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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"><b><i>Organization</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Freedom Leaf,
Inc. (the “Company,” “we,” “us,” “our,” or “Freedom Leaf”) was incorporated
in the State of Nevada on February 21, 2013, under the name of Arkadia International, Inc. The Company was originally engaged
in the business of the acquisition of in demand equipment, cars, and goods with the intent to resale these in the U.S. territory
or export to overseas countries.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On October
3, 2014, the Company experienced a change in control. Richard C. Cowan acquired a majority of the issued and outstanding common
stock of the Company in accordance with stock purchase agreements by and between Mr. Cowan and Vladimir and Galina Shekhtman (“Sellers”).
On the closing date, October 3, 2014, pursuant to the terms of the Stock Purchase Agreement, Cowan purchased from the Sellers
6,950,100 shares of the Company’s outstanding restricted common stock for $100,000, representing 93%.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On November
6, 2014, the Company merged with Freedom Leaf, Inc., a private Nevada corporation. The Company changed its name from Arkadia International,
Inc., to Freedom Leaf, Inc. As a result of the merger, the private company was dissolved. See Note 2 for related discussion.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1A1A19"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1A1A19"><font style="font-size: 8pt">For
financial reporting purposes, the Share Exchange represents a "reverse merger" rather than a business combination and
Private Company is deemed to be the accounting acquirer in the transaction. The Share Exchange is being accounted for as a reverse-merger
and recapitalization. Private Company is the acquirer for financial reporting purposes and the Public Company (Freedom Leaf, Inc.,
f/k/a Arkadia International, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that will
be reflected in the historical financial statements prior to the Share Exchange will be those of the Private Company and will
be recorded at the historical cost basis of the Private Company, and the financial statements after completion of the Share Exchange
will include the assets and liabilities of the Public Company and the Private Company, and the historical operations of Private
Company and operations of both companies from the closing date of the Share Exchange.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Quoted Prices in</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance at</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Active Markets</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Other</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>September</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>for Identical</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Observable</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Unobservable</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>30,
2015</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Assets</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Inputs</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Inputs</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 1)</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 2)</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 3)</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Assets:</font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 43%; padding-bottom: 1pt"><font style="font-size: 8pt">Trademarks</font></td><td style="width: 1%; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: Black 1pt solid; text-align: right; width: 12%"><font style="font-size: 8pt">–</font></td><td style="width: 1%; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt">Total Financial Assets</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Freedom Leaf,
Inc., (f/k/a Arkadia International, Inc., the “Public Company,” “we,” “us,” “our”)
entered into a share exchange agreement (the “Exchange Agreement”) with Freedom Leaf, Inc. (the “Public Company”),
a Nevada corporation. Prior to the reverse merger, Richard C. Cowan, an officer and director of the Company, post-merger, acquired
89,808,000, or 99.8% of the outstanding shares of Freedom Leaf, Inc., the public company. Clifford J. Perry, an individual, and
the Private Company’s sole officer and director (“Perry”), was the owner of record of all of the outstanding
common shares of the Private Company (the “Private Company <u>Stock</u>”). Pursuant to the Exchange Agreement, upon
surrender by the Shareholders and the cancellation by the Private Company of the certificates evidencing the Private Company Stock
as registered in the name of the Shareholder, and pursuant to the registration of the Public Company in the register of Shareholders
maintained by Private Company as the new holder of the Public Company Stock and the issuance of the certificates evidencing the
aforementioned registration of the Private Company Stock in the name of the Public Company, the Public Company will issue 83,401,200
shares (the “<u>New Shares</u>”) (subject to adjustment for fractionalized shares as set forth below) of the Company’s
common stock to the Shareholders (or their designees), and Perry will cause 100% of the shares of the Private Company’s
common stock that he owns (the “<u>Perry Stock</u> ,” together with the New Shares, the “<u>Acquisition Stock</u>”)
to be transferred to the Shareholders (or their designees), which collectively shall represent 48.1% of the issued and outstanding
common stock of the Public Company immediately after the Closing, in exchange for the Private Company Stock, representing 100%
of the issued share capital of the Private Company. As a result of the exchange of the Private Company Stock for the Acquisition
Stock (the “<u>Share Exchange</u>”), the Private Company will be dissolved.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The closing
of the Exchange Agreement was conditioned upon certain, limited customary representations and warranties, as well as the satisfaction
or waiver of specified conditions to closing. As the parties satisfied all of the closing conditions, on November 6, 2014, we
consummate the Share Exchange contemplated by the Exchange Agreement. As a result, the shareholders of Private Company own approximately
