $25,000.

On July 31, 2014, we issued a promissory note with no interest to Southridge Partners II LP in which we received $15,000.

On August 21, 2014, we issued a promissory note with no interest to Alpha Capital Anstalt in which we received $10,000.

On August 29, 2014, we issued a promissory note with no interest to Tarpon Bay Partners LLC in which we received $10,000.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

LIQUIDITY AND CAPITAL RESOURCES (continued)

On September 17, 2014, we issued a promissory note with no interest to Alpha Capital Anstalt in which we received $10,000.

On September 30, 2014, we issued a promissory note with no interest to Southridge Partners II LP in which we received $15,000.

On September 30, 2014, we issued a promissory note with no interest to Alpha Capital Anstalt in which we received $15,000.

All of the net proceeds from the above financings were used for operations and working capital purposes.

The foregoing securities were issued in reliance upon an exemption from registration under Section 4(a)(2) and/or Regulation D of the Securities Act of 1933, as amended. All of the investors were accredited investors and/or had preexisting relationships with the Company, there was no general solicitation or advertising in connection with the offer or sale of securities and the securities were issued with a restrictive legend.

RECENT ACCOUNTING PRONOUNCEMENTS:

CURRENT AND FUTURE FINANCING NEEDS

We will require additional capital to finance our future operations. We can provide no assurance that we will obtain additional financing sufficient to meet our future needs on commercially reasonable terms or otherwise. Currently we are in default in paying certain short-term bridge loans in the amount of $115,000 although we are working on extending the due dates. Please see a summary of all convertible notes and short-term bridge loans in the table below. We have convertible notes in the principal face amount of $6,075,092 outstanding at September 30, 2014. There is no guarantee that we will be able to pay these notes when due or secure further extensions. We are recording interest expense at the default interest rate of 15% for the short-term bridge loans. If we are unable to obtain the necessary financing, our business, operating results and financial condition will be materially and adversely affected. We anticipate a need of funding in the range of $1,500,000 to $1,750,000 for the next twelve months to meet our business plan and operating needs only. This figure does not include any new product research and development activities. There is no guarantee that we will be able to obtain these funds and continue operations.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CURRENT AND FUTURE FINANCING NEEDS (continued)

The following table sets forth various details of all convertible notes and short-term bridge loans including applicable interest and default rates at September 30, 2014:

RECAP ANALYSIS OF ALL CONVERTIBLE NOTES PAYABLE

AND SHORT-TERM BRIDGE NON-CONVERTIBLE LOANS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2014

Original											Default			Accrued
New Note			Issue		Default	$ Amount		Interest			Interest			Default
Amounts			Date	Due Date	Yes/No	Past Due		Rate			Rate			Interest

$	25,000		December, 2012	12/31/2014	No		-		None			None			-
$	25,000		January, 2013	12/31/2014	No		-		None			None			-
$	6,259,771	(a)	February, 2013	2/21/2015	No		-		4	%		20	%		-
$	25,000		February, 2013	12/31/2014	No		-		None			None			-
$	25,000		March, 2013	12/31/2014	No		-		None			None			-
$	25,000		April, 2013	12/31/2014	No		-		None			None			-
$	25,000		May, 2013	12/31/2014	No		-		None			None			-
$	25,000		June, 2013	12/31/2014	No		-		None			None			-
$	37,000		June, 2013	6/7/2014	Yes (b)		37,000		None			None			-
$	25,000		July, 2013	12/31/2014	No		-		None			None			-
$	25,000		August, 2013	12/31/2014	No		-		None			None			-
$	25,000		September, 2013	1/31/2015	No		-		None			None			-
$	25,000		October, 2013	2/28/2015	No		-		None			None			-
$	25,000		November, 2013	3/31/2015	No		-		None			None			-
$	25,000		December, 2013	4/30/2015	No		-		None			None			-
$	25,000		January, 2014	5/31/2015	No		-		None			None			-
$	25,000		February, 2014	6/30/2015	No		-		None			None			-
$	25,000		March, 2014	7/31/2015	No		-		None			None			-
$	25,000		April, 2014	8/31/2015	No		-		None			None			-
$	25,000		May, 2014	9/30/2015	No		-		None			None			-
$	35,200		May, 2014	5/13/2015	No		-		4	%		20	%		-
$	25,000		June, 2014	10/31/2015	No		-		None			None			-
$	25,000		July, 2014	11/30/2015	No		-		None			None			-
$	25,000		August, 2014	12/31/2015	No		-		None			None			-
$	25,000		September, 2014	1/31/2016	No		-		None			None			-

$	6,881,971

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CURRENT AND FUTURE FINANCING NEEDS (continued)

(a) Total amount includes total consolidated notes for $5,492,271 plus additional issued allonges.

(b) The Company is working with the debt holder to extend the maturity date.

SHORT-TERM BRIDGE LOANS (c)

$	60,000	April 14, 2008	Past due	Yes	$	60,000	15	%	$	48,369
$	55,000	August 5, 2008	Past due	Yes		55,000	15	%		60,984
$	115,000	Total amount past due			$	115,000			$	109,353

(c)

Notes indicated in default are in default because they are past due. One of the debt holders is a Board Director and will extend the maturity date as soon as we can locate the other debt holder.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.

CERTAIN BUSINESS RISKS:

Investing in our securities involves a high degree of risk. You should carefully consider the risk factors discussed below, together with all the other information contained or incorporated by reference in this report and in our filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act, before deciding whether to purchase any of our securities. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities, and the occurrence of any of these risks might cause you to lose all or part of your investment.

