Annual Report (10-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-K

þ	ANNUAL REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JULY 31, 2014

Commission File Number: 333-156059

MINERCO RESOURCES, INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

800 Bering Drive

Suite 201

Houston, TX 77057

(Address of principal executive offices, including zip code.)

(888) 473-5150

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:		Securities registered pursuant to section 12(g) of the Act:
NONE		Common Stock $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES o NO þ

Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act: YES þ NO o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES þ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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

Large Accelerated Filer	o	Accelerated Filer	o
Non-accelerated Filer	o	Smaller Reporting Company	þ
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO þ

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of January 31, 2014: $3,050,053.

At October 31, 2014, 2,828,775,598 shares of the registrant’s common stock were outstanding.

TABLE OF CONTENTS

		Page No.

PART I

Item 1.	Business	3

Item 1A.	Risk Factors	13

Item 1B.	Unresolved Staff Comments	13

Item 2.	Properties	13

Item 3.	Legal Proceedings	13

Item 4.	Mine Safety Disclosure	13

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14

Item 6.	Selected Financial Data	17

Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 8.	Financial Statements and Supplementary Data	25

Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	26

Item 9A.	Controls and Procedures	26

Item 9B.	Other Information	27

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	28

Item 11.	Executive Compensation	31

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	32

Item 13.	Certain Relationships and Related Transactions, and Director Independence	33

Item 14.	Principal Accountant Fees and Services	34

PART IV

Item 15.	Exhibits, Financial Statement Schedules	35

	Signatures	38

	Exhibit Index	39

PART I

ITEM 1. BUSINESS.

Forward-Looking Statements

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “could”, "may", "will", "should", "expects", "plans”, "anticipates", "believes", "estimates", "predicts", "potential" or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.

As used in this annual report, the terms "we," "us," "our," “company” and "Minerco" mean Minerco Resources, Inc., unless otherwise indicated.

All dollar amounts in this annual report refer to U.S. dollars unless otherwise indicated.

Company Overview

Our principal offices are located at 800 Bering Drive, Suite 201, Houston, TX 77057. Our telephone number is 888-473-5150. Information about our businesses can be obtained from our website www.minercoresources.com. Information on website is not incorporated by reference into this report.

Company History

Minerco Resources, Inc. was incorporated as a Nevada company on June 21, 2007 and our only two subsidiaries are Level 5 Beverage Company, Inc. (“Level 5”) and Minerco Honduras S.A. From our inception in June 2007 through May 27, 2010, we were engaged in the acquisition of interests and leases in oil and natural gas properties. In May, 2010, we changed the focus of our business to the development, production and provision of clean, renewable energy solutions in Central America. On October 16, 2012, we added a functional specialty beverage retailer that is developed and sold by Level 5 as an additional line of business, which has become our primary focus. As of September 20, 2013, we have completely discontinued operations of our renewable energy line of business. We continue to own royalty interests in two (2) renewable energy project(s) and an earned net revenue interest in one (1) renewable energy project; however, all operational control for all three (3) projects has been returned to the originating companies.

Specialty Beverage Business

In September, 2012, we started Level 5 Beverage Company, Inc. (“Level 5”), a specialty beverage company which develops, produces, markets and distributes a diversified portfolio of forward-thinking, good-for-you consumer brands. Level 5 has developed or acquired exclusive rights to four separate and distinct brands: VitaminFIZZ®, Vitamin Creamer®, COFFEE BOOST™ and the LEVEL 5® Brand. We have established a fifth brand, The Herbal Collection™, with a private partner to add to our portfolio, and The Herbal Collection has been transferred out of Level 5 and assigned to Minerco. At July 31, 2014, our only beverage sales have come from the sale of our COFFEE BOOST™ of which we have sold $12,381.

We organically developed the LEVEL 5® and COFFEE BOOST™ Brands, and we acquired the exclusive, worldwide rights to the VitaminFIZZ® Brand from VITAMINFIZZ, L.P. in November, 2013. In 2014, we acquired 100% of the right, title and intellectual property to the Vitamin Creamer® Brand. The current focus of our business is on the VitaminFIZZ® brand. We are currently completing the research and development of the VitaminCreamer® brand to include a Boost and Relax, and Minerco is pilot testing The Herbal Collection™ brand with target consumers in specialized markets.

More information about Level 5 Beverage Company, Inc. is available from our website at: www.level5beverage.com. Information from our website is not incorporated into this Annual Report on Form 10-K.

Our Brands

VitaminFIZZ® Brand

VitaminFIZZ®, developed by Power Brands Consulting, LLC in 2010, was launched in 2014 and is a zero calorie, vitamin enhanced lightly sparkling water, similar in concept to the popular VitaminWater®, only in carbonated format. VitaminFIZZ® contains 100% of daily vitamin C, 100% of daily vitamin B6 and B12 and is zero calories. VitaminFIZZ® is also non-GMO (no genetically modified organism) and is certified Kosher. Level 5 acquired the exclusive, worldwide rights to VitaminFIZZ in November, 2013. The suggested retail price is between $1.29 and $1.49 per 17 oz. bottle and is based on geographic region and strength of sales.

We launched VitaminFizz® in June of 2014 in select New York and Southern California locations. The 17 oz. slim plastic bottle packaging was hard launched in August, 2014 in New York City and Southern California and has been very well received. VitaminFIZZ® is currently available in six (6) flavors: Lemon-Lime, Orange-Mango, Strawberry-Watermelon, Black Raspberry, Strawberry Lemonade and Coconut-Pineapple. Additional flavors, and possibly smaller sizes, are expected in 2015.

As of October 31, 2014, VitaminFIZZ® is available in over 500 retail locations in New York City and Southern California and is also available in our online store at Amazon.com. Locations include a mix of major chain and independent placements. A complete list of retail locations is available on www.vitamin-fizz.com.

As of October 31, 2014, VitaminFIZZ® had sold or placed for sale (including direct sales, promotions and Purchase Orders) approximately 20,000 cases of five flavors (Coconut-Pineapple was delayed).

More details about the VitaminFIZZ® Brand are available from our brand website at: www.vitamin-fizz.com. Information from our website is not incorporated into this Annual Report on Form 10-K.

COFFEE BOOST™ Brand

COFFEE BOOST™ is the 2nd Generation of the LEVEL 5™ - RISE™ product and is dual designed to be taken “straight up” or added to coffee for an all-natural, healthy alternative to synthetic flavored creamers and powders and was developed to provide all the benefits of the LEVEL 5™ Brand (great taste, functionality, low calories, and all-natural ingredients in a 2.5 oz. bottle). Currently, the sku’s include:

1.	COFFEE BOOST™ – Coffee

2.	COFFEE BOOST™ – French Vanilla

3.	COFFEE BOOST™ – Hazelnut

4.	COFFEE BOOST™ – Mocha

COFFEE BOOST™ is packaged in slender 2.5 oz. PET (plastic) bottles, which are sophisticated in design and offer on-the-go convenience. The logo, graphics, and copy are designed to communicate the key branding elements: dual designed energy supplement in multiple coffee based flavors. The brand is premium priced, with a retail price of $2.99 for one 2.5 oz. container; however, the product will be sold in multiple formats including blister packs and sample packs of all four current flavors at a discount.

On July 23, 2014, we produced all four (4) flavors of COFFEE BOOST™ and began selling the Brand in select New York City and Southern California locations and also on our online store at Amazon.com.

With the acquisition of VitaminCreamer® in 2014, we plan to incorporate Coffee Boost™ (name and functionality) into the VitaminCreamer® product line.

More details about the COFFEE BOOST™ Brand are available from our brand website at: www.drinkcoffeeboost.com. Information from our website is not incorporated into this Annual Report on Form 10-K.

VitaminCreamer® Brand

In June, 2014, we acquired 100% of the right, title and intellectual property to the VitaminCreamer® Brand.

Vitamin Creamer® with Coffee Boost™ (or Boost): Merging these two cutting edge concepts into one powerful range of products seems inevitable. We believe that The VitaminCreamer® with Boost range of coffee creamer and enhancement products will solidify Level 5’s position in the very strong and very lucrative coffee and creamer markets. Level 5 intends to merge the brands to include a range of cutting edge products with 2 main drivers: (1) increasing consumers’ nutritional and vitamin intake; and (2) increasing function and flavor to the coffee drinkers’ experience.

The VitaminCreamer® product line will include three functions: (1) Vitamin Creamer - Original; (2) Vitamin Creamer Boost; and (3) Vitamin Creamer Relax. The Original version is being designed not to interfere with the daily coffee but is expected to enhance the nutritional value; the Boost version is expected to provide all the benefits of the Original version and will also add an enhanced energy boost; and the Relax version is expected to provide all the benefits of the Original version and will also take the edge off for caffeine sensitive consumers.

The VitaminCreamer® product line will include at least two packaging sizes: (1) Trial / Single-serve size (2 oz.) for on-the-go consumers; and (2) Take home size (12 oz.) for daily home and/or office consumers. The available flavors and exact volume specifications per container should be released at a later date.

Level 5 with PowerBrands, the leading beverage development company in the US, are diligently working with US supplement and ingredient suppliers to create this cutting-edge breakthrough in the coffee and creamer market. PowerBrands with their award winning food scientists and highly decorated package design team, who also created the stand alone brands of VitaminCreamer® and CoffeeBoost™, are fully dedicated to and actively creating the world’s leading coffee and creamer products for Level 5.

Exact specifications and dates are to be determined; however, we expect VitaminCreamer® to be finalized in early calendar year 2015.

LEVEL 5® Brand

The LEVEL 5® product line features four (4) distinct varieties, each with a unique flavor profile aimed at addressing a specific targeted result. LEVEL 5® is positioned as a lifestyle brand, with a delicious and convenient easy-to-drink shot format.

●	RISETM (Energy Supplement)

●	CURVES (Women’s Supplement)

●	ARMOR (Wellness Supplement)

●	FLEX (Workout Supplement)

All LEVEL 5® products are formulated with proprietary blends of amino acids, essential vitamins and minerals, and natural adaptogens. Each ingredient has been carefully selected for its taste profile and health benefit. LEVEL 5™ is packaged in slender 2.5 oz. PET (plastic) bottles, which are sophisticated in design and offer on-the-go convenience. The logo, graphics, and copy are designed to communicate the key branding elements: energy, wellness, protection, and stamina. The brand is premium priced, with a retail price of $2.99 for one 2.5 oz. container.

We intend to continue to seek partners to develop specialty products for the Level 5® Brand: RISE™ with rapidly deployed personnel, FLEX with a gym/fitness chains, CURVES with a women’s health specialist and ARMOR with wellness / health care groups.

The Herbal Collection™ Brand

The Herbal Collection trademark was applied for by Level 5 in March, 2014. While we wait for the trademark to be approved, we have transferred the rights for the mark and the Brand to Minerco. The Herbal Collection™ will partner with a private company to execute the business plan. During the lengthy trademark process, we continue to complete Research and Development and expect to have The Herbal Collection in the pilot testing phase in early 2015.

Target Market

We have positioned our brands to appeal to the growing category of consumers who choose products based on their nutritional and functional benefits. More specifically, we are targeting the on-the-go health and wellness oriented consumers who lead active professional and social lifestyles. This consumer segment spans the entire demographic spectrum of consumers that share an awareness of the health benefits associated with functional beverages and are willing to explore new items offering superior taste and efficacy.

Retail Activation

We provide health and wellness oriented individuals a beverage solution for “On-the-Go” (OTG) demand. We are targeting conventional retail distribution for the brands, including natural and organic chain grocery stores (such as Whole Foods) for our functional brands, conventional chain and independent grocery accounts, drug stores, club stores, and mass merchandisers. We have contracted with third party Direct-Store-Delivery (DSD) distributors, such as Avanzar, to transport and merchandise the product line. Additionally, our products will be available for sale directly to consumers through our website and Amazon.com.

Through our distributors on both the east and west coasts, we have launched VitaminFizz® in California and New York and are actively and aggressively supporting the bi-coastal launch. We intent to follow distribution of these products with our VitaminCreamer® (with COFFEE BOOST™ integrated) and The Herbal Collection™ Brands in the coming year.

Through our distributor in California (Avanzar), we previously soft launched VitaminFizz®, RISETM and COFFEE BOOSTTM in Southern California, our targeted region for pilot testing before expanding into multiple markets and ultimately national distribution. We have also made our products available through our websites and on Amazon.com. We intend to do the same with our other products.

Distribution Systems

The beverage industry largely operates via a three tier distribution system: manufacturer → distributor → retailer. Third party distributors provide a vital service to beverage manufacturers who do not wish to bear the supply chain burden of moving product from bottling facilities to retail shelves. This operation requires supply chain management resources, significant labor, transportation resources, warehouse resources, as well as sales and merchandising expertise. Third party distributors allow beverage manufacturers to focus on core competencies: brand building, innovation, consumer marketing, research, and key account management. For this service, distributors command margin percentages of 20% to 30% based on wholesale price.

All of our products are distributed by regional third party direct-store-delivery (DSD) distributors focusing primarily on natural retail channels, conventional grocery, drug, mass and club channels, and secondarily focused on gas and convenience channels, as well as specialty retail (fitness clubs and gyms). The Company’s management team, specifically our Brand Manager, will train all participating distributors’ sales and merchandising personnel.

We have entered into an agreement with Avanzar, in Southern California, to distribute our entire line of products in California. The Distribution Agreement provides that Avanzar has the exclusive right to sell and distribute our current products in the following California counties: Los Angeles, Riverside, San Bernardino, Orange County, San Diego County, and Imperial. The Distribution Agreement also provides that Avanzar shall have a right of first refusal for the distribution of any similar products developed in the future.

We have entered into an agreement with Drink King, in New York, to distribute our entire line of products, starting with VitaminFIZZ®. The Distribution Agreement provides that Drink King has the exclusive right to sell and distribute our current products in the following New York locations or counties: Brooklyn (Kings County), Staten Island (Richmond County), Queens (Queens County), Bronx (Bronx County), Manhattan (New York County), Long Island (Suffolk and Nassau Counties), Westchester County, Rockland County. The Distribution Agreement also provides that Drink King shall have a right of first refusal for the distribution of any similar products developed in the future.

On October 24, 2014 (Effective September 15, 2014), we entered into an Membership Interest Purchase Agreement with Avanzar Sales and Distribution, LLC to acquire the controlling interest in Avanzar. Level 5 acquired an initial thirty percent (30%) equity position and fifty-one percent (51%) voting interest for the Purchase Price of $500,000 with a twenty-one percent (21%) Option and Second Option to acquire up to seventy-five percent (75%) of Avanzar. The Agreement is Effective as of September 15, 2014.

Production Facilities

We outsource the manufacturing and warehousing of our products to third party bottlers and independent contract manufacturers (“co-packers”). We purchase our raw materials from North American suppliers which deliver to our third party co-packers.

Raw Materials

Substantially, all of the raw materials used in the preparation, bottling and packaging of our products are purchased by us or by our contract manufacturers in accordance with our specifications. The raw materials used in the preparation and packaging of our products consist primarily of readily available, non-specialty products. We believe that we have adequate sources of raw materials, which are available from multiple suppliers.

Quality Control

We are committed to building products that meet or exceed the quality standards set by the U.S. government. Our products are made from high quality, all natural ingredients. We ensure that all of our products satisfy our quality standards. Contract manufacturers are selected and monitored by our own quality control representatives in an effort to assure adherence to our production procedures and quality standards. Samples of our products from each production run undertaken by our contract manufacturers are analyzed and categorized in a reference library. The manufacturing process steps include source selection, receipt and storage, filtration, disinfection, bottling, packaging, in-place sanitation, plant quality control and corporate policies affecting quality assurance. In addition, in the future, we will attempt to ensure that each bottle is stamped with a production date, time, and plant code to quickly isolate problems should they arise.

For every run of product, our contract manufacturer undertakes extensive testing of product quality and packaging. This includes testing levels of sweetness, taste, product integrity, packaging and various regulatory cross checks. For each product, the contract manufacturer must transmit all quality control test results to us for reference following each production run. Water quality is ensured through activated carbon and particulate filtration as well as alkalinity adjustment when required. We are committed to ongoing product improvement with a view toward ensuring the high quality of our product through a stringent contract packer selection and training program.

Growth Strategy

Our growth strategy includes:

●	Securing additional distributors within the United States and globally;

●	Increasing brand awareness of all of our products;

●	Securing additional chain, convenience and key account store listings for our products across United States and globally;

●	Providing online sales through various online channels;

●	Rolling out the additional products in our brand umbrella (including VitaminCreamer® and The Herbal Collection™);

●	Continuing to vertically and strategically integrate our beverage business; and

●	Expanding our brand portfolio to other segments (through development and/or acquisition).

U.S. Beverage Market

The U.S. liquid refreshment beverage market stayed essentially unchanged in size in 2013, according to newly released preliminary data from the Beverage Marketing Corporation. Its flatness followed three years of growth. Total liquid refreshment beverage volume stood at 30.2 billion gallons in 2013. 1

Niche categories continued to outperform traditional mass-market categories. Premium beverages such as energy drinks and, especially, ready-to-drink (RTD) coffee advanced particularly forcefully during 2013. Aggressive pricing contributed to the sizeable increase in bottled water volume. Larger, more established segments such as carbonated soft drinks and fruit beverages failed to grow once again.

RTD coffee moved forward faster than all other segments with a 6.2 percent volume increase in 2013. Nonetheless, the segment accounted for a relatively small share of total liquid refreshment beverage volume. Indeed, it was the smallest, trailing even value-added water, which registered the largest decline of any liquid refreshment beverage type (despite a strong showing by Glaceau Smartwater). Energy drinks advanced by 5.5 percent, but also remained fairly modest in size and didn't match the double-digit volume gains of the prior two years. Not surprisingly, no energy drink, RTD coffee or value-added water brand ranked among the leading trademarks by volume. 1

Carbonated soft drinks remained by far the biggest liquid refreshment beverage category, but they continued to lose both volume and market share. Volume slipped by 3.2 percent from 13.3 billion gallons in 2012 to 12.9 billion gallons in 2013, which lowered their market share from 44 percent to less than 43 percent. Even so, certain soda trademarks, such as Canada Dry and certain varieties of Mountain Dew, did achieve growth. Moreover, carbonated soft drinks accounted for five of the 10 biggest beverage trademarks during 2013, with Coca-Cola and Pepsi-Cola retaining their usual first and second positions. 1

“Beverages endured a transitional year in 2013,” says Michael C. Bellas, chairman and CEO, Beverage Marketing Corporation. “Even in the face of economic challenges, healthier products thrived and even formerly floundering segments like RTD coffee demonstrated their potential. Certainly the state of the economy is crucial for overall beverage category success, but so are products that connect with the evolving American consumer.”

Carbonated Soda Drinks (CSDs)

The consumption of CSDs has been declining in developed markets over the past few years. The situation in the U.S. is a key example of this trend – per capita consumption of CSDs peaked around 1998 at about 54 gallons a year. Today, the figure stands at around 44 gallons a year. A major reason behind this has been growing consumer awareness about negative health impacts of CSDs. A research paper recently published in the American Journal of Public Health concluded: “Soft drink consumption is significantly linked to overweight, obesity, and diabetes prevalent worldwide.” This certainly is bad news for major cola companies whom have been hit hard by this trend. 2

Unlike the mature CSD market which is dominated by two or three big companies, small individual brands have a stronghold in the carbonated water segment. Sparkling ICE, owned by Talking Rain, is the largest individual brand in carbonated water with 21%-plus of the overall sales in FY2013. Its market share increased by nearly 10% year on year during this period. LaCroix, Topo Chico and Cascade Ice water are other brands which together constitute ~11% of this market. 3

This carbonated water category also faces stiff competition from private labels, which account for over one-fourth of this category. Private labels offer relatively cheaper prices and thus appeal to price sensitive consumers. Going forward, the beverage giants will look to leverage its wide distribution channels and compete with private labels on the pricing front in order to advance in the sparkling bottled water market. 3

Functional Beverages

The general trend toward a consumer preference for functional beverages is evident in nearly every beverage segment. The accelerated pace of innovation has increased the pressure on beverage companies to stay ahead of the pack by delivering new and interesting flavors, healthier ingredients and enhanced functionality to consumers who are bombarded with choices. U.S. retail sales of natural and organic foods and beverages rose to nearly $29B in 2011, an increase of 9% over the previous year, and 63% higher than sales five years earlier, according to the Organic Trade Association’s Organic Industry Survey (2011). 1

Perhaps the best illustration of the growing consumer demand for functional benefits from their beverages is the relatively recent emergence of the $8.9 billion energy drink category. This category didn’t exist until the introduction of Red Bull in 1997. It continues to be the fastest growing segment in the beverage industry, up 14.3% in retail dollar volume versus one year ago. This category is dominated by three top brands with national distribution: Red Bull, Monster and RockStar, however, there are many smaller and regional brands throughout the U.S. While core energy drink consumers are 18-24 year old males, trends indicate that females and older blue and white collar workers 25-40 are increasingly choosing energy drinks over coffee as an afternoon pick-me-up. 1

This recent innovation in the beverage industry has also impacted the major Super-natural retail chains (Whole Foods, Wild Oats, Trader Joes) where there is an increasingly wide range of healthy options, including flash-pasteurized juice and smoothie products from national leaders Odwalla and Naked Juice, and beverages such as Sambazon, based on super-fruits such as pomegranate, blueberry and the acai berry from Brazil. Beverages sold in this channel are primarily differentiated on features such as freshness (e.g., use of flash pasteurization), and perceived health benefits (e.g., use of super-fruits that have unusually high concentrations of antioxidants). 1

(1)	Source: Beverage Marketing Corporation

(2)	Source: Beverage World

(3)	Beverage Industry Magazine

Beverage Industry Regulations

The processing, formulation, manufacturing, packaging, labeling, advertising, and distribution of our products are subject to federal laws and regulation by one or more federal agencies, including the FDA, the FTC, the Consumer Product Safety Commission, the United States Department of Agriculture, and the Environmental Protection Agency. These activities are also regulated by various state, local, and international laws and agencies of the states and localities in which our products are sold. Government regulations may prevent or delay the introduction, or require the reformulation, of our products, which could result in lost revenues and increased costs to us. For instance, the FDA regulates, among other things, the composition, safety, labeling, and marketing of dietary supplements (including vitamins, minerals, herbs, and other dietary ingredients for human use). The FDA may not accept the evidence of safety for any new dietary ingredient that we may wish to market, may determine that a particular dietary supplement or ingredient presents an unacceptable health risk, and may determine that a particular claim or statement of nutritional value that we use to support the marketing of a dietary supplement is an impermissible drug claim, is not substantiated, or is an unauthorized version of a “health claim.” Any of these actions could prevent us from marketing particular dietary supplement products or making certain claims or statements of nutritional support for them. The FDA could also require us to remove a particular product from the market. Any future recall or removal would result in additional costs to us, including lost revenues from any additional products that we are required to remove from the market, any of which could be material. Any product recalls or removals could also lead to liability, substantial costs, and reduced growth prospects. With respect to FTC matters, if the FTC has reason to believe the law is being violated (e.g., failure to possess adequate substantiation for product claims), it can initiate an enforcement action. The FTC has a variety of processes and remedies available to it for enforcement, both administratively and judicially, including compulsory process authority, cease and desist orders, and injunctions. FTC enforcement could result in orders requiring, among other things, limits on advertising, consumer redress, divestiture of assets, rescission of contracts, or such other relief as may be deemed necessary. Violation of these orders could result in substantial financial or other penalties. Any action against us by the FTC could materially and adversely affect our ability to successfully market our products.

The production and marketing of our proprietary beverages are subject to the rules and regulations of various federal, provincial, state and local health agencies, including the U.S. Food and Drug Administration (FDA). The FDA also regulates labeling of our products. From time to time, we may receive notifications of various technical labeling or ingredient reviews with respect to our products. We believe that we have a compliance program in place to ensure compliance with production, marketing and labeling regulations.

Packagers of our beverage products presently offer non-refillable, recyclable containers in the U.S. and various other markets. Legal requirements have been enacted in jurisdictions in the U.S. requiring that deposits or certain eco-taxes or fees be charged for the sale, marketing and use of certain non-refillable beverage containers. The precise requirements imposed by these measures vary. Other beverage container related deposit, recycling, eco-tax and/or product stewardship proposals have been introduced in various jurisdictions in the U.S. We anticipate that similar legislation or regulations may be proposed in the future at local, state and federal levels both in the U.S.

Additional Concerns

Additional or more stringent regulations of beverages and dietary supplements and other products have been considered from time to time. These developments could require reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling, additional scientific substantiation, adverse event reporting, or other new requirements. Any of these developments could increase our costs significantly. For example, the Dietary Supplement and Nonprescription Drug Consumer Protection Act (S3546) which was passed by Congress in December 2006, imposes significant regulatory requirements on dietary supplements including reporting of “serious adverse events” to FDA and recordkeeping requirements. This legislation could raise our costs and negatively impact our business. In June 2007, the FDA adopted final regulations on GMPs in manufacturing, packaging, or holding dietary ingredients and dietary supplements, which apply to the products we manufacture and sell. These regulations require dietary supplements to be prepared, packaged, and held in compliance with certain rules. These regulations could raise our costs and negatively impact our business. Additionally, our third-party suppliers or vendors may not be able to comply with these rules without incurring substantial expenses. If our third-party suppliers or vendors are not able to timely comply with these new rules, we may experience increased cost or delays in obtaining certain raw materials and third-party products. Also, the FDA has announced that it plans to publish guidance governing the notification of new dietary ingredients. Although FDA guidance is not mandatory, it is a strong indication of the FDA’s current views on the topic discussed in the guidance, including its position on enforcement.

In addition, there are an increasing number of laws and regulations being promulgated by the United States government, governments of individual states and governments overseas that pertain to the Internet and doing business online. In addition, a number of legislative and regulatory proposals are under consideration by federal, state, local and foreign governments and agencies. Laws or regulations have been or may be adopted with respect to the Internet relating to:

●		liability for information retrieved from or transmitted over the Internet;
●		online content regulation;
●		commercial e-mail;
●		visitor privacy; and
●		taxation and quality of products and services.

Moreover, the applicability to the Internet of existing laws governing issues such as:

●		intellectual property ownership and infringement;
●		consumer protection;
●		obscenity;
●		defamation;
●		employment and labor;
●		the protection of minors;
●		health information; and
●		personal privacy and the use of personally identifiable information.

This area is uncertain and developing. Any new legislation or regulation or the application or interpretation of existing laws may have an adverse effect on our business. Even if our activities are not restricted by any new legislation, the cost of compliance may become burdensome, especially as different jurisdictions adopt different approaches to regulation.

Intellectual Property

Level 5 has applied for, received and/or acquired the following trademarks:

●	LEVEL 5. On August 20, 2013, we filed a trademark application with the USPTO for a U.S. federal trademark for LEVEL 5 (registration number 86042387). On June 17, 2014, we received the trademark for LEVEL 5 (serial number: 4553428);

●	VITAMINFIZZ. In November, 2013, we acquired the exclusive rights for the trademark: VITAMINFIZZ (registration number 3913788); and

●	VITAMIN CREAMER. In June, 2014, we acquired the trademark: VITAMIN CREAMER (registration number 4404886).

Level 5 applied for the trademark: The Herbal Collection™, and has transferred all rights of the mark to Minerco Resources, Inc. The details of this marks are as follows:

●	THE HERBAL COLLECTION. On March 2, 2014, we filed a trademark application with the USPTO for a U.S. federal trademark for THE HERBAL COLLECTION (registration number 86208571)

We consider our trademarks and trade secrets to be of considerable value and importance to our business.

Research and Development

The Company’s Research and Development (R&D) consisted of formulating the LEVEL 5™ product line including: RISE™, COFFEE BOOST™, CURVES, FLEX and ARMOR. The Company spent $-0- in the fiscal year ending July 31, 2014 and $-0- in the fiscal year ended July 31, 2013 in R&D activities. The R&D for LEVEL 5™ is the only R&D activities since the Company’s inception. The Company anticipates spending $100,000 in R&D activities over the next two fiscal years. The Company spent $86,850 on management and consulting fees activities for this product line. These fees have been recorded as selling, general, and administrative fees.

Renewable Energy Business Overview

As of September 23, 2013, we have completely discontinued operations of our Renewable Energy line of business. We continue to own royalty interests in two (2) renewable energy project(s) and an earned net revenue interest in one (1) renewable energy project; however, all operational control has been returned to the originating companies for all three (3) projects.

The projects that we have interests in are two (2) Hydro-Electric Projects and one (1) Wind Project in various parts of Honduras (collectively the “Projects”). Both of the Hydro-Electric projects are classified as run-of-the-river projects (not conventional retention dams). The Chiligatoro Hydro-Electric Project, is in the final permitting stage of development, and the Iscan Hydro-Electric Project is currently in the early feasibility stage of development. The wind project, Sayab Wind Project, is also in the early feasibility stage of development.

Effective May, 2013, we have a six percent (6%) royalty interest in the Sayab Wind Project after the Project is completed by Energia Renovable Hondurenas, S.A. (ERSHA) or his assigns. We also have a have a ten percent (10%) royalty interest in the Iscan Hydro-Electric Project after the Project is completed by ENERCOSA or his assigns. Both Projects are actively completing the Socialization and Feasibility stages of development.

On September 23, 2013, we entered into a Return of Asset Agreement with ROTA Inversiones, S.A. (“ROTA”) to return ninety-five percent (95%) of the Chiligatoro Hydro-Electric Project back to the originating company in exchange for our earned interest in the Project, estimated at five percent (5%) for credit of the monies spent by Minerco to develop the Project. The Chiligatoro Hydro-Electric Project is in the final permitting stage of development and is expected to receive final approval in 2014.

The feasibility stage of development is the stage of development where the preliminary permits are obtained, measurement of the water flow for hydro-electric projects or wind and weather patterns for wind projects are observed, and final project size are determined. See Managements’ Discussion and Analysis. However, there can be no assurance that the owners of these projects will successfully develop or complete the projects or that we will receive a royalty or revenue interests from the Projects.

To the date hereof, the Projects have not completed construction; and therefore, we have not received any revenue from the projects. There can be no assurance given that the projects will be completed in a timely manner, if at all. Since we only have royalty or “earned” interests, we will require very minimal funds to maintain our ownership interests, estimated at $20,000 in the aggregate. Additionally, even if the Projects complete development, there is no guarantee that it will be successfully used to create electricity or that it will generate a consistent revenue stream for us. As of July 31, 2013, these assets were impaired due to inactivity; however, we are advised that the Projects are still actively pursuing obtaining necessary permits and negotiating contracts including the Feasibility Permits, Power Purchase Agreements, Congressional Approval, Equity Partner Financing and Senior Debt Financing.