48.1% of our issued and outstanding common stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Prior to
the execution and delivery of the Exchange Agreement, our board of directors approved the Share Exchange and the transactions
contemplated thereby. Similarly, the board of directors of Private Company approved the Share Exchange. Reference is hereby made
regarding the completion of the Share Exchange.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Following
the Share Exchange, we have abandoned our prior business plan and we are now pursuing Private Company’s historical businesses
and proposed businesses. Private Company is in the business of advertising in industry publications related to marijuana.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The foregoing
description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by the Share Exchange Agreement,
a copy of which has been filed on Form 10-Q/A for the period ended December 31, 2014 which is incorporated herein by reference.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><i>Accounting
Treatment of the Merger</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">For financial
reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination and Private
Company is deemed to be the accounting acquirer in the transaction. The Share Exchange is being accounted for as a reverse-merger
and recapitalization. Private Company is the acquirer for financial reporting purposes and the Public Company (Freedom Leaf, Inc.,
f/k/a Arkadia International, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that will
be reflected in the historical financial statements prior to the Share Exchange will be those of the Private Company and will
be recorded at the historical cost basis of the Private Company, and the financial statements after completion of the Share Exchange
will include the assets and liabilities of the Public Company and the Private Company, and the historical operations of Private
Company and operations of both companies from the closing date of the Share Exchange.</font></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 15%; text-align: left"><font style="font-size: 8pt">2016</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 36%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 15%; text-align: right"><font style="font-size: 8pt">33,264</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">2017</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">45,360</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">2018</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">46,704</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">2019</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">48,048</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt">2020</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; border-bottom: Black 1pt solid"><font style="font-size: 8pt"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font-size: 8pt">12,096</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt">Total</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; border-bottom: Black 2.5pt double"><font style="font-size: 8pt">$</font></td><td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 8pt">185,472</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td colspan="7" style="text-align: left"><font style="font-size: 8pt">Note: After September 30, 2017, the Company can opt
out of the remaining lease obligation.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Richard C.
Cowan (“Cowan”), Director and former officer of the Company, has payables and accruals due to him of $194,355 and
$221,821 as of September 30, 2015 and June 30, 2015, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Clifford
J. Perry (“Perry”), chief executive officer, chief financial officer, and director of the Company, has payables and
accruals due to him of $20,000 and $0 as of September 30, 2015 and June 30, 2015, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange
Commission. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial
statements, except as stated herein.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On October
12, 2015, the Company issued 1,700,000 shares of common stock to various employees as part of compensation. The stock was valued
at $0.20 or $340,000 and will be recorded accordingly.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On October
12, 2015, the Company issued 2,000,000 shares of common stock to Raymond Medeiros, a director of the Company, for his past services.
The stock was valued at $0.20 or $400,000 and will be recorded accordingly.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On October
12, 2015, the Company issued 3,000,000 shares of common stock to Raymond Medeiros, a director of the Company, for his future services.
The issuance will vest over a period of twelve months. The stock was valued at $0.20 or $600,000 and will be amortized accordingly.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On October
12, 2015, the Company issued 2,010,000 shares of common stock to various subcontractors for their services. The stock was valued
at $0.20 or $402,000 and will be recorded accordingly.</font></p>
0
0
5892
5892
0
0
5892
5892
-109094
45360
46704
48048
12096
185472
194355
221821
0
20000
0.001
0.001
0
4636
1164
671
2801
0
8167
15095
0
41309
0
113316
9214
-139530
-9214
-4636
0
0.00
0.00
174181200
90000000
82
0
82
-1150
0
34564
0
-7466
0
26172
0
8167
0
-76861
-9214
1230
0
1230
-1230
0
58500
0
22500
0
81000
0
2909
-9214
0
0
0
0
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"><b><i>Organization</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Freedom Leaf,
Inc. (the “Company,” “we,” “us,” “our,” or “Freedom Leaf”) was incorporated
in the State of Nevada on February 21, 2013, under the name of Arkadia International, Inc. The Company was originally engaged
in the business of the acquisition of in demand equipment, cars, and goods with the intent to resale these in the U.S. territory
or export to overseas countries.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On October
3, 2014, the Company experienced a change in control. Richard C. Cowan acquired a majority of the issued and outstanding common
stock of the Company in accordance with stock purchase agreements by and between Mr. Cowan and Vladimir and Galina Shekhtman (“Sellers”).