Risks Relating to Our Business

We have a limited history of operating losses. If we continue to incur operating losses, we eventually may have insufficient working capital to maintain or expand operations according to our business plan.

As of September 30, 2014, we had total shareholders’ deficit of ($13,924,343) and a working capital deficit of ($13,851,917) compared to a total shareholders’ deficit of ($12,335,519) and a working capital deficit of ($12,266,740) at March 31, 2014. Cash and cash equivalents were $25,681 as of September 30, 2014 as compared to $20,615 at March 31, 2014. The main contributing factor to the working capital deficit was primarily attributable to the changes in the fair value calculations for the valuation of our convertible notes payable as well as changes in the derivative liabilities.

Ability to continue as a going concern.

Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

For the foreseeable future, we will have to fund all of our operations and capital expenditures from the net proceeds of equity or debt offerings we may have and cash on hand. Although we plan to pursue additional financing, there can be no assurance that we will be able to secure financing when needed or obtain such financing on terms satisfactory to us, if at all, or that any additional funding we do obtain will be sufficient to meet our needs in the long term. Obtaining additional financing may be more difficult because of the uncertainty regarding our ability to continue as a going concern. If we are unable to secure additional financing in the future on acceptable terms, or at all, we may be unable to complete planned development of certain products.

To date, we have generated no material product revenues. Our operating losses have negatively impacted our liquidity, and we are continuing our efforts to develop new products, while focusing on increasing net sales. However, changes may occur that would consume our existing capital at a faster rate than projected, including, among others, the progress of our research and development efforts and hiring of additional key employees. If we continue to suffer losses from operations, our working capital may be insufficient to support our ability to expand our business operations as rapidly as we would deem necessary at any time, unless we are able to obtain additional financing. There can be no assurance that we will be able to obtain such financing on acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to pursue our business objectives and would be required to reduce our level of operations, including reducing infrastructure, promotions, personnel and other operating expenses. These events could adversely affect our business, results of operations and financial condition. If adequate funds are not available or if they are not available on acceptable terms, our ability to fund the growth of our operations, take advantage of opportunities, develop products or services or otherwise respond to competitive pressures, could be curtailed or significantly limited. Any additional sources of financing will likely involve the sale of our equity securities, which will have a dilutive effect on our stockholders. If we are unable to achieve profitability, the market value of our common stock will decline, and there would be a material adverse effect on our financial condition.

At September 30, 2014, we were in default on certain of our short-term bridge notes and have other substantial outstanding debt obligations.

At September 30, 2014, we were in default on short term bridge notes totaling $115,000 in principal. One of the two short term note holders is on our Board of Directors and will extend the due date once we locate the other note holder as we have been looking for quite some time. The remedy for default under the notes is acceleration of principal and interest due thereunder. Further, we have secured convertible notes outstanding totaling $6,075,092 in principal face value at September 30, 2014. Although we have been able to extend the maturity dates of most of these convertible notes to February 21, 2015, there is no assurance that we will be able to continue to extend these obligations. Penalties for default under our convertible notes include but are not limited to acceleration of principal and interest and default interest rates up to 20%. As of September 30, 2014, we are were in default for one convertible notes payable for $37,000 as we are working with the debt holder to extend the maturity date as maturity dates range from June 7, 2014 through January 31, 2016.

Defaults on these obligations could materially adversely affect our business operating results and financial condition to such extent that we may be forced to restructure, file for bankruptcy, sell assets or cease operation. Further, certain of these obligations are secured by our assets. Failure to fulfill our obligations under these notes and related agreements could lead to the loss of these assets, which would be detrimental to our operations.

We may not be able to develop successful new beverage products which are important to our growth.

An important part of our strategy is to increase our sales through the development of new beverage products. We cannot assure you that we will be able to continue to develop, market and distribute future beverage products that will have market acceptance. The failure to continue to develop new beverage products that gain market acceptance could have an adverse impact on our growth and materially adversely affect our financial condition.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

Further, we may have higher obsolescent product expense if new products fail to perform as expected due to the need to write off excess inventory of the new products.

Our results of operations may be impacted in various ways by the introduction of new products, even if they are successful, including the following:

sales of new products could adversely impact sales of existing products:

we may incur higher cost of goods sold and selling, general and administrative expenses in the periods when we introduce new products due to increase costs associated with the introduction and marketing of new products, most of which are expensed as incurred;

and when we introduce new platforms and bottle sizes, we may experience increased freight and logistics costs as our co-packers adjust their facilities for the new products.

The beverage business is highly competitive.

The premium and functional beverage drink industries are highly competitive. Many of our competitors have substantially greater financial, marketing, personnel and other resources than we do. Competitors in these industries include bottlers and distributors of nationally advertised and marketed products, as well as chain store and private label drinks. The principal methods of competition include brand recognition, price and price promotion, retail space management, service to the retail trade, new product introductions, packaging changes, distribution methods and advertising. We also compete for distributors, shelf space and customers primarily with other premium beverage companies. As additional competitors enter the field, our market share may fail to increase or may decrease.

The growth of our revenues is dependent on acceptance of our products by mainstream consumers.

We have limited resources to introduce our products to the mainstream consumer. As such, we will need to increase our sales force and execute agreements with distributors who, in turn, distribute to mainstream consumers at grocery stores, club stores and other retailers. If our products are not accepted by the mainstream consumer, our business could suffer.

