Right On Brands Inc (RTON)

[Werbe]

During the quarter ended June 30, 2019, Noteholders 2, 3, and 4 submitted notices of conversion for a portion of the principal and interest owing to them totaling $252,277. The conversions resulted in the settlement of $307,539 of the derivative liability, an $8,693 loss on settlement of interest payable, and the issuance of 67,054,397 shares of common stock.



The convertible debt held by noteholders 2 through 6 is also in default at June 30, 2019. At the noteholders’ discretion, if notice is given to the Company, additional penalties of approximately $227,000 would be due. As of August 14, 2019, the Company has not received notices of default from these noteholders.



These fiscal 2019 note agreements require a certain number of shares be reserved so that they are readily available for note conversion. As of June 30, 2019 and March 31, 2019, we had approximately 374 million shares and 398 million shares, respectively, of our common stock reserved or designated for future issuance upon conversion of outstanding convertible promissory notes. As of June 30, 2019, four notes had fewer shares reserved than required under the terms of the note agreements.