On the closing date, October 3, 2014, pursuant to the terms of the Stock Purchase Agreement, Cowan purchased from the Sellers
6,950,100 shares of the Company’s outstanding restricted common stock for $100,000, representing 93%.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On November
6, 2014, the Company merged with Freedom Leaf, Inc., a private Nevada corporation. The Company changed its name from Arkadia International,
Inc., to Freedom Leaf, Inc. As a result of the merger, the private company was dissolved. See Note 2 for related discussion.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1A1A19"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1A1A19"><font style="font-size: 8pt">For
financial reporting purposes, the Share Exchange represents a "reverse merger" rather than a business combination and
Private Company is deemed to be the accounting acquirer in the transaction. The Share Exchange is being accounted for as a reverse-merger
and recapitalization. Private Company is the acquirer for financial reporting purposes and the Public Company (Freedom Leaf, Inc.,
f/k/a Arkadia International, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that will
be reflected in the historical financial statements prior to the Share Exchange will be those of the Private Company and will
be recorded at the historical cost basis of the Private Company, and the financial statements after completion of the Share Exchange
will include the assets and liabilities of the Public Company and the Private Company, and the historical operations of Private
Company and operations of both companies from the closing date of the Share Exchange.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Nature
of Operations</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">We are currently
devoting substantially all of our efforts in migrating to the news, arts and entertainment niche, with both in print and online
publications. Principal business activities are still in the development stage and have not yet commenced. The Company will generate
revenue through paid advertising in publications, both print and online, in the cannabis/hemp marketplace. The Company will also
earn revenue from consulting companies who are in our industry, contracting with companies to brand, market, and sell their products
and/or services, provide seminars in this space, and sell branded products for the Company and others the Company represents. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Basis
of Presentation</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The accompanying
unaudited financial statements of Freedom Leaf, Inc. have been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations
for the interim period ended September 30, 2015 shown in this report are not necessarily indicative of results to be expected
for the full fiscal year ending June 30, 2016. In the opinion of the Company’s management, the information contained herein
reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s
results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction
with the audited financial statements in the Company’s Form 10-K for the year ended June 30, 2015 filed on October 6, 2015
and Management’s Discussion and Analysis of Financial Condition and Results of Operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Impairment
of Long-Lived Assets</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting
for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an
asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our
financial instruments, including cash, accounts payable, accrued expenses, deposits received from customers for layaway sales
and short term loans the carrying amounts approximate fair value due to their short maturities.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">We follow
accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance
for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but
rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply
to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable
market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the
service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Level 1:
Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Level 2:
Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets
or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Level 3:
Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by
us, which reflect those that a market participant would use.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">We currently
measure and report at fair value our intangible assets (due to our impairment analysis) and derivative liabilities. The fair value
of intangible assets has been determined using the present value of estimated future cash flows method. The fair value of derivative
liabilities is measured using the Black-Scholes option pricing method. The following table summarizes our non-financial assets
and liabilities measured at fair value on a recurring basis as of September 30, 2015:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Quoted Prices in</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance at</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Active Markets</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Other</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>September</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>for Identical</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Observable</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Unobservable</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>30,
2015</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Assets</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Inputs</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Inputs</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 1)</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 2)</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 3)</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Assets:</font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 43%; padding-bottom: 1pt"><font style="font-size: 8pt">Trademarks</font></td><td style="width: 1%; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: Black 1pt solid; text-align: right; width: 12%"><font style="font-size: 8pt">–</font></td><td style="width: 1%; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt">Total Financial Assets</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Following