Renewable Energy Projects

Chiligatoro Hydro-Electric Project

On September 23, 2013, we entered into a Return of Asset Agreement with ROTA Inversiones, S.A. (“ROTA”) to return ninety-five percent (95%) of the Chiligatoro Hydro-Electric Project back to the originating company in exchange for our earned interest in the Project, estimated at five percent (5%) for credit of the monies spent by Minerco to develop the Project. We have been informed that the Chiligatoro Hydro-Electric Project is in the final permitting stage of development and is expected to receive final approval in 2014.

On May 27, 2010, we acquired 100% of the 6 mega-watt per hour (MWh) Chiligatoro Hydro-Electric Project (“Chiligatoro”) in Intibuca, Honduras. This project is classified as a run-of-the-river project (not a conventional retention dam) and is currently in the final permitting stage of development. To date, the construction of Chiligatoro has not started, and we have not received any revenues from the project. There is no assurance that Chiligatoro will be completed in a timely manner, if at all. Additionally, if Chiligatoro is completed, there is no guarantee that it will be successfully used to create electricity or that it will generate a consistent revenue stream for us.

Chiligatoro has received approval from the National Energy Commission, signed a 30 Year Operations Contract with SERNA and is currently negotiating its Power Purchase Agreement (PPA) with ENEE. Chiligatoro is awaiting final approval from the Honduran National Congress. This Congressional Approval acts as a “defacto” guarantee. This approval makes Chiligatoro’s Power Purchase Contracts a recorded law in the Honduran National Congress. Final approval and start of construction is anticipated in 2014.

We acquired the rights to Chiligatoro from ROTA INVERSIONES S.DE R.L. (“ROTA”), a corporation formed under the laws of Honduras, pursuant to the terms of an acquisition agreement we entered into with ROTA on May 27, 2010. As of the date hereof, 13,500,000 shares have been issued to ROTA in accordance with the terms of the agreement.

Iscan Hydro-Electric Project

On May 28, 2013, we entered into a Return of Asset Agreement with ENERCOSA to return one hundred percent (100%) of the Iscan Hydro-electric Project to the originating company in exchange for ten percent (10%) royalty interest after the Project is completed by ENERCOSA or his assigns. We have been informed that the Iscan Project is actively completing the Socialization and Feasibility stages of development.

On January 5, 2011, we acquired 100% of the 4 mega-watt per hour (MWh) Iscan Hydro-Electric Project (“Iscan”) in Olancho, Honduras. This project is classified as a run-of-the-river project (not a conventional retention dam) and is currently in the feasibility stage of development. To date, construction of Iscan has not started, and we have not received any revenues from the project. There is no assurance that Iscan will be completed in a timely manner, if at all. Additionally, if the Iscan project is completed, there is no guarantee that it will be successfully used to create electricity or that it will generate a consistent revenue stream for us.

We acquired the rights to Iscan from Energetica de Occidente S.A. de C.V. (“ENERCOSA”), a corporation formed under the laws of Honduras, pursuant to the terms of an acquisition agreement we entered into with the Iscan Seller on January 5, 2011. We paid ENERCOSA a total of 1,500,000 shares of common stock foregoing.

Sayab Wind Project

On May 25, 2013, we entered into a Return of Asset Agreement with Energia Renovable Hondurenas S.A. (EHRSA) to return one hundred percent (100%) of the Sayab Wind Project to the originating company in exchange for six percent (6%) royalty interest after the Project is completed by EHRSA or his assigns. We have been informed that the Sayab Project is actively completing the Socialization and Feasibility stages of development.

On January 18, 2011, we acquired 100% of the 100 mega-watt per hour (MWh) Sayab Wind Project (“Sayab”) in Choluteca, Honduras. To date, the construction of Sayab has not started, and we have not received any revenues from the project. There is no assurance that Sayab will be completed in a timely manner, if at all. Additionally, if Sayab is completed, there is no guarantee that it will be successfully used to create electricity or that it will generate a consistent revenue stream for us.

We acquired the rights to Sayab from Energia Renovable Hondurenas S.A., a corporation formed under the laws of Honduras (the “Sayab Seller”), pursuant to the terms of an acquisition agreement we entered into with the Sayab Seller on January 18, 2011. We paid the Sayab Seller a total of 1,500,000 shares of common stock.

Clean, Renewable Energy Projects in Central America (Honduras)

We believe that there is market opportunity in renewable energy projects in Central America, specifically Honduras; however, we have been unable to capitalize on those opportunities due to a lack of financing, Due to growing concerns of energy security and climate change, the Central American Region has widely adopted a shift toward Clean, Renewable Energy generation. In 1998, Decrees No. 85-98 and 267-98 were passed into Honduran law to promote the development of renewable energy-generating plants. The decrees include tax breaks to developers and a secure buyer for energy at prices equivalent to the system’s short-term marginal cost. The national integrated utility ENEE, which is the default buyer, must pay a premium (10 percent of the same short-run marginal cost) for the electricity generated when the installed capacity is below 50 MW. This framework has facilitated the negotiation of about 30 public/private partnerships with ENEE for small renewable energy plants. In addition, Decree No. 85-98 also establishes tax exemptions in favor of developers including import and sales taxes on equipment and a five-year income tax holiday.. Most countries rely on fossil fuels for the majority of power generation. Very few countries in the region have native fossil fuel resources and spend huge portions of their budgets on “dirty” energy generation. However, they do have the natural resources for “clean” renewable, sustainable energy creation. In fact, these renewable natural resources are abundant, but they are underdeveloped and largely unexploited. In order to encourage and stimulate renewable energy investment and development in Central America the major markets have introduced or adopted additional regulatory and fiscal incentives. In addition, many countries have introduced measures to limit carbon emissions, making renewable energy more desirable.

Common Stock

Our common stock is quoted on the OTC Pink Limited under the symbol “MINE.” On March 30, 2010, the Company effected a 6 for 1 forward stock split, increasing the issued and outstanding shares of common stock from 55,257,500 to 331,545,000 shares. On February 13, 2012, the Company effected a 150 for 1 reverse stock split, decreasing the issued and outstanding share of common stock from 1,054,297,534 to 7,028,670 shares. On May 13, 2013, we effectuated an increase in our authorized shares of common stock from 1,175,000,000 to 2,500,000,000. On August 5, 2014, we effectuated an increase in our authorized shares of common stock from 2,500,000,000 to 3,500,000,000. All share amounts throughout this annual report have been retroactively adjusted for all periods to reflect this stock split.

Funding

To date, we have met our financing needs through private sale of shares of our common stock and other equity securities and loans from investors. With the launch of our LEVEL 5™ product line, we began generating revenues this year; however, we are not guaranteed that our revenue from sales will be sufficient to meet our ongoing expansion; and, therefore we will need additional financing.

Employees

As of October 31, 2014, we had 2 full time employees and 2 consultants. We currently expect to hire approximately 5 employees and/or consultants over the next 12 months providing that we have adequate funding to do so, which will cause us to incur additional costs.

Property

Our principal office is located at 800 Bering Drive, Suite 201, Houston, TX 77057. This space consists of approximately 500 square feet. We also have a secondary office which is located at 16035 N. 80th St., Suite E, Scottsdale, AZ 85260. This space consists of approximately 750 square feet. We believe these facilities are adequate to serve our present corporate needs.

Our Brand Management Agreement with Power Brands, LLC provides us office space, at 16501 Sherman Way, #215, Van Nuys, CA 91406, which we utilize when necessary.

Inventory

As of July 31, 2014, our remaining inventory of products, produced in August, 2013, is estimated to be 0 cases of RISE™ and 0 cases of COFFEE BOOST™. In the first quarter of fiscal 2015, we produced approximately 24,000 bottles of Coffee Boost (produced in July, 2014, but we took control in August, 2014) and approximately 55,000 cases of VitaminFIZZ.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 2. PROPERTIES.

We are currently in a month to month lease for 500 square feet of office space in Houston, Texas which is contributed by our Chief Executive Officer at no cost to us. Additionally, we are also in a thirteen month lease with Stephan Commercial LLC for 750 square feet of office space in Scottsdale, Arizona for a rental payment of $1,021 per month during the term.

Our Brand Management Agreement with Power Brands, LLC provides us office space, at no additional cost located at 16501 Sherman Way, #215, Van Nuys, CA 91406, which we utilize when necessary.

ITEM 3. LEGAL PROCEEDINGS.

We are not aware of any legal proceedings to which we are a party or of which our property is the subject.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our stock was listed for trading on the OTC QB operated by pink sheets on February 2009 under the symbol “MINE”. There are no outstanding options or warrants to purchase, or securities convertible into, our common stock.

Fiscal Year
2014	High Bid		Low Bid
Fourth Quarter: 5/1/14 to 7/31/14	$	0.0066	$	0.0258
Third Quarter: 2/1/14 to 4/30/14	$	0.0014	$	0.0361
Second Quarter: 11/1/13 to 1/31/14	$	0.0013	$	0.0029
First Quarter: 8/1/13 to 10/31/13	$	0.0022	$	0.0067

Fiscal Year
2013	High Bid		Low Bid
Fourth Quarter: 5/1/13 to 7/31/13	$	0.0006	$	0.0034
Third Quarter: 2/1/13 to 4/30/13	$	0.0008	$	0.0029
Second Quarter: 11/1/12 to 1/31/13	$	0.0011	$	0.007
First Quarter: 8/1/12 to 10/31/12	$	0.0006	$	0.0084

Holders

On October 31, 2014, we had approximately 37 shareholders of record of our common stock. The reported sale price of our stock on October 31, 2014 was $0.0045.

Dividends

As of October 31, 2014, we had not paid any dividends on shares of our common stock and we do not expect to declare any or pay any dividends on shares of our common stock in the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our Board of Directors and will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by the Board.

Securities Authorized for Issuance Under Equity Compensation Plans

We primarily issue restricted stock units under equity compensation plans, which are part of our 2014 Executive Annual Incentive Compensation Plan, Director Bonus Plan and Key Employee and Distributor Incentive Plan. We did any issue stock under these plans in fiscal 2014.

Recent Sales of Unregistered Securities

Set forth below are the sales of unregistered securities during the past year that were not previously reported.

On May 21, 2014, we issued 50,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On May 22, 2014, we issued 105,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated November 19, 2013. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On May 28, 2014, we issued 26,150,685 common shares in one (1) transaction upon conversion of a convertible promissory note dated November 13, 2013. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On May 29, 2014, we issued 28,888,8888 common shares in one (1) transaction upon conversion of a convertible promissory note dated November 20, 2013. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On June 4, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with an individual and a member of our Board of Directors (the “Noteholder”), where, among other things, the Company and Noteholder exchanged a certain Note (inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The Noteholder and the Company exchanged the Note, dated July 23, 2012, in the principal amount of $352,499 together will all interest and other amounts accrued thereon for the 105,000 shares of Series B Preferred Stock.

On June 4, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with Ann Powers, an individual (the “Noteholder”), where, among other things, the Company and Noteholder exchanged a certain Note (Inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The Noteholder and the Company exchanged the Notes, dated September 27, 2013 in the principal amount of $25,000 together will all interest and other documents amount accrued thereon for 6,000 shares of Series B Preferred Stock.

On June 4, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with MSF International, Inc., a Belize Company (the “Noteholder”), where, among other things, the Company and Noteholder exchanged a certain Note (Inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The Noteholder and the Company exchanged the Notes, dated July 1, 2013, July 19, 2013, September 6, 2013 and October 1, 2013, respectively in the principal amount of $25,000 ,$60,000, $20,000 and $35,000, respectively together will all interest and other documents amount accrued thereon for 212,000 shares of Series B Preferred Stock.

On June 6, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with LOMA Management Partners, LLC, a limited liability company domiciled in the State of New York (the “Noteholder”), where, among other things, the Company and Noteholder exchanged a certain Note (inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The Noteholder and the Company exchanged the Notes, dated July 31, 2013, October 28, 2013, January 23, 2014 and April 23, 2014, respectively, in the principal amounts of $46,400, $85,000, $20,000 and $150,000, respectively, together will all interest and other amounts accrued thereon for 60,000 shares of Series B Preferred Stock.

On July 6, 2014, we issued 6,000,000 common shares in one (1) transaction for an exchange of a note payable in the amount of $25,000.

On July 8, 2014, we issued 250,000 common shares pursuant to a consulting agreement.

On August 1, 2014, we issued 50,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On August 8, 2014, we issued 250,000 common shares pursuant to a consulting agreement. The shares were issued in reliance upon Section 4(a)(2) of the Act.

On September 3, 2014, we issued 10,000,000 common shares pursuant to a consulting agreement.

On September 3, 2014, we issued 21,666,666 common shares in one (1) transaction upon conversion of a convertible promissory note dated March 3, 2014. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On September 4, 2014, the Company issued 12,000,000 common shares pursuant to a consulting agreement.

On September 4, 2014, the Company issued 8,000,000 common shares pursuant to a consulting agreement.

On September 9, 2014, the Company issued 50,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On September 11, 2014, the Company issued 25,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On September 12, 2014, the Company issued 26,055,560 common shares in one (1) transaction upon conversion of a convertible promissory note dated November 19, 2013. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On September 16, 2014, the Company issued 500,000 common shares under its Key Employee and Distributor Incentive Plan. The shares were issued in reliance upon Section 4(a)(2) of the Act.

On September 30, 2014, the Company issued 50,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On October 9, 2014, the Company issued 25,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On October 10, 2014, the Company issued 68,632,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On October 16, 2014, we issued 500,000 common shares pursuant to a consulting agreement. The shares were issued in reliance upon Section 4(a)(2) of the Act.

On October 21, 2014, the Company issued 2,005, 269 common shares in one (1) transaction upon conversion of a convertible promissory note dated March 31, 2014. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On October 27, 2014, the Company issued 10,237,980 common shares in one (1) transaction upon conversion of a convertible promissory note dated March 31, 2014. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

On October 29, 2014, the Company issued 25,000,000 common shares in one (1) transaction upon conversion of a convertible promissory note dated July 23, 2012. These shares of common stock were issued in reliance on Section 3(a)(9) of the Act.

ITEM 6. SELECTED FINANCIAL DATA.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Forward Looking Statements

This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including “could”, “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.

Business Overview

Minerco Resources, Inc. was incorporated as a Nevada company on June 21, 2007 and our only two subsidiaries are Level 5 and Minerco Honduras S.A. From our inception in June 2007 through May 27, 2010, we were engaged in the acquisition of interests and leases in oil and natural gas properties. In May 2010, we changed the focus of our business to the development, production and provision of clean, renewable energy solutions in Central America. On October 16, 2012, we added a functional specialty beverage retailer, Level 5 Beverage Company, Inc., that is developed and sold under the LEVEL 5™ brand umbrella as an additional line of business, which has become our primary focus. As of September 20, 2013, we completely discontinued operations of our Renewable Energy line of business. We continue to own royalty interests in two (2) renewable energy project(s) and an earned net revenue interest in one (1) renewable energy project; however, all operational control for all three (3) projects has been returned to the originating companies.

Specialty Beverage Business

In September, 2012, we started Level 5 Beverage Company, Inc. (“Level 5”), a specialty beverage company which develops, produces, markets and distributes a diversified portfolio of natural and highly functional brands. Level 5 has developed or acquired exclusive rights to four separate and distinct brands: VitaminFIZZ®, VitaminCreamer®, COFFEE BOOST™ and LEVEL 5®. Minerco has established a fifth brand, The Herbal Collection™, with a private partner to add to our brand portfolio. The rights to The Herbal Collection™ has been assigned to the parent company, Minerco Resources

We organically developed the LEVEL 5® and COFFEE BOOST™ Brands, and we acquired the exclusive, worldwide rights to the VitaminFIZZ® Brand from VITAMINFIZZ, L.P. in November, 2013. In 2014, we acquired 100% of the right, title and intellectual property to the Vitamin Creamer® Brand. The current focus of our business is on the VitaminFIZZ® brand. We are currently completing the Research and Development of the VitaminCreamer® brand to include a Boost and Relax, and we are pilot testing The Herbal Collection™ brand with target consumers in specialized markets.

More information about Level 5 Beverage Company, Inc. is available from our website at: www.level5beverage.com. Information from our website is not incorporated into this Annual Report on Form 10-K.

Our Brands

VitaminFIZZ® Brand

VitaminFIZZ®, developed by Power Brands Consulting, LLC in 2010, was launched in 2014 and is now a zero calorie, vitamin enhanced lightly sparkling water, similar in concept to the popular VitaminWater®, only in carbonated format. VitaminFIZZ® contains 100% of daily vitamin C, 100% of daily vitamin B and is only zero calories. VitaminFIZZ® is also non-GMO (no genetically modified organism) and is certified Kosher. Level 5 acquired the exclusive, worldwide rights to VitaminFIZZ® in November, 2013.

We launched VitaminFizz® in June of 2014 in select New York locations. The 17 oz. slim plastic bottle packaging has been very well received. VitaminFIZZ® is currently available in six (6) flavors: Lemon-Lime, Orange-Mango, Strawberry-Watermelon, Black Raspberry, Strawberry Lemonade and Coconut-Pineapple. More flavors, and possibly smaller sizes, will be available in 2015.

As of October 31, 2014, VitaminFIZZ® is available in over 500 retail locations in New York City and Southern California and also available on our online store at Amazon.com.

As of October 31, 2014, VitaminFIZZ® had sold or placed for sale (including direct sales, promotions and Purchase Orders) approximately 20,000 cases of five flavors (Coconut-Pineapple was delayed).

More details about the VitaminFIZZ® Brand are available from our brand website at: www.vitamin-fizz.com. Information from our website is not incorporated into this Annual Report on Form 10-K.

COFFEE BOOST™ Brand

1.	COFFEE BOOST™ – Coffee

2.	COFFEE BOOST™ – French Vanilla

3.	COFFEE BOOST™ – Hazelnut

4.	COFFEE BOOST™ – Mocha

With the acquisition of VitaminCreamer® in 2014, we plan to incorporate Coffee Boost™ (name and functionality) into the VitaminCreamer® product line.

More details about the COFFEE BOOST™ Brand are available from our brand website at: www.drinkcoffeeboost.com. Information from our website is not incorporated into this Annual Report on Form 10-K.

VitaminCreamer® Brand

In June, 2014, we acquired 100% of the right, title and intellectual property to the VitaminCreamer® Brand.

The primary driver behind VitaminCreamer® is the ever growing trend of “good for you” or “better for you” in the food, beverage, health supplement, cosmetics and other consumable products industry. For example, Pepsi is split into 2 categories of product (1) Fun for You; and (2) Good for You. The CEO of Pepsi Co. has been widely scrutinized by shareholders and investors for empathizing (even over-empathizing) the “Good for You” brands. The CEO of Pepsi is looking to the future and we are doing just the same.

VitaminCreamer®, being the 1st and only highly vitamin fortified creamer available in US or the global market, meets these “good for you” needs by focusing on natural ingredients as well as supplying multiple, essential daily vitamin / mineral requirements. VitaminCreamer® replaces artificial and non-fortified competitors in a multi-billion dollar market that is rapidly growing annually.

Vitamin Creamer® with Coffee Boost™ (or Boost): Merging these two cutting edge concepts into one powerful range of products seems inevitable. The VitaminCreamer® with Boost range of coffee creamer and enhancement products will solidify Level 5’s position in the very strong and very lucrative coffee and creamer markets. Level 5 intends to merge the brands to include a range of cutting edge products with 2 main drivers: (1) adding to consumers’ nutritional and vitamin intake; and (2) add function and flavor to the coffee drinkers’ experience.

The VitaminCreamer® product line will include three functions: (1) Vitamin Creamer - Original; (2) Vitamin Creamer Boost; and (3) Vitamin Creamer Relax. The Original version will not interfere with the daily coffee but will enhance the nutritional value; the Boost version will provide all the benefits of the Original version and will also add an enhanced energy boost; and the Relax version will provide all the benefits of the Original version and will also take the edge off for caffeine sensitive consumers.

Level 5 with PowerBrands, the leading beverage development company in the US, are diligently working with the leading US supplement and ingredient suppliers to create this cutting-edge breakthrough in the coffee and creamer market. PowerBrands with their award winning food scientists and highly decorated package design team, who also created the stand alone brands of VitaminCreamer® and CoffeeBoost™, are fully dedicated to and actively creating the world’s leading coffee and creamer products for Level 5.

Exact specifications and dates are to be determined (TBD); however, we expect VitaminCreamer® to be finalized in early calendar year 2015.

LEVEL 5® Brand

●	RISETM (Energy Supplement)

●	CURVES (Women’s Supplement)

●	ARMOR (Wellness Supplement)

●	FLEX (Workout Supplement)

We will continue to seek partners to develop specialty products for the Level 5® Brand: RISE™ with rapidly deployed personnel, FLEX with a gym/fitness chains, CURVES with a women’s health specialist and ARMOR with wellness / health care groups.

More details about the LEVEL 5™ Brand are available from our brand website at: www.level5energy.com. Information from our website is not incorporated into this Annual Report on Form 10-K.

As of July 31, 2014, we had generated minimal revenue since inception, and during the twelve months ended July 31, 2014, we had an accumulated deficit of $20,774,915, a stockholder’s deficit of $1,076,239 and a net loss of $12,543,749. There is substantial doubt regarding our ability to continue as a going concern. Our operations are dependent upon our ability to: (1) generate sales, revenue and profit from our Level 5 brands; (2) obtain necessary financing; and (3) effectively manage costs and/or attain profitable operations. As such, the report of our independent certified auditor for the year ended July 31, 2014 is qualified subject to substantial doubt as to our ability to continue as a going concern.

On March 30, 2010, we effected a 6 for 1 forward stock split, increasing the issued and outstanding shares of common stock from 55,257,500 to 331,545,000 shares. On February 13, 2012, the Company effected a 150 for 1 reverse stock split, increasing the issued and outstanding share of common stock from 1,054,297,534 to 7,028,670 shares. All share amounts throughout this Annual Report have been retroactively adjusted for all periods to reflect this stock split. On May 13, 2013, we effectuated an increase in our authorized shares of common stock from 1,175,000 to 2,500,000,000. On August 5, 2014, we effectuated an increase in our authorized shares of common stock from 2,500,000,000 to 3,500,000,000.

Renewable Energy Projects

As of September 20, 2013, we completely discontinued operations of our Renewable Energy line of business. We continue to own royalty interests in two (2) renewable energy project(s) and an earned net revenue interest in one (1) renewable energy project(s); however, all operational control has been returned to the originating companies for all three (3) projects.

We currently have non-operating interests in two (2) Hydro-Electric Projects and one (1) Wind Project in various parts of Honduras (collectively the “Projects”). Both of the Hydro-Electric projects are classified as run-of-the-river projects (not conventional retention dams). The Chiligatoro Hydro-Electric Project, is in the final permitting stage of development, and the Iscan Hydro-Electric Project is currently in the early feasibility stage of development. The wind project, Sayab Wind Project, is also in the early feasibility stage of development.

Significant Accounting Policies

Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, valuation of intangible assets and investments, share-based payments, income taxes and litigation. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results that differ from our estimates could have a significant adverse effect on our operating results and financial position. We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others.

Revenue Recognition

The Company will recognize revenue in accordance with ASC-605, “Revenue Recognition,” which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or title has passed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts.

Revenues are recognized upon shipment, provided that a signed purchase order has been received, the price is fixed, title has transferred, collection of resulting receivables is reasonably assured, and there are no remaining significant obligations. Reserves for sales returns and allowances, including allowances for so called “ship and debit” transactions, are recorded at the time of shipment, based on historical levels of returns and discounts, current economic trends and changes in customer demand. Certain Internet generated transactions that are prepaid at time of order, are recognized at the time the merchandise ships from the warehouse to the customer.

Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Net sales have been determined after deduction of discounts, slotting fees and other promotional allowances in accordance with ASC 605-50.

Principles of Consolidation

We consolidate all entities that we control by ownership of a majority voting interest. Currently, we have two subsidiaries: Minerco Honduras S.A. in which we own one hundred percent (100%) interest and Level 5 Beverage Company, Inc., which we own seventy and three-tenths percent (70.3%) interest.

Uncertainties

We are a development stage company that has only recently begun operations. We have generated $12,381 from our business activities, but we do expect to generate additional revenues from our Beverage Business in the fiscal year ended July 31, 2015. Since our inception, we have incurred operational losses, and we have been issued a going concern opinion by our auditors. To finance our operations, we have completed several rounds of financing and raised $2,728,864 through private placements of our common stock and debt financing.

We anticipate that we will require additional financing in order to complete our acquisition and development activities. We currently do not have sufficient financing to fully execute our business plan and there is no assurance that we will be able to obtain the necessary financing to so. Accordingly, there is uncertainty about our ability to continue to operate.

We have recently began development of our beverage line of business inasmuch as we are new to this market there can be no assurance that we will successfully develop or market the beverage line.

Results of Operations

Our results of operations are presented below:

	Year ended			Year ended
	July 31,			July 31,
	2014			2013
Sales		12,381			-
Cost of Goods Sold		10,193			-
Gross Profit (Loss)		2,188			-

General and administrative		871,988			368,002
Total operating expenses		871,988			368,002

Other Income (Expenses):
Interest expense		(124,634	)		(41,349	)
Gain on settlement of Debt		246			-
Gain/(Loss) on Derivative Liability		(7,893,507	)		503,107
Accretion of discount on convertible notes		(990,184	)		(641,159	)
Gain/(Loss) on Debt for Equity Exchange		(2,651,839	)		-
Total other income (expenses)		(11,658,918	)		(179,401	)

Net loss		(12,528,718	)		(547,403	)
Net loss attributable to Noncontrolling interest		(42,981	)		-
Net loss attributable to Minerco	$	(12,485,737	)	$	(547,403	)
Preferred Stock Dividends		54,904			-
Net loss attributable to common shareholders	$	(12,540,641	)	$	(547,403	)

Net loss Per Share - Basic and Diluted	$	(0.01	)	$	(0.00	)

Weighted Average Number of Common Shares Outstanding - Basic and Diluted		1,854,746,508			413,802,302

Results of Operations for the Twelve Months Ended July 31, 2014 compared to the Twelve Months Ended July 31, 2013

During the twelve months ended July 31, 2014, we incurred a net loss of $12,528,718, compared to a net loss of $547,403 during the same period in fiscal 2013. Our net loss per share decreased to a loss of $0.01 per share compared to a loss of $0.00 in the same period in fiscal 2013 primarily due to net loss on derivative liability. The increase in our loss loss during the twelve months ended July 31, 2014 was primarily due to increased loss on derivative liabilities and increase in general and administrative expenses due to an increase in business activity.

Our total operating expenses for the twelve months ended July 31, 2014 were $871,988 compared to operating expenses of $368,002 during the same period in fiscal 2013. Our total operating expenses during the twelve months ended July 31, 2014 consisted of $95,911 in compensation expense, $76,500 in consulting fees, $224,705 in professional fees, $474,872 in general and administrative expenses, and we did not incur any foreign exchange losses, management fees, rent expenses or other operating expenses.

Our general and administrative expenses consist of professional fees, transfer agent fees, investor relations expenses and general office expenses. Our professional fees include legal, accounting and auditing fees.

Liquidity and Capital Resources

As of July 31, 2014, we had $304,104 in cash, $602,482 in prepaids, and $1,011,586 in total assets, $2,115,776 in total liabilities and a working capital deficit of $209,190. Our accumulated deficit from our inception on June 21, 2007 to July 31, 2014 is $20,359,884 and was funded primarily through equity and debt financing.

We are dependent on funds raised through our equity and debt financing, and since our inception on June 21, 2007, we have raised gross proceeds of $90,514 in cash from the sale of our common stock, $2,737,250 in proceeds from loans, and $51,018 from advances from related parties.

During the twelve months ended July 31, 2014 we spent net cash of $1,390,106 on operating activities, compared to net cash spending of $273,810 on operating activities during the same period in fiscal 2013. The expenditures on operating activities for the twelve months ended July 31, 2014 increased primarily due to a loss on derivative offset by an increase in accretion discount, net loss on debt for equity exchange and increase in share based compensation.

We did spend net cash of $90,000 on investing product development activities during the twelve months ended July 31, 2014, compared to net cash spending of $15,000 on investment activities for the same period in fiscal 2013. The increase was primarily due to an increase in product development.

During the twelve months ended July 31, 2014 we did receive $1,660,500 net cash from financing activities, compared to net cash received of $412,520 during the same period in fiscal 2013. The increase in receipts from financing activities for the twelve months ended July 31, 2014 was primarily due to an increase in proceeds from loans and long term debt.

During the twelve months ended July 31, 2014 our monthly cash requirements to fund our operating activities was approximately $115,842. Our cash on hand of $304,104, as of July 31, 2014, will allow us to continue to operate until we receive Level 5 revenue proceeds and additional financings. We estimate our planned expenses for the next 24 months (beginning November, 2014) to be approximately $26,200,000, as summarized in the tables below assuming revenue from our beverage sales will exceed $2,000,000 over the next 12 months and $5,000,000 in fiscal 2016. If revenue is not as anticipated those numbers, we will be forced to scale our expenses according to our business requirements which will negatively impact our ability to increase revenue.

Expense Overview
Description
Renewable Energy	Fiscal Year 2015 ($)		Fiscal Year 2016 ($)		Total
General and Administrative Expenses		10,000		10,000		20,000
Renewable Energy Total		10,000		10,000		20,000

Beverage
Advertising		500,000		1,250,000		1,750,000
Warehouse & Delivery		75,000		1,000,000		1,075,000
Insurance		75,000		75,000		150,000
Inventory Purchases / Production		1,250,000		8,000,000		9,250,000
Consulting Services		750,000		750,000		1,500,000
Retail incentive		100,000		500,000		120,000
Sales incentive		75,000		500,000		115,000
Sales Representative Payroll		600,000		1.200,000		1,800,000
Payroll Taxes		90,000		180,000		270,000
Rent or Lease		60,000		120,000		180,000
Filling Equipment Lease		0		125,000		125,000
Sales Commission		50,000		425,000		475,000
Research & Development		250,000		375,000		625,000
POS material		150,000		750,000		900,000
Taxes & Licenses		100,000		250,000		350,000
Utilities & Telephone		30,000		37,500		67,500
Sampling		250,000		500,000		750,000
Accounting & Legal fees		250,000		450,000		700,000
General and Administrative Expenses		900,000		1,800,000		2,700,000

Contingencies (10%)		555,500		1,829,000		2,384,500
Beverage Total		6,110,500		20,116,500		26,227,000

Grand Total (All Business Lines)		6,120,500		20,126,500		26,247,000

Our general and administrative expenses for the year are expected to consist primarily of salaries, transfer agent fees, investor relations expenses and general office expenses. The professional fees are related to our regulatory filings throughout the year.