Our failure to accurately estimate demand for our products could adversely affect our business and financial results.

We may not correctly estimate demand for our products. Our ability to estimate demand for our products is imprecise, particularly with new products, and may be less precise during periods of rapid growth, particularly in new markets. If we materially underestimate demand for our products or are unable to secure sufficient ingredients or raw materials including, but not limited to, containers, labels, flavors or packing arrangements, we might not be able to satisfy demand on a short-term basis. Moreover, industry-wide shortages of certain ingredients have been and could, from time to time in the future, be experienced, which could interfere with and/or delay production of certain of our products and could have a material adverse effect on our business and financial results. We do not use hedging agreements or alternative instruments to manage this risk.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

The loss of our third-party distributors could impair our operations and substantially reduce our financial results.

We continually seek to expand distribution of our products by entering into distribution arrangements with regional bottlers or other direct store delivery distributors having established sales, marketing and distribution organizations. Many distributors are affiliated with and manufacture and/or distribute other beverage products. In many cases, such products compete directly with our products.

The marketing efforts of our distributors are important for our success. If our brands prove to be less attractive to our existing distributors and/or if we fail to attract additional distributors and/or our distributors do not market and promote our products above the products of our competitors, our business, financial condition and results of operations could be adversely affected.

Inability to secure co-packers for our products could impair our operations and substantially reduce our financial results.

We rely on third parties, called co-packers in our industry, to produce our products. We currently have only one co-packing agreement for our products and at this time have only one milk-based product commercially available (Phase III® Recovery). Our co-packing agreement with our principal co-packer was signed on December 16, 2008 and had an initial term of three (3) years which has now expired. This agreement automatically renews for consecutive one (1) year periods (next renewal date of December 16, 2013) unless either party provides notice of cancellation at least one hundred twenty (120) calendar days prior to the end of the initial term or subsequent extension period. Our dependence on one co-packer puts us at substantial risk in our operations. If we lose this relationship and/or require new co-packing relationships for other products, we may be unable to establish such relationships on favorable terms, if at all. Further, co-packing arrangements with potential new companies may be on a short term basis, and such co-packers may discontinue their relationship with us on short notice. Our dependence on co-packing arrangements exposes us to various risks, including:

if any of those co-packers were to terminate our co-packing arrangements or have difficulties in producing beverages for us, our ability to produce our beverages would be adversely affected until we were able to make alternative arrangements;

and our business reputation would be adversely affected in any of the co-packers were to produce inferior quality products.

We compete in an industry that is brand-conscious so brand name recognition and acceptance of our products are critical to our success.

Our business is substantially dependent upon awareness and market acceptance of our products and brands by our targeted consumers. In addition, our business depends on acceptance by our independent distributors of our brands as beverage brands that have the potential to provide incremental sales growth rather than reduce distributors’ existing beverage sales. We believe that the success of our product name brands will also be substantially dependent upon acceptance of our product name brands. Accordingly, any failure of our brands to maintain or increase acceptance or market penetration would likely have a material adverse affect on our revenues and financial results.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

We compete in an industry characterized by rapid changes in consumer preferences and public perception so our ability to continue to market our existing products and develop new products to satisfy our consumers’ changing preferences will determine our long-term success.

Consumers are seeking greater variety in their beverages. Our future success will depend, in part, upon our continued ability to develop and introduce different and innovative beverages. In order to retain and expand our market share, we must continue to develop and introduce different and innovative beverages and be competitive in the areas of quality and health, although there can be no assurance of our ability to do so. There is no assurance that consumers will continue to purchase our products in the future. Additionally, many of our products are considered premium products and to maintain market share during recessionary periods, we may have to reduce profit margins, which would adversely affect our results of operations. Product lifecycles for some beverage brands and/or products and/or packages may be limited to a few years before consumers’ preferences change. The beverages we currently market are in their early lifecycles, and there can be no assurance that such beverages will become or remain profitable for us. The beverage industry is subject to changing consumer preferences, and shifts in consumer preferences may adversely affect us if we misjudge such preferences. We may be unable to achieve volume growth through product and packaging initiatives. We also may be unable to penetrate new markets. If our revenues decline, our business, financial condition and results of operations will be materially and adversely affected.

Our quarterly operating results may fluctuate significantly because of the seasonality of our business.

As our products are relatively new, there may be seasonality issues that could cause our financial performance to fluctuate. In addition, beverage sales can be adversely affected by sustained periods of bad weather.

Our business is subject to many regulations, and noncompliance is costly.

The production, marketing and sale of our unique beverages, including contents, labels, caps and containers, are subject to the rules and regulations of various federal, provincial, state and local health agencies. If a regulatory authority finds that a current or future product or production run is not in compliance with any of these regulations, we may be fined, or production may be stopped, thus adversely affecting our financial conditions and operations. Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time to time and while we closely monitor developments in this area, we have no way of anticipating whether changes in these rules and regulations will impact our business adversely. Additional or revised regulatory requirements, whether labeling, environmental, tax or otherwise, could have a material adverse effect on our financial condition and results of operations.

We face risks associated with product liability claims and product recalls.

Other companies in the beverage industry have experienced product liability litigation and product recalls arising primarily from defectively manufactured products or packaging. Our co-packer maintains product liability insurance insuring our operations from any claims associated with product liability. This insurance may or may not be sufficient to protect us. We do not maintain product recall insurance. In the event we were to experience additional product liability or product recall claim, our business operations and financial condition could be materially and adversely affected.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

Our intellectual property rights are critical to our success; the loss of such rights could materially, adversely affect our business.