is a summary of activity through September 30, 2015 of the fair value of intangible assets valued using Level 3 inputs:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Accumulated</font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Asset</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Amortization</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Net</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 36%; text-align: left"><font style="font-size: 8pt">Intangibles
- June 30, 2015</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">4,913</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">(169</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt">)</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">4,744</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">Additions</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1,230</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1,230</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">Amortization</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(82</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(82</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">Intangibles
- September 30, 2015</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">6,143</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">(251</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of
those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain
circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the
event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other
income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion
date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become
subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on
the reclassification date.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><font style="font-size: 8pt"><b><i>Stock-Based
Compensation</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to
recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued
to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite
service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance
with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the
grant date by using the Black-Scholes option-pricing model.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Going
Concern</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The accompanying
unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company sustained net losses of $144,166 and used cash in operating
activities of $76,861 for the three months ended September 30, 2015. The Company had working capital deficit, stockholders’
deficiency and accumulated deficit of $109,094, $293,973 and $1,143,284, respectively, at September 30, 2015. These factors raise
substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company’s
continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving investment
capital and loans from third parties to sustain its current level of operations. The Company is in the process of securing working
capital from investors for common stock, convertible notes payable, and/or strategic partnerships. No assurance can be given that
the Company will be successful in these efforts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The financial
statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Use
of Estimates</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include
the amortization period for intangible assets, valuation and impairment valuation of intangible assets, depreciable lives of the
web site and property and equipment, valuation of warrants and beneficial conversion feature debt discounts, valuation of derivatives,
valuation of share-based payments and the valuation allowance on deferred tax assets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"><b><i>Reclassifications</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Certain amounts
in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications
had no effect on reported losses, total assets, or stockholders’ equity as previously reported.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Development
Stage Company</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Since inception,
the Company became a “development stage company” as defined in the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities.” On June 10, 2014 the
FASB issued authoritative guidance which eliminates the concept of a development stage entity. The incremental reporting requirements
for presenting the development stage operations and cash flows since inception will no longer apply to development stage entities.
The amendments of Topic 915 are to be applied retrospectively and are effective for fiscal years beginning after December 15,
2014. The Company has elected early adoption of this guidance effective with the filing of its previous quarterly report.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On November
6, 2015, the Company merged with Freedom Leaf, Inc., a private Nevada corporation. The Company changed its name from Arkadia International,
Inc., to Freedom Leaf, Inc. As a result of the merger, the private company was dissolved. See Note 3 for related discussion.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Net
Earnings (Loss) Per Share</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In accordance
with ASC 260-10, “Earnings Per Share,” basic net earnings (loss) per common share is computed by dividing the net
earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings
(loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding
during the period.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Segment
Information</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In accordance
with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company
is required to report financial and descriptive information about its reportable operating segments. The Company does not have
any operating segments as of September 30, 2015 and 2014.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Effect
of Recent Accounting Pronouncements</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
reviews new accounting pronouncements as issued. No new pronouncements had any material effect on these unaudited financial statements.