Based on our planned expenditures, we require additional funds of approximately $25,850,000 to proceed with our business plan over the next 12 months. If we secure less than the full amount of financing that we require or derive less than the anticipated amount of revenue from operations, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.

We anticipate incurring losses until the Level 5 Business creates significant, sustainable sales and revenues. Although we maintain non-operating interests in the Chiligatoro Hydro-Electric Project, Iscan Hydro-Electric Project and Sayab Wind Project, there is no assurance that revenues will be received from these interests or that the operators will construct the projects or that we will be paid our proportionate interests by the operator. Meanwhile, Level 5 has started generating revenues for the company; however, there can be no assurances that enough sales or revenues will be received to support our capital needs.

Derivative Liabilities

Below is a table of derivative liabilities outstanding over the last 4 fiscal quarters:

October 31, 2013		January 31, 2014		April 30, 2014		July 31, 2014
$2,474,241		$1,683,074		$5,291,245		$650,135

Future Financings

Our financial statements for the year ended July 31, 2014 have been prepared on a going concern basis and contain an additional explanatory paragraph in Note 1 which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As of July 31, 2014, we have generated $12,381 of revenues, have achieved losses since inception, and rely upon the sale of our securities to fund our operations. We may not generate any revenues from our interest in the Chiligatoro Hydro-Electric Project, Iscan Hydro-Electric Project or Sayab Wind Project, or from any of the hydro-electric projects in which we acquire an interest. As a new competitor in the beverage line of business, there can be no assurance we will generate any revenue from the sale of any such products and our future cash needs vary from those estimated. Accordingly, we are dependent upon obtaining outside financing to carry out our operations and pursue any acquisition and exploration activities. In addition, we require funds to meet our current operating needs and to repay certain demand note obligations and other convertible debt obligations that will mature shortly.

We had $304,104 in cash as of July 31, 2014. We intend to raise the balance of our cash requirements for the next 12 months from revenues received from Level 5, private placements, shareholder loans or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we have a two million dollar line of credit with Post Oak, LLC which has an outstanding balance of $1,000,000 as of July 31, 2014, but there is no guarantee that any additional financing will be available to us or if available, on terms that will be acceptable to us. We intend to negotiate with our management and any consultants we may hire to pay parts of their salaries and fees with stock and stock options instead of cash. If we are unable to obtain the necessary additional financing, then we plan to reduce the amounts spent on our acquisition and development activities and our general and administrative expenses so as not to exceed the amount of capital resources that are available to us. Specifically, we anticipate deferring development, expansion and certain acquisitions pending the receipt of additional financing. Still, if we do not secure additional financing, our current cash reserves and working capital will be not be sufficient to enable us to sustain our operations for the next 12 months unless revenue increases dramatically, even if the Company does decide to scale back our operations.

Outstanding Indebtedness

Set forth below is a chart of our outstanding debt obligations as of July 31, 2014:

	Original Amount	Balance on 7/31/2014	Date of Issuance	Maturity Date	Features

Convertible Promissory Note*	100,000	25,000	7/23/2012	On Demand	5% interest rate converts at the lower of $0.0025 or 50% of market based on the lowest day during the preceding 5 days

Convertible Promissory Note*	100,000	50,000	7/23/2012	On Demand	5% interest rate converts at the lower of $0.0025 or 50% of market based on the lowest day during the preceding 5 days.

Convertible Promissory Note*	100,000	28,500	7/23/2012	On Demand	5% interest rate converts at the lower of $0.0025 or 50% of market based on the lowest day during the preceding 5 days. * Assigned and restated on 3/22/2013 from $583,300 Note, dated 7/23/2012

Convertible Promissory Note	60,000	1,167	11/20/2013	11/20/2015	8% interest rate converts at the lower of $0.0015 or 60% of market based on the lowest day during the preceding 25 days

Convertible Promissory Note	20,000	22,222	2/21/2014	11/20/2015	8% interest rate converts at the lower of $0.0015 or 60% of market based on the lowest day during the preceding 25 days

Convertible Promissory Note	25,000	25,000	3/3/2014	9/3/2014	8% interest rate converts at the lower of $0.0012 or 50% of market based on the lowest day during the preceding 5 days

Convertible Promissory Note	153,500	153,500	4/9/2014	3/31/2015	8% interest rate converts at a variable conversion price of 50% of the market price calculated based on the lowest day during the preceding 20 days

*Assigned and restated from $583,300 Note, dated 7/23/2012

Outstanding Notes

As of July 31, 2014, our obligations under outstanding notes totaled an aggregate principal amount of $305,389. Of such amount $103,500 is due on demand, $25,000 was due September 3, 2014, $153,500 is due March 31, 2015 and $23,389 is due on November 20, 2015. We currently do not have sufficient funds to all of the past due or future notes.

On July 23, 2012, we entered into a Securities Purchase Agreement and Convertible Promissory Note between the Company and its former Chief Executive Officer for $588,299. The convertible notes carry a 5% rate of interest and are convertible into common stock at a variable conversion price of 50% of the market price which shall be calculated as the lowest day during the preceding 5 days before conversion. The Convertible Promissory Notes are due on demand. On March 22, 2013, $200,000 of the note was purchased by, assigned to and restated for unrelated third parties: $100,000 to MSF International, Inc. and $100,000 to FTB Enterprises, Inc.

On November 20, 2013 and February 21, 2014, we entered into a Promissory Note with JMJ Financial for $60,000 and $20,000 respectively. The promissory note carries an Original Issue Discount (OID) of approximately 11%, a 0% rate of interest if paid within 90 days, 12% one-time interest charge after 90 days, and the Note is convertible into common stock at a variable conversion price of the lower of $.003 or 60% of the market price which shall be calculated as the lowest day during the preceding 25 days before conversion. As of June 23, 2014, the remaining balances of these Notes are $1,667 and $22,222, respectively.

On March 3, 2014, we entered into a Securities Purchase Agreement and Convertible Promissory Note with Micaddan Consultants for $25,000. The convertible note carries 8% rate of interest and the Note is convertible into common stock at a variable conversion price of the lower of $0.0012 or 50% of the market which shall be calculated as the lowest day during the preceding 5 days before conversion.

On April 9, 2014, we entered into a Securities Purchase Agreement and Convertible Promissory Note with Union Capital for $153,500. The convertible note carries 8% rate of interest and the Note is convertible into common stock at a variable conversion price of 50% of the market which shall be calculated as the lowest day during the preceding 20 days before conversion.

During the year ended July 31, 2014, Level 5 received proceeds of $50,000 from promissory notes. These notes have an interest rate of 10% and mature between July 6, 2014 and July 24, 2014. The total principal due as of July 31, 2014 is $25,000.

On May 1, 2014, we entered into an agreement with Post Oak, LLC (“the Lender”), where, among other things, we and the Lender entered into a Line of Credit Financing Agreement in the principal sum of up to Two Million Dollars ($2,000,000), or such lesser amount as may be borrowed by us as Advances under this line of credit. The Line of Credit bears interest at the rate of ten percent per annum (10.00%) unless modified by certain provisions of the Line of Credit. The entire outstanding principal balance amount of this Line of Credit is due and payable on April 30, 2016. We will make one interest payment twelve months from the date of each advance and one interest payment eighteen months from the date of each advance. We are obligated to make a payment for the entire unpaid balance of all advances, plus any accrued interest, in a “balloon” payment, which is due in two years from the date of the Line of Credit Agreement. As of July 31, 2014, there was $1,000,000 outstanding under this line of credit.

Product Research and Development

Our Research and Development (R&D) consisted of formulating the LEVEL ® product line including: RISE™, COFFEE BOOST™, CURVES, FLEX and ARMOR. The Company spent $-0- in the fiscal year ending July 31, 2014 and $-0- in the fiscal year ended July 31, 2013 in R&D activities. The R&D for LEVEL 5® is the only R&D activities since the Company’s inception. The Company anticipates spending at least $100,000 in R&D activities over the next two fiscal years. The Company spent $86,850 on management and consulting fees activities for this Level 5® product line. These fees have been recorded as selling, general, and administrative fees.

Acquisition of Plants and Equipment and Other Assets

The Company does not anticipate selling or acquiring any material properties, plants or equipment during the next 12 months.

Off-Balance Sheet Arrangements

The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements of Minerco Resources, Inc. follow. All currency references in this report are to U.S. dollars unless otherwise noted.

		Index
Report of Independent Registered Public Accounting Firm		F-1
Balance Sheets		F-2
Statements of Expenses		F-3
Statements of Cash Flows		F-4
Statements of Stockholders’ Equity (Deficit)		F-5
Notes to the Financial Statements		F-6

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Minerco Resources, Inc.

Houston, Texas

We have audited the accompanying consolidated balance sheets of Minerco Resources, Inc. and its subsidiaries (collectively the “Company”), as of July 31, 2014 and 2013 and the related consolidated statement of expenses, stockholders’ equity (deficit), and cash flows for the years ended July 31, 2014 and July 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurances about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration over of internal control over financial reporting as a basis for design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts of disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statements presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Minerco Resources, Inc. and its subsidiaries, as of July 31, 2014 and 2013 and the results of their operations, their cash flows for years ended July 31, 2014, and July 31, 2013 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MALONEBAILEY LLP

www.malonebailey.com

Houston, Texas

November 6, 2014

F-1

Minerco Resources, Inc.

Consolidated Balance Sheets

	July 31,			July 31,
	2014			2013
ASSETS

Current Assets:
Cash	$	304,104		$	123,710
Prepaid expenses		602,482			915
Total Current Assets		906,586			124.625
Intangible Assets		105,000			15,000
Total Assets	$	1,011,586		$	139,625

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable and accrued liabilities	$	195,446		$	134,219
Amounts payable to related parties		63,955			22,519
Loan Payable		25,000			-
Convertible debt to related parties, net unamortized discount $0 and $0		-			558,999
Convertible debt, net unamortized discount $124,149 and $298,764		181,240			127,311
Derivative liabilities		650,135			1,537,510
Total Current Liabilities		1,115,776			2,380,558

Line of Credit		1,000,000			-
Total Liabilities		2,115,776			2,380,558

STOCKHOLDERS’ DEFICIT

Preferred stock – Series A Convertible Preferred, $0.001 par value, 25,000,000 shares authorized, 15,000,000 and 15,000,000 issued and outstanding, respectively		15,000			15,000

Preferred stock – Series B Preferred, $0.001 par value, 2,000,000 shares authorized and none authorized, 436,000 and 0 issued and outstanding, respectively		436			-

Common stock, $0.001 par value, 3,500,000,000 and 2,500,000,000 shares authorized, 2,443,428,123 and 1,185,426,462 shares issued and outstanding, respectively		2,443,428			1,185,426

Additional paid-in capital		16,839,811			4,377,884
Accumulated Deficit		(20,359,884	)		(7,819,243	)
Total Minerco stockholders’ deficit		(1,061,209	)		(2,240,933	)
Noncontrolling Interest		(42,981	)		-
Total Stockholders’ Deficit		(1,104,190	)		(2,240,933	)

Total Liabilities and Stockholders’ Deficit	$	1,011,586		$	139,625

The accompanying notes are an integral part of these audited consolidated financial statements

F-2

Consolidated Statements of Expenses

	Year ended			Year ended
	July 31,			July 31,
	2014			2013
Sales		12,381			-
Cost of Goods Sold		10,193			-
Gross Profit (Loss)		2,188			-

General and administrative		871,988			368,002
Total operating expenses		871,988			368,002

Other Income (Expenses):
Interest expense		(123,634	)		(41,349	)
Gain on settlement of Debt		246			-
Gain/(Loss) on Derivative Liability		(7,893,507	)		503,107
Accretion of discount on convertible notes		(990,184	)		(641,159	)
Gain/(Loss) on Debt for Equity Exchange		(2,651,839	)		-
Total other income (expenses)		(11,658,918	)		(179,401	)

Net loss		(12,528,718	)		(547,403	)
Net loss attributable to Noncontrolling interest		(42,981	)		-
Net loss attributable to Minerco	$	(12,485,737	)	$	(547,403	)
Preferred Stock Dividends		54,904			-
Net loss attributable to common shareholders	$	(12,540,641	)	$	(547,403	)

Net loss Per Share - Basic and Diluted	$	(0.01	)	$	(0.00	)

Weighted Average Number of Common Shares Outstanding - Basic and Diluted		1,854,746,508			413,802,302

The accompanying notes are an integral part of these audited consolidated financial statements

F-3

Minerco Resources, Inc.

Consolidated Statements of Cash Flows

	Year ended			Year ended
	July 31,			July 31,
	2014			2013
Cash Flows from Operating Activities
Net loss	$	(12,485,737	)	$	(547,403	)
Adjustments to reconcile net loss to net cash used in operating activities:
Net loss attributable to noncontrolling interest		(42,981	)		-
(Gain)/loss on debt for equity exchange		2,651,839			-
(Gain)/ loss on change in fair value of derivatives		7,893,507			(503,107	)
Accretion of discount		990,184			641,159
Stock-based compensation		95,800			41,750
Changes in operating assets and liabilities:
Prepaid expenses		(601,567	)		(915	)
Accounts payable and accrued liabilities		67,791			47,687
Accounts payable to related parties		41,058			47,019
Net cash used in operating activities		(1,390,106	)		(273,810	)

Cash Flows from Investing Activities
Product development		(90,000	)		(15,000	)
Net cash used in investing activities		(90,000	)		(15,000	)

Cash Flows from Financing Activities
Proceeds from Line of credit		1,000,000			-
Proceeds from Short-term debt		50,000			-
Proceeds from convertible debt		799,500			464,750
Payments on convertible debt		(189,000	)		(22,930	)
Payments on related party debt		-			(29,300	)
Net cash provided by financing activities		1,660,500			412,520

Net increase (decrease) in cash		180,394			123,710
Cash at the beginning of period		123,710			-
Cash at end of the period	$	304,104		$	123,710

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	-		$	-
Income taxes		-			-

Non-Cash Investing and Financing Activities
Resolution of derivative liabilities	$	9,580,537		$	1,416,381
Conversion of notes and interest into common shares	$	527,528		$	320,210
Exchange of Debt for Preferred Stock	$	3,458,300		$	-
Conversion of common stock to preferred stock	$	30,000		$	51,860
Exchange of Note Payable for Common Stock	$	25,556		$	-
Cancellation of conversion of debt- return of shares	$	3,000		$	2,845
Debt discounts due to derivative liabilities	$	799,655		$	367,500
Note assigned from related party to third party	$	200,000
Common stock issued to forgive related party accrual	$	-		$	24,500

The accompanying notes are an integral part of these audited consolidated financial statements

F-4

Minerco Resources, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

Years ended July 31, 2013 and 2014

							PREFERRED STOCK				PREFERRED STOCK				ADDITIONAL
	COMMON STOCK						SERIES A				SERIES B				PAID-IN			ACCUMULATED			NONCONTROLLING
	SHARES			AMOUNT			SHARES		AMOUNT		SHARES		AMOUNT		CAPITAL			DEFICIT			INTEREST			TOTAL
Balance, July 31, 2012		87,051,824		$	87,052			10,000,000	$	10,000			$		$	3,681,262		$	(7,271,840	)				$	(3,493,526	)

Shares issued for debt conversion		1,103,162,975			1,103,162			-		-		-		-		(782,952	)		-			-			320,210
Return of common stock from conversion of convertible debt		(2,845,000	)		(2,845	)		-		-		-		-		-			-			-			(2,845	)
Return of common stock from consulting agreement		(83,334	)		(83	)		-		-		-		-		83			-			-			-
Common stock issued for services		15,000,000			15,000			-		-		-		-		(11,750	)		-			-			3,250
Common stock issued for consulting services		20,000,000			20,000			-		-		-		-		18,500			-			-			38,500
Preferred stock issued for conversion on common stock		(51,860,003	)		(51,860	)		5,000,000		5,000		-		-		46,860			-			-			-
Common stock issued for forgiveness of accrual salary		15,000,000			15,000			-		-		-		-		9,500			-			-			24,500
Resolution of derivative liabilities		-			-			-		-		-		-		1,416,381			-			-			1,416,381
Net loss		-			-			-		-		-		-		-			(547,403	)		-			(547,403	)
Balance, July 31,2013		1,185,426,462			1,185,426			15,000,000		15,000						4,377,884			(7,819,243	)					(2,240,933	)

Shares issued for debt conversion		1,267,751,661			1,267,752			-		-		-		-		(740,224	)		-			-			527,528
Return of common stock from conversion of convertible debt		(3,000,000	)		(3,000	)		-		-		-		-		-			-			-			(3,000	)
Common stock issued for consulting services		17,250,000			17,250			-		-		-		-		78,550			-			-			95,800
Preferred stock issued for conversion on common stock		(300,000,000	)		(30,000	)		-		-		53,000		53		29,947			-			-			-
Common stock issued for settlement		6,000,000			6,000			-		-						55,200			-			-			61,200
Preferred Stock in resolution of debt liabilities		-			-			-		-		383,000		383		3,457,917			-			-			3,458,300
Resolution of derivative liabilities		-			-			-		-		-		-		9,580,537			-			-			9,580,537
Net loss		-			-			-		-		-		-		-			(12,485,737	)		(42,981	)		(12,528,718	)
Preferred Stock Dividends		-			-			-		-		-		-		-			(54,904	)		-			(54,904	)
Balance, July 31,2014		2,443,428,123		$	2,443,428			15,000,000	$	15,000		436,000	$	436	$	16,839,811		$	(20,359,884	)	$	(42,981	)	$	(1,104,190	)

The accompanying notes are an integral part of these audited consolidated financial statements

F-5

Minerco Resources, Inc.

Consolidated Notes to the Financial Statements

1. Nature of Operations and Going Concern

Minerco Resources, Inc. (the “Company”) was incorporated in Nevada on June 21, 2007. The Company was engaged in the exploration stage from its June 21, 2007 (inception) to May 27, 2010. As of May 27, 2010, the Company was no longer in the oil and natural gas business. The Company intends to develop, produce, and provide clean, renewable energy solutions in Central America. On October 16, 2012, the Company added an additional line of business, Level 5 Beverage Company, Inc., a progressive specialty beverage retailer. The company has decided to divest of itself of its clean, renewable energy projects in Central America. The company has evaluated its clean energy projects in Central America and has determined they are too capital intensive to pursue at this time.

The Company has transitioned its focus to its specialty beverage market retailer, Level 5 Beverage Company, Inc. and its products.

On March 30, 2010, the Company effected a 6 for 1 forward stock split, increasing the issued and outstanding shares of common stock from 55,257,500 to 331,545,000 shares. On February 13, 2012, the Company effected a 150 for 1 reverse stock split, increasing the issued and outstanding share of common stock from 1,054,297,534 to 7,028,670 shares. On May 13, 2013, we effectuated an increase in our authorized shares of common stock from 1,175,000,000 to 2,500,000,000. On August 5, 2014, we effectuated an increase in our authorized shares of common stock from 2,500,000,000 to 3,500,000,000. All shares amounts in these financial statements have been retroactively adjusted for all periods presented to reflect this stock split.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize it assets and discharge its liabilities in the normal course of business. During the period ended July 31, 2014, the Company has an accumulated deficit and revenue of $12,381. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company intends to fund operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending July 31, 2014.

2. Summary of Significant Accounting Policies

a)	Basis of Presentation

These financial statements and notes are presented in accordance with accounting principles generally accepted in the United States.

b)	Principles of Consolidation

The Company’s consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. The Company does not hold significant variable interests in any variable interest entities. All significant intercompany accounts and transactions have been eliminated.

c)	Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

d)	Use of Estimates

The Company’s fiscal year end is July 31. The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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. The Company regularly evaluates estimates and assumptions related to the recoverability of long-lived assets, donated expenses and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

F-6

e)	Financial Instruments

ASC 820, “Fair Value Measurements”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, and due to related party. Pursuant to ASC 820, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

f)	Foreign Currency Translation

The financial statements are presented in United States dollars. In accordance with ASC 830, “Foreign Currency Translation,” foreign denominated monetary assets and liabilities are translated into United States dollars at rates of exchange in effect at the balance sheet date. Non-monetary items, including equity, are translated at the historical rate of exchange. Revenues and expenses are translated at the average rates of exchange during the year.

g)	Loss per share

The Company computes net loss per share in accordance with ASC 260, "Earnings per Share ". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

F-7

h)	Intangible Assets

Acquired intangible assets are amortized over their useful lives unless the lives are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. Amortization of finite-lived intangible assets is computed over the useful lives of the respective assets.

i)	Impairment of Intangible Assets

The Company assesses potential impairments to its intangible assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the carrying amount of the intangible asset is not recoverable and exceeds its fair value. The carrying amount of an intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of an intangible asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. Intangible assets with indefinite lives are tested annually for impairment and in interim periods if certain events occur indicating that the carrying value of the intangible assets may be impaired.

j)	Comprehensive Loss

ASC 220, “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. For the periods ended July 31, 2013 and 2009, except for net loss, the Company had no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

k)	Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, “Accounting for Income Taxes,” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

l)	Long Lived Assets

Long-lived assets, including license agreement costs, are evaluated for impairment whenever events or conditions indicate that the carrying value of an asset may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets.

m)	Reclassifications

Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

n)	Accounting for Derivative Instruments

Minerco accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging and all derivative instruments are reflected as either assets or liabilities at fair value in the balance sheet.

F-8

Minerco uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, Minerco’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for Minerco’s liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc. depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, NSL seeks to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. Minerco categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As at July 31, 2014 and 2013, the company had a $650,135 and $1,537,510 derivative liability, respectively.

o)	Stock Based Compensation

We account for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock that are recognized in the statement of operations based on their fair values at the date of grant.

We account for stock-based payments to non-employees in accordance with ASC 718 and Topic 505-50, “Equity-Based Payments to Non-Employees.” Stock-based payments to non-employees include grants of stock that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date.

The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the requisite service period of the award.

p)	Research and Development

Research and development costs are expensed as incurred.

q)	Recent Accounting Pronouncements

The adoption of recently issued accounting pronouncements are not expected to have a material effect on the Company's future reported financial position or results of operations.

3. Intangible Assets

Intangible Assets, net, at July 31, 2014 and 2013 consists of:

	2014		2013
VitaminFizz Name Licensing Rights		30,000		-
Product Development (VitaminFizz)	$	-		15,000
Vitamin Creamer Licensing Rights		75,000		-
Less accumulated amortization		-		-
Product Development, net	$	105,000		15,000

On February 26, 2013, the Company entered into an Agreement (the “Premium Product Development Agreement”) with Power Brands, LLC, a California Limited Liability Company (“Power Brands”) to render product development services for Level 5 Beverage Company, Inc. (“Level 5”). On February 26, 2013, the Company entered into an Agreement (the “Prototype Development Agreement”) with Power Brands to render prototype development services for Level 5. On November 21, 2013, through our subsidiary, Level 5 Beverage Company, Inc., we entered into an Agreement with VITAMINFIZZ, L.P, a California Limited Partnership where the Licensee acquires the exclusive rights in North America to use VitaminFIZZ® on and in connection with the marketing, distribution and sale of the Brand. On June 24, 2014, Level 5 Beverage Company, Inc., a subsidiary of Minerco Resources, Inc. entered into an Agreement, effective June 20, 2014, with Vitamin Creamer LP, a limited partnership, where, among other things, Level 5 bought all right, title and interest to the (i) the Trademark “Vitamin Creamer”, and (ii) formulas and certain other intellectual property rights related to the Brand and the Products. The Company has determined the capitalized Licensing Rights to have nominal amortization during year ended July 31, 2014.

F-9

4. Related Party Transactions

On July 23, 2012, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note between the Company and its former Chief Executive Officer and former Chief Financial Officer for $320,301 and $267,998, respectively. The convertible notes carry a 5% rate of interest and are convertible into common stock at a variable conversion price of 50% of the market price which shall be calculated as the lowest day during the preceding 5 days before conversion. The Convertible Promissory Notes are due on January 23, 2012. The Convertible Promissory Notes are due on to former Chief Financial Officer for $267,998 has been assigned to former Chief Executive officer as of July 23, 2012. On July 23, 2012, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note between the Company and its former Chief Executive Officer for $588,299. The convertible notes carry a 5% rate of interest and are convertible into common stock at a variable conversion price of 50% of the market price which shall be calculated as the lowest day during the preceding 5 days before conversion. On March 22, 2013, $200,000 of the note was purchased by, assigned to and restated for unrelated third parties: $100,000 to MSF International Inc, and $100,000 to FTB Enterprises, Inc. On June 4, 2014, the Company and its Chief Executive Officer exchanged the note in the principal amount of $352,499 together with all interest and other amounts accrued thereon for 105,000 shares of Series B Preferred Stock.

As of July 31, 2014, the Company owes its current Chief Executive Officer $13,911 ($0 – 2013) in accrued salary ($18,750 per month) for the period July 9 through July 31, 2014 and $10,044 ($3,178 – 2013) for advances made to the Company. The company owes its current Chief Financial Officer $2,500 ($0 – 2013) in accrued salary ($12,500 per month) for the period July 1 through July 31, 2014. The company owes its former Chief Executive Officer $37,500 ($19,341 – 2013) in accrued salary ($7,000 per month) for the period February 19, 2014 through July 31, 2014. The advances are due on demand and non interest bearing.

5. Prepaid Expenses

Prepaid Expenses, at July 31, 2014 and 2013 consists of:

	2014		2013

Prepaid Product Marketing	$	450,000		-
Prepaid Rent		2,482		-
Other Prepaid Expenses		-		915
Prepaid Royalty		150,000		-
Prepaid Expenses	$	602,482		915

On the June 25, 2014, the Company through its subsidiary, Level 5 Beverage Company, Inc. (“Level 5”), entered into a Brand Licensing Agreement with VitaminFizz, LP (“Licensor”) which was effective November 21, 2013. Level 5 agreed to pay a licensing fee of $250,000 and no royalties shall be made to Licensor until such time as the aggregate royalty payments earned by Licensor exceed $250,000.

6. Preferred Stock

The preferred stock may be divided into and issued in series. The Board of Directors of the Company is authorized to divide the authorized shares of preferred stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

On January 11, 2011, the Company effected 25,000,000 shares of unclassified preferred stock.

On January 11, 2011, the Company designated 15,000,000 shares of its preferred stock as Class A Convertible Preferred Stock (“Class A Stock”). Each share of Class A Stock is convertible into 10 shares of common stock, has 100 votes, has no dividend rights except as may be declared by the Board of Directors, and has a liquidation preference of $1.00 per share.

F-10

On January 11, 2011, the Company issued 10,000,000 Class A convertible preferred shares to its former Chief Executive Officer valued at $0.007964 or $79,649. The Company recognized this as compensation. On February 15, 2012, the former Chief Executive Officer converted 2,500,000 into 25,000,000 common shares. The Company amended the employment agreement during fiscal year; whereby as of July 31, 2014 all issuances of stock are vested; therefore, all compensation is recognized.

On August 28, 2011, the Company issued 5,000,000 shares of its Class A Convertible Preferred stock to its former Chief Financial Officer valued at $0.0041 or $20,500. The Company recognized this as compensation. On February 15, 2012, the former Chief Executive Officer converted 2,500,000 shares of preferred stock into 25,000,000 common shares. The Company amended the employment agreement during fiscal year; whereby as of July 31, 2014 all issuances of stock are vested; therefore, all compensation is recognized.

On February 19, 2013, the Company issued 5,000,000 shares of its Class A Convertible Preferred stock to its Chairman of the Board in exchange for 51,860,003 shares of the company’s par value common stock.

On May 29, 2014, Minerco Resources, Inc. (the “Company”) filed a Certificate of Designation to its Certificate of Incorporation with the Secretary of State of the State of Nevada setting forth the rights and preferences of the Series B Preferred Stock (the “Series B Shares”). The following is a summary of material provisions of the Series B Shares as set forth in the Certificate of Designations. The number of shares constituting Series B Preferred is 2,000,000. The Company has recognized $54,904 in preferred stock dividends for the twelve months ended July 31, 2014.

Dividends

The Series B Shares accrue dividends at the rate per annum equal to 8% of the Stated Value which initially is ten dollars per share payable in cash; provided that after an initial public offering of the Company’s common stock the dividends may be paid at the option of the Company in cash or additional shares of common stock.

Conversion

Each Series B Share (together with any accrued but unpaid dividends thereon) is convertible into shares of Common Stock at the option of the holder at any time at a conversion price per share equal to the sum of the Stated Value a divided by the Conversion Price, subject to adjustment as described below. The initial Conversion Price shall be equal to .02. The Series B Shares automatically convert to common stock immediately prior to the closing of a firmly underwritten public offering for gross offering proceeds of at least $10,000,000 or upon the consent of two-thirds of the holders of Series B Shares.

Redemption

The Company has the right to redeem the Series B Shares at any time at a price per share equal to the Stated Value multiplied by 125%.

Liquidation

In the event of a liquidation, dissolution or winding up of the Company and other Liquidation Events as defined in the Certificate of Designations, holders of Series B Shares are entitled to receive from proceeds remaining after distribution to the Company’s creditors and prior to the distribution to holders of Common Stock but junior to the Series A Preferred Stock the (x) Stated Value (as adjusted for any stock splits, stock dividends, reorganizations, recapitalizations and the like) held by such holder and (y) all accrued but unpaid dividends on such shares.

F-11

Anti-Dilution

The Series B Shares are entitled to weighted average anti-dilution protection under certain circumstances specified in the Certificate of Designations.

Voting

Except as otherwise required by law and except as set forth below, holders of Series B Shares will, on an as-converted basis, vote together with the Common Stock as a single class. Each holder of Series B Shares is entitled to cast the number of votes equal to five times the number of shares of Common Stock into which such shares of Series B Shares could be converted at the record date for determining stockholders entitled to vote at the meeting.

On June 4, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with V. Scott Vanis, an individual and a member of our Board of Directors (the “Vanis”), where, among other things, the Company and Vanis exchanged a certain Note (inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The Vanis and the Company exchanged the Note, dated July 23, 2012, in the principal amount of $352,499 together will all interest and other amounts accrued thereon for the 105,000 shares of Series B Preferred Stock.

On June 4, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with Ann Powers, an individual (the “Powers”), where, among other things, the Company and Powers exchanged a certain Note (Inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The Powers and the Company exchanged the Notes, dated September 27, 2013 in the principal amount of $25,000 together will all interest and other documents amount accrued thereon for 6,000 shares of Series B Preferred Stock.