We regard the protection of our trademarks, trade dress and trade secrets as critical to our future success. We have registered our trademarks in the United States that are very important to our business. We also own the copyright in and to portions of the content on the packaging of our products. We regard our trademarks, copyrights and similar intellectual property as critical to our success and attempt to protect such property with registered and common law trademarks and copyrights, restrictions on disclosure and other actions to prevent infringement. Product packages, mechanical designs and artwork are important to our success, and we would take action to protect against imitation of our packaging and trade dress and to protect our trademarks and copyrights, as necessary. We also rely on a combination of laws and contractual restrictions, such as confidentiality agreements, to establish and protect our proprietary rights, trade dress and trade secrets. However, laws and contractual restrictions may not be sufficient to protect the exclusivity of our intellectual property rights, trade dress or trade secrets. Furthermore, enforcing our rights to our intellectual property could involve the expenditure of significant management and financial resources. There can be no assurance that other third parties will not infringe or misappropriate our trademarks and similar proprietary rights. If we lose some or all of our intellectual property rights, our business may be materially and adversely affected.

If we are not able to retain the full time services of our management team, including Roy G. Warren, it will be more difficult for us to manage our operations and our operating performance could suffer.

Our business is dependent, to a large extent, upon the services of our management team, including Roy G. Warren, our founder and Chief Executive Officer and Chairman of the Board. We depend on our management team, but especially on Mr. Warren’s creativity and leadership in running or supervising virtually all aspects of our day-to-day operations. We do not have a written employment agreement with any member of our management team or Mr. Warren. In addition, we do not maintain key person life insurance on any of our management team or Mr. Warren. Therefore, in the event of the loss or unavailability of any member of the management team to us, there can be no assurance that we would be able to locate in a timely manner or employ qualified personnel to replace him. The loss of the services of any member of our management team or our failure to attract and retain other key personnel over time would jeopardize our ability to execute our business plan and could have a material adverse effect on our business, results of operations and financial condition.

We need to manage our growth and implement and maintain procedures and controls during a time of rapid expansion in our business.

If we are to expand our operations, such expansion would place a significant strain on our management, operational and financial resources. Such expansion would also require improvements in our operational, accounting and information systems, procedures and controls. If we fail to manage this anticipated expansion properly, it could divert our limited management, cash, personnel, and other resources from other responsibilities and could adversely affect our financial performance.

Our business may be negatively impacted by a slowing economy or by unfavorable economic conditions or developments in the United States and/or in other countries in which we may operate.

A general slowdown in the economy in the United States or unfavorable economic conditions or other developments may result in decreased consumer demand, business disruption, supply constraints, foreign currency devaluation, inflation or deflation. A slowdown in the economy or unstable economic conditions in the United States or in the countries in which we operate could have an adverse impact on our business results or financial condition. Currently we do not have any international operations.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

The beneficial ownership of a significant percentage of our common stock gives Roy Warren and members of his family effective control of us and limits the influence of other shareholders on important policy and management issues.

Roy Warren, our Chief Executive Officer and Chairman of our Board, through his control of 51% of our voting stock, has control over our company and important matters relating to us. As a result he can control the outcome of all matters submitted to our shareholders for approval, including the election of our directors, our business strategy, our day-to-day operations and any proposed merger, consolidation or sale of all or substantially all of our assets. This control of our company could discourage the acquisition of our common stock by potential investors and could have an anti-takeover effect, preventing a change in control of our company that might be otherwise beneficial to our shareholders, and possibly depressing the trading price of our common stock. There can be no assurance that conflicts of interest will not arise with respect to Roy Warren’s ownership and control of our company or that any conflicts will be resolved in a manner favorable to the other shareholders of our company.

Certain provisions of the General Corporation Law of the State of Delaware, our Amended and Restated Certificate of Incorporation, as amended, and our bylaws may have anti-takeover effects which may make an acquisition of our company by another company more difficult.

We are subject to the provisions of Section 203 of the General Corporation Law of the State of Delaware, which prohibits a Delaware corporation from engaging in any business combination, including mergers and asset sales, with an interested stockholder (generally, a 15% or greater stockholder) for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The operation of Section 203 may have anti-takeover effects, which could delay, defer or prevent a takeover attempt that a holder of our common stock might consider in its best interest.

Our Amended and Restated Certificate of Incorporation and bylaws contain provisions that permit us to issue, without any further vote or action by the stockholders, up to 20,000,000 shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting powers, if any, of the shares of the series, and the preferences and relative, participating, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such series.

These provisions on our Amended and Restated Certificate of Incorporation may have anti-takeover effects, which could delay, defer or prevent a takeover attempt that a holder of our common stock might consider in its best interest

Certain of our officers may have a conflict of interest and lack of availability.

Some of our officers, including our Chief Executive Officer and our Chief Financial Officer, are currently working for the Company on a part-time basis and are the Chief Executive Officer and Chief Financial Officer of Harrison Vickers and Waterman Inc. These officers have discretion to decide what time they devote to our activities, which may result in a lack of availability when needed due to responsibilities at other jobs.

We do not have an audit committee.

While not being legally obligated to have an audit committee or independent audit committee financial expert, we currently do not have an audit committee or independent audit committee financial expert which is an important entity-level control over the Company’s financial statements.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

Risks Relating to Our Securities

There has been a very limited public trading market for our securities, and the market for our securities may continue to be limited and be sporadic and highly volatile.