The accounting pronouncements issued subsequent to the date of these unaudited financial statements that were considered significant
by management were evaluated for the potential effect on these unaudited financial statements. Management does not believe any
of the subsequent pronouncements will have a material effect on these unaudited financial statements as presented and does not
anticipate the need for any future restatement of these unaudited financial statements because of the retro-active application
of any accounting pronouncements issued subsequent to September 30, 2015 through the date these unaudited financial statements
were issued.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Nature
of Operations</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">We are currently
devoting substantially all of our efforts in migrating to the news, arts and entertainment niche, with both in print and online
publications. Principal business activities are still in the development stage and have not yet commenced. The Company will generate
revenue through paid advertising in publications, both print and online, in the cannabis/hemp marketplace. The Company will also
earn revenue from consulting companies who are in our industry, contracting with companies to brand, market, and sell their products
and/or services, provide seminars in this space, and sell branded products for the Company and others the Company represents. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Basis
of Presentation</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The accompanying
unaudited financial statements of Freedom Leaf, Inc. have been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations
for the interim period ended September 30, 2015 shown in this report are not necessarily indicative of results to be expected
for the full fiscal year ending June 30, 2016. In the opinion of the Company’s management, the information contained herein
reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s
results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction
with the audited financial statements in the Company’s Form 10-K for the year ended June 30, 2015 filed on October 6, 2015
and Management’s Discussion and Analysis of Financial Condition and Results of Operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Impairment
of Long-Lived Assets</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting
for the Impairment or Disposal of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an
asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 8pt"><b></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our
financial instruments, including cash, accounts payable, accrued expenses, deposits received from customers for layaway sales
and short term loans the carrying amounts approximate fair value due to their short maturities.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">We follow
accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance
for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but
rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply
to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable
market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the
service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Level 1:
Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Level 2:
Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets
or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Level 3:
Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by
us, which reflect those that a market participant would use.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">We currently
measure and report at fair value our intangible assets (due to our impairment analysis) and derivative liabilities. The fair value
of intangible assets has been determined using the present value of estimated future cash flows method. The fair value of derivative
liabilities is measured using the Black-Scholes option pricing method. The following table summarizes our non-financial assets
and liabilities measured at fair value on a recurring basis as of September 30, 2015:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Quoted Prices in</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Balance at</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Active Markets</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Other</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Significant</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>September</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>for Identical</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Observable</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Unobservable</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>30,
2015</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Assets</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Inputs</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>Inputs</b></font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 1)</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 2)</b></font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>(Level 3)</b></font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Assets:</font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 43%; padding-bottom: 1pt"><font style="font-size: 8pt">Trademarks</font></td><td style="width: 1%; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: Black 1pt solid; text-align: right; width: 12%"><font style="font-size: 8pt">–</font></td><td style="width: 1%; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 12%; border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="width: 1%; padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt">Total Financial Assets</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Following
is a summary of activity through September 30, 2015 of the fair value of intangible assets valued using Level 3 inputs:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Accumulated</font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Asset</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Amortization</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Net</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 36%; text-align: left"><font style="font-size: 8pt">Intangibles
- June 30, 2015</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">4,913</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">(169</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt">)</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">4,744</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">Additions</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1,230</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1,230</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">Amortization</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(82</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(82</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">Intangibles
- September 30, 2015</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">6,143</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">(251</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of
those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain
circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the
event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other
income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion
date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become
subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on
the reclassification date.</font></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Accumulated</font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Asset</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Amortization</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Net</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 36%; text-align: left"><font style="font-size: 8pt">Intangibles
- June 30, 2015</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">4,913</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">(169</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt">)</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 10%; text-align: right"><font style="font-size: 8pt">4,744</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">Additions</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1,230</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">1,230</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">Amortization</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(82</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(82</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">Intangibles
- September 30, 2015</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">6,143</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">(251</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">5,892</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><font style="font-size: 8pt"><b><i>Stock-Based
Compensation</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to
recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued
to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite
service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance
with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the
grant date by using the Black-Scholes option-pricing model.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Going
Concern</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The accompanying
unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company sustained net losses of $144,166 and used cash in operating
activities of $76,861 for the three months ended September 30, 2015. The Company had working capital deficit, stockholders’
deficiency and accumulated deficit of $109,094, $293,973 and $1,143,284, respectively, at September 30, 2015. These factors raise
substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company’s
continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving investment
capital and loans from third parties to sustain its current level of operations. The Company is in the process of securing working
capital from investors for common stock, convertible notes payable, and/or strategic partnerships. No assurance can be given that
the Company will be successful in these efforts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The financial
statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Use
of Estimates</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include
the amortization period for intangible assets, valuation and impairment valuation of intangible assets, depreciable lives of the
web site and property and equipment, valuation of warrants and beneficial conversion feature debt discounts, valuation of derivatives,
valuation of share-based payments and the valuation allowance on deferred tax assets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"><b><i>Reclassifications</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Certain amounts
in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications
had no effect on reported losses, total assets, or stockholders’ equity as previously reported.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Development
Stage Company</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Since inception,
the Company became a “development stage company” as defined in the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities.” On June 10, 2014 the
FASB issued authoritative guidance which eliminates the concept of a development stage entity. The incremental reporting requirements
for presenting the development stage operations and cash flows since inception will no longer apply to development stage entities.