On June 4, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with MSF International, Inc., a Belize Company (the “MSF”), where, among other things, the Company and MSF exchanged a certain Note (Inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The MSF and the Company exchanged the Notes, dated July 1, 2013, July 19, 2013, September 6, 2013 and October 1, 2013, respectively in the principal amount of $25,000, $60,000, $20,000 and $35,000, respectively together will all interest and other documents amount accrued thereon for 212,000 shares of Series B Preferred Stock.

On June 6, 2014, the Company entered into an Agreement (the “Exchange Agreement”) with LOMA Management Partners, LLC, a limited liability company domiciled in the State of New York (the “LOMA”), where, among other things, the Company and LOMA exchanged a certain Note (inclusive of the principal amount, accrued and unpaid interest owed and other amounts owed in respect to the Note) for shares of the Company’s Series B Preferred Stock. The LOMA and the Company exchanged the Notes, dated July 31, 2013, October 28, 2013, January 23, 2014 and April 23, 2014, respectively, in the principal amounts of $46,400, $85,000, $20,000 and $150,000, respectively, together will all interest and other amounts accrued thereon for 60,000 shares of Series B Preferred Stock.

Accrued interest of $23,196 related to the above notes was exchanged into shares of the Company’s Series B Preferred Stock during the year ended July 31, 2014.

The market value of the preferred stock on the dates of conversion was $3,458,300 and a loss of $2,616,205 was recognized on the debt for equity conversions for the twelve months ended July 31, 2014.

7. Common Stock

During the fiscal year ended July 31, 2013, the Company issued 1,103,162,975 common shares for the conversion of $320,210 convertible promissory notes. These notes converted at conversion rates between $0.0001 and $0.001.

On February 1, 2013, the Company issued 15,000,000 common shares to its Chief Executive Officer pursuant to the terms of his 3 year employment agreement. These shares were fair valued at $19,500 and amortized over the employee service term. The Company expensed $3,250 as stock based compensation during fiscal year 2013.

On May 20, 2013, the Company issued 15,000,000 common shares to its Chief Executive Officer to forgive $24,500 of accrued salary. The fair value of these shares was determined to be $12,000. Due to the accrual being due to a related party the Company did not record a gain of forgiveness of accrual.

F-12

During fiscal year 2013, the Company issued 20,000,000 common shares for consulting services. The shares vested immediately. The fair value of these shares was determined to be $38,500 and was expensed as stock compensation.

During the fiscal year 2013, a convertible promissory holder returned 2,845,000 of common share to the Company. The Company cancelled these shares and recorded the convertible debt of $2,845 for the convertible notes payable.

During the fiscal year 2013, a consultant returned 83,334 of common share to the Company. The Company cancelled these shares.

During the twelve months ended July 31, 2014, the Company issued 1,267,751,661 common shares for the conversion of $527,528 convertible promissory notes. These notes converted at conversion rates between $0.0003 and $0.004.

On August 22, 2013, the Company issued 10,000,000 common shares for consulting services. The shares vested immediately. The fair value of these shares was determined to be $38,000 and was expensed as stock compensation.

On October 3, 2013, the Company issued 5,000,000 common shares for consulting services. The shares vested immediately. The fair value of these shares was determined to be $20,500 and was expensed as stock compensation.

On April 8, 2014, the Company issued 2,000,000 common shares pursuant to a settlement agreement. The shares vested immediately. The fair value of these shares was determined to be $34,800 and was expensed as stock compensation.

On May 29, 2014, the former Chief Executive Officer returned 30,000,000 of common shares to the Company in exchange for 53,000 shares of Series B Preferred stock.

On July 6, 2014, the Company issued 6,000,000 common shares in exchange for a note payable in the amount of $25,566 including principal and interest with its subsidiary, Level 5 Beverage Company, Inc. The company recognized a loss $35,634 on the debt for equity exchange.

On July 8, 2014, the Company issued 250,000 common shares pursuant to a consulting agreement. The shares vested immediately. The fair value of these shares were determined to be $2,500 and was expensed as stock compensation.

During the twelve months ended July 31, 2014, a convertible promissory holder returned 3,000,000 of common share to the Company. The Company cancelled these shares and recorded the convertible debt of $3,000 for the convertible notes payable.

8. Debt

On May 1, 2014, Minerco Resources, Inc. (“we” or the “Company”) entered into an Agreement (the “Line of Credit”) with Post Oak, LLC (the “Lender”), where, among other things, the Company and Lender entered into a Line of Credit Financing Agreement in the principal sum of up to Two Million Dollars ($2,000,000.00), or such lesser amount as may be borrowed by the Company as Advances under this line of credit (the “Line of Credit”). As of July 31, 2014, the Company had $1,000,000 outstanding under the line of credit.

The summary of the Line of Credit is as:

This Line of Credit shall bear interest at the rate of ten percent (10.00%) per annum.

F-13

The entire outstanding principal amount of this Line of Credit shall be due and payable on April 30, 2016 (the “Maturity Date”).

Advances. Subject to the provisions of Section 2 below, the Company shall have the right, at any time or from time to time prior to the Maturity Date to request loans and advances from the Lender (individually an “Advance” and collectively, the “Advances”). Each such Advance shall be considered a legal promissory note, shall be in the amount of $250,000, and shall be reflected on Schedule A to this Line of Credit and initialed as received by an officer or director of the Company. The Lender shall not be under any obligation to make advances under this Line of Credit.

Use of Proceeds. All proceeds received by the Company from each Advance made by the Lender under this Line of Credit shall be used by the Company for expenses incurred by the Company in connection with working capital and any other operating expenses determined to be necessary by the Company.

Interest Payments, Balloon Payment. Company shall pay interest at the rate of ten percent (10.00%) per annum, calculated on a per day basis for each Advance made by Lender, and Company shall make one interest payment in twelve (12) months and one interest payment in eighteen (18) months. Company shall make a payment for the entire unpaid balance of all Advances, plus any accrued unpaid interest, as per a “balloon” payment, in two (2) years from the date of the Line of Credit.

Security. As security for the Line of Credit, immediately upon the first Advance made by Lender to Company, Company shall cause and/or direct Preferred Class “C” Shares of Minerco Resources, Inc. (“MINE”) to be issued to Lender. The amount of shares shall be sufficient to provide adequate security to the Lender for any Advances made to Company, and shall be reasonably determined by the parties at a later date. Company shall contact its transfer agent Island Stock Transfer to initiate this issuance, with all proper corporate approvals. The Company has not yet created a Preferred Class C Shares.

9. Noncontolling Interest

The Company owns 70.3% of its subsidiary Level 5 Beverage Company, Inc. The remaining 29.7% is owned by unrelated third parties. The net loss attributable to noncontrolling interest for the twelve months ended July 31, 2014 and 2013 was $42,981 and 0 respectively.

10 Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred a net operating loss of approximately $3,700,000, which begins expiring in 2028. The Company has adopted ASC 740, “Accounting for Income Taxes”, as of its inception. Pursuant to ASC 740 the Company is required to compute tax asset benefits for non-capital losses carried forward. The potential benefit of the net operating loss has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the loss carried forward in future years.

Significant components of the Company’s deferred tax assets and liabilities as at July 31, 2014 and 2013, after applying enacted corporate income tax rates, are as follows:

	July 31,			July 31,
	2014			2013
Deferred income tax asset
Net operating loss carry forward	$	1,295,000		$	990,000
Valuation allowance		(1,295,000	)		(990,000	)
Net deferred tax assets	$	–		$	–

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

F-14

11. Convertible note payable and derivative liabilities

During fiscal year 2013, the Company received proceeds of $464,750 from convertible promissory notes. These notes carry interest rates between 5 % and 10%. The notes are convertible at variable conversion prices of between 35% and 50% of the market price and shall be calculated using the lowest trading days during the preceding 5 to120 days before conversion. The total principal due at July 31, 2013 is $426,075.

During fiscal year 2014, the Company received proceeds of $799,500 from convertible promissory notes. These notes carry interest rates between 5 % and 10%. The notes are convertible at fixed conversion rates that range from $0.0012 to $0.004 or variable conversion prices between 45% and 60% of the market price and shall be calculated using the lowest trading days during the preceding 5 to 25 days before conversion of whichever is lower . The Company repaid $189,000 of the convertible during the year ended July 31, 2014. The total principal due at July 31, 2014 is $305,389 with an unamortized discount of $124,149 at July 31, 2014.

Due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options embedded in the Convertible Promissory Notes, the options are classified as derivative liabilities and recorded at fair value.

Derivative Liability:

The fair values of the three instruments were determined to be $650,135 using a Black-Scholes option-pricing model. Upon the issuance dates of the Convertible Promissory Notes, $799,655 was recorded as debt discount and $1,734,572 was recorded as day one loss on derivative liability. During the year ended July 31, 2014 and 2013, the Company recorded a loss on mark-to-market of the conversion options of $7,893,507 and a gain of $503,107, respectively. As of July 31, 2014 and 2013, the aggregate unamortized discount is $124,149 and $298,764, respectively.

The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on July 31, 2014.

	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative Financial instruments	$	-	$	-	$	650,135	$	650,135

The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on July 31, 2013.

	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative Financial instruments	$	-	$	-	$	1,537,510	$	1,537,510

The following table summarizes the derivative liabilities included in the consolidated balance sheet at July 31, 2014:

Balance at July 31, 2012	$	3,089,498
Debt discount	$	367,500
Day one loss on fair value		737,656
July 31, 2013 loss on change in fair value		(1,240,763)
Write off due to conversion		(1,416,381)
Balance at July 31, 2013	$	1,537,510
Debt discount	$	799,655
Day one loss on fair value		-
July 31, 2014 loss on change in fair value		7,893,507
Write off due to conversion		(9,580,537)
Balance at July 31, 2014	$	650,135

F-15

Pursuant to ASC 815, “Derivatives and Hedging,” the Company recognized the fair value of the embedded conversion feature of all the notes of $650,135 and $1,537,510 at July 31, 2014 and 2013 respectively. The initial fair value of the derivative liability was determined using the Black Scholes option pricing model with a quoted market price of $0.000560 to $0.02, a conversion price of $0.0001 to $0.009, expected volatility of 25% to 462%, no expected dividends, an expected term of one year and a risk-free interest rate of 0.004% to 0.11% at July 31, 2014 and a quoted market price of $0.0006 to $0.0084, a conversion price of $0.0001 to $0.0025, expected volatility of 74% to 1581%, no expected dividends, an expected term of one year and a risk-free interest rate of 0.01% to 0.05% at July 31, 2013. The discount on the convertible loan is accreted over the term of the convertible loan. During the twelve months ended July 31, 2014 and 2013, the Company recorded accretion of $990,184 and $641,159 respectively.

The net loss recorded on the above derivative liabilities for the twelve months ended July 31, 2014 was $7,893,507 and the net gain for the twelve months ended July 31, 2013 was $503,107.

12. Commitments and Contingencies

Operating Leases

We have an operating lease for Arizona office. At July 31, 2014, total future minimum payments on our operating lease were as follows:

2015	$	12,016
2016		1,021
Total	$	13,037

Brand Licensing Agreements

VITAMINFIZZ ®

On November 21, 2013, through our subsidiary, Level 5 Beverage Company, Inc. (“Licensee”), we entered into an Agreement with VITAMINFIZZ, L.P (“Licensor”), a California Limited Partnership where the Licensee acquires the exclusive rights in North America to use VitaminFIZZ® on and in connection with the marketing, distribution and sale of the Brand. Level 5 agreed to pay a licensing fee of $250,000 and no royalties shall be made to Licensor until such time as the aggregate royalty payments earned by Licensor exceed $250,000. Licensor shall retain a 49% equity interest in all net revenue. A milestone payment of $1,000,000 is due to Licensor when net sales exceed $25,000,000.

VITAMIN CREAMER ®

On June 24, 2014, Level 5 Beverage Company, Inc. (“Buyer”), a subsidiary of Minerco Resources, Inc. entered into an Agreement, effective June 20, 2014, with Vitamin Creamer LP (“Seller”), a limited partnership, where, among other things, Level 5 bought all right, title and interest to the (i) the Trademark “Vitamin Creamer”, and (ii) formulas and certain other intellectual property rights related to the Brand and the Products. The purchase price is $100,000 of which $50,000 was paid during 2014 and $50,000 is due within 24 months after closing. Seller shall retain a 5% equity interest in all net profits.

Employment Agreements

On September 10, 2014, we entered into an exclusive employment agreement with V. Scott Vanis to serve as our Chief Executive Officer, President and Secretary.

F-16

The agreement is for a term of five years and one month beginning retroactively on July 9, 2014 and ending July 31, 2019. An Extension to the Term must be agreed upon in writing and executed by the Company and Mr. Vanis no later than 5 p.m. Eastern Standard Time on July 31, 2019.

Mr. Vanis will be paid a salary of $225,000 per annum beginning on July 9, 2014. If revenues exceed $25 million, then Mr. Vanis’ salary will be increased to $450,000 per annum. If revenues exceed $50 million, then Mr. Vanis’ salary will be increased to $675,000 per annum.

Mr. Vanis was issued 500,000 shares of Series B Preferred stock, upon the effective date of the agreement.

If Mr. Vanis voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy within 12 months of the date of the agreement, all shares granted will be cancelled. If Mr. Vanis voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after twelve months and before 24 months of the date of the agreement, Four Hundred Thousand (400,000) shares granted to him will be returned.

If Mr. Vanis voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after twenty four months and before 36 months of the date of the agreement, Three Hundred Thousand (300,000) s shares granted to him will be returned.

If Mr. Vanis voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after thirty six months and before 48 months of the date of the agreement, Two Hundred Thousand (200,000) shares granted to him will be returned.

If there is a sale of all or substantially all of the assets or a merger in which the Company is not the surviving entity, Mr. Vanis will be entitled to receive an additional amount of shares of common stock in the Company which would equal Five percent (5%) of the final value of the transaction.

Further, Mr. Vanis will be entitled to such additional bonus, if any, as may be granted by the Board (with Mr. Vanis abstaining from any vote thereon) or compensation or similar committee thereof in the Board's (or such committee's) sole discretion based upon Employee's performance of his Services under the Agreement.

On September 10, 2014, we entered into an exclusive employment agreement with Sam J Messina III to serve as our Chief Financial Officer, and Treasurer.

The agreement is for a term of five years and one month beginning retroactively on July 1, 2014 and ending July 31, 2019. An Extension to the Term must be agreed upon in writing and executed by the Company and Mr. Messina no later than 5 p.m. Eastern Standard Time on July 31, 2019.

Mr. Messina will be paid a salary of $150,000 per annum beginning on July 1, 2014. If revenues exceed $25 million, then Mr. Messina’s salary will be increased to $300,000 per annum. If revenues exceed $50 million, then Mr. Messina’s salary will be increased to $450,000 per annum.

Mr. Messina was issued 500,000 shares of Series B Preferred stock, upon the effective date of the agreement.

If Mr. Messina voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy within 12 months of the date of the agreement, all shares granted will be cancelled. If Mr. Messina voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after twelve months and before 24 months of the date of the agreement, Four Hundred Thousand (400,000) shares granted to him will be returned.

F-17

If Mr. Messina voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after twenty four months and before 36 months of the date of the agreement, Three Hundred Thousand (300,000) s shares granted to him will be returned.

If Mr. Messina voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after thirty six months and before 48 months of the date of the agreement, Two Hundred Thousand (200,000) shares granted to him will be returned.

If there is a sale of all or substantially all of the assets or a merger in which the Company is not the surviving entity, Mr. Messina will be entitled to receive an additional amount of shares of common stock in the Company which would equal Three percent (3%) of the final value of the transaction.

Further, Mr. Messina will be entitled to such additional bonus, if any, as may be granted by the Board (with Mr. Messina abstaining from any vote thereon) or compensation or similar committee thereof in the Board's (or such committee's) sole discretion based upon Employee's performance of his Services under the Agreement.

13. Subsequent Events

a)	On August 1, 2014, the Company issued 50,000,000 common shares for the conversion of $12,500 pursuant to a convertible promissory note dated July 23, 2012.

b)	On August 5, 2014, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to increase the authorized common stock to 3,500,000,000.

c)	On August 8, 2014, the Company issued 250,000 common shares pursuant to a consulting agreement.

On August 19, 2014, through our subsidiary, Level 5 Beverage Company, Inc.(the “Supplier”) (“Level 5”), we entered into an amended Agreement (the “Distribution Agreement – Exclusive Territory”) with Drink King Distribution Company, Inc. (“ Distributor ”), a New Jersey Corporation (“Drink King”) to exclusively distribute the entire product line under the Level 5 brand.

On August 28, 2014, through our subsidiary, Level 5 Beverage Company, Inc.(the “Supplier”) (“Level 5”), we entered into an amended Agreement (the “Distribution Agreement – Exclusive Territory”) with Avanzar Sales and Distribution, LLC (“ Distributor ”), a California Limited Liability Company (“Avanzar”) to exclusively distribute the entire product line under the Level 5 brand.

f)	On September 3, 2014, the Company issued 10,000,000 common shares pursuant to a consulting agreement.

g)	On September 3, 2014, the Company issued 21,666,666 common shares for the conversion of $21,667 pursuant to a convertible promissory note dated March 3, 2014.

h)	On September 4, 2014, the Company issued 12,000,000 common shares pursuant to a consulting agreement.

i)	On September 4, 2014, the Company issued 8,000,000 common shares pursuant to a consulting agreement.

j)	On September 9, 2014, the Company issued 50,000,000 common shares for the conversion of $12,500 pursuant to a convertible promissory note dated July 23, 2012.

k)	On September 10, 2014, the Company issued 500,000 shares of Class B Preferred to its Chief Executive Officer pursuant to his employment agreement.

l)	On September 10, 2014, the Company issued 500,000 shares of Class B Preferred to its Chief Financial Officer pursuant to his employment agreement.

m)	On September 11, 2014, the Company issued 25,000,000 common shares for the conversion of $6,250 pursuant to a convertible promissory note dated July 23, 2012.

F-18

n)	On September 12, 2014, the Company issued 26,055,560 common shares for the conversion of $26,056 pursuant to a convertible promissory note dated November 19, 2013.

o)	On September 16, 2014, the Company adopted its Key Employee and Distributor Incentive Plan.

p)	On September 16, 2014, the Company issued 500,000 common shares under its Key Employee and Distributor Incentive Plan.

q)	On September 16, 2014, the Company issued 500,000 common shares under its Key Employee and Distributor Incentive Plan.

r)	On September 30, 2014, the Company issued 50,000,000 common shares for the conversion of $12,500 pursuant to a convertible promissory note dated July 23, 2012.

s)	On October 9, 2014, the Company issued 25,000,000 common shares for the conversion of $6,250 pursuant to a convertible promissory note dated July 23, 2012.

t)	October 10, 2014, the Company issued 68,632,000 common shares for the conversion of $17,158 pursuant to a convertible promissory note dated July 23, 2012.

u)	On October 16, 2014, the Company issued 500,000 common shares pursuant to a consulting agreement.

v)	On October 21, 2014, the Company issued 2,005,269 common shares for the conversion of $5,000 pursuant to a convertible promissory note dated March 31, 2014.

On October 24, 2014, through our subsidiary, Level 5 Beverage Company, Inc., we entered into an Agreement with Avanzar Sales and Distribution, LLC (“Company”), a California Limited Liability Company (“Avanzar”) to acquire an initial thirty percent (30%) equity position and fifty-one percent (51%) voting interest for the Purchase Price of $500,000 with a twenty-one percent (21%) Option and Second Option to acquire up to seventy-five percent (75%) of Avanzar. The Agreement is Effective as of September 15, 2014.

x)	On October 27, 2014, the Company issued 10,237,980 common shares for the conversion of $25,000 pursuant to a convertible promissory note dated March 31, 2014.

y)	On October 29, 2014, the Company issued 25,000,000 common shares for the conversion of $6,250 pursuant to a convertible promissory note dated July 23, 2012.

F-19

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

There have been no disagreements on accounting and financial disclosures from the inception of our company through the date of this Form 10-K. Our financial statements for the period from inception to July 31, 2014, included in this report have been audited by Malone Bailey LLP as set forth in this annual report.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were not effective as of the end of the period covered by this report due to identified material weaknesses. Inasmuch as we only have one individuals serving as our officer, and employee we have determined that the Company has inadequate controls and procedures over financial reporting due to the lack of segregation of duties and lack of a formal review process that includes multiple levels of review, resulting in several audit adjustments related to derivative accounting, accounting of the Company’s convertible debt instruments, and write-off of assets. Management recognizes that its controls and procedures would be substantially improved if there was a greater segregation of the duties of Chief Executive Officer and Chief Financial Officer and as such is actively seeking to remediate this issue. Management believes that the material weakness in its controls and procedures referenced did not have an effect on our financial results.

Limitations on the Effectiveness of Controls

Our management, including our CEO and our CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of July 31, 2014. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of July 31, 2014, the Company’s internal control over financial reporting was not effective based on those criteria due to identified material weaknesses. Inasmuch as we only have two individuals serving as our Chief Executive Officer and Chief Financial Officer we have determined that the Company has, inadequate controls and procedures over financial reporting due to the lack of segregation of duties and lack of a formal review process that includes multiple levels of review, resulting in several audit adjustments related to derivative accounting, accounting of the Company’s convertible debt instruments, and write-off of assets.. Management recognizes that its controls and procedures would be substantially improved if there was a greater segregation of the duties of Chief Executive Officer and Chief Financial Officer and as such is actively seeking to remediate this issue. Management believes that the material weakness in its controls and procedures referenced did not have an effect on our financial results.

This annual report does not include an attestation report of our registered public accountant regarding internal control over financial reporting. Managements’ report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Controls

There were no changes in our internal control over financial reporting during the quarter ended July 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Officers and Directors

V. Scott Vanis and Sam J Messina III are our directors. Our directors serve until his or her successor is elected and qualified. Officers are elected by the board of directors for a term of one (1) year and serve until their successor is duly appointed, or until he or she resigns. We have no nominating, auditing or compensation committees.

The name, address, age and position of our present sole officer and sole director is set forth below:

Name and Address	Age	Position(s)

V. Scott Vanis	37	Chairman of the Board of Directors, Chief Executive Officer, President and Secretary

Sam J Messina III	35	Member of the Board of Directors, Chief Financial Officer, and Treasurer

Background of officers and directors

V Scott Vanis, Chairman of the Board of Directors

From March 23, 2010 to September 21, 2012 and from July 9, 2014 to current, V. Scott Vanis served as our President, Chief Executive Officer, Chief Financial Officer, and since March 23, 2010 he has served as a member of the Board of Directors. From May of 2007 to the present, Mr. Vanis has served as President of TC Energy International, SA, which provides international finance and acquisition services to energy companies, national oil companies and foreign governments. Mr. Vanis facilitated the identification, acquisition and financing of high-value properties in Latin and South America. From June 2003 to the present Mr. Vanis, has served as President of VSV Resources, LLC providing engineering consulting services to exploration and production companies, energy companies, national oil companies and foreign governments. He specialized in complicated, high risk operational procedures throughout the world. During his tenure with VSV, Mr. Vanis has also served as a liaison consultant to Central American governments to evaluate potential energy reserves and projects in their respective countries. From June of 2001 to June of 2003, Mr. Vanis was a Staff Petroleum Engineer with Pinnacle Technologies, Inc. and from June of 2000 through June of 2001 he served BJ Services, Inc. as a Field Petroleum Engineer. Mr. Vanis holds of Bachelor of Science in Petroleum Engineering from The University of Tulsa.

Mr. Vanis has extensive public company experience. He also has extensive experience in the energy sector and business administration of our company, with a focus in specialized operational and energy related financial services. Having served in senior corporate positions at companies involved in the energy sector, he has a vast knowledge of the alternative energy industry. His prior business experience also provides him with a broad understanding of the operational, financial and strategic issues facing public companies.

Sam Messina III, Chief Financial Officer, Treasurer and Member of the Board of Directors

From July 26, 2010 to July 23, 2012 and from July 1, 2014 served as our Chief Financial Officer, Treasurer and member of the Board of Directors. From July 26, 2010 to July 23, 2012, Mr. Messina also served as our Secretary. From June 2012 to July 2014, Mr. Messina worked at Workiva, LLC formerly known as Webfilings, LLC in their Professional Services Team. Mr. Messina worked at Alternative Energy Development Corporation (ADEC:OTCBB) as Chief Financial Officer and Director from November 2009 to September 2010. He previously worked at Qualcomm, Inc. (QCOM:NASD) at various roles within their accounting and finance team from October 2006 to November 2009. Prior to that Mr. Messina served as the Chief Financial Officer of Pop3 Media Corp. (POPT:OTCBB) from July 2004 to July 2006. Mr. Messina holds a B.A. degree in Finance from the Loyola University Chicago and is a Certified Public Accountant in the State of California. Mr. Messina filed a Chapter 7 bankruptcy on October 26, 2012 which was subsequently discharged on February 22, 2013.

Mr. Messina brings to the Board extensive knowledge of the corporate accounting and finance and XBRL having served in senior corporate executive positions. His prior business and financial experience provides him with a broad understanding of the operational, financial and strategic issues facing public companies.

William Juarez, Jr., President of Avanzar Sales and Distribution, LLC

From March 2012 to current, William Juarez, Jr. served as the President of Avanzar Sales and Distribution, LLC (“Avanzar”). Mr Juarez was also one of the co-founders of Avanzar where he was instrumental in forming and implementing its vision for the next generation of representation and distribution model for fast moving consumer goods (“FMCG”). The model is defined to be full scale national brokerage including regional in houses direct store delivery (“DSD”). He has helped the company grow from revenue of approximately $1.1 million in 2012 to an anticipated $2.7 million in 2014. From Jan 2001 to February 2012, Mr. Juarez worked at Energized Distribution, LLC (“Energized”). He first served as the General Manager from January 2001 to December 2007 then as the Managing Partner from January 2008 to February 2012. He helped lead the company from a start-up to the widely recognized gold standard for Red Bull Distribution in North America which generated in revenues in excess of $70 million annually while directing a staff of over 150 employees. Energized represented and/or distributed many top tier and emerging brands including Red Bull, Nestle Chilled Beverages, Voss Water, Langers Juice, Fuze, Honest Tea, Izze, Calypso Lemonades, Jarritos Soda’s, Muscle Milk and Vitamin Water.

Mr. Juarez has extensive FMCG distribution experience. Having served in leadership positions at companies involved in the distribution business, he has a vast knowledge of the beverage industry. His prior business experience also provides him with a broad understanding of the operational, financial and strategic issues facing beverage manufacturers and distributors.

On September 10, 2014, we entered into an exclusive employment agreement with V. Scott Vanis to serve as our Chief Executive Officer, President and Secretary.

Mr. Vanis was issued 500,000 shares of Series B Preferred stock, upon the effective date of the agreement.

If Mr. Vanis voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after thirty six months and before 48 months of the date of the agreement, Two Hundred Thousand (200,000) shares granted to him will be returned.

If there is a sale of all or substantially all of the assets or a merger in which the Company is not the surviving entity, Mr. Vanis will be entitled to receive an additional amount of shares of common stock in the Company which would equal five percent (5%) of the final value of the transaction.

On September 10, 2014, we entered into an exclusive employment agreement with Sam J Messina III to serve as our Chief Financial Officer, and Treasurer.

Mr. Messina was issued 500,000 shares of Series B Preferred stock, upon the effective date of the agreement.

If Mr. Messina voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after twenty four months and before 36 months of the date of the agreement, Three Hundred Thousand (300,000) shares granted to him will be returned.

If Mr. Messina voluntarily terminates his employment with the Company or if a petition for Chapter 7 bankruptcy is filed by the Company resulting in an adjudication of bankruptcy after thirty six months and before 48 months of the date of the agreement, Two Hundred Thousand (200,000) shares granted to him will be returned.

If there is a sale of all or substantially all of the assets or a merger in which the Company is not the surviving entity, Mr. Messina will be entitled to receive an additional amount of shares of common stock in the Company which would equal three percent (3%) of the final value of the transaction.

Audit Committee Financial Expert

We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted. Although ours securities are not listed on the Nasdaq, when determining independence we use the Nasdaq definition of independence Our board member is not “independent” in accordance with rule 4200(a)(14) of the Nasdaq Marketplace Rules. The board of directors believes that its member is financially literate and experienced in business matters and is capable of (1) understanding generally accepted accounting principles (“GAAP”) and financial statements, (2) assessing the general application of GAAP principles in connection with our accounting for estimates, accruals and reserves, (3) analyzing and evaluating our financial statements, (4) understanding our internal controls and procedures for financial reporting, and (5) understanding audit committee functions, all of which are attributes of an audit committee financial expert. The board of directors believes that its board is able to fulfill its role under SEC regulations despite not having a designated “audit committee financial expert.”

Code of Ethics

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A copy of the code of ethics is filed on our website at www.minercoresources.com.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors, and persons who beneficially own more than 10% of our common stock to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission ("SEC"). Officers, directors and greater than 10% beneficial owners are also required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file.

Based solely upon a review of the copies of such forms furnished to us, or written representations that no Form 5 filings were required, we believe that during the fiscal year ended July 31, 2014, there was compliance with all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners.

ITEM 11. EXECUTIVE COMPENSATION.

The following table sets forth the compensation paid by us for the last two years through July 31, 2014, for our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named executive officer.

Summary Compensation Table

											Equity		Deferred		All
Name											Incentive		Compensa-		Other
And						Stock			Option		Plan		tion		Compen-
Principal		Salary		Bonus		Awards			Awards		Compensation		Earnings		sation		Total
Position	Year	(US$)		(US$)		(US$)			(US$)		(US$)		(US$)		(US$)		(US$)
(a)	(b)	(c)		(d)		(e)			(f)		(g)		(h)		(i)		(j)
John Powers, (former)	2014		79,500		0		0			0		0		0		0	$	79,500
CEO, President	2013		17,500		0		27,750	(1)		0		0		0		0	$	43,250

V. Scott Vanis, Chairman	2014		13,911		0		0			0		0		0		0		13,911
President, CEO, Secretary	2013		0		0		0			0		0		0		0		0

Sam Messina III	2014		12,500		0		0			0		0		0		0		12,500
CFO, Treasurer	2013		0		0		0			0		0		0		0		0

(1)	Stock Award for John Powers include conversion of $24,500 of salary into common stock. Mr. Powers resigned as our Chief Executive Officer on July 9, 2014.
(2)	Mr. Vanis was appointed our Chief Executive Officer on July 9, 2014.
(3)	Mr. Messina was appointed our Chief Financial Officer on July 1, 2014.

