HARRISON VICKERS & WATERMAN INC

In February, 2016, the Financial Accounting Standards Board issued an ASU that contained guidance about Leases (Topic 842). This topic provides guidance in that a lessee should recognize the assets and liabilities that arise from operating leases. For operating leases as we have no finance or capital leases, the lessee is required to do the following: (1) Recognize a right-of-use assets and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position; (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; (3) classify all cash payments within operating activities in the statement of cash flows. This pronouncement probably will relate to our leases for our World of Beer locations and are to be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. As such, we will prepare the needed calculations beginning in our fiscal year July 1, 2017 that ends June 30. 2018. The Company believes there is no change needed until July 1 2017.

As noted above in the Series A Convertible Preferred Stock section, we issued 1,056,075 shares of the Company’s common stock for the conversion of 1,000 shares of this convertible preferred stock.

On April 7, 2016, we issued 7,485,413 shares of common stock for two conversions with the first on $2,000 convertible debt and $494 accrued interest and the second conversion of $2,500 convertible debt and $620 accrued interest with both converted at a conversion price of $.00075 .

Commensurate with the change in business model described under “General” above, the Company generated $672,481 in net revenues for the three months ended March 31, 2016. These are revenues associated with the operations of the West Hartford World of Beer location. There are no comparison figures for the prior year as we did not purchase the first World of Beer location until April, 2015. Administrative Salaries, taxes and employee benefits were zero for the three months ended March 31, 2016 as compared to $(175,000) for the prior year as this amount represented an accrual adjustment. There are no corporate employees in 2015 as Attitude Drinks Incorporated’s employees provide all needed management services for the Company.

We reported $222,858 other expenses and $212,106 labor costs for the World of Beer location. There are no prior year comparison figures as we did not buy the first World of Beer location until April, 2015.