The amendments of Topic 915 are to be applied retrospectively and are effective for fiscal years beginning after December 15,
2014. The Company has elected early adoption of this guidance effective with the filing of its previous quarterly report.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On November
6, 2015, the Company merged with Freedom Leaf, Inc., a private Nevada corporation. The Company changed its name from Arkadia International,
Inc., to Freedom Leaf, Inc. As a result of the merger, the private company was dissolved. See Note 3 for related discussion.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Net
Earnings (Loss) Per Share</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In accordance
with ASC 260-10, “Earnings Per Share,” basic net earnings (loss) per common share is computed by dividing the net
earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings
(loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding
during the period.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Segment
Information</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In accordance
with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company
is required to report financial and descriptive information about its reportable operating segments. The Company does not have
any operating segments as of September 30, 2015 and 2014.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Effect
of Recent Accounting Pronouncements</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
reviews new accounting pronouncements as issued. No new pronouncements had any material effect on these unaudited financial statements.
The accounting pronouncements issued subsequent to the date of these unaudited financial statements that were considered significant
by management were evaluated for the potential effect on these unaudited financial statements. Management does not believe any
of the subsequent pronouncements will have a material effect on these unaudited financial statements as presented and does not
anticipate the need for any future restatement of these unaudited financial statements because of the retro-active application
of any accounting pronouncements issued subsequent to September 30, 2015 through the date these unaudited financial statements
were issued.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">The Company
was authorized to issue up to 75,000,000 shares of common stock, par value $0.001 per share. On January 21, 2015, the Company
increased it’s authorized to 500,000,000 shares of common stock. Each outstanding share of common stock entitles the holder
to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative,
with no pre-emptive rights.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On November
6, 2014, the Company merged with Freedom Leaf, Inc., a private Nevada corporation (see Note 1). After the completion of the merger,
there were 173,401,200 shares of common stock issued, issuable and outstanding.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On November
10, 2014, the Company issued 780,000 shares of common stock to Vincent Moreno for consulting services from November 10, 2014 through
April 10, 2015. The Company’s stock is thinly traded therefore the valuation of the issuance was based on the value of the
services, which was $12,500.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b>Legal
Matters</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">From time
to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of its business.
The Company is not currently a party to any material legal proceedings, nor is the Company aware of any other pending or threatened
litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial
condition should such litigation be resolved unfavorably.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b>Lease
Commitment</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">We lease
approximately 2,800 square feet of office space in Las Vegas, Nevada, pursuant to a lease that will expire on September 30, 2019.
This facility serves as our corporate headquarters. After September 30, 2017, the Company has the option to opt out of the lease.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">Future minimum lease payments
under these leases are as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 15%; text-align: left"><font style="font-size: 8pt">2016</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 36%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 15%; text-align: right"><font style="font-size: 8pt">33,264</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">2017</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">45,360</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">2018</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">46,704</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt">2019</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">48,048</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt">2020</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; border-bottom: Black 1pt solid"><font style="font-size: 8pt"> </font></td><td style="text-align: right; border-bottom: Black 1pt solid"><font style="font-size: 8pt">12,096</font></td><td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt">Total</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="text-align: left; border-bottom: Black 2.5pt double"><font style="font-size: 8pt">$</font></td><td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 8pt">185,472</font></td><td style="text-align: left; padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td colspan="7" style="text-align: left"><font style="font-size: 8pt">Note: After September 30, 2017, the Company can opt
out of the remaining lease obligation.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">Rent expense for the three months
ended September 30, 2015 and 2014 was $22,172 and $0, respectively.</font></p>
Freedom Leaf Inc.