* The addresses of each of the executive officers is c/o 800 Bering Drive, Suite 201, Houston, Texas 77057.

The Company did not award any stock options or SAR grants, as of July 31, 2014.

The following table sets forth the compensation paid by us from to our directors for the year ending July 31, 2014. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named director.

Director Compensation

Fees

Earned

Nonqualified

Non-Equity

Deferred

Paid in

Stock

Option

Incentive Plan

Compensation

All Other

Cash

Awards

Compensation

Earnings

Compensation

Total

Name

(US$)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

V. Scott Vanis

Sam J Messina III

Our directors do not receive any compensation for serving as a member of the board of directors.

There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.

Long-Term Incentive Plan Awards

On September 16, 2014, the Company adopted its Key Employee and Distributor Incentive Plan.

On September 10, 2014, we entered into an employment agreement with both our Chief Executive Officer and our Chief Financial Officer.

Indemnification

Under our Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth, as of the date of this report, the total number of common shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The stockholders listed below have direct ownership of his/her shares and possess voting and dispositive power with respect to the shares. The share calculations are based upon 2,828,777,176 shares of common stock outstanding as of October 31, 2014.

Name and Address	Number of		Percentage of
Beneficial Owner	Shares		Ownership			Voting Power 3
V. Scott Vanis 1		3,069,540,001		26.9	%	38.8	%
Sam J Messina III 2		1,250,000,000		8.1	%	15.8	%

All Officers and Directors as a Group		4,319,540,001		35.0	%	54.6	%

[1] V. Scott Vanis is our Chairman of the Board of Directors and our Chief Executive Officer, President and Secretary. Includes 57,040,001 shares for common stock, of which 47,000,000 shares are held by Vanis Education Trust. Includes 15,000,000 shares of Class A Convertible Preferred stock that is entitled to 100 votes per share (an aggregate of 1,500,000,000 votes) and converts to common stock at a ratio of 10 to 1. Also Includes 605,000 shares of Class B Preferred stock that is entitled to 2,500 votes per share (an aggregate of 1,512,500,000 votes) and converts to common stock at a ratio of 500 to 1.

[2] Sam J Messina III is a member of the Board of Directors and our Chief Financial Officer and Treasurer. Includes 500,000 shares of Class B Preferred stock that is entitled to 2,500 votes per share (an aggregate of 1,250,000,000 votes) and converts to common stock at a ratio of 500 to 1.

[3] Based on 7,918,777,176 votes including 2,828,777,176 shares of common stock, 1,500,000,000 Class A Convertible Preferred stock votes and 3,590,000,000 Class B Preferred Stock votes.

The following table sets forth, as of the date of this report, the total number of Class A Convertible Preferred shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The Class A Convertible Preferred shares are entitled to 100 votes per share and convert to common shares at a ratio of 10 to 1. The stockholders listed below have direct ownership of his/her shares and possess voting and dispositive power with respect to the shares.

Name and Address	Number of		Percentage of
Beneficial Owner	Shares		Ownership

V. Scott Vanis [1]		15,000,000		100.00	%

All Officers and Directors as a Group		15,000,000		100.0	0%

[1] V. Scott Vanis is our Chairman of the Board of Directors, President, CEO and Secretary.

The following table sets forth, as of the date of this report, the total number of Class B Preferred shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The Class B Preferred shares are entitled to 2,500 votes per share and convert to common shares at a ratio of 500 to 1. The stockholders listed below have direct ownership of his/her shares and possess voting and dispositive power with respect to the shares.

Name and Address	Number of		Percentage of
Beneficial Owner	Shares		Ownership

V. Scott Vanis [1]		605,000		42.1	%
Sam J Messina III [2]		500,000		34.8	%
John Powers [3]		53,000		3.7	%
All Officers and Directors as a Group		1,158,000		80.6	%

[1] V. Scott Vanis is our Chairman of the Board of Directors, President, CEO and Secretary.

[2] Sam J Messina III is a member of our Board of Directors and CFO and Treasurer.

[3] John Powers is our former Chief Executive Officer, President, Chief Financial Officer, Seretary and Treasurer.

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

On July 23, 2012, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note between the Company and its former Chief Executive Officer and former Chief Financial Officer for $320,301 and $267,998, respectively. The convertible notes carry a 5% rate of interest and are convertible into common stock at a variable conversion price of 50% of the market price which shall be calculated as the lowest day during the preceding 5 days before conversion. The Convertible Promissory Notes are due on January 23, 2012. The Convertible Promissory Notes are due on to former Chief Financial Officer for $267,998 has been assigned to former Chief Executive officer as of July 23, 2012. On July 23, 2012, the Company entered into a Securities Purchase Agreement and Convertible Promissory Note between the Company and its former Chief Executive Officer for $588,299. The convertible notes carry a 5% rate of interest and are convertible into common stock at a variable conversion price of 50% of the market price which shall be calculated as the lowest day during the preceding 5 days before conversion. On June 4, 2014, the Company and its Chief Executive Officer exchanged the note in the principal amount of $352,499 together with all interest and other amounts accrued thereon for 105,000 shares of Series B Preferred Stock.

On November 1, 2012, the Company paid $2,500 to a family member of the Chairman of the Board of Directors for professional services provided.

On December 11, 2012, the Company paid $2,000 to a family member of the Chairman of the Board of Directors for professional services provided.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(1) Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

2014	$	43,169	Malone Bailey LLP

2013	$	41,470	Malone Bailey LLP

(2) Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

2014	$	-0-	Malone Bailey LLP

2013	$	-0-	Malone Bailey LLP

(3) Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

2014	$	-0-	Malone Bailey LLP

2013	$	-0-	Malone Bailey LLP

(4) All Other Fees

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:

2014	$	-0-	Malone Bailey LLP

2013	$	-0-	Malone Bailey LLP

(5) Currently, we have no independent audit committee. Our full board of directors functions as our audit committee and is comprised of one director who is not considered to be "independent" in accordance with the requirements of Rule 10A-3 under the Exchange Act. Our audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.

(6) The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

		Incorporated by reference
Exhibit	Document Description	Form	Date	Number	Filed herewith

3.1	Articles of Incorporation.	S-1	12/10/08	3.1

3.2	Bylaws.	S-1	12/10/08	3.2

3.3	Amendment to Articles of Incorporation	8-K	1/13/11	3.1

4.1	Instrument Defining the Rights of Shareholders – Form of Share Certificate	S-1	12/10/08	4

10.1	Notice of Prepayment of Note to Asher Enterprises, Inc. dated August 27, 2013	8-K	8/29/13	10.1

10.2	Return of Asset Agreement with ROTA Inversiones dated September 20, 2013	8-K	9/23/13	10.1

10.3	Notice of Prepayment of Note to Asher Enterprises, Inc. dated October 29, 2013	8-K	11/4/13	10.1

10.4	Securities Purchase Agreement with LG Capital Funding LLC dated August 27, 2013	10-K	11/13/13	10.26

10.5	Securities Purchase Agreement with Ann Powers dated September 27, 2013	10-K	11/13/13	10.27

10.6	Convertible Promissory Note with Braeden Storm Enterprises dated October 1, 2013	10-K	11/13/13	10.28

10.7	Securities Purchase Agreement with LG Capital Funding LLC dated October 16, 2013	10-K	11/13/13	10.29

10.8	Convertible Promissory Note issued to Jim Erickson, dated November 13, 2013	10-Q	12/23/13	10.1

10.9	Convertible Promissory Note issued to JMJ Financial, dated November 20, 2013	10-Q	12/23/13	10.2

10.10	Convertible Promissory Note issued to CCR Capital, LLC, dated November 20, 2013	10-Q	12/23/13	10.3

10.11	Convertible Promissory Note issued to LOMA Management Partners, LLC, dated October 28, 2013	10-Q	12/23/12	10.4

10.12	Brand License Agreement with VITAMINFIZZ, L.P., dated November 21, 2013	8-K	12/5/13	10.1

10.13	Securities Purchase Agreement with LG Capital LLC dated December 19, 2013	10-Q	3/24/14	10.1

10.14	Convertible Promissory Note with LOMA Manaagement Partners, LLC, dated January 23, 2014	10-Q	3/24/14	10.2

10.15	Convertible Promissory Note with CCR Capital, LLC dated February 18, 2014	10-Q	3/24/14	10.3

10.16	Securities Purchase Agreement with Micaddan Consulting dated March 3, 2014	10-Q	6/23/14	10.1


10.17	Securities Purchase Ageement with Union Capital, LLC, dated April 9, 2014	10-Q	6/23/14	10.2

10.18	Securities Purchase Agreeement with LOMA Management Partners, LLC, dated April 23, 2014	8-K	6/9/14	10.8

10.19	Line of Credit with Post Oak, LLC, dated May 1, 2014	8-K	5/7/14	10.1

10.20	Mutual Release and Termination Agreement, effective as of March 1, 2014	8-K	4/8/14	10.1

10.21	Notice of Prepayment of Note to LG Capital Funding, LLC, dated April 8, 2014	8-K	4/9/14	10.1

10.22	Notice of Prepayment of Note to LG Capital Funding, LLC, dated April 9, 2014	8-K	4/10/14	10.1

10.23	Assignment of Notes between Braeden Storm Enterprises and MSF International, Inc.	8-K	4/15/14	10.1

10.24	MSF International Exchange Agreement, dated April 15, 2014	8-K	4/15/14	10.1

10.25	MSF International Exchange Convertible Promissory Note, dated April 15, 2014	8-K	4/15/14	10.4

10.26	MSF International Exchange Agreement, dated April 15, 2014	8-K	4/15/14	10.5

10.27	MSF International Exchange Convertible Promissory Note, dated April 15, 2014	8-K	4/15/14	10.7

10.28	Certificate of Designations for Series B Preferred Stock	8-K	6/2/14	10.1

10.29	Exchange Agreement, Minerco – Vanis, dated June 4, 2014	8-K	6/6/14	10.1

10.30	Exchange Agreement, Minerco – Powers, dated June 4, 2014	8-K	6/6/14	10.3

10.31	Exchange Agreement, Minerco – MSF1, dated June 4, 2014	8-K	6/6/14	10.5

10.32	Exchange Agreement, Minerco – MSF2, dated June 4, 2014	8-K	6/6/14	10.8

10.33	Exchange Agreement, Minerco – MSF3, dated June 4, 2014	8-K	6/6/14	10.10

10.34	Exchange Agreement, Minerco – MSF4, dated June 4, 2014	8-K	6/6/14	10.12

10.35	Exchange Agreement, Minerco – LOMA1, dated June 6, 2014	8-K	6/9/14	10.1

10.36	Exchange Agreement, Minerco – LOMA2, dated June 6, 2014	8-K	6/9/14	10.3

10.37	Exchange Agreement, Minerco – LOMA3, dated June 6, 2014	8-K	6/9/14	10.5

10.38	Exchange Agreement, Minerco – LOMA4, dated June 6, 2014	8-K	6/9/14	10.7

10.39	Asset Purchase Agreement, Vitamin Creamer, dated June 20, 2014	8-K	6/25/14	10.1


10.40	Intellectual Property Assignment Agreement, Vitamin Creamer, dated June 20, 2014	8-K	6/25/14	10.2

10.41	Public Relations Agreement with Spelling Communications, dated July 7, 2014	8-K	6/25/14	10.1

10.42	Exclusive Territory Distribution Agreement with Drink King Distributing Company, Inc.	8-K	9/3/14	10.1

10.43	Exclusive Territory Distribution Agreement with Avanzar Sales and Distribution, LLC	8-K	9/3/14	10.2

10.44	Premium Brand Management Agreement with New World Consultants, LLC, dated July 1, 2014				X

10.45	Social Media, Marketing and Advertising Consulting Agreement with Jake Counselbaum, dated July 8, 2014				X

10.46	Employment Agreement with V. Scott Vanis dated September 10, 2014				X

10.47	Employment Agreement with Sam J Messina III, dated September 10, 2014				X

10.48	Key Employee and Distributor Incentive Plan				X

10.49	Membership Interest Purchase Agreement for Avanzar Sales and Distribution, LLC, dated October 24, 2014	8-K	10/27/2014	10.1

10.50	Brand Licensing Agreement VITAMINFIZZ, L.P., dated June 25, 2014				X

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.2	Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

32.2	Certification of Prinicipal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

EX-101.INS	XBRL INSTANCE DOCUMENT				X

EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA				X

EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE				X

EX-101.LAB	XBRL TAXONOMY EXTENSION LABEL LINKBASE				X

EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE				X

EX-101.DEF	XBRL TAXONOMY EXTENSION DEFNITION LINKBASE				X

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing of this Form 10-K and has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 7th day of November, 2014.

	MINERCO RESOURCES INC.

	BY:	/s/ V. Scott Vanis
		V. Scott Vanis, President, Principal Executive Officer, Secretary and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities.

Signature	Title	Date

/s/ V. Scott Vanis	Director	November 7, 2014
V. Scott Vanis

/s/ Sam J Messina III	Director	November 7, 2014
Sam J Messina III

EXHIBIT INDEX

		Incorporated by reference
Exhibit	Document Description	Form	Date	Number	Filed herewith

3.1	Articles of Incorporation.	S-1	12/10/08	3.1

3.2	Bylaws.	S-1	12/10/08	3.2

3.3	Amendment to Articles of Incorporation	8-K	1/13/11	3.1

4.1	Instrument Defining the Rights of Shareholders – Form of Share Certificate	S-1	12/10/08	4

10.1	Notice of Prepayment of Note to Asher Enterprises, Inc. dated August 27, 2013	8-K	8/29/13	10.1

10.2	Return of Asset Agreement with ROTA Inversiones dated September 20, 2013	8-K	9/23/13	10.1

10.3	Notice of Prepayment of Note to Asher Enterprises, Inc. dated October 29, 2013	8-K	11/4/13	10.1

10.4	Securities Purchase Agreement with LG Capital Funding LLC dated August 27, 2013	10-K	11/13/13	10.26

10.5	Securities Purchase Agreement with Ann Powers dated September 27, 2013	10-K	11/13/13	10.27

10.6	Convertible Promissory Note with Braeden Storm Enterprises dated October 1, 2013	10-K	11/13/13	10.28

10.7	Securities Purchase Agreement with LG Capital Funding LLC dated October 16, 2013	10-K	11/13/13	10.29

10.8	Convertible Promissory Note issued to Jim Erickson, dated November 13, 2013	10-Q	12/23/13	10.1

10.9	Convertible Promissory Note issued to JMJ Financial, dated November 20, 2013	10-Q	12/23/13	10.2

10.10	Convertible Promissory Note issued to CCR Capital, LLC, dated November 20, 2013	10-Q	12/23/13	10.3

10.11	Convertible Promissory Note issued to LOMA Management Partners, LLC, dated October 28, 2013	10-Q	12/23/12	10.4

10.12	Brand License Agreement with VITAMINFIZZ, L.P., dated November 21, 2013	8-K	12/5/13	10.1

10.13	Securities Purchase Agreement with LG Capital LLC dated December 19, 2013	10-Q	3/24/14	10.1

10.14	Convertible Promissory Note with LOMA Manaagement Partners, LLC, dated January 23, 2014	10-Q	3/24/14	10.2

10.15	Convertible Promissory Note with CCR Capital, LLC dated February 18, 2014	10-Q	3/24/14	10.3

10.16	Securities Purchase Agreement with Micaddan Consulting dated March 3, 2014	10-Q	6/23/14	10.1


10.17	Securities Purchase Ageement with Union Capital, LLC, dated April 9, 2014	10-Q	6/23/14	10.2

10.18	Securities Purchase Agreeement with LOMA Management Partners, LLC, dated April 23, 2014	8-K	6/9/14	10.8

10.19	Line of Credit with Post Oak, LLC, dated May 1, 2014	8-K	5/7/14	10.1

10.20	Mutual Release and Termination Agreement, effective as of March 1, 2014	8-K	4/8/14	10.1

10.21	Notice of Prepayment of Note to LG Capital Funding, LLC, dated April 8, 2014	8-K	4/9/14	10.1

10.22	Notice of Prepayment of Note to LG Capital Funding, LLC, dated April 9, 2014	8-K	4/10/14	10.1

10.23	Assignment of Notes between Braeden Storm Enterprises and MSF International, Inc.	8-K	4/15/14	10.1

10.24	MSF International Exchange Agreement, dated April 15, 2014	8-K	4/15/14	10.1

10.25	MSF International Exchange Convertible Promissory Note, dated April 15, 2014	8-K	4/15/14	10.4

10.26	MSF International Exchange Agreement, dated April 15, 2014	8-K	4/15/14	10.5

10.27	MSF International Exchange Convertible Promissory Note, dated April 15, 2014	8-K	4/15/14	10.7

10.28	Certificate of Designations for Series B Preferred Stock	8-K	6/2/14	10.1

10.29	Exchange Agreement, Minerco – Vanis, dated June 4, 2014	8-K	6/6/14	10.1

10.30	Exchange Agreement, Minerco – Powers, dated June 4, 2014	8-K	6/6/14	10.3

10.31	Exchange Agreement, Minerco – MSF1, dated June 4, 2014	8-K	6/6/14	10.5

10.32	Exchange Agreement, Minerco – MSF2, dated June 4, 2014	8-K	6/6/14	10.8

10.33	Exchange Agreement, Minerco – MSF3, dated June 4, 2014	8-K	6/6/14	10.10

10.34	Exchange Agreement, Minerco – MSF4, dated June 4, 2014	8-K	6/6/14	10.12

10.35	Exchange Agreement, Minerco – LOMA1, dated June 6, 2014	8-K	6/9/14	10.1

10.36	Exchange Agreement, Minerco – LOMA2, dated June 6, 2014	8-K	6/9/14	10.3

10.37	Exchange Agreement, Minerco – LOMA3, dated June 6, 2014	8-K	6/9/14	10.5

10.38	Exchange Agreement, Minerco – LOMA4, dated June 6, 2014	8-K	6/9/14	10.7

10.39	Asset Purchase Agreement, Vitamin Creamer, dated June 20, 2014	8-K	6/25/14	10.1


10.40	Intellectual Property Assignment Agreement, Vitamin Creamer, dated June 20, 2014	8-K	6/25/14	10.2

10.41	Public Relations Agreement with Spelling Communications, dated July 7, 2014	8-K	6/25/14	10.1

10.42	Exclusive Territory Distribution Agreement with Drink King Distributing Company, Inc.	8-K	9/3/14	10.1

10.43	Exclusive Territory Distribution Agreement with Avanzar Sales and Distribution, LLC	8-K	9/3/14	10.2

10.44	Premium Brand Management Agreement with New World Consultants, LLC, dated July 1, 2014				X

10.45	Social Media, Marketing and Advertising Consulting Agreement with Jake Counselbaum, dated July 8, 2014				X

10.46	Employment Agreement with V. Scott Vanis dated September 10, 2014				X

10.47	Employment Agreement with Sam J Messina III, dated September 10, 2014				X

10.48	Key Employee and Distributor Incentive Plan				X

10.49	Membership Interest Purchase Agreement for Avanzar Sales and Distribution, LLC, dated October 24, 2014	8-K	10/27/2014	10.1

10.50	Brand Licensing Agreement VITAMINFIZZ, L.P., dated June 25, 2014				X

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.2	Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

32.2	Certification of Prinicipal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

EX-101.INS	XBRL INSTANCE DOCUMENT				X

EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA				X

EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE				X

EX-101.LAB	XBRL TAXONOMY EXTENSION LABEL LINKBASE				X

EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE				X

EX-101.DEF	XBRL TAXONOMY EXTENSION DEFNITION LINKBASE				X

Exhibit 10.44

Premium Management Agreement

This Premium Management Agreement (the “Agreement”) is made as of the 1st day of July, 2014 (the “Effective Date”), by and between New World Consulting, LLC, 44 Inverness, #5, Englewood, CO 80112 (“NEW WORLD CONSULTING”) and Minerco Resources, Inc., 800 Bering Drive, Suite 201, Houston, TX 77057 (the “Client”).

RECITALS:

WHEREAS, NEW WORLD CONSULTING, by and through his own experience and their officers, employees, agents, representatives and affiliates, has expertise in the area of non-alcoholic beverage product development, brand management, sales, marketing, distribution and other matters relating to the beverage industry; and

WHEREAS, the Client desires to avail itself of the expertise of NEW WORLD CONSULTING in certain of the aforesaid areas.

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and conditions herein set forth, the parties hereto agree as follows:

1. APPOINTMENT

The Client hereby appoints NEW WORLD CONSULTING to perform the management services described in section 2 hereof for the Term of this Agreement. NEW WORLD CONSULTING will report to V. Scott Vanis appointed by the Level 5 Board of Directors.

2. SERVICES

Through this Agreement the Client will be provided the following privileges and services from New World Consulting:

a)	Workspace in Englewood facility

●	Client will have full access to New World Consulting including designated work area with desktop or laptop computer, phone (service plan to be covered by Client), and access to printer, fax, scanner, and all necessary office equipment.

b)	Two (2) meeting per week with Managing Member

c)	Advanced Financial Services

●	New World Consulting CFO will develop necessary P&L, Cash Flow, and Balance Sheet documents

●	New World Consulting CFO will setup Clients books in QuickBooks software

●	New World Consulting will manage and report Client financials on a weekly basis

d)	Advanced production advice and management

●	New World Consulting team will manage Client’s full-scale manufacturing process

●	New World Consulting will manage ordering raw materials, invoicing, delivery, and finished goods logistics (freight and warehousing)

e)	Strategic Sales and Marketing plan and management

●	New World Consulting will create a brand specific sales and marketing plan based on the brand’s demographic and geographic targets and Client budget.

●	New World Consulting will manage Client’s sales person(s)

●	New World Consulting will design Client sell sheet and Point of Sale material including posters, suction racks, static clings, coolers, etc.

●	New World Consulting will establish appropriate sales and marketing budgets based on scope of overall project and with Client approval.

●	New World Consulting will set sales objectives and metrics.

●	New World Consulting will develop an impactful and cost effective rollout marketing campaign.

●	New World Consulting will provide a detailed weekly report to Client on sales progress (number of stores, velocity)

●	Number of sales representatives will vary based on Client’s budget

●	Additional sales representatives will incur additional cost

f)	Retail and Distributor activation

●	New World Consulting will create Retailer and Distributor presentations based on Client’s brand demographic and geographic targets.

●	New World Consulting will identify correct retail and distributor partners

●	New World Consulting will actively participate in key account buyer meetings.

●	New World Consulting will work directly with sales personnel to secure sales meetings and ultimately shelf space.

3. FEES

In consideration of performance of these services, Client agrees to pay NEW WORLD CONSULTING the following fees in accordance with the schedule specified below. Except with respect to mutually agreed and prepaid travel expenses, NEW WORLD CONSULTING acknowledges and agrees that the fees include all management fees for NEW WORLD CONSULTING. Fees for other parties related to this project mentioned above are separate and will be discussed on a case-by-case basis and subject to Client’s prior written approval. The only required additional costs will be for: 1) the physical production of the actual product, 2) the manufacture of promotional materials, 3) salaries associated with promotional staff, 4) salaries associated with sales staff, and 5) the actual costs of placing advertising and marketing materials. These costs will be specifically allocated and provided for in the budget to be approved by Client in writing.

1. Monthly management fee: $6,000 (Six thousand)

●	Client will pay $6,000 to NEW WORLD CONSULTING on the first of every month for the duration of this contract.

4. NON-SOLICITATION

During the Term of this Agreement, and for a period of 1 (one) year following the termination of this Agreement, Client agrees that he shall not directly or indirectly solicit for employment, offer to employ or employ any employees of NEW WORLD CONSULTING’S employees or independent contractors that are involved in beverage production, sales or marketing introduced to Client by NEW WORLD CONSULTING without the express written consent of NEW WORLD CONSULTING.

5. TERM; TERMINATION

The minimum term of this Agreement is 90 days. After 90 days from the Effective Date, this Agreement may be terminated by Client without cause, with such termination effective upon the receipt by NEW WORLD CONSULTING of a written notice of termination.

If either party materially defaults in the performance of its obligations under this Agreement and fails to cure such default within thirty (30) days after receiving written notice thereof, the non-defaulting party may immediately terminate this Agreement.

6. CONFIDENTIALITY

The parties hereby agree that the Non-Disclosure Agreement dated as of July 1, 2014 (“NDA”) entered into by and between the parties is incorporated herein by reference and shall continue in full force and effect throughout the Term of this Agreement and shall apply to all Information (as defined in the NDA) provided by Client to New World Consulting for purposes of this Agreement.

7. INTELLECTUAL PROPERTY

Client shall retain sole ownership of any and all ideas, concepts, plans, recipes, formulas, product or packaging designs, and other information and materials provided by Client to New World Consulting for use by New World Consulting in connection with this Agreement (collectively, “Client IP”). In addition, upon payment of the entire Fee to New World Consulting, Client shall acquire full ownership rights to all product and packaging designs, business plans, and other materials produced by New World Consulting in the performance of its obligations under this Agreement (collectively, “New World Consulting IP”). Accordingly, effective as of the final payment of the Fee, New World Consulting hereby assigns all of its right, title, and interest in and to the New World Consulting IP to Client and agrees to execute and deliver all documents, and take all actions, as may be reasonably necessary to fully vest in Client the rights to the New World Consulting IP. If Client does not pay the entire Fee, then New World Consulting shall retain ownership of the New World Consulting IP and Client shall have no rights in the New World Consulting IP except to the extent that the New World Consulting IP incorporates any Client IP. If New World Consulting retains ownership of such New World Consulting IP, the rights of New World Consulting to use such New World Consulting IP shall be subject to the rights of Client in any Client IP and Information (as defined in the NDA) that may be incorporated into the New World Consulting IP, and nothing in this Agreement shall permit New World Consulting to use or disclose any such Client IP or Information for any purpose. However, from time to time, New World Consulting has other clients who have ideas, concepts, plans, recipes, formulas, product or packaging designs, and other information and materials similar to those contained in the Client IP (“Third Party Client IP”). Client acknowledges and agrees that New World Consulting is free to use Third Party Client IP and to work on similar projects for other clients.

8. INDEMNIFICATION

Client shall indemnify and hold New World Consulting harmless from and against any and all claims, liabilities, demands, causes of action, damages, losses and expenses, including, without limitation, reasonable attorneys’ fees and costs of suit, arising out of or in connection with (i) Client’s business and the conduct of any advertising, marketing or sales in connection therewith; (ii) the negligent, illegal or intentional acts or omissions of Client or any of its agents, contractors, servants or employees, (iii) the Client IP or use or possession thereof, and/or (iv) the breach of any warranty or obligation of Client hereunder.

9. ASSIGNMENT

Neither party to this Agreement can assign its interest herein (other than to an affiliate or subsidiary) without the prior written consent of the other party, and the granting of such consent is at the sole discretion of the granting party.

10. CONFLICT OF INTEREST

New World Consulting and Client will exercise reasonable care and diligence to prevent any actions or conditions which could result in a conflict with the other's best interest.

11. CHOICE OF LAW

This Agreement shall be governed and interpreted in accordance with the laws of the State of Texas.

12. NOTICES

All notices required or permitted to be delivered in connection with this Agreement shall be in writing and shall be delivered to the following addresses.

To New World Consulting:

New World Consulting, LLC

44 Inverness Dr, #5

Englewood, CO 80112

Attention: Tony Skinner

Managing Member

Facsimile No.: N/A

To Client:

Minerco Resources, Inc.

800 Bering Drive, Suite 201

Houston, TX 77057

Attention: V. Scott Vanis

Chief Executive Officer

Facsimile No.: (713) 456-2724

13. DISCLAIMER OF WARRANTIES; LIMITATION OF LIABILITY

NEW WORLD CONSULTING PROVIDES ITS SERVICES PERFORMED HEREUNDER AND THE RESULTS AND PROCEEDS THEREOF "AS IS" AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF NON-INFRINGEMENT AND ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS WELL AS IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.

IN NO EVENT SHALL NEW WORLD CONSULTING OR ITS EMPLOYEES, OFFICERS AND/OR DIRECTORS BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, COSTS, EXPENSES, OR LOSSES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), WHETHER OR NOT CLIENT HAS BEEN ADVISED OF THE POSSIBILITY THEREOF. CLIENT AGREES THAT NEW WORLD CONSULTING, ITS EMPLOYEES, OFFICERS AND DIRECTORS, SHALL NOT BE LIABLE TO CLIENT FOR ANY ACTIONS, DAMAGES, CLAIMS, LIABILITIES, COSTS, EXPENSES, OR LOSSES IN ANY WAY ARISING OUT OF OR RELATING TO THE PERFORMANCE AND OR NONPERFORMANCE OF THIS AGREEMENT OR NEW WORLD CONSULTING’ SERVICES HEREUNDER FOR AN AGGREGATE AMOUNT IN EXCESS OF FEES ACTUALLY PAID BY CLIENT TO NEW WORLD CONSULTING FOR THE SERVICES PERFORMED IN ACCORDANCE WITH THIS AGREEMENT. NO TERMS OF THIS AGREEMENT SHALL BENEFIT OR CREATE ANY RIGHT OR CAUSE OF ACTION IN OR ON BEHALF OF ANY PERSON OR ENTITY OTHER THAN CLIENT AND NEW WORLD CONSULTING. THE PROVISIONS OF THIS PARAGRAPH SHALL APPLY REGARDLESS OF THE FORM OF ACTION, DAMAGE, CLAIM, LIABILITY, COST, EXPENSE, OR LOSS, WHETHER IN CONTRACT, STATUTE, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE), OR OTHERWISE. THIS LIMITATION SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN.

14. STATUS AS INDEPENDENT CONTRACTOR

The parties to this Agreement are independent contractors, and no agency, partnership, joint venture, or employee-employer relationship is intended or created by this Agreement. Neither party shall have the power to obligate or bind the other party.

15. GENERAL PROVISIONS

Modifications. No change or modification of this Agreement shall be valid and binding upon the parties hereto unless such change or modification is in writing and is signed by all of the parties hereto. No waiver of any term or condition of this Agreement shall be valid and binding unless such waiver is in writing and is signed by the party against whom it is sought to be enforced.

b.	Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the parties, their successors, and their permitted assigns.