There is currently a limited public market for our common stock. Our common stock has been listed for trading on the OTC Pink Sheets (the “PINK”). We cannot assure you that an active market for our shares will be established or maintained in the future. Holders of our common stock may, therefore, have difficulty selling their shares, should they decide to do so. In addition, there can be no assurances that such markets will continue or that any shares, which may be purchased, may be sold without incurring a loss. Any such market price of our shares may not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value and may not be indicative of the market price for the shares in the future. In addition, the market price of our common stock may be volatile, which could cause the value of our common stock to decline. Securities markets experience significant price and volume fluctuations. This market volatility, as well as general economic conditions, could cause the market price of our common stock to fluctuate substantially. Many factors that are beyond our control may significantly affect the market price of our shares. These factors include:

- price and volume fluctuations in the stock markets;

- changes in our revenues and earnings or other variations in operating results;

- any shortfall in revenue or increase in losses from levels expected by us or securities analysts;

- changes in regulatory policies or law;

- operating performance of companies comparable to us;

- and general economic trends and other external factors.

Even if an active market for our common stock is established, stockholders may have to sell their shares at prices substantially lower than the price they paid for it or might otherwise receive than if a broad public market existed.

Future financings as well as conversion of existing convertible securities could adversely affect common stock ownership interest and rights in comparison with those of other security holders.

Our board of directors has the power to issue additional shares of common or preferred stock without stockholder approval. If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of our existing stockholders will be reduced, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders. In addition, as of September 30, 2014, we had issued and outstanding options that may be exercised into 10,054,454 shares of common stock, 9,000,000 shares of Series A Convertible Preferred Stock and 51 shares of Series A-1 Convertible Preferred Stock that may be converted into 54,000,306 shares of common stock, outstanding principal convertible notes totaling $6,075,092 and accrued interest payable of $1,384,269 which together may be converted into 5,821,704,627 shares of common stock (subject to 4.99-9.99% beneficial ownership limitations) at a maximum conversion cap rate of $.02 per share. The Series A and A-1 Preferred Stock vote with the common stock on an as converted basis. Pursuant to the terms and conditions of the Company’s outstanding Series A and Series A-1 Preferred Stock, the conversion rate and the voting rights of the Series A and A-1 will not adjust as a result of any reverse stock split. Further, the authorized but unissued Series A will not adjust as a result of any reverse split. As a result, in the event of a reverse split of our common stock, the voting power would be concentrated with the Series A holder.

ITEM 2. –

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CERTAIN BUSINESS RISKS (continued):

Further, if we issue any additional common stock or securities convertible into common stock, such issuance will reduce the proportionate ownership and voting power of each other stockholder. In addition, such stock issuances might result in a reduction of the book value of our common stock.

A substantial number of our shares are available for sale in the public market, and sales of those shares could adversely affect our stock price and our ability to obtain financing.

Sales of a substantial number of shares of common stock into the public market, or the perception that such sales could occur, could substantially reduce our stock price in the public market for our common stock and could impair our ability to obtain capital through a subsequent financing of our securities. We have 690,277,229 shares of common stock outstanding as of September 30, 2014 of which 690,246,659 shares are held by non-affiliates. Further, the Company has outstanding convertible notes in the face value of $6,075,092 which may be converted into 4,736,003,529 shares of common stock. Generally, the holders of the securities convertible or exercisable into our common stock may be able to sell the common stock issued upon conversion or exercise after a six month holding period under Rule 144 adopted under the Securities Act of 1933 (as amended, the “Securities Act”). As such, you should expect a significant number of such shares of common stock to be sold. Depending upon market liquidity at the time our common stock is resold by the holders thereof, such re-sales could cause the trading price of our common stock to decline. In addition, the sale of a substantial number of shares of our common stock, an anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

ITEM 3. –

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4. –

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2014. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

The Company has disclosed management’s determination in its annual report that deficiencies existed in the Company’s internal controls over financial reporting as of March 31, 2014. Management concluded that control deficiencies existed as of March 31, 2014 that constituted material weaknesses, as described below.

* We have noted that there may be an insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.

ITEM 4. –

CONTROLS AND PROCEDURES (continued)

* We do not have an audit committee or an independent audit committee financial expert. While not being legally obligated to have an audit committee or independent audit committee financial expert, it is the management’s view that to have an audit committee, comprised of independent board members, and an independent audit committee financial expert, is an important entity-level control over the Company's financial statements. Currently, the Board does not have sufficient independent directors to form such an audit committee. Also, the Board of Directors does not have an independent director with sufficient financial expertise to serve as an independent financial expert.

* Due to the complex nature of recording derivatives and similar financial instruments, we noted a need for increased coordination and review of techniques and assumptions used in recording derivatives to ensure accounting in conformity with generally accepted accounting principles.

Remediation Efforts to Address Deficiencies in Internal Control Over Financial Reporting

As a result of the findings from the evaluation conducted of the effectiveness of our internal control over financial reporting as set forth above, management intends to take practical, cost-effective steps in implementing internal controls, including the following remedial measures:

* Interviewing and potentially hiring outside consultants that are experts in designing internal controls over financial reporting based on criteria established in Internal Control-Integrated Framework issued by COSO.

* The Company has hired an outside consultant to assist with controls over the review and application of derivatives to ensure accounting in conformity with generally accepted accounting principles.

* The Board of Directors to consider nominating an audit committee and audit committee financial expert, which may or may not consist of independent members as funds allow.