0001581545
10-Q
2015-09-30
false
--06-30
No
No
Yes
Smaller Reporting Company
Q1
2016
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Convertible
notes payable, all classified as current at September 30, 2015, consists of the following:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold"><font style="font-size: 8pt">Convertible notes, net of discounts</font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: right"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: right"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: right"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="10" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">September 30, 2015</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt">Principal,</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt">Debt</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt">net
of</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: center"><font style="font-size: 8pt">Principal</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: center"><font style="font-size: 8pt">Discounts</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: center"><font style="font-size: 8pt">Discounts</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 55%; text-align: left"><font style="font-size: 8pt">Bruce Perlowin</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 11%; text-align: right"><font style="font-size: 8pt">5,000</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 11%; text-align: right"><font style="font-size: 8pt">(3,836</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt">)</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 11%; text-align: right"><font style="font-size: 8pt">1,164</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt">Bruce Perlowin</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">(4,329</font></td><td style="text-align: left"><font style="font-size: 8pt">)</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">671</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt">Svetlana Ogorodnikova</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">12,500</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(9,699</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">2,801</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt"><font style="font-size: 8pt">Total</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">22,500</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">(17,864</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">4,636</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On July 7,
2015, the Company executed a convertible promissory note for $5,000 with Bruce Perlowin. The note is for one year, 12% interest
rate, and convertible at $0.10 per share. The current price at that date was $0.085, which is less than the conversion price.
The stock price for our common stock as of September 30, 2015 was $0.40. Our common stock is thinly traded therefore our price,
as management has determined, is not indicative of our valuation. In October 2015, the Company issued common stock for services
to unrelated parties and the common stock was values at $0.20, therefore, the $0.20 was used for valuation purposes for this note.
A beneficial conversion feature of $5,000 was recorded and, as of September 30, 2015, $1,164 was amortized.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On August
12, 2015, the Company executed a convertible promissory note for $5,000 with Bruce Perlowin. The note is for one year, 12% interest
rate, and convertible at $0.10 per share. The current price at that date was $0.10, which is less than the conversion price. The
stock price for our common stock as of September 30, 2015 was $0.40. Our common stock is thinly traded therefore our price, as
management has determined, is not indicative of our valuation. In October 2015, the Company issued common stock for services to
unrelated parties and the common stock was values at $0.20, therefore, the $0.20 was used for valuation purposes for this note.
A beneficial conversion feature of $5,000 was recorded and, as of September 30, 2015, $671 was amortized.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">On August
20, 2015, the Company executed a convertible promissory note for $12,500 with Svetlana Ogorodnikova. The note matures on February
19, 2016, 12% interest rate, and convertible at $0.10 per share. The current price at that date was $0.085, which is less than
the conversion price. The stock price for our common stock as of September 30, 2015 was $0.40. Our common stock is thinly traded
therefore our price, as management has determined, is not indicative of our valuation. In October 2015, the Company issued common
stock for services to unrelated parties and the common stock was values at $0.20, therefore, the $0.20 was used for valuation
purposes for this note. A beneficial conversion feature of $12,500 was recorded and, as of September 30, 2015, $2,801 was amortized.</font></p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold"><font style="font-size: 8pt">Convertible notes, net of discounts</font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: right"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: right"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: right"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="10" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">September 30, 2015</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt">Principal,</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt">Debt</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: center"><font style="font-size: 8pt">net
of</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: center; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: center"><font style="font-size: 8pt">Principal</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: center"><font style="font-size: 8pt">Discounts</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: center"><font style="font-size: 8pt">Discounts</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 55%; text-align: left"><font style="font-size: 8pt">Bruce Perlowin</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 11%; text-align: right"><font style="font-size: 8pt">5,000</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 11%; text-align: right"><font style="font-size: 8pt">(3,836</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt">)</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 11%; text-align: right"><font style="font-size: 8pt">1,164</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt">Bruce Perlowin</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">(4,329</font></td><td style="text-align: left"><font style="font-size: 8pt">)</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">671</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt">Svetlana Ogorodnikova</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">12,500</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">(9,699</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">2,801</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 2.5pt"><font style="font-size: 8pt">Total</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">22,500</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">(17,864</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt">)</font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">4,636</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
251
169
33264
22172
0
17864
3836
4329
9699
22500
5000
5000
12500