Entire Agreement. Each party to this Agreement acknowledges that this Agreement (together with the NDA) constitutes the entire agreement of the parties with regard to the subject matter addressed in this Agreement, that this Agreement supersedes all prior or contemporaneous agreements, discussions, or representations, whether oral or written, with respect to the subject matter of this Agreement, and that it should not rely on any promise, representation, inducement, or warranty other than those expressly set forth herein.

d.	Severability. In the event any provision of this Agreement is held to be unenforceable or invalid, such finding of unenforceability or invalidity shall not affect the enforceability or validity of the remaining provisions of this Agreement.

Force Majeure. New World Consulting shall be excused from performance hereunder to the extent that such performance is prevented, delayed, or obstructed by causes beyond its reasonable control, including, without limitation, acts of any federal, state, or local governmental authority; fires, floods, or other natural disasters; strikes or labor unrest; terrorism or acts of war; degradation of telecommunications service; severe weather conditions; or for any other matters that are beyond New World Consulting’ control, whether or not otherwise foreseeable.

Continuing Obligations. Each indemnity provided for herein shall survive the termination of this Agreement for any reason whatsoever and each covenant which provides for or permits performance hereunder after termination or by its nature requires performance after termination shall survive the termination of this Agreement.

Arbitration. In the event of any dispute or controversy arising out of or in any way related to this Agreement, the matters referred to herein, or the services to be rendered by Consultant pursuant to this Agreement, or in any way relating to the claim of any third party against Consultant in connection with matters in any way arising out of this Agreement (each, a “Dispute”), such Dispute shall be settled exclusively by final and binding arbitration in Houston, Texas in accordance with the then current rules of the American Arbitration Association (“AAA”). The parties agree that any and all Disputes that are submitted to arbitration in accordance with this Agreement shall be decided by one (1) neutral arbitrator who is a retired judge or attorney licensed to practice law in Texas who is experienced in complex commercial transactions. If the parties are unable to agree on an arbitrator, AAA shall designate the arbitrator. The parties will cooperate with AAA and with one another in selecting the arbitrator and in scheduling the arbitration proceedings in accordance with applicable AAA procedures. Any award issued as a result of such arbitration shall be final and binding between the parties thereto and shall be enforceable by any court having jurisdiction over the party against whom enforcement is sought. By entering into this Agreement, the parties are waiving their constitutional right to have any Disputes decided in a court of law or before a jury and waive the right of appeal, and instead of relying on said rights, each party is solely and knowingly accepting the use of arbitration as a means of resolution of any Disputes. The prevailing party in such arbitration shall be awarded its costs and reasonable attorneys’ fees.

No Prejudice Against Drafter. The parties to this Agreement agree that this Agreement was negotiated fairly between them at arm's length and that the final terms of this Agreement are the product of the parties' negotiations. Each of the parties has had the opportunity to seek the advice of independent legal counsel, and has read and understood all of the terms and provisions of this Agreement. The parties agree that this Agreement shall be deemed to have been jointly and equally drafted by them, and that the provisions of this Agreement therefore should not be construed against a party or parties on the grounds that the party or parties drafted or was more responsible for drafting the provision(s).

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day and date first written above.

Client: Minerco Resources, Inc.

Sign: /s/ V. Scott Vanis

Name: V. Scott Vanis

Title: Chief Executive Officer

Date: 7/1/2014

New World Consulting, LLC

Sign: /s/ Tony Skinner

Name: Tony Skinner

Title: Managing Member

Date: 7/1/2014

Exhibit 10.45

SOCIAL MEDIA, MARKETING AND ADVERTISING

CONSULTING AGREEMENT

This Agreement is made and entered into as of the 8th day of July, 2014 between Jake Counselbaum, an individual (the "Consultant"), and Minerco Resources, Inc. (the “Company”), a Nevada corporation.

WHEREAS, the Company owns greater than 70% of Level 5 Beverage Company, Inc., a Delaware corporation (“Level 5”) which develops, distributes and sells a line of beverage products (the “Products”); and

WHEREAS, the Consultant is in the business of assisting companies in social media, marketing and advertising strategies (the “Services”); and

AND WHEREAS, the Company wishes to engage the services of the Consultant in relation to the development and execution of certain social media, marketing and advertising strategies for the Company, Level 5 and the Products;

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Engagement and Duties. The Company hereby engages the Consultant to render consulting advice and services to the Company and Level 5 upon the terms and conditions set forth herein to advise on and oversee a social media, marketing and/or advertising program that is intended to stimulate better recognition, understanding, and valuation of the Company / Level 5 and the Products, by increasing product and market interest in the Company, Level 5 and the Products. The services shall include all services customarily rendered by social media consultants within the industry including, without limitation, the following elements:

The Consultant shall consult with the Company's / Level 5’s management concerning availability to expand investor and consumer base, sale and support of the Products, and reach new classes of consumers and/or investors. Particularly, the Consultant shall manage the social media campaign to reach these objectives.

B)	As necessary, the Consultant shall produce media (videos, pictures, etc.) for the Company and/or shall implement social media campaigns or general advertising campaigns for the Company.

C)	As necessary, the Consultant shall coordinate with trade or business partners of the Company or Level 5, as requested.

2. Insider Information. The Consultant acknowledges that pursuant to this Agreement the Consultant may receive confidential insider information about the Company and/or its subsidiaries. The Consultant agrees not to disclose such information to anyone, including, but not limited to, the Consultant's family, friends, business associates or affiliates, until such information has been approved for release by the Company and is released to the general public. The Consultant shall not use such confidential insider information to arrange for or solicit to buy or sell shares of the Company either directly or indirectly through any person, until such information has been approved for release by the Company and is released to the general public.

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3. Relationship of the Parties. Nothing contained in this Agreement shall be construed to (i) constitute the parties as joint venturers, partners, co-owners or otherwise as participants in a joint undertaking; (ii) constitute the Consultant as an agent, legal representative or employee of the Company; or (iii) authorize or permit the Consultant or any director, officer, employee, agent or other person acting on its behalf to incur on behalf of the other party any obligation of any kind, either express or implied, or do, sign or execute any things, deeds, or documents which may have the effect of legally binding or obligating the Company in any manner in favor of any individual, business, trust, unincorporated association, corporation, partnership, joint venture, limited liability company or other entity of any kind. The Company and the Consultant agree that the relationship among the parties shall be that of independent contractor.

4. Terms of the Agreement. The term (the "Term") of this Agreement shall commence effective as of July 8, 2014 (the “Effective Date”) and shall continue for a period of three (3) months or until terminated by the Company in its sole discretion. The Company may terminate this Agreement at any time by providing thirty (30) days written notice of termination to the Consultant. This Agreement will not be binding on the Company until it is approved by the Company's Board of Directors.

5. Compensation and Payment of Expenses. The Company agrees to pay the Consultant or its nominees compensation (the "Compensation") according to the following:

A)	As of the Effective Date first written above, 250,000 restricted shares of Minerco Resources, Inc. (OTCQB: MINE) common stock to Consultant or his nominee; and

B)	Thirty (30) days following the Effective Date, $2,500 in cash or restricted shares of Minerco Resources, Inc. (OTCQB: MINE) common stock, at the Company’s sole discretion, to Consultant or his nominee; and

C)	Sixty (60) days following the Effective Date, $2,500 in cash or restricted shares of Minerco Resources, Inc. (OTCQB: MINE) common stock, at the Company’s sole discretion, to Consultant or his nominee; and

D)	Non-ordinary Monthly Expenses approved, in advance, by the Company, at its sole discretion.

The issuance of restricted shares of common stock will be made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “1933 Act”).

6. Time Devoted by Consultant. Consultant shall devote such time and effort as is reasonably necessary to achieve the purposes hereof in his reasonable discretion.

7. Place Where Services Will Be Rendered. The Consultant will perform the Services in accordance with this Agreement at his home or other office obtained by him at his sole cost and expense. In addition, at the Company’s convenience, the Consultant will perform services by phone or by any other mean requested by the Company. The Company shall not provide the Consultant an office, cell phone, computer, printer or any other support services, supplies or equipment in connection with services to be provided as set forth herein.

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8. Independent Contractor. Both the Company and Consultant agree that the Consultant will act as an independent contractor in the performance of his/her duties under this Agreement. Accordingly, Consultant shall be responsible for payment of all taxes including federal, state and local taxes arising out of the Services, including by way of illustration but not limitation, payroll taxes, federal and state income tax, Social Security tax, unemployment insurance and disability taxes, and any other taxes or business licenses required whether federal, state or local in nature.

9. Confidential Information. The Consultant shall not disclose, without the consent of Client, any financial and business information concerning the business, affairs, plans and programs of Client which are delivered by Client to the Consultant in connection with the Consultant's services hereunder, provided such information is plainly and prominently marked in writing by Client as being confidential (the "Confidential Information"). The Consultant shall not be bound by the foregoing limitation in the event (i) the Confidential Information is otherwise disseminated and becomes public information or (ii) the Consultant is required to disclose the Confidential Informational pursuant to a subpoena or other judicial order.

10. Indemnification.

Company agrees to indemnify and hold harmless the Consultant and its respective agents and employees, against any losses, claims, damages or liabilities incurred or suffered by the Consultant that result from any untrue statement or alleged untrue statement of any material fact contained in any registration statement, or prospectus of the Company; or that arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading.

The Consultant agrees to indemnify and hold harmless the Company, its partners, financiers parent, affiliated and related companies, and all of their respective individual shareholders, directors, officers, employees, licensees and assigns from and against any claims, actions, losses and expenses (including legal expenses) occasioned by any breach of the Consultant's representations and warranties contained in, or by any breach of any other provision of, this Agreement by the Consultant. Employment of Others. All Services shall be performed exclusively by Consultant.

C)	If a court or administrative agency determines that Consultant is an employee of Company, Consultant shall indemnify and hold Company harmless and shall pay all of Company’s related fines, damages, assessments, benefits and reasonable attorney’s fees incurred by the Company with such motive.

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11. Legends. The Consultant acknowledges that the certificate(s) representing the shares of Common Stock shall each conspicuously set forth on the face or back thereof a legend in substantially the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE RULES AND REGULATIONS PROMULGATED THEREUNDER, OR UNDER THE SECURITIES LAWS, RULES OR REGULATIONS OF ANY STATE; AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, RULES OR REGULATIONS OR AN EXEMPTION THEREFROM DEEMED ACCEPTABLE BY COUNSEL TO THE COMPANY.”

12. Governing Law. This Agreement, its interpretation, performance or any breach thereof, shall be construed in accordance with, and all questions with respect thereto shall be determined by, internal, substantive laws of the State of Nevada. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement. A failure of either Consultant or the Company to enforce at any time or for any period of time the provisions of this Agreement shall not be construed to be a waiver of such provisions or of the right of Consultant or the Company to enforce each and every such provision. Company and Consultant shall waive trial by jury in any action, proceeding or counterclaim brought by one against the other, or any matters arising out of or in any way connected with this Agreement, the relationship of Company and Consultant, Consultant’s use or occupancy of Company’s office or any claim of injury or damage. In the event either party files suit to enforce any of the terms hereof, the prevailing party shall be entitled to an award of reasonable legal fees and costs and venue for any such action shall be exclusively in State of Nevada.

13. Notices. All notices required or permitted to be given under this Agreement shall be given in writing and shall be delivered, either personally or by express delivery service, to the party to be notified. Notice to each party shall be deemed to have been duly given upon delivery, personally or by courier, addressed to the attention of the officer at the address set forth heretofore, or to such other officer or addresses as either party may designate upon at least ten days written notice to the other party.

14. Entire agreement. This Agreement contains the entire understanding and agreement among the parties. There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto. This Agreement may be amended only in writing signed by all parties.

15. Waiver. A delay or failure by any party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right.

16. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall be deemed the same Agreement.

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17. Assignment. This Agreement may not be assigned without the prior written consent of Company and Consultant.

18. Survival. The provisions of Section 9 and 10 shall survive termination or expiration of the Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.

	JAKE COUNSELBAUM

Dated: July 8, 2014		/s/ Jake Counselbaum
	By:	Jake Counselbaum
		An individual

	MINERCO RESOURCES, INC.

Dated: July 8, 2014		/s/ V. Scott Vanis
	By:	V. Scott Vanis
		Its: CEO, Chairman

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Exhibit 10.46

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of the 10th day of September, 2014 between V. Scott Vanis ("Employee") and Minerco Resources, Inc., a Nevada Corporation, its affiliates, predecessors and subsidiaries (the "Company”).

WHEREAS, Employee and the Company desire to enter into this Agreement setting forth the terms and conditions for the employment relationship of Employee with the Company during the Employment Term (as defined below). This agreement shall be retroactively effective to beginning of Employee's employment, July 9, 2014.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties to this Agreement hereby agree as follows:

Services

1.1 Employment. During the Employment Term (as defined below), the Company hires Employee to perform such services as the Company may from time to time reasonably request consistent with Employee's position with the Company (as set forth in Section 1.1 and 1.5 hereof) and Employee's stature and experience as an Executive Officer (the "Services"). The Services and authority of Employee shall include, but not necessarily be limited to, management and supervision of (A) the general accounting, reporting, financial management and regulatory compliance of the of the Company, (B) the general accounting, reporting, financial management and regulatory compliance of future acquisitions and Affiliates. For purposes of this Agreement, "Affiliates" shall mean, as to any person, any other person controlled by or under common control with (or, where applicable, controlling), directly or indirectly, such person; and "person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof, or any other entity; whereas such person in the normal course of business shall be deemed an affiliate of the Company.

1.2 Location. During the Term, Employee's Services shall be performed in the Houston, Texas area or any other area of Employee’s convenience which permits regular communication via telephone, Internet or other popular medium with employees, officers, directors, customers and other affiliates as needed to effectively carry out duties as described herein. Employee acknowledges and understands that the Company’s current headquarters are located in Houston, Texas and that officers and other participants critical to the Company’s business are dispersed nationally and internationally, and that such dispersion will increase substantially as the Company grows. The parties therefore acknowledge and agree that the nature of Employee's duties hereunder may require domestic and international travel from time to time.

1.3 Term. The term of Employee's employment under this Agreement (the "Employment Term") shall commence on the 9th day of July, 2014 (the "Effective Date") and shall end on July 31, 2019 unless sooner extended or terminated in accordance with the provisions of this Agreement.

For purposes of this Agreement, "Employment Year" shall mean each twelve-month period during the Term commencing on July 9th, and ending on July 8th, of the following year. In the event the parties decide to extend this Agreement for an additional one year Employment Term, any extension agreed upon must be done so in writing and executed by the Company and Employee no later than 5 p.m. Eastern Standard Time on July 31, 2019.

1.4 Exclusive Employment; Non-Competition. Employee agrees that his employment hereunder is on an exclusive basis, and that as long as Employee is employed by the Company, Employee will not engage in any other business activity which is in conflict with Employee’s duties and obligations hereunder. Employee agrees that during the Employment Term, Employee shall not directly or indirectly engage in or participate as an owner, partner, shareholder, officer, employee, director, agent of or consultant for any business that competes with any of the principal activities of the Company. Provided however, that Employee may acquire and/or retain, as an investment, and take customary actions (including the exercise or conversion of any securities or rights) to maintain and preserve Employee's ownership of any one or more of the following (provided such actions, other than passive investment activities, do not unreasonably interfere with Employee's Services hereunder): (i) securities of any corporation that are registered under Sections 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and that are publicly traded as long as Employee is not part of any control group of such corporation and, in the case of public corporations in competition with the Company, such securities do not constitute more than five percent of the voting power of that public corporation; (ii) any ownership interest in a partnership, trust, corporation or other person so long as Employee remains a passive investor in that entity and so long as such entity is not, directly or indirectly, in competition with the Company, (iii) securities or other interests now owned or controlled, in whole or in part, directly or indirectly, by Employee in any corporation or other person and which are identified on Schedule 1.4 hereto; and (iv) securities of the Company or any of its Affiliates. Nothing in this Agreement shall be deemed to prevent or restrict Employee's ownership interest in the Company and any of its Affiliates or Employee’s ability to render charitable or community services not in competition with the Company.

1.5 Power and Authority.

1.5.1 During the Employment Term, Employee shall be a member of the Board of Directors (“The Board”), a member of the executive or supervisory committee (or comparable committee) (the “Executive Committee”) of the Board, Chairman of the Board, President, Secretary and Chief Executive Officer of the Company.

1.5.2 During the Employment Term, all officers and employees of the Company shall report to Employee (directly or through such channels as Employee and the Board may designate). During the term, there shall be no officer or employee of the Company whose title, position, or authority with the Company is equal to Employee or superior to that the Employee.

1.5.3 The Company may from time to time during the Term appoint Employee to one or more additional offices of the Company. Employee agrees to accept such offices if consistent with Employee's stature and experience and position with the Company.

1.6 Indemnification. The Company shall indemnify Employee to the fullest extent allowed by applicable law. Without limiting the foregoing, Employee shall be entitled to the benefit of the indemnification provisions contained on the date hereof in the Bylaws of the Company and any applicable Bylaws of any Affiliate, notwithstanding any future changes therein.

2. Compensation.

As compensation and consideration for the Services provided by Employee during the Term pursuant to this Agreement, the Company agrees to pay to Employee the compensation set forth below.

2.1 Fixed Annual Compensation. The Company shall pay to Employee salary ("Fixed Annual Compensation") at the rate beginning on July 9, 2014 and continuing for the term of this agreement as follows:

2.1.1 225,000.00 per annum at such times and in such amounts as the Company may designate in accordance with the Company’s usual salary practices, but in no event less than twice monthly.

2.1.2 If annual revenues exceed $25,000,000.00, 450,000.00 per annum at such times and in such amounts as the Company may designate in accordance with the Company’s usual salary practices, but in no event less than twice monthly.

2.1.3 If annual revenues exceed $50,000,000.00, 675,000.00 per annum at such times and in such amounts as the Company may designate in accordance with the Company’s usual salary practices, but in no event less than twice monthly.

2.2 Stock. The Company shall grant to Employee Five Hundred Thousands (500,000) shares of the Company’s Class B Preferred stock upon the effective date of this agreement. The stock shall be fully paid, non-assessable and shall contain other customary rights and privileges, including piggy back registration rights. These shares shall be exempt from Automatic Conversion designation feature and shall only convert at the election of the Employee.

2.2.1 If Employee voluntarily terminates his employment with the Company or if a petition for Chapter 7 Bankruptcy is filed by the Company resulting in an adjudication of bankruptcy within 12 months of the date of this agreement, all shares granted under this section shall be returned to the Company.

2.2.2 If Employee voluntarily terminates his employment with the Company or if a petition for Chapter 7 Bankruptcy is filed by the Company resulting in an adjudication of bankruptcy within 24 months of the date of this agreement, Four Hundred Thousand (400,000) shares granted under this section shall be returned to the Company.

2.2.3 If Employee voluntarily terminates his employment with the Company or if a petition for Chapter 7 Bankruptcy is filed by the Company resulting in an adjudication of bankruptcy within 36 months of the date of this agreement, Three Hundred Thousand (300,000) shares granted under this section shall be returned to the Company.

2.2.4 If Employee voluntarily terminates his employment with the Company or if a petition for Chapter 7 Bankruptcy is filed by the Company resulting in an adjudication of bankruptcy within 48 months of the date of this agreement, Two Hundred Thousand (200,000) shares granted under this section shall be returned to the Company.

2.3 Bonus. Under this Agreement, Employee shall be entitled to participate in the highest bonus incentive program (hereafter “BIP”) set up by the Board. While the specific structure and trigger mechanisms for the BIP are at the sole discretion of the Board, the BIP shall afford Employee the opportunity to earn a cash and/or stock bonus through the Employee’s accomplishment of specific pre-identified reasonable milestones in the development of the Company’s business. Any payments under the BIP shall be paid annually to Employee and shall be paid no later than the end of the first quarter following the Company’s fiscal year-end. In addition to the BIP, Employee shall also be entitled to such additional bonus, if any, as may be granted by the Board (with Employee abstaining from any vote thereon) or compensation or similar committee thereof in the Board's (or such committee's) sole discretion based upon Employee's performance of his Services under this Agreement.

3. Expenses; Additional Benefits

3.1 Vacation. Employee shall be entitled to an aggregate of six weeks of paid vacation during each year of the Contract Year. Employee shall take vacation at times determined by the Employee, however, with appropriate consideration for the Company’s business needs. In addition, Employee shall be entitled to holidays generally observed in the United States and the State of Texas.

3.2 Employee Business Expense Reimbursement. Employee shall be entitled to reimbursement of all business expenses for which Employee makes a submission for and provides an adequate accounting to the Company beginning on the effective date of this Agreement. The determination of the adequacy of the accounting of the foregoing expenses shall be within the reasonable discretion of the Company’s independent certified accountants taking into consideration the substantiation requirements of the Internal Revenue Code of 1986, as amended (the "Code"). Employee shall be entitled to cash reimbursement for expense items, including extended travel. Employee shall be entitled to cash or stock reimbursement for ordinary expenses, including phone and local travel, as approved in advance by the Board. Such reimbursement of business expenses shall be payable to Employee at the end of each calendar month for the business expenses incurred by the Employee for the month prior for each specific submission for reimbursement during the Term of this Agreement,

3.3 Executive Stock Plan and Agreement. Within 12 months of the execution of this Agreement and in consideration for the execution thereof, Employee and the Company shall develop, implement and enter into a Executive Stock Plan and Agreement, which represents a material inducement to Employee's willingness to enter into this Agreement.

3.4 Directors and Officers Liability Insurance. During the Term of this agreement, Employee shall be entitled to the protection of any insurance policies the Company or any of its Affiliates may elect to maintain generally for the benefit of its directors and officers against all costs, charges and expenses whatsoever incurred or sustained by Employee in connection with any action, suit or proceeding to which Employee may be made a party by reason of Employee being or having been a director or officer of the Company or any of its Affiliates or Employee serving or having served any other enterprises as a director, officer or employee at the request of the Company. In the event the Company elects to maintain such directors and officers liability insurance, the policy shall be issued by a reputable and financially-sound insurance carrier of national standing which is acceptable to Employee, and providing coverage in the amount of at least $1,500,000.

3.5 Medical and Dental Insurance. In the event that the Company, with the approval of the Board of Directors, elects to establish a Medical Insurance Benefit Plan for the benefit of the Company’s employment staff, Employee shall be entitled to participate in such plan which shall include comprehensive medical and dental insurance (from a reputable and financially-sound insurance carrier of national standing) for himself and his immediate family. Such insurance shall cover at the minimum 100% of all hospitalization costs after payment of deductibles and 80% of other medical costs, with the annual deductible not exceeding $500 per person. There shall be no cap on benefits for the medical insurance, and the annual cap for dental insurance benefits shall not be less than $3,000. The Company may either provide these benefits directly to Employee or promptly reimburse Employee for the cost of such benefits, at the Company’s election.

3.6 General. Employee shall be entitled to participate in any profit-sharing, pension, health, sick leave, holidays, personal days, insurance or other plans, benefits or policies (not duplicative of the benefits provided hereunder) available to the employees of the Company or its Affiliates on the terms generally applicable to such employees.

3.7 No Reduction of Benefit or Payment. No payment or benefit made or provided under this Agreement shall be deemed to constitute payment to Employee or his legal representative or guardian in lieu of, or in reduction of, any benefit or payment under an insurance, pension or other benefit plan, and no payment under any such plan shall reduce any payment or benefit due under this Agreement except as set forth in Section 5.3 of this Agreement.

3.8 Asset Sale or Merger. In the event of an arm’s length transaction sale of all or substantially all of the assets or a merger in which the Company is not the surviving entity, Employee shall be entitled to receive and the Company shall issue, additional amount of shares of common stock in the Company which would equal Five percent (5%) of the final value of the transaction.

3.9 Covenant Not To Solicit. Employee agrees that for a period of one (1) year following any termination of the employment of the Employee with the Company, Employee will not, directly or indirectly, without the prior written consent of the Company: solicit, entice, persuade or induce any employee, consultant, agent or independent contractor of the Company or of any of its subsidiaries or Affiliates to terminate his or her employment by the Company or such subsidiary or Affiliate to become employed by any person, corporation or other entity other than the Company or such subsidiary or Affiliate, or approach any such employee, consultant, agent or independent contractor for any of the foregoing purposes, or hire any such employee, consultant, agent or independent contractor or authorize or assist in the taking of any such actions by any third party.

3.10 Confidentiality. During the Term of Employment and continuously thereafter, Employee shall keep secret and retain in strictest confidence and not use or disclose, furnish or make accessible to anyone outside the Company and any of its Affiliates, directly or indirectly, or use for the benefit of Employee or others except in conjunction with the business of the Company and the business of any of its subsidiaries or Affiliates, any Protected Information. The term “Protected Information” shall mean trade secrets, confidential or proprietary information and all other knowledge, technology, know-how, information, documents or materials owned, developed or possessed by the Company or any of its subsidiaries or Affiliates, whether in tangible or intangible form, pertaining to the business of the Company or any of its subsidiaries or Affiliates, including, but not limited to, research and development, operations, systems, databases, computer programs and software, designs, models, operating procedures, knowledge of the organization, products and services (including prices, costs, sales or content), processes, techniques, contracts, financial information or measures, business methods, future business plans, details of consultant contracts, new personnel acquisition plans, business acquisition plans, customers and suppliers (including identities of customers and prospective customers and suppliers, identities of individual contacts at business entities which are customers or prospective customers or suppliers, preferences, businesses or habits), and business relationships. Provided however, that Protected Information shall not include information that shall become generally known to the public or the trade without violation of this Section 1.6.

3.11 Company Ownership. The results and proceeds of Employee’s services hereunder, including, without limitation, any works of authorship resulting from Employee’s services during his employment with the Company or any of the Company’s Affiliates and any works in progress, shall be works-made-for-hire, and the Company shall be, and shall be deemed, the sole owner throughout the universe of any and all rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner the Company determines in its sole discretion without any further payment to Employee whatsoever. If, for any reason, any of such results and proceeds shall not legally be a work-for-hire and/or there are any rights which do not accrue to the Company under the preceding sentence, then Employee hereby irrevocably assigns and agrees to assign any and all of Employee’s right, title and interest thereto, including, without limitation, to any and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed to the Company, and the Company shall have the right to use the same in perpetuity throughout the universe in any manner the Company determines without any further payment to Employee whatsoever. Provided however, that if the Company elects not to utilize any work(s) of authorship resulting from Employee’s services during his Employment Term, the Company shall wave and release all rights to said work(s) and assign all rights thereto to Employee.

Employee shall, from time to time, as may be requested by the Company, do any and all things which the Company may deem useful or desirable to establish or document the Company’s exclusive ownership of any and all rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright and/or patent applications or assignments. To the extent Employee has any rights in the results and proceeds of Employee’s services that cannot be assigned in the manner described above, Employee unconditionally and irrevocably waives the enforcement of such rights. This Section 3.11 is subject to, and shall not be deemed to limit, restrict, or constitute any waiver by the Company of any rights of ownership to which the Company may be entitled by operation of law by virtue of the Company’s being the employer of Employee.

3.12 Litigation. Employee agrees that, during the Employment Term, for two (2) year thereafter and, if longer, during the pendency of any litigation or other proceeding, (i) Employee shall not communicate with anyone (other than his personal attorney(s) and/or tax advisor(s)) and, except to the extent necessary in the performance of Employee’s duties hereunder, with respect to the facts or subject matter of any pending or potential litigation, or regulatory or administrative proceeding involving the Company or any of its Affiliates, or any of their officers, directors, shareholders, representatives, agents, employees, suppliers or customers, other than any litigation or other proceeding in which Employee is a party-in-opposition, without giving prior notice to the Company’s Board of Directors or General Counsel and receiving a response, and (ii) in the event that any other party attempts to obtain information or documents from Employee with respect to matters possibly related to such litigation or other proceeding, Employee shall promptly so notify the Company’s Board of Directors or General Counsel and await any response .

3.13 No right to Give Interviews or to Write Books, Articles, etc. Employee agrees that during the Employment Term and for a period of two (2) years thereafter, except with the Company’s prior written authorization, Employee shall not (i) give any interviews or speeches, or (ii) prepare or assist any person or entity in the preparation of any books, articles, television or motion picture productions or other creations, in either case, concerning the Company or any of its Affiliates, or any of their officers, directors, shareholders, representatives, agents, employees, suppliers or customers.

3.14 Return of Property. All documents, date books, recordings, or other property, whether tangible or intangible, including all information stored in electronic form, obtained or prepared by or for Employee and/or utilized by Employee in the course of Employee’s employment with the Company shall remain the exclusive property of the Company. In the event of the termination of Employee’s employment for any reason, the Company reserves the right, to the extent permitted by law and in addition to any other remedy the Company may have, to deduct from any monies otherwise payable to Employee by the Company the following: (i) the full amount of any debt Employee owes to the Company or to any of the Company’s Affiliates at the time of or subsequent to the termination of Employee’s employment with the Company; and (ii) the value of the Company’s property which is retained in Employee’s possession after the termination of Employee’s employment with the Company. In the event that the law of any state or other jurisdiction requires the consent of an employee for such deductions, this Agreement and the Employee’s signature hereon shall serve, and be deemed to serve, as such consent. Employee acknowledges and agrees that the foregoing remedy shall not be the sole and/or exclusive remedy of the Company with respect to a breach of this Section 3.14.

3.15 Non-Disparagement. Employee agrees that he shall not, during the Employment Term and for a period of two (2) years thereafter, criticize, ridicule or make any statement which disparages or is derogatory of the Company or any of its Affiliates, or of any of their officers, directors, shareholders, representatives, agents, employees, suppliers or customers.

3.16 Injunctive Relief/Specific Enforcement. The Company has entered into this Agreement in order to obtain the benefit of Employee’s unique skills, talent, and experience. Employee acknowledges that the services to be rendered by Employee are of a special, unique and extraordinary character and, in connection with such services, Employee will have access to confidential or proprietary information or trade secret vital to the Company’s business and the businesses of its subsidiaries and Affiliates. By reason of this, Employee acknowledges, consents and agrees that any violation of Sections 1.4 and 3.10 – 3.16 of this Agreement will result in irreparable harm to the Company and its subsidiaries or Affiliates, and that money damages will not provide adequate remedy to the Company, and that the Company shall be entitled to have those sections specifically enforced by any court having competent jurisdiction. Accordingly, Employee agrees that the Company may obtain injunctive and/or other equitable relief for any breach or threatened breach of those sections, in addition to any other remedies, including the recovery of money damages from Employee available to the Company.