Due to inadequate financing, the Company has not hired any outside experts to design additional internal controls over financing reporting or reviewed or made recommendations to shareholders concerning the composition of the Board of Directors or recommended a new board director that is a financial expert.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Accordingly, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective, as of September 30, 2014, for the purposes of recording, processing, summarizing, and timely reporting material information required to be disclosed in reports filed by the Company under the Securities Exchange Act of 1934.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the quarter ended September 30, 2014, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

On May 18, 2009, F&M Merchant Group, LLC commenced a lawsuit in the state of Texas to recover the balance owed by us under a Sales Agent Agreement entered by the parties on November 1, 2008. This agreement requires us to pay $5,000 per month and a 5% commission on all net sales. On September 3, 2009, a final judgment by default was approved by the district court in Denton County, Texas for a total sum of $22,348. This claim has been recorded on the Company’s records. Due to the lack of adequate capital financing, we have not been able to make any payments. We expect to resolve this matter as soon as practical.

On August 21, 2009, CH Fulfillment Services, LLC commenced a lawsuit in the state of Alabama to recover past due amounts owed by us under a contract to provide shipping and fulfillment services. The claim is for $2,106 plus interest and legal costs. This amount was already recorded on our records as well as projected interest costs of $682 and estimated court costs of $307 for a total of $3,095. A process of garnishment by the district court in Mobile County, Alabama was approved on September 25, 2009 for the total amount of $3,095. On October 26, 2009, the same court authorized a garnishment process to pay $657 which was done as part payment of the total due amount. Current outstanding balance due is $2,438. No other payments have been made.

On September 20, 2013, James N. Fuller, Jr. commenced a lawsuit in the state of Florida to recover past due amounts owed by us for rendered independent sales contracting services. The claim was for $18,300 plus filing fee of $460. The $18,300 was already recorded on our records. Due to lack of adequate capital financing, we have not been able to make any payments. We expect to resolve that matter as soon as practical.

On October 1, 2013, Beanpot Broadcasting Corp. d/b/a WXRV-FM, commenced a lawsuit in the state of Massachusetts to recover past due amounts owed by us for rendered independent sales contracting services. The claim was for $15,500 for past due services, $4,169 in service charges, $363 for prejudgment interest and $200 court costs for a total of $20,232. The total $20,232 amount was already recorded on our records. On November 15, 2013, the Trial Court of Massachusetts entered a judgment for the plaintiff (“Beanpot”) for the total $20,232. Due to the lack of adequate capital financing, we have not been able to make any payments. We expect to resolve this matter as soon as practical.

On November 27, 2013, we received an order of the court from The Trial Court of Massachusetts Small Claims Session, to attend a hearing on December 12 2013 about a small claims amount of $5,000 from Marshfield Broadcasting Company, Inc. to recover past due amounts. A total of $5,500 was already recorded our records. On December 31, 2013, a judgment in the amount of $5,238 was entered in favor of Marshfield Broadcasting Inc. No payments have been made as we expect to resolve this matter as soon as practical.

On February 4, 2014, Philip Terrano commenced a lawsuit in the state of Florida to recover past due amounts owed by us for past compensation in the amount of approximately $17,000. We disagree with this amount as our records reflect a total amount owed of $6,974. On May 28, 2014, we entered into a settlement agreement with Terrano to pay him a total of $11,000, to be remitted 60 days of the effective date of this agreement. Due to a lack of capital financing, we expect to address this matter as soon as we can.

PART II – OTHER INFORMATION (continued)

Item 1. Legal Proceedings (continued)

On June 9, 2014, North Palm Beach Broadcasting Company d/b/a/ WSVU-AM Radio filed a lawsuit in the state of Florida to recover past due services owed by us in the amount of $22,000 that is due with interest. We do not agree with that amount as we did make various payments in 2013 that totaled $8,000. We are working with that party to arrive at a mutual agreeable outstanding amount if any. We do not have any other outstanding balance that is recorded on our records. On August 6, 2014, we received a Default Final Judgment from Palm Beach County Circuit Court in Florida for a total amount of $23, 411. We are still contesting that amount and will resolve the matter as soon as possible.

On June 26, 2014, Innerworkings, Inc. filed a lawsuit in the state of Florida to recover past due services owed by us in the amount of $5,039 that is due with interest. This same amount has already been recorded on our records. We expect to address this issue as soon as practical.

On November 11, 2014, C.A. Courtesy Demos, Inc. commenced a lawsuit in the state of Florida to recover past due amounts owed by us for rendered services. The claim was for $5,803. We do not agree with this amount and have not recorded this amount on our records as services were supposed to be rendered, but a hurricane in the northeastern section of the United States occurred at that given time. We expect to resolve this matter as soon as we can.

On November 20, 2014, Pavilion Law Center, LLC filed a motion in the circuit court of Palm Beach County, Florida to enforce a settlement agreement for past due fees. We are contesting some of the amounts and will resolve this matter as soon as practical.

On April 22, 2015, Edgar Agents LLC filed a lawsuit in the state of Florida to recover past due amounts owned by us for rendered services. The claim was for $23,323.50 plus interest and costs. We have recorded $19,069.50 in our records as we have not received the backup for the $4,254.00 difference. We expect to resolve this matter as soon as we can.