3.17 Non-Renewal Notice. The Company shall notify Employee in writing in the event that the Company elects not to extend or renew this Agreement. If the Company gives Employee such notice less than three (3) months before the end of the Employment Term, or Employee’s employment terminates pursuant to Section 4.1 hereof during the three (3) months of the Employment Term, Employee shall be entitled to receive his Salary as provided in Section 2.1, payable in accordance with the Company’s then-effective payroll practices, subject to applicable withholding requirements, for the period commencing after the end of the Employment Term which, when added to the portion of the Employment Term, if any, remaining when the notice is given or the termination occurs, equals three (3) months. The payments provided for in this Section 3.17 are in lieu of any severance or income continuation or protection under any Company plan that may now or hereafter exist. Employee shall be required to mitigate the amount of any payment provided for in this Section 3.17 by seeking other employment or otherwise, and the amount of any such payment provided hereunder shall be reduced by any compensation earned by Employee from any third person.

3.18 The provisions of Sections 1.4 and 3.11-3.18 shall, without any limitation as to time, survive the expiration of Employee’s employment hereunder, irrespective of the reason for any termination.

4. Termination for Cause by the Company:

4.1 Cause. Reasons and process for termination for Cause. Executive may be terminated from employment with “Cause.” For purposes of this Agreement, the term “Cause” shall mean:

Gross negligence or willful misconduct in the performance of duties to the Company that has resulted or is likely to result in substantial and material damage to the Company,

Repeated unexplained or unjustified absence from the Company;

A material or willful violation of any federal, state or local law;

commission of any act of fraud with respect to the Company, or

conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of the Company, in each case as determined in good faith by the Board of Directors of the Company; or

substantial or continued unwillingness to perform duties as reasonable directed by Company’s Board of Directors.

4.2 Effects of Termination for Cause. In the event this Agreement is terminated for Cause, all of the Company’s obligations under this agreement shall cease as of the date in which the Employee’s receives the Notice of Termination. The Company shall pay the Fixed Annual Compensation up to the date of termination, and have no further obligations to Employee under this Agreement. Additionally, in the event this Agreement is terminated for Cause, the Employee is prohibited from taking Employment with a direct competitor of the Company for a period of two years from the date of termination. The Company may also pursue damages and injunctive relief from Employee as compensation for its damages.

5. Termination for Not-for-Cause by the Company:

5.1 Reasons and process for termination for Not-for-Cause. The Company may terminate this Agreement, for Not-for-Cause (with the ramifications described below), subject to the Provisions of this Section 5.

5.2 Effects of Termination Not-for-Cause. Employee’s obligations to provide Employee’s Services under this Agreement shall cease as of date in which the Employee receives the Notice of Termination for Not-for-Cause. Employee shall be entitled for a pro-rated Additional Annual Compensation under Sections 2.1 – 2.3 for the balance of the then current term and all and any unvested stock and options Employee or any of Employee’s assigns holds in the Company or its Affiliates shall vest immediately. Employee shall be entitled to the Employee’s Benefits until the end of the then current term. Employee shall have no restrictions to furnish the Services of the Employee and the Employee shall have no restrictions with respect to accepting other Employment (even with companies directly competing with the Company), except upon the receipt of comparable health and dental insurance through another company, the Company’s obligations to provide these benefits shall end. Employee’s restrictions under 3.1.2 and 3.1.7 of this agreement shall remain in full force and effect.

5.3 No Mitigation. In the event of Termination-Not-for-Cause, Employee shall not be required to mitigate the amount of any payment provided for in this Section 5 in any way whatsoever, nor shall the amount any payment or benefit provided for in this Section 5 be reduced by any compensation earned by Employee as the result of employment by another employer or by retirement benefits after the termination date. The Company shall not be entitled to any rights to offset, mitigate or otherwise reduce the amounts owing to Employee by virtue of this Section 5 with respect to any rights, claims, or damages that the Company or its Affiliates may have against Employee, including, without limitation, any claims by reason of any breach or alleged breach of this Agreement by Employee.

6. Termination for Disability or Death of Employee

6.1. Employee’s incapacity. If, as a result of Employee's incapacity to materially perform the Services required under this Agreement because of physical or mental illness, as evidenced by Employee having been absent from his duties for three (3) consecutive months or for more than an aggregate of five (5) months in any Contract Year, the Board may give Employee a Disability Notice, which will be the first step in the parties attempts to terminate or amend this Agreement with mutual consent.

6.2. Mandatory good faith dialogue. Upon the receipt of the Disability Notice by Employee, Employee and the Company shall engage in a good faith dialogue to agree on a resolution to the matter that is sensitive to the Company’s business needs as well as the Employee’s situation.

6.3. Termination for Disability. In the event the parties after 30 days have not reached an agreement on the necessary amendments to this Agreement or terms for a mutual separation agreement, and the Employee’s incapacity persists, by unanimous decision by the Board (excluding Employee) the Company shall have the right to terminate the Employee for Disability, by sending Employee a Notice of Termination for Disability.

6.4. Effects of Termination for Disability. Upon the termination of this Agreement for Disability of Employee, Employee shall be entitled to receive (i) the Fixed Annual Compensation that would otherwise be payable hereunder to the end of the month in which such termination occurs and for six months thereafter; (ii) any bonus and or Additional Annual Compensation due and earned throughout the then Employment Year; and (iii) any amounts earned pursuant to the terms of this Agreement but unpaid at the time of termination. The payments specified in this Section 6.4 shall commence as soon as practicable but no later than one month after the date of termination. The payments

shall be made in cash, company check or certified funds. Whenever compensation is payable to Employee hereunder during a time when Employee is partially or totally disabled and such disability (except for the provisions hereof) would entitle Employee to disability income or other special compensation according to the terms of any plan now or hereafter provided by the Company or according to any policy of the Company in effect at the time of such disability, the payments to Employee hereunder shall be inclusive of any such disability income or other special compensation and shall not be in addition thereto. If disability income is payable directly to Employee by an insurance company under an insurance policy paid for by the Company, then any such disability income paid during the twenty four (24) months following the Date of Termination shall be considered to be part of the payments to be made by the Company pursuant to this Section 6.4, and not in addition thereto, and shall be paid to the Company, up to but not to exceed the amount of payments actually made by the Company pursuant to this Section 6.4. All disability income paid to Employee by said insurance company (i) during the twenty four (24) months following the termination date in excess of the payments actually made by the Company pursuant to this Section 6.4, and (ii) after twenty four (24) months following the termination shall be the sole property of Employee, as the case may be, pursuant to the terms of such insurance policy and shall not be required to be paid to the Company.

6.5. Termination in Case of Death. In case of Employee's death, any and all unvested stock or options granted to Employee under Section 2.2 of this Agreement shall vest in favor of Employee's estate as provided for in this Section(s) 6.51, 6.5.2, 6.5.3, and 6.5.4 herein. Company shall also continue any health benefits for family for one year.

6.5.1 If the Employee's death occurs within 12 months of the date of this agreement, One Hundred Thousand (100,000) shares granted under Section 2.2 shall immediately vest in favor of Employee's estate and Four Hundred Thousand (400,000) shall be returned to the Company;

6.5.2 If the Employee's death occurs within 24 months of the date of this agreement, Two Hundred Thousand (200,000) shares granted under Section 2.2 shall immediately vest in favor of Employee's estate and Three Hundred Thousand (300,000) shall be returned to the Company;

6.5.3 If the Employee's death occurs within 36 months of the date of this agreement, hree Hundred Thousand (300,000) shares granted under Section 2.2 shall immediately vest in favor of Employee's estate and Two Hundred Thousand (200,000) shall be returned to the Company;

6.5.4 If the Employee's death occurs within 48 months of the date of this agreement, Four Hundred Thousand (400,000) shares granted under Section 2.2 shall immediately vest in favor of Employee's estate and One Hundred Thousand (100,000) shall be returned to the Company;

6.5.5 Any unvested additional shares granted for past performance under Sections 2.3 and 3.3 shall immediately vest in favor of Employee’s estate.

7. Termination by Employee for Material Breach

7.1. Employee shall have the right to terminate this Agreement only in the event of a verifiable Material Breach by the Company. For purposes of this Agreement, "Material Breach" shall mean any of the following:

(A) The breach by the Company of a material term, condition or covenant of this Agreement;

(B) The assignment to Employee of any duties inconsistent in any material respect with his status set forth in Sections 1.1 and 1.5 hereof;

(D) A unanimous decision by the Board of Directors and a majority vote of the shareholders of all classes of stock in the Company, who are entitle to vote in such matters, that would result in a significant change to the core business of the Company which having been effectuated without Employee's consent would cause the Company’s business is to fundamentally depart from the purpose in which the Employee was originally contracted for.

7.2. Material Breach Notice by Employee. In the event Employee wishes to pursue a termination of the Agreement on the account of a material breach by the Company as defined in this Section 7.1 (a)(b)( c) and (d), Employee may send to the Board a Notice of Material Breach describing in detail the nature of the alleged breech and the required corrective action to cure the alleged breach. Unless the Board formally objects to the Notice of Material Breach or responds and cures the breach within sixty (60) days from the receipt thereof, Employee shall have the right to terminate this Agreement by sending a Notice of Termination for Breach to that effect no earlier than the latest date by which the Company could still object or cure the Notice of Material Breach, but no later than sixty (60) days from the Company’s receipt of the Notice of Material Breach.

7.3. Effect of the Company’s objection. In the event the Company receives a Notice of Breach from Employee and does not consider the allegations in the notice to be valid, it has the right to object to the contents of the Notice by informing Employee to such effect in writing within two weeks of receipt of the Notice of Material Breach. In the event of an objection by the Company to a Notice of Material Breach, the following process shall apply:

(a) The Board shall call a special meeting to allow Employee to state Employee's position on the matter and to allow for the parties to resolve the situation. The Employee shall abstain from voting during such meeting. Employee shall be allowed to have outside legal counsel present at such meeting.

(b) In the event the parties fail to resolve the matter in such meeting, the parties shall submit the dispute to binding arbitration in accordance with Section12hereunder. In the event the arbitration does not find that a material breach by the Company existed, the Company shall not be required to pay the Fixed Annual Compensation for any period during which Employee did not provide the Employee’s Services as called for in this Agreement.

7.4. Effects of Termination by Employee for Material Breach. An effective termination by Employee resulting from a material breach of the Company shall be considered a Termination Not-for-Cause by the Company.

8. Termination by Employee for Change in Control

such reporting requirement, including, but not limited to (i) a transaction or series of related transactions resulting in a change in beneficial ownership of more than 51% of the outstanding equity securities of the Company; (ii) or a sale of all or substantially all of the assets of the Company.

8.2. Termination Notice for Change of Control. In the event of an occurrence of Change of Control (as defined above), Employee shall have the right for a 30 day period upon becoming aware of the Change of Control to notify the Company of Employee's intention to terminate this Agreement based on this occurrence by sending a the Board a Notice of Disputed Change of Control. Unless the Board formally responds to the Notice of Disputed Change in Control with an offer to address the Employee's concerns by amending this Agreement in two weeks from its receipt, Employee shall have the right to terminate this Agreement by sending a Notice of Termination for

Change of Control to that effect no earlier than the latest date by which the Company could still object or cure the Notice of Disputed Change of Control but no later than sixty (60) days from the Company’s receipt of the Notice of Disputed Change of Control

8.3. In the event the Board has responded to the Notice of Disputed Change in Control with an offer to address Employee's concerns, the parties shall engage in meaningful good faith negotiations for a period of 60 days to amend or renew this Agreement to the satisfaction of both parties. In the event no agreement has been reached after the 60-day period, Employee shall have the right to terminate this Agreement by sending a Notice of Termination for Change of Control.

8.4. Effect of termination for Change of Control. An effective termination by Employee resulting from a Change in Control of the Company shall be considered a Termination Not-for-Cause by the Company.

8.5. For the sake of clarity, a Change in Control does not give the Company (or the company acquiring it) any new rights. Anything herein contained to the contrary notwithstanding, in the event the Company experiences either a “change in control” transaction as defined herein, including, but not limited to, a merger, acquisition or sale of a controlling interest in the corporation as stated above, the terms and conditions of this Agreement shall remain in effect and in full force, all stock, options, warrants and any other consideration due Employee, or Employee's assignee. Employee shall become fully vested and such action the Company shall not in any way diminish, affect or compromise Employee’s rights under this Agreement.

9. General

9.1 Governing Law. Venue The laws of the State of Texas shall govern the interpretation, construction and applicability of this Agreement in any arbitration or judicial proceeding.

9.2 Attorneys’ Fees. In the event that any legal (judicial or arbitral) proceeding is instituted in connection with any controversy arising out of this Agreement or the enforcement of any rights hereunder, the prevailing party (as defined by the courts of Texas) shall be entitled to recover, in addition to court and other costs, such sums as the court or arbitrator may decide are reasonable as attorneys’ fees.

9.3 Indemnification. In the event Employee is made, or threatened to be made, a witness or party to any civil, criminal or administrative action, proceeding or investigation of the fact that Employee is or was a director or officer of the Company, or serves on the Board of another corporation fifty percent (50%) or more owned by the Company in any capacity at the Company’s request, or serves or served as a director of any other corporation at the request, or serves as a fiduciary of any ERISA plan at the Company’s request, Employee shall be indemnified by the Company for all amounts paid as a fine or settlement, including the cost of defense.

9.4 Waiver. Neither party shall, by mere lapse of time, without giving notice be deemed to have waived any breach by the other party of any of this Agreement. Further, the waiver by either party of a particular breach of this Agreement shall be construed or deemed as a continuing waiver of such breach.

9.5 Entire Agreement. The parties agree that this instrument constitutes and contains the entire agreement between the parties concerning the subject matter and contents of this Agreement, and that this instrument supersedes all prior negotiations, proposed agreement, or understandings, if any, between the parties concerning any of the provisions or contents of this Agreement. No amendment to this Agreement shall be effective unless it is in writing and signed by a duly authorized representative of each of the parties to this Agreement.

9.6 Fair Meaning. The parties agree that the wording of this Agreement shall be construed as a whole according to its fair meaning, and not strictly for or against the party that drafted this Agreement.

9.7 Counterparts. This Agreement may be executed in any number of counterparts which shall be deemed an original, and all of which taken together constitutes one and the same Agreement.

9.8 Severability. The parties agree that if any provision of this Agreement should ever be declared or determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby, and said illegal or invalid part, term or provision shall be automatically conformed to the law, if possible, or if not possible, be deemed to be stricken from this Agreement.

9.9 Waiver/Estoppel. Any party hereto may waive the benefit of any term, condition or covenant in this Agreement or any right or remedy at law or in equity to which any party may be entitled, but only by an instrument in writing signed by the parties to be charged. No estoppel may be raised against any party except to the extent the other parties rely on an instrument in writing, signed by the party to be charged, specifically reciting that the other parties may rely thereon. The parties' rights and remedies under and pursuant to this Agreement or at law or in equity shall be cumulative and the exercise of any rights or remedies under any provision hereof or rights or remedies at law or in equity shall not be deemed an election of remedies; and any waiver or forbearance of any breach of this Agreement or remedy granted hereunder or at law or in equity shall not be deemed a waiver of any preceding or succeeding breach of the same or any other provision hereof or of the opportunity to exercise such right or remedy or any other right or remedy, whether or not similar, at any preceding or subsequent time.

9.10 Notices. Any notice that the Company is required to give or may desire to give to Employee hereunder shall be in writing and may be served by delivering it to Employee, or by sending it to Employee by certified mail, return receipt requested (effective five days after mailing) or overnight delivery of the same by delivery service capable of providing verified receipt (effective the next business day), or facsimile (effective twenty-four hours after receipt is confirmed by person or machine), at the address set forth below, or such substitute address as Employee may from time to time designate by notice to the Company. Any notice that Employee is required or may desire to serve upon the Company hereunder shall be in writing and may be served by delivering it personally or by sending it certified mail, return receipt requested or overnight delivery, or facsimile (with receipt confirmed by person or machine) to the address set forth below, or such other substitute address as the Company may from time to time designate by notice to Employee. Such notices by Employee shall be effective at the same times as specified in this Section 9.10 for notices by the Company.

The Company:

Minerco Resources, Inc.

800 Bering Drive, Suite 201

Houston, TX 77057

Employee:

V. Scott Vanis

800 Bering Drive, Suite 201

Houston, TX 77057

9.11 Captions. The paragraph headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

9.12 No Partnership or Joint Venture. Nothing herein contained shall constitute a partnership between or joint venture by the parties hereto.

9.13 Assignability. Successors.

(a) The obligations of employee may not be delegated and, except as expressly provided in this Section 9.13 relating to the designation of beneficiaries, Employee may not, without the Company’s prior written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest herein. Any such attempted delegation or disposition shall be null and void and without effect. Provided however, that Employee may assign all or any portion of his rights to receive compensation hereunder to any corporation of which at least fifty percent (50%) of the capital stock of which is owned or controlled by Employee, to any other entity in which Employee owns or controls at least fifty percent (50%) of the total ownership interests, to trusts for the benefit of the family of Employee, to charitable trusts or to trusts for the benefit of any charitable purpose, or to any charity or non-profit organization. Notwithstanding any other provision hereof, Employee shall not be permitted to establish loan-out companies to provide his services to the Company and assign this Agreement thereto.

(b) The Company and Employee agree that this Agreement and each of the Company’s rights and obligations hereunder may be assigned or transferred by the Company to, and shall be assumed by and be binding upon, any Successor to the Company. The term “Successor” shall mean any corporation or other business entity which succeeds to the assets or conducts the business of the Company, whether directly or indirectly, by purchase, merger, consolidation or otherwise. In the event another corporation or other business entity becomes a Successor of the Company, then the Successor shall expressly assume and agree to perform this Agreement in the same manner and to the same extent as the Company is required to perform if there had been no merger.

9.14 No Mitigation; No Offset. Without limiting any other provision hereof, the Company agrees that any income and other employment benefits received by Employee from any and all sources (other than as set forth in Section 5.2) before, or during this Agreement shall in no way reduce or otherwise affect the Company's obligation to make payments and afford benefits hereunder.

10. Arbitration.

(a) In the event of any controversy arising from or concerning the interpretation of this Agreement or its subject matter (including, without limitation, the interpretation, application, or enforceability of this Agreement or the arbitrability of the controversy), the parties agree that such controversy shall be resolved exclusively by binding arbitration before a single neutral arbitrator selected jointly by the parties. The Company and Employee shall each be responsible for 50% of the fees and expenses of the arbitrator. Each party shall be responsible for its own attorneys’ fees and any other costs arising from the arbitration, without regard to which party thereto prevails. Provided however, that the arbitrator may award attorneys’ fees and costs to the prevailing party. The parties to the arbitration shall have all rights, remedies, and defenses available to them in a civil action before a court. If, for any legal reason, a controversy arising from or concerning the interpretation, application, or enforceability of this Agreement requires judicial intervention, the parties agree that the controversy shall be brought in the Harris County Superior Court or the U.S. District Court for the District of Texas.

(b) The parties hereby waive and agree not to assert (by way of motion, as a defense or otherwise) (a) any and all objections to jurisdiction that they may have under the laws of the State of Texas or the United States, and (b) any claim (i) that it or [he/she] is not subject personally to jurisdiction of such court, (ii) that such forum is inconvenient, (iii) that venue is improper, or (iv) that this Agreement or its subject matter may not for any reason be arbitrated or enforced as provided in this Section 6.0 (b).

(c) Within ten (10) business days after receipt of the notice submitting a dispute or controversy to arbitration, the parties shall attempt in good faith to agree upon an arbitrator to whom the dispute will be referred and on a joint statement of contentions. Each party hereby agrees that service of process in such action will be deemed accomplished and completed when a copy of the documents is sent in accordance with the notice provisions in Section 5.10 hereof.

(d) The arbitration shall be held within sixty (60) days of the appointment of the arbitrator. Discovery shall be conducted in accordance with the Texas Rules of Civil Procedure regarding discovery. The arbitrator shall establish the discovery schedule promptly following submission of the joint statement of contentions (or the filing of the answer to the demand for arbitration) which schedule shall be strictly adhered to. To the extent the contentions of the parties relate to custom or practice in the Company’s business model, or the technical industry generally, or to accounting matters, each party may select an independent expert or accountant (as applicable) with substantial experience in the industry segment involved to render an expert opinion or opinions. All decisions of the arbitrator shall be final and in writing. The arbitrator shall make all rulings in accordance with Texas law and shall have authority equal to that of a Superior Court judge, to grant equitable relief in an action pending in Superior Court in which all parties have appeared.

11. Contractual Nomenclature. All references herein to "Dollars" or "$" shall mean Dollars of the United States of America, its legal tender for all debts public and private. Wherever used herein and to the extent appropriate, the masculine, feminine or neuter gender shall include the other two genders, the singular shall include the plural, and the plural shall include the singular.

12. Publicity. Neither party shall issue any press release or announcement of or relating to the execution of, or any terms, provisions or conditions contained in this Agreement without the other party's prior approval of the content and timing of any such announcement or announcements.

13. Proof of Right to Work. For purposes of federal immigration law, Employee will be required to provide the Company with documentary evidence of his identity and eligibility for employment in the United States within three (3) business days of Employee’s date of hire; otherwise, the Company may terminate the employment relationship and this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Minerco Resources, Inc., a Nevada Corporation

By: /s/ V. Scott Vanis

V. Scott Vanis, President, Director

Employee

By: /s/ V. Scott Vanis

V. Scott Vanis, an Individual

Exhibit 10.47

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of the 10th day of September, 2014 between Sam J Messina III ("Employee") and Minerco Resources, Inc., a Nevada Corporation, it’s affiliates, predecessors and subsidiaries (the "Company”).

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties to this Agreement hereby agree as follows:

Services

1.1 Employment. During the Employment Term (as defined below), the Company hires Employee to perform such services as the Company may from time to time reasonably request consistent with Employee's position with the Company (as set forth in Section 1.1 and 1.5 hereof) and Employee's stature and experience as a Certified Public Accountant (the "Services"). The Services and authority of Employee shall include, but not necessarily be limited to, management and supervision of (A) the general accounting, reporting, financial management and regulatory compliance of the of the Company, (B) the general accounting, reporting, financial management and regulatory compliance of future acquisitions and Affiliates. For purposes of this Agreement, "Affiliates" shall mean, as to any person, any other person controlled by or under common control with (or, where applicable, controlling), directly or indirectly, such person; and "person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof, or any other entity; whereas such person in the normal course of business shall be deemed an affiliate of the Company.

1.3 Term. The term of Employee's employment under this Agreement (the "Employment Term") shall commence on the 1st day of July, 2014 (the "Effective Date") and shall end on July 31, 2019 unless sooner extended or terminated in accordance with the provisions of this Agreement.

For purposes of this Agreement, "Employment Year" shall mean each twelve-month period during the Term commencing on July 1st, and ending on June 30th, of the following year. In the event the parties decide to extend this Agreement for an additional one year Employment Term, any extension agreed upon must be done so in writing and executed by the Company and Employee no later than 5 p.m. Eastern Standard Time on July 31, 2019.

1.5 Power and Authority.

1.5.1 During the Employment Term, Employee shall be Employed as Chief Financial Officer and Treasurer of the Company, Employee shall report directly to the President, Chief Executive Officer and Company’s Board of Directors. Employee shall be a member of the Board of Directors of the Company (the "Board") and a member of the executive or supervisory committee(s) or comparable committee(s), (the "Executive Committee").

1.5.2 During the Employment Term, all accounting officers and employees of the Company shall report to Employee (directly or through such channels as Employee and the Board may designate).

2. Compensation.

As compensation and consideration for the Services provided by Employee during the Term pursuant to this Agreement, the Company agrees to pay to Employee the compensation set forth below.

2.1 Fixed Annual Compensation. The Company shall pay to Employee salary ("Fixed Annual Compensation") at the rate beginning on July 1, 2014 and continuing for the term of this agreement as follows:

2.1.1 150,000.00 per annum at such times and in such amounts as the Company may designate in accordance with the Company’s usual salary practices, but in no event less than twice monthly.

2.1.2 If annual revenues exceed $25,000,000.00, 300,000.00 per annum at such times and in such amounts as the Company may designate in accordance with the Company’s usual salary practices, but in no event less than twice monthly.

2.1.3 If annual revenues exceed $50,000,000.00, 450,000.00 per annum at such times and in such amounts as the Company may designate in accordance with the Company’s usual salary practices, but in no event less than twice monthly.

3. Expenses; Additional Benefits

3.8 Asset Sale or Merger. In the event of an arm’s length transaction sale of all or substantially all of the assets or a merger in which the Company is not the surviving entity, Employee shall be entitled to receive and the Company shall issue, additional amount of shares of common stock in the Company which would equal Three percent (3%) of the final value of the transaction.

4. Termination for Cause by the Company:

4.1 Cause. Reasons and process for termination for Cause. Executive may be terminated from employment with “Cause.” For purposes of this Agreement, the term “Cause” shall mean:

Gross negligence or willful misconduct in the performance of duties to the Company that has resulted or is likely to result in substantial and material damage to the Company,

Repeated unexplained or unjustified absence from the Company;

A material or willful violation of any federal, state or local law;

commission of any act of fraud with respect to the Company, or

substantial or continued unwillingness to perform duties as reasonable directed by Company’s Board of Directors.

5. Termination for Not-for-Cause by the Company:

6. Termination for Disability or Death of Employee

6.5.5 Any unvested additional shares granted for past performance under Sections 2.3 and 3.3 shall immediately vest in favor of Employee’s estate.

7. Termination by Employee for Material Breach

(A) The breach by the Company of a material term, condition or covenant of this Agreement;

(B) The assignment to Employee of any duties inconsistent in any material respect with his status set forth in Sections 1.1 and 1.5 hereof;

8. Termination by Employee for Change in Control

8.1. Definition of "Change in Control." For purposes of this Agreement, "Change in Control of the Company ” means a change in control (except Changes in Control effected with the express consent of Employee) of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement, including, but not limited to (i) a transaction or series of related transactions resulting in a change in beneficial ownership of more than 51% of the outstanding equity securities of the Company; (ii) or a sale of all or substantially all of the assets of the Company.

9. General

9.1 Governing Law. Venue The laws of the State of Texas shall govern the interpretation, construction and applicability of this Agreement in any arbitration or judicial proceeding.

9.7 Counterparts. This Agreement may be executed in any number of counterparts which shall be deemed an original, and all of which taken together constitutes one and the same Agreement.

The Company:

Minerco Resources, Inc.

800 Bering Drive, Suite 201

Houston, TX 77084

Employee:

Sam J Messina III

16035 N. 80th St., Suite E

Scottsdale, AZ 85260

9.11 Captions. The paragraph headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

9.12 No Partnership or Joint Venture. Nothing herein contained shall constitute a partnership between or joint venture by the parties hereto.

9.13 Assignability. Successors.

10. Arbitration.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Minerco Resources, Inc., a Nevada Corporation

By: /s/ V. Scott Vanis

V. Scott Vanis, President, Director

Employee

By: /s/ Sam J Messina III

Sam J Messina III, an Individual

Exhibit 10.48

MINE INC.

KEY EMPLOYEE AND DISTRIBUTOR INCENTIVE PLAN

On September 16, 2014, the Board adopted the Minerco Resources, Inc. (“MINE” or the “Company) Key Employee and Distributor Incentive Plan as set forth herein.

1. PURPOSE. The purpose of the Plan is to provide Key Employees and Distributors of MINE with common stock of the Company through the granting of shares to achieve one or more of the following:

a. provide incentive to Key Employees and Distributors who are expected to make substantial contribution to the long-term success of the Company;

b. enhance the interests of such Key Employees and Distributors in the Company’s success and progress; and

c. enhance the Company’s ability to maintain a competitive position in attracting and retaining qualified Key Employees and Distributors necessary for the continued success and progress of the Company.

2. DEFINITIONS. For the purpose of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated below:

a. “Award Agreement” means, with respect to each grant of common stock to a Participant, the written agreement between the Participant and the Company setting forth the terms and conditions of the award of common stock. Award Agreements, which need not be identical, shall state the number of shares of common stock originally awarded to the Participant, shall be signed by the Company, and shall incorporate by reference the terms of this Plan, which shall be attached thereto. The Committee (defined herein) shall determine the amount of the award with approval of the Company’s Board.

b. “Beneficiary” means any person or persons so designated in accordance with the provisions of Section 10.

c. “Board” means the Board of Directors of the Company.

d. “Code” means the Internal Revenue Code of 1986, as amended, and rules and regulations issued thereunder.

e. “Committee” means the committee of the Board appointed by the Board to administer the Plan. If no Committee is appointed by the Board, the Committee shall be the Board.

f. “Continuous Service” means the provision of services to the Company, or any successor, as an employee or distributor that is not interrupted or terminated or the provision of services to a subsidiary of the Company, or its successor, as an employee or distributor of such subsidiary.

g. “Common Stock” means the common stock, $.0001 par value, of the Company which is publicly traded on the OTC Markets OTCQB.

h. “Company” means Minerco Resources, Inc.

i. “Key Employee” means an individual who performs services on behalf of the Company as an employee. The Committee shall, from time to time, select the particular employees of the Company to whom Shares are granted, and who will, upon such grant, become Participants in the Plan. The Committee shall determine, for purposes of applying the provisions of the Plan, when an employee’s Continuous Service terminates.

j. “Distributor” means a company or key employees at the company or an individual who performs services on behalf of the Company as a distributor under distribution agreement. The Committee shall, from time to time, select the particular Distributors of the Company to whom Shares are granted, and who will, upon such grant, become Participants in the Plan. The Committee shall determine, for purposes of applying the provisions of the Plan, when an employee’s Continuous Service terminates.

k. “Disability” means a physical or mental condition of a Participant resulting from any accident or illness that, in the judgment of the Committee, makes the Participant unable to engage in any substantial gainful activity and which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

l. “Effective Date” means the date the Plan is adopted by the Board as set forth above.

m. “Fair Market Value” of the Common Stock and of the common stock shall be the value of the Common Stock as of any relevant date based on the average of the closing prices of the Common Stock for the ten trading days immediately preceding the date of determination.

n. “Participant” means a Key Employee or Distributor to whom shares of common stock have been granted under the Plan.

o. “Plan” means the MINE Inc. Key Employee and Distributor Incentive Plan, as set forth herein, and as it may be amended from time to time.

p. “Threshold Value” means the Fair Market Value of shares of common stock on the date the common stock is granted based on the average of the closing prices of the Common Stock for the ten trading days immediately preceding the applicable grant date.

q. “Shares” means shares of common stock of the Company to determine the amount of an award under the Plan. The value of the common stock shall be determined for purposes of calculating the benefits payable under the Plan at any relevant time by subtracting the Threshold Value applicable to such common stock as set forth in the Award Agreement from the Fair Market Value of the Common Stock on the Vesting Date (as defined below).

r. “Vesting Date” means the date or dates and events upon which Shares that have been granted become vested as provided for in an Award Agreement, including the death or Disability of a Participant.