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

During the three months ended September 30, 2014, the Company issued a total of 145,378,100 shares of common stock for the conversions of $23,950 of principal of convertible notes payable and $5,432 of related accrued interest to note holders of the Company pursuant to the terms of the note instruments. No additional consideration was given for these conversions by the note holders. See Note 8 (c) for more details. The shares of common stock issued upon conversion of these notes were issued pursuant to an exemption from the registration requirements of the Securities Act provided by Section 3(a)(9) thereof as the conversions were an exchange of securities with existing holders exclusively, and no commission or other remuneration was paid or given in connection with the exchange.

On July 11, 2014, we executed a $25,000 allonge #18 with Alpha Capital Anstalt to an original secured convertible note for $175,000 dated February 22, 2012 in which we received $25,000.

On July 31, 2014, we issued a promissory note with no interest to Southridge Partners II LP in which we received $15,000.

On August 21, 2014, we issued a promissory note with no interest to Alpha Capital Anstalt in which we received $10,000.

PART II – OTHER INFORMATION (continued)

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (continued)

On August 29, 2014, we issued a promissory note with no interest to Tarpon Bay Partners LLC in which we received $10,000.

On September 17, 2014, we issued a promissory note with no interest to Alpha Capital Anstalt in which we received $10,000.

On September 30, 2014, we issued a promissory note with no interest to Southridge Partners II LP in which we received $15,000.

On September 30, 2014, we issued a promissory note with no interest to Alpha Capital Anstalt in which we received $15,000.

All of the net proceeds from the above financings were used for operations and working capital purposes.

Item 3. Defaults on Senior Securities

As of September 30, 2014, we were in default in paying the April 14, 2008 short-term bridge loan with principal balance of $60,000 and the August 5, 2008 short-term bridge loan with principal balance of $55,000 for a total of $115,000. These debt holders agreed in January, 2009 to extend the due dates to April 30, 2009. We are working on the extension of the due dates for these debts although there is no guarantee that we will obtain such extensions. One of the debt holders is a Board Director and has agreed to extend the note once we locate the other debt holder as we are searching for current contact information for the second investor.

In addition, we were in default in paying a convertible note payable for $37,000 that was due on June 7, 2014. We are working with the debt holder to extend the maturity date.

PART II – OTHER INFORMATION (continued)

Item 4. Mine Safety Disclosures - None

Item 5. Other Information

See Note 10 – “Subsequent Events” of Note to Condensed Consolidated Financial Statements for additional disclosure data on events occurring after the date of the financial statements included herein.

ITEM 6 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The exhibits listed in the accompanying Exhibit Index are filed, furnished or incorporated by reference as part of this Quarterly Report on Form 10-Q.

Exhibit		Incorporated	Filed
No.	Documents Description	By Reference	Herewith
(10)(140)	Promissory Note July 1, 2014	(37)
(10)(141)	Allonge No. 18 dated July 11, 2014 to Secured Note Issued February 22, 2013	(37)
(10)(142)	Promissory Note July 31, 2014	(37)
(10)(143)	Promissory Note August 1, 2014	(37)
(10)(144)	Promissory Note August 21, 2014	(37)
(10)(145)	Promissory Note August 29, 2014	(37)
(10)(146)	Promissory Note September 1, 2014	(37)
(10)(147)	Promissory Note September 17. 2014	(37)
(10)(148)	Form of Promissory Note September 30. 2014 - two investors	(37)
(10)(149)	Promissory Note October 1, 2014	(37)
(10)(150)	Promissory Note November 1, 2014	(37)
(10)(151)	Promissory Note November 19, 2014	(37)
(10)(152)	Promissory Note December 1, 2014	(37)
(10)(153)	Class A Common Stock Purchase Warrant-Attitude Drinks Incorporated	(36)
(10)(154)	Form of Convertible Note	(36)
(10)(155)	Non-Circumvention-No-Shop Agreement	(36)
(10)(156)	Confidentiality, Non-solicitation and Noncompetition Agreement	(36)
(10)(157)	West Hartford WOB, LLC Amended & Restated Operating Agreement	(36)
(10)(158)	Joint Venture Agreement	(36)
(10)(159)	Form of Secured Convertible Note-Attitude Beer Holding Co.	(36)
(10)(160)	Escrow Agreement	(36)
(10)(161)	Form of Class A Common Stock Purchase Warrant-Attitude Beer Holding Co.	(36)
(10)(162)	Guaranty	(36)
(10)(163)	Form of Security Agreement	(36)
(10)(164)	Securities Purchase Agreement	(36)
(10)(165)	Promissory Note dated December 19, 2014	(37)
(10)(166)	Convertible Note dated December 19, 2014	(37)
(10)(167)	Promissory Note January 1, 2015	(37)
(10)(168)	Form of Convertible Note January 14, 2015	(37)
(10)(169)	Form of Convertible Note and Class A Purchase Warrant dated January 23, 2015	(37)
(10)(170)	Promissory Note dated February 1, 2015	(37)