3. ADMINISTRATION. The Plan shall be administered by the Committee. All questions of interpretation and application of the Plan, or of the terms and conditions pursuant to which awards are granted or forfeited or pursuant to which amounts are paid under the provisions hereof, shall be subject to the determination of the Committee. Such determination shall be final and binding upon all parties affected thereby.

4. PARTICIPANTS. The Committee shall approve awards under the Plan. The Committee shall, from time to time, select the particular Key Employees or Distributors to whom Shares are granted, and who will, upon such grant, become Participants in the Plan. The Committee has the authority, in its complete discretion, to grant Shares to Participants, and no Participant has any right to be granted Shares or any other rights. A Participant may be granted Shares at more than one time, and Shares may be granted at any time or times during the term of the Plan.

5. ALLOTMENT OF SHARES; SHARES SUBJECT TO PLAN. The Committee shall determine the number of Shares to be granted to Participants. The grant of Shares to a Participant shall not be deemed either to entitle the Participant to, or to disqualify the Participant from, participation in any other grant of Shares under the Plan.

6. GRANT OF SHARES. All grants of Shares under the Plan shall be approved by the Committee. Each grant of Shares under the Plan shall be evidenced by resolution of the Committee and by an Award Agreement containing such terms and provisions as are approved by the Committee, but not inconsistent with the Plan, including among other things, vesting provisions that are different than the provisions set forth in Section 7, and arrangements whereby Shares will be granted upon the achievement of specific performance objectives established by the Committee. The Company shall execute each Award Agreement upon instructions from the Committee.

7. VESTING. Except as provided otherwise in an Award Agreement, a Participant shall not be vested in his or her right to receive a payment attributable to the Shares granted to him or her under an Award Agreement unless the Participant remains in Continuous Service until the earlier of the Participant’s death, Disability or other applicable Vesting Date.

8. PAYMENT OF BENEFITS. A Participant shall be entitled to payments (the “Cash-Out Payments”) commencing within the sixty-day period following the Vesting Date, with the actual payment date during such sixty-day period determined by the Committee in its sole discretion (the “Payment Commencement Date”). The Cash-Out Payments with respect to a Vesting Date other than a Participant’s death or Disability shall be paid in three substantially equal annual payments, the first such payment on the Payment Commencement Date, the second payment on the first anniversary of the Payment Commencement Date and the third payment on the second anniversary of the Payment Commencement Date. The unpaid amounts during such payment period shall be credited with interest at a rate of LIBOR plus 2% per year, with unpaid accrued interest paid with the next scheduled Cash-Out Payment. The Cash-Out Payment with respect to a Vesting Date attributable to a Participant’s death or Disability shall be paid in a single lump sum payment on the Payment Commencement Date. The aggregate amount of the Cash-Out Payments payable as a result of a Vesting Date shall be the Fair Market Value of the Common Stock on the Vesting Date less the Threshold Value multiplied by the number of Shares that become vested on that Vesting Date.

If a Participant’s Continuous Service ends for any reason (other than death or Disability) before the Vesting Date, the Participant shall forfeit all unvested Shares and all rights to payments for such Shares. Notwithstanding the foregoing provisions, if a Participant’s services are terminated or end for any reason other than death or Disability after a Vesting Date, twenty percent of each remaining Cash-Out Payment shall be forfeited and no interest shall be paid on the forfeited amount. The remaining eighty percent of the scheduled Cash-Out Payments shall be paid as if the Participant was still providing Continuous Service to the Company.

9. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of Shares covered by each outstanding grant under an Award Agreement shall be adjusted to reflect, as deemed appropriate by the Committee in its sole discretion, any stock dividend, stock split, share combination, exchange of shares, recapitalization, merger, consolidation, separation, reorganization, liquidation or the like, of or by the Company, provided that such adjustment does not cause the Award to fail to satisfy the requirements of Section 409A of the Code.

10. DESIGNATION OF BENEFICIARIES. Each Participant from time to time may designate any person or persons (who may be named contingently or successively) to receive such benefits as may be payable under the Plan upon or after the Participant’s death, and such designation may be changed from time to time by the Participant by filing a new designation. Each designation will revoke all prior designations by the same Participant and will be effective only when filed in writing with the Committee during the Participant’s lifetime. In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Participant, the Company shall pay any such benefit payment to the Participant’s estate.

11. INTERPRETATION. The Committee shall interpret the Plan and shall prescribe such rules and regulations in connection with the operation of the Plan as it determines to be advisable for the administration of the Plan. The Committee may rescind and amend its rules and regulations at any time. Any determination or interpretation by the Committee shall be final, conclusive and binding on the Participants and all other interested parties.

12. AMENDMENT OR DISCONTINUANCE; TERM. The Plan may be amended or discontinued by the Board without the approval of the shareholders of the Company. The Plan shall terminate on September 10, 2020. Any amendment or termination of the Plan shall be subject to the applicable provisions of Section 409A of the Code and the Board retains the right, in its sole discretion, to terminate the Plan and any awards granted hereunder in connection with a change in control event as described in Treasury Regulation Section 1.409A-3(j)(4)(ix).

13. EFFECT OF PLAN. Neither the adoption of the Plan nor any action of the Committee or the Board shall be deemed to give a Participant any right to be granted Shares or any other rights. Nothing in this Plan shall be construed as conferring upon any Participant the right to continue as a Participant or as a Key Employee or Distributor. In addition, nothing in this Plan or in an Award Agreement shall be deemed to give any person any shareholder rights with respect to the Company, including rights to distributions and liquidation proceeds.

14. NONTRANSFERABILITY. Except by the laws of descent and distribution, no benefit provided hereunder shall be subject to alienation, assignment, or transfer by a Participant (or by any person entitled to such benefit pursuant to the terms of the Plan), nor shall it be subject to attachment or other legal process of whatever nature, and any attempted alienation, assignment, attachment, or transfer shall be void and of no effect whatsoever and upon any such attempt, the benefit shall terminate and be of no force or effect. During a Participant’s lifetime, awards granted to the Participant shall be payable only to the Participant.

15. TAX WITHHOLDING. The Company shall have the right to deduct from all awards paid hereunder any income and other taxes that it deems are required by law to be withheld with respect to such payments.

16. TITLE AND HEADINGS. The titles and headings of the Sections in this Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

17. APPLICABLE LAW. This Plan shall be construed in accordance with and governed by the laws of the State of Texas.

IN WITNESS WHEREOF, the Plan is executed on behalf of the Company on this 16th day of September, 2014.

		MINERCO RESOURCES, INC.


	By:	/s/ V. Scott Vanis
		V. Scott Vanis
		Chairman of the Board

Exhibit 10.50

BRAND LICENSING AGREEMENT

LEVEL 5 BEVERAGE COMPANY, INC. and VITAMINFIZZ, L.P.

This Brand Licensing Agreement (the “Agreement”) is made on June 25, 2014, and effective as of November 21, 2013, between Level 5 Beverage Company, Inc. (the “Licensee”), a corporation organized and existing under the laws of the State of Delaware having offices at 20 Trafalgar Square, Suite #455, Nashua, New Hampshire 03063 (the “Licensee”) and VITAMINFIZZ, L.P. (the “Licensor”), a limited partnership organized and existing under the laws of the State of California having offices at 16501 Sherman Way, 215, Van Nuys, CA 91406 (the “Licensor”).

WITNESSETH:

WHEREAS, Minerco Resources, Inc., the parent company of Level 5 Beverage Company, Inc. (the “Licensee”), is a publicly traded company on the United States OTC Markets (“OTC”) under the symbol OTCQB: MINE; and

WHEREAS, Licensor is in the business of developing beverages and is seeking to obtain retail sales of its Products (as each is defined in Exhibit A hereto) marketed under the Brand (as defined below in paragraph 2(b) below); and

WHEREAS, Licensee is in the business of developing and selling beverages and is seeking to expand its brand base; and

WHEREAS, Licensee desires to acquire the exclusive rights Worldwide (the “Territory”) to use the Brand on and in connection with the marketing, distribution and sale of the Products, and Licensor desires to grant to Licensee, an exclusive license to use the Brands on and in connection with the marketing, distribution and sale of the Products in the Territory, subject to and in accordance with this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. License.

(a) Licensor hereby grants to Licensee, subject to the terms and conditions hereof, the exclusive license in the Territory to use Licensor's Brand, Know-how and commercial and technical information to market, distribute and sell the Products and any other products it manufactures using the Brand to {commercial} customers, which shall include all rights to use in advertising, publicity, or otherwise, any other trademark, trade name or names, or any contraction, abbreviation, or simulation thereof, on and in connection with the marketing, distribution and sale of the Products.

(b) Licensor shall provide information on all Know-how, technical information, techniques, and other technical information, as requested, within a commercially reasonable period of time.

(c) Licensee shall have the right to grant sublicenses provided that such sublicensees agree to abide by the terms of this Agreement to the same extent as if they were a licensee.

(d) Licensor acknowledges that Licensee may hereafter enter into licenses with third parties regarding the sale of other similar products and such sale shall not be deemed to be a breach of this Agreement.

(e) Licensor agrees that except for the license herein granted to Licensee it shall not license or sell any products similar to the Products or any other products in connection with the Brand.

2. Definitions.

(a) Know-how. All patent applications, inventions, discoveries, data, improvements, techniques, technology, formulae, processes, plans or programs, useful, related to, or necessary to formulate, handle, or utilize the Brand, now or hereafter owned or controlled by Licensor prior to the termination of this Agreement to the extent to which Licensor has the right to grant licenses of the scope herein granted.

(b) The Brand: Vitamin FIZZ®.

(d) Licensor Component: That part of the technical information developed by Licensor that consists of patents, copyrights, trade secrets, trademarks or service marks as well as all parts and components based upon or derived from Licensor Know-how pertaining to the Licensor Component.

(e) Product: any product employing or derived from Licensor Know-how, as well as improvements, modifications, additions, adaptations, or new models designed or developed by, for or in association with the Brand.

(f) Term of the Agreement: Five years from the date of this Agreement. The Agreement will be automatically renewed for an additional five years if agreed to by both parties of this Agreement within thirty days prior to the termination of the initial term and provided that Licensee is in compliance with all of the terms and conditions of this agreement.

3. Initial License Fee.

(a) Fee. In consideration for the costs incurred by Licensor for manufacturing and maintaining its existing inventory of Products, inclusive of any raw material costs, Licensee shall pay Licensor an initial license fee of Two Hundred Fifty Dollars ($250,000) according to the schedule: (1) $100,000 upon the execution of this Agreement; (2) $100,000 within 30 days of the execution of this Agreement; and (3) $50,000 within 60 days of the execution of this Agreement, as an advance against license fees due under paragraph 4 below.

(b) Proof of Sufficient Financial Resources. During the six (6) months following the execution of this Agreement, Licensee shall provide, to Licensor on a strictly confidential basis, as and when requested by Licensor, sufficient proof that Licensee’s financial resources to be dedicated to the Brand and the marketing, distribution and sale of the Products are in excess of Two Million Dollars ($2,000,000.00), inclusive of the Two Hundred and Fifty Thousand Dollars ($250,000) initial advance license fee paid as set forth above. During the next succeeding six (6) month period, Licensor shall continue to have the right to request, and Licensee shall continue to provide on a strictly confidential basis, information related to the sufficiency of its resources to market and sell the Products.

(c) Maintenance of Trademarks. During the Term, Licensor shall be responsible for filing and maintaining any patents or trademarks licensed by Licensor related to the Brand.

(d) Services to be Provided by Licensor or its Affiliated Entities. The parties acknowledge that Power Brands International, LLC is the general partner of the Licensor and that Power Brands International, LLC will provide or cause to be provided certain product development and brand management services for the Brand. Licensor acknowledges that one of the incentives for Licensee to enter into this Agreement was its agreement to provide the following services or to cause the following services to be provided at no cost to Licensee other than brand management services fee which shall be provided to Licensee at the cost price incurred by Licensor:

●	Re-formulation and re-design of VitaminFIZZ®;

●	Set up and maintain a website for the display of the Products under the Brand;

●	Provide all brand management services at cost;

o	develop necessary P&L, Cash Flow, and Balance Sheet documents

o	setup and keep Licensee’s accounting books

o	Advise on production (all scales)

o	Advise on ordering raw materials, invoicing, delivery, and finished goods logistics (freight and warehousing)

o	Create a brand specific sales and marketing plan based on the brand’s demographic and geographic targets and budget.

o	Manage sales person(s)

o	Design Product and Brand sell sheet and Point of Sale material including posters, suction racks, static clings, coolers, etc.

o	Establish appropriate sales and marketing budgets based on scope of overall project.

o	Develop an impactful and cost effective rollout marketing campaign.

o	Create retailer and distributor presentations based on brand’s demographic and geographic targets.

o	Identify correct retail and distributor partners

o	Actively participate in key account buyer meetings.

o	Work directly with sales personnel to secure sales meetings and ultimately shelf space.

4. Percentage Fee, Milestones and Investment.

(a) Percentage Fee. The Licensee and Licensor agree that the profit to be recognized by each party shall be earned and distributed as follows: (i) fifty-one percent (51%) of the net revenue derived from the sale of Products under the Brand shall be earned by and distributed to Licensee and (ii) forty-nine percent (49%) of the net revenue derived from the sale of Products under the Brand shall be earned by and distributed to Licensor as license fees. For the purposes hereof, “net sales” shall mean the gross amount invoiced to third parties by Licensee less the sum of: (a) trade, cash and quantity discounts or rebates actually allowed or taken; (b) credit or allowances given or made for rejection of or return of previously sold Products or for retroactive price reduction; (c) charges for insurance, freight and other transportation costs directly related to delivery of the Products; and (d) sales, transfer and other excise taxes levied on the sale of the Products. If the Licensor and Licensee cannot mutually agree on (a), (b), (c) or (d) above, on (a), (b), (c) or (d) above will be determined by generally accepted beverage industry accounting principles. The payment by the Licensee to the Licensor shall be within thirty (30) days following the calendar month in which payment for the net revenue was received. No percentage fee payment shall be made to Licensor until such time as the aggregate percentage fee payments earned by Licensor exceed Two Hundred and Fifty Thousand Dollars ($250,000). The percentage fee shall be computed and paid in accordance with Licensee’s accounting records. All withholding and other taxes that may be imposed on Licensee shall be deducted from the payment of such fees upon provision to Licensor of an official receipt evidencing payment of such taxes. All out-of-pocket expenses related to the manufacture of the Products after the date hereof shall managed by, and the responsibility of, Licensee. Licensor shall have the right to assign and/or sell its revenue interest to a third party upon thirty (30) days prior written notice.

(b) Milestone Payment. If at any time the Licensee’s gross sales of Products under the Brands exceeds Twenty-Five Million Dollars ($25,000,000), then Licensee shall pay to Licensor a one-time cash milestone payment equal to One Million Dollars ($1,000,000), payable within thirty days of the end of the first fiscal year in which such gross sales are achieved.

(c) Investment. The Licensee shall invest sufficient monies, according to mutual agreement of Licensee and Licensor, to develop, to grow and expand the Brand and sell the Product. Licensee shall invest sufficient monies, at least One Million Dollars ($1,000,000) excluding the licensing fee ($250,000) in the first six (6) months and $250,000 on the first day of the second six months) or to sell at least 100,000 cases (24 x 16oz cans per case) of Product during the twelve (12) months following the date hereof.

(d) Sales Milestones. The Licensee shall have set sales milestones to be mutually agreed upon by Licensee and Licensor at the commencement of each and every fiscal year of the Licensee.

(i)	Licensee shall sell at least 250,000 cases (24 x 16oz cans per case) of Product during the twenty-four (24) months following the date hereof;

(ii)	Future required Licensee Sales Milestones will be determined, by mutual agreement of Licensee and Licensor, twelve (12) months following the date hereof and annually thereafter.

5. Term. The initial term of this Agreement shall be for five (5) years from the date hereof unless earlier terminated pursuant to the terms hereof. Thereafter, so long as Licensee is not in default, this Agreement may be extended by Licensee for five (5) additional years under such terms and conditions as may be mutually agreed to by the parties Licensor. If the parties are unable to agree to renewal terms then, at the election of the Licensee, in its sole discretion, this Agreement shall continue for an additional five year term upon the same terms and condition contained in this agreement. If this Agreement is terminated before the end of the initial term then the Licensee, its agents or sublicensees shall not engage, directly or indirectly, in any part of the business of manufacturing, marketing or servicing of Products based upon or derived from Licensor Know-how for a period of five (5) years.

6. Buy / Sell / Right of First Refusal. If at any time after the Effective Date, the gross sales of the Product exceed 1,000,000 cases in any twelve (12) month period, either Licensor or Licensee may propose to offer, sale or otherwise assign its interest in the Brand (its “Interest”) under this Agreement according to the following. Whereas X and Y represent the parties:

(a)

Before X may sell the Interest to a third party, X shall first offer the Interest to Y on the same terms and conditions as are offered by the third party. Y shall have 30 days during which to accept said offer. If Y does not accept said offer within said period, X shall be free to accept the third-party offer. If X does not enter into an agreement with the third party on said terms and conditions and close the transaction within 90 days, X’s right to sell the Interest to the third party shall expire and the procedure described in this Section shall again be applicable.

7. Confidentiality.

(a) Licensee recognizes that trade secrets and other proprietary information of Licensor will be conveyed to Licensee pursuant to this Agreement, and Licensee agrees to keep such information in confidence and not to disclose it during or within five (5) years after the term of this Agreement to third parties other than Licensee Affiliates that are bound by confidentiality restrictions as set forth herein and as required by Licensor’s Intellectual Property Protection Program. This confidentiality provision shall survive the early termination or cancellation of this Agreement, and remain in full force.

(b) The restrictions set forth in subparagraph (a) of this paragraph shall not apply to any information: (i) well-known and in the public domain at the time of disclosure; (ii) known to Licensee at the time it was disclosed to it by Licensor as shown by documentation establishing such prior knowledge; (iii) disclosed with the prior written approval of Licensor; and (iv) rightfully disclosed to Licensee by a third party other than a Licensee Affiliate.

8. Technical Data. Within ten (10) days after the execution of this Agreement, Licensor shall provide Licensee with a complete description of all Licensor patent applications, plans, specifications, and instructions and drawings, for the manufacture and use of Products, provided, however, that all such materials shall remain the property of Licensor.

9. Board of Directors. The board of directors of the Licensee shall consist of no more than three (3) members, of which, one (1) member was appointed by Licensor. Licensor shall appoint a representative to Licensee’s to its board of directors. The third member of the board of directors, or increase in number of members, shall be unanimously approved by the existing members of the board of directors. The by-laws or resolutions of the Licensee shall further provide that no action may be taken by the Board without notice being given to Licensor’s representative and that any sale of the Licensee or its business operations will require a unanimous vote.

10. Relationship. Licensee and Licensor shall act as principals in all respects hereunder, and nothing herein shall be construed to constitute either as the agent, partner, or joint venturer of the other.

11. Litigation; Indemnification. Licensee must at its own expense prosecute any suits or other proceedings against third parties for infringement of Licensor patents or for theft or misuse of the industrial property of Licensor licensed hereunder, and shall be entitled to retain all judgments or other recoveries. In the event that a third party alleges that Licensee infringes any United States patents owned or controlled by such third party by virtue of the manufacture, sale or use of products, except for any improvements thereto by Licensee, Licensee shall be solely responsible for ensuring the compliance of Products with all safety or other standards under any applicable law, rule or order, of any competent governmental authority. Licensee shall indemnify Licensor and its officers, directors and employees agents and representatives, harmless from any loss, cost or expense, including reasonable attorneys fees, damages, or penalties of any kind on account of or resulting from any claim incurred in connection with the manufacture or sale of the Products other than (i) due to a breach of the representations or warranties contained in this Agreement; (ii) the gross negligence or willful misconduct of Licensor; or (iii) a claim for which Licensor is obligated to indemnify Licensee under the preceding paragraph.

12. Termination.

(a)	In the event of the failure of Licensee to:

(i) pay any royalties due hereunder in full and in a prompt manner,

(ii) sell at least 100,000 cases (24 x 16oz cans per case) of Product during the twenty-four (24) months following the date hereof;

(iii) invest sufficient monies to develop the Brand and/or sell the Product as set forth in paragraph four (4); or

(iv) or in the event of Licensee's failure to observe or comply with any of the other material terms and conditions of this Agreement

and any such failure is not corrected within thirty (30) days after written notice thereof is given to Licensee, the licenses granted hereunder to Licensee may be terminated forthwith by Licensor upon furnishing a written notice to that effect to Licensee; provided, however, in the event of a default under clause (ii) above, Licensee shall be entitled to cure such default by purchasing sufficient cases (described in paragraph 11(a)(ii) above) to total one hundred thousand (100,000) cases including inventory purchased or inventory sold to date thereof.

(b) In the event that Licensee shall become insolvent, or admit in writing its inability to pay its debts as they mature, or make a general assignment for the benefit of creditors, or file a petition for bankruptcy or permit a petition for bankruptcy against it to remain undismissed for a period of sixty (60) days, or go into liquidation or receivership, or become a party to dissolution proceeding or be admitted as a party to any statutory procedure for the settlement of its debts, Licensor shall have the right and option upon written notice to Licensee to terminate forthwith the licenses granted herein to Licensee.

(c) In the event of termination, however occasioned, the entire unpaid balance as of the date of termination under paragraph 3 shall become immediately due and payable.

(d) In the event of termination, however occasioned, Licensee, its agents or sublicensees shall return to Licensor all printed or written materials containing, based upon, or derived from Licensor Know-how, and shall make no further use of such Know-how, or of Licensor patents, if any. Licensee shall have the option to purchase from Licensor or its Affiliates any or all of Licensor's inventory at cost. Licensee will undertake to examine favorably such inventory and acquire on the aforesaid basis from Licensor such items as it may determine to be commercially reasonable for it to acquire.

(e) In the event of termination, however occasioned, Licensor shall not have any liability or responsibility for compensation, reimbursement, indemnification or damages on account of the loss of prospective business by Licensee or on account of expenditures, investments, leases or commitments made by Licensee.

(f) In the event of termination, under subparagraph (a) and (b) above, Licensor at its option shall have the exclusive worldwide right to, use and sell, lease, loan, rent or otherwise dispose of, with full right to assign or sublicense, any improvements, to Licensor Know-how developed or owned by Licensee subject for ninety (90) days. Inventory containing the Products shall be disposed of thereafter, unless approved in writing by the Licensor.

(g) In the event that Licensor shall become insolvent, or admit in writing its inability to pay its debts as they mature, or make a general assignment for the benefit of creditors, or file a petition for bankruptcy or permit a petition for bankruptcy against it to remain undismissed for a period of sixty (60) days, or go into liquidation or receivership, or become a party to dissolution proceeding or be admitted as a party to any statutory procedure for the settlement of its debts, Licensee shall have the right and option upon written notice to Licensor to terminate forthwith the licenses granted herein to Licensee.

13. Representations and Warranties of Licensor. Licensor represents and warrants to Licensee that,

(a) The License granted hereunder does not infringe any patent, trade secret or other property or proprietary rights of any third party. Licensor is the exclusive owner of all Know-how licensed hereunder and shall use its best efforts to prosecute its pending patent application to completion, and to protect all trade secrets and other intellectual property. Licensor has not granted a license to the Brands or Products to any other party in the Territory. This paragraph excludes any distribution rights granted to beverage distributors prior to the date hereof.

(b) All proceeds received from Licensee under this license will be applied by Licensor first to satisfy all legal obligations to employees and government instrumentalities, and next to trade creditors, prior to any payments to shareholders for interest on debt, repayment of debt principal, or dividends or other distribution in respect of Licensor stock.

(c) Licensor has good title to the Products to be sold to Licensee and its customers hereunder, and such inventory and equipment is, and at the time of conveyance to Licensee or its customers, as the case may be, shall be, free and clear of all liens or encumbrances.

(d) Licensor has full authority to execute and to perform this Agreement in accordance with its terms; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby does not and will not conflict with, result in a breach, violation or default or give rise to an event which, with the giving of notice or after the passage of time, or both, would conflict with or result in a breach, violation or default of any of the terms or provisions or of any indenture, agreement, judgment, decree or other instrument or restriction to which Licensor is a party or by which Licensor may be bound or affected; and no further authorization or approval, whether of governmental bodies or otherwise, is necessary in order to enable Licensor to enter into and perform the same.

(e) This Agreement constitutes a valid and binding obligation enforceable against Licensor in accordance with its terms.

14. Representations and Warranties of Licensee. Licensee represents and warrants to Licensor that,

(a) Licensee has full authority to execute and to perform this Agreement in accordance with its terms; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby does not and will not conflict with, result in a breach, violation or default or give rise to an event which, with the giving of notice or after the passage of time, or both, would conflict with or result in a breach, violation or default of any of the terms or provisions or of any indenture, agreement, judgment, decree or other instrument or restriction to which Licensee is a party or by which Licensee may be bound or affected; and no further authorization or approval, whether of governmental bodies or otherwise, is necessary in order to enable Licensee to enter into and perform the same.

(b) This Agreement constitutes a valid and binding obligation enforceable against Licensee in accordance with its terms.

15. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered: (a) personally; (b) by facsimile or email transmission; (c) by a commercial overnight delivery service (e.g., Federal Express, UPS, Airborne, etc.) and paid for by the sender; or (d) by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered: (i) personally, upon such service or delivery; (ii) if sent by facsimile or email transmission, on the day so transmitted, if the sender receives written confirmation (which may be electronic form) from the receiver that the communication was received; (iii) if sent by commercial overnight delivery service, on the date reflected by such service as delivered to the addressee; or (iv) if mailed by certified or registered mail, five business days after the date of deposit in the United States mail. In each instance, such notice, request, demand or other communications shall be addressed to the parties at the addresses set forth hereinabove or to such other address or to such other person as Licensor or Licensee shall have last designated by written notice given as herein provided.

16. Miscellaneous.

(a) Nothing contained in this Agreement shall be construed as (i) a warranty or representation as to the validity or scope of any patent; (ii) an agreement to bring or prosecute actions or suits against third parties for infringement, or conferring any rights to bring or prosecute actions against third parties for infringement except as provided in paragraph 10; or (iii) conferring by implication, estoppel, or otherwise, upon Licensee any license or other right in or to any patent, trademark, copyright or Know-how.

(b) No delay or failure of either party in exercising any right hereunder shall affect such right, nor shall any single or partial exercise of any right preclude any further exercise thereof. No modification, amendment, addition, or waiver, of any provision of this Agreement shall be effective unless set forth in a writing signed by Licensor and Licensee which specifically states that such writing is to be a modification, amendment, addition, or waiver, and then only in that specific instance and for the specific purpose for which given.

(c) This Agreement contains the entire and complete understanding of the parties with respect to the subject matter and merges all prior and contemporaneous understandings.

(d) This Agreement may not be assigned or sublicensed by Licensee without the prior written consent of Licensor, which shall not be unreasonably withheld. Where Licensee is permitted to assign or sublicense, this Agreement it shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and sublicensees. Licensor retains the right to sell and/or assign at any time its right to receive any of the license fees and other payments due to it hereunder to third parties upon no less than thirty (30) days prior written notice to the Licensee.

(e) Arbitration. In the event of any dispute or controversy arising out of or in any way related to this Agreement, the matters referred to herein, or the services to be rendered by Consultant pursuant to this Agreement, or in any way relating to the claim of any third party against Consultant in connection with matters in any way arising out of this Agreement (each, a “Dispute”), such Dispute shall be settled exclusively by final and binding arbitration in Los Angeles, California in accordance with the then current rules of the American Arbitration Association (“AAA”). The parties agree that any and all Disputes that are submitted to arbitration in accordance with this Agreement shall be decided by one (1) neutral arbitrator who is a retired judge or attorney licensed to practice law in California who is experienced in complex commercial transactions. If the parties are unable to agree on an arbitrator, AAA shall designate the arbitrator. The parties will cooperate with AAA and with one another in selecting the arbitrator and in scheduling the arbitration proceedings in accordance with applicable AAA procedures. Any award issued as a result of such arbitration shall be final and binding between the parties thereto and shall be enforceable by any court having jurisdiction over the party against whom enforcement is sought. By entering into this Agreement, the parties are waiving their constitutional right to have any Disputes decided in a court of law or before a jury and waive the right of appeal, and instead of relying on said rights, each party is solely and knowingly accepting the use of arbitration as a means of resolution of any Disputes. The prevailing party in such arbitration shall be awarded its costs and reasonable attorneys’ fees.

(f) Each of the parties hereto shall make, do or cause to be done, such further acts and things, and execute, acknowledge, and deliver, such instruments and documents as may be necessary to effectuate the purposes and intent of this Agreement.

(g) The invalidity, partial failure of consideration, or unenforceability, of any particular provision of this Agreement shall not affect the validity or enforceability hereof.

(h) This Agreement may be executed in counterparts, all of which taken together shall be deemed one original agreement.

(i) This Agreement shall be governed by the laws of the State of California.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their representatives, thereunto duly authorized, as of the date first above written.

LEVEL 5 BEVERAGE COMPANY, INC

By: /s/ V. Scott Vanis

Name: V. Scott Vanis

Title: Chairman and CEO

VITAMINFIZZ, L.P.

By: /s/ Darin Ezra

General Partner: Power Brands Consulting, LLC

Name: Darin Ezra

Title: CEO

Exhibit A

The Products

VitaminFIZZ (in all forms, past, present and future)

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14 OR RULE 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, V. Scott Vanis, certify that:

1.	I have reviewed this Form 10-K of MINERCO RESOURCES INC.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and,

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014	/s/ V. Scott Vanis
	V. Scott Vanis
	Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER

PURSUANT TO RULE 13a-14 OR RULE 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sam J Messina III, certify that:

1.	I have reviewed this Form 10-K of MINERCO RESOURCES INC.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014	/s/ Sam J Messina III
	Sam J Messina III
	Chief Financial Officer (Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Minerco Resources Inc. (the “Company”) on Form 10K for the twelve months ended July 31, 2014, as filed with the Securities and Exchange Commission on the date here of (the “Report”), I, V. Scott Vanis, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 7th day of November, 2014.

	/s/ V. Scott Vanis
	V. Scott Vanis
	Chief Executive Officer (Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER

PURSUANT TO18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Minerco Resources Inc. (the “Company”) on Form 10K for the twelve months ended July 31, 2014, as filed with the Securities and Exchange Commission on the date here of (the “Report”), I, Sam J Messina III, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 7th day of November, 2014.