(10)(171)	Promissory Note dated March 1, 2015	(39)
(10)(172)	Promissory Note dated March 5, 2015	(39)
(10)(173)	Promissory Note dated March 13,2015	(39)
(10)(174)	Promissory Note dated March 19, 2015	(39)
(10)(175)	Promissory Note dated March 26, 2015	(39)
(10)(176)	Promissory Note dated April 1, 2015	(39)
(10)(177)	Promissory Note dated April 3, 2015	(39)
(10)(178)	Promissory Note dated April 17, 2015	(39)
(10)(179)	Certificate of Designations of Series B Convertible Preferred Stock of Harrison	(38)
	Vickers and Waterman Inc. as Exhibit 4.1 to the Company's Form 8-K filed on
	April 27, 2015
(10)(180)	Warrant issued to Attitude Drinks Incorporated as Exhibit 4.2 to the	(38)
	Company's Form 8-K filed on April 27,2015
(10)(181)	Secured Convertible Note due 2017 issued to Alpha Capital Anstalt as Exhibit 4.3	(38)
	to the Company's Form 8-K filed on April 27,2015
(10)(182)	Secured Convertible Note due 2017 issued to Tarpon Bay Partners LLC as Exhibit 4.4	(38)
	to the Company's Form 8-K filed on April 27, 2015
(10)(183)	Additional Investment Right issued to Alpha Capital Anstalt as Exhibit 4.5	(38)
	to the Company's Form 8-K filed on April 27,2015
(10)(184)	Additional Investment Right issued to Tarpon Bay Partners LLC as Exhibit 4.6	(38)
	to the Company's Form 8-K filed on April 27,2015
(10)(185)	Asset Purchase Agreement dated as of April 21, 2015 by and between Harrison	(38)
	Vickers and Waterman Inc., Attitude Drinks Incorporated, Alpha Capital Anstalt and
	Tarpon Bay Partners LLC as Exhibit 10.1 to the Company’s From 8-K filed on
	April 27, 2015.
(10)(186)	Pledge Agreement dated as of April 21, 2015 by and between Attitude Drinks Incorporated	(38)
	and Tarpon Bay Partners LLC as collateral agent on behalf of Alpha Capital Anstalt
	and Tarpon Bay Partners LLC as exhibit 10.2 to the Company's Form 8-K filed on
	April 27, 2015.
(10)(187)	Security Agreement dated as of April 21, 2015 among Harrison Vickers and Waterman	(38)
	Inc., each subsidiary of Harrison Vickers and Waterman Inc. and Tarpon Bay Partners
	LLC as collateral agent as Exhibit 10.3 to the Company's Form 8-K on April 27, 2015
(10)(188)	Guaranty dated as of April 21, 2015 entered into by Attitude Beer Holding Co. for the	(38)
	benefit of Alpha Capital Anstalt and Tarpon Bay Partners LLC as Exhibit 10.4 to the
	Company's Form 8-K filed on April 27,2015
(10)(188)	Guaranty dated as of April 21, 2015 entered into by Attitude Drinks Incorporated for the	(38)
	benefit of Alpha Capital Anstalt and Tarpon Bay Partners LLC as Exhibit 10.5 to the
	Company's Form 8-K filed on April 27,2015
(10)(189)	Exchange Agreement dated as of April 21, 2015 by and among Attitude Beer Holding	(38)
	Co., Attitude Drinks Incorporated, Alpha Capital Anstalt and Tarpon Bay Partners
	loc as exhibit 10.6 to the Company's Form 8-K filed on April 27, 2015
(10)(190)	Purchase Agreement dated as of April 21, 2015 between HVW Holdings LLC and	(38)
	Attitude Drinks Incorporated as exhibit 10.7 to the Company's Form 8-K on April
	27, 2015

(10)(191)	A Warrant issued to Alpha Capital Anstalt as exhibit 99.1 to the Company's Form	(38)
	8-K on April 27, 2015
(10)(192)	Series A Warrant issued to Tarpon Bay Partners LLC as exhibit 99.2 to the Company's	(38)
	Form 8-K on April 27, 2015
(10)(193)	Purchase Agreement dated as of April 21, 2015 between HVW Holdings LLC and	(38)
	Alpha Capital Anstalt as exhibit 99.3 to the Company's Form 8-K on April 27, 2015
(10)(194)	Promissory Note dated April 24, 2015	(39)
(10)(195)	Promissory Note dated May 1, 2015	(39)
(10)(196)	Promissory Note dated May 1, 2015	(39)
(10)(197)	Promissory Note dated May 1, 2015	(39)
(10)(198)	Promissory Note dated May 15, 2015	(39)
(10)(199)	Promissory Note dated June 1, 2015		X

(14)	Code of Ethics	**
(21)	Subsidiaries of Registrant	*
(31)(i)	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14 (a),
	as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X
(31)(ii)	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14 (a),
	as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X
(32)(1)	Certification of Chief Executive Officer and Chief Financial Officer pursuant
	to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
	of the Sarbanes-Oxley Act of 2002		X
101.INS	XBRL Instance Document		X
101.SCH	XBRL Taxonomy Extension Schema Document		X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document		X
101.DEF	XBRL Taxonomy Extension Definitiom Linkbase Documeent		X
101.LAB	XBRL Taxonomy Extension Label Linkbase		X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase		X

(36) previously filed with the Commission on December 31, 2014 as a Form 8-K (SEC Accession No. 0001144204-14-076573)

(37) previously filed with the Commission on February 13,2015 as a Form 10-K (SEC Accession No. 0001144204-15-009097)

(38) previously filed with the Commission on April 27, 2015 as a Form 8-K (SEC Accession No. 0001144204-15-025275)

(39) previously filed with the Commission on May 18, 2015 as an exhibit to Form 10-Q (SEC Accession No. 0001144204-15-031872)

SIGNATURES

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

ATTITUDE DRINKS INCORPORATED
(Registrant)
Date: June 12, 2015

/S/Roy G. Warren
Roy G. Warren
President and Chief Executive Officer

/S/Tommy E. Kee
Tommy E. Kee
Chief Financial Officer and Principal Accounting Officer