Annual Report (10-k)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED APRIL 30, 2019 Commission file number: 333-175941 MCIG, INC. (Exact name of registrant as specified in its charter)
















NEVADA	27-4439285
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

10752 Deerwood Park Blvd, Suite 100, Jacksonville, Florida	32256
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code	570-778-6459
4720 Salisbury Road, Jacksonville, Florida
(Former name, former address and formal fiscal year, if changed since last report)
Securities registered under Section 12(b) of the Act:
None
Securities registered under Section 12(g) of the Act:
Common Stock, par value $0.0001 per share (Title of class) Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x 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 Yes o No x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated Filer o Accelerated Filer o Non-accelerated Filer o Smaller Reporting Company x Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x The aggregate market value of the voting and non-voting common equity held by non-affiliates as of the last business day of the registrant's most recently completed second fiscal quarter was approximately $33,210,069. For purposes of the above statement only, all directors, executive officers and 10% shareholders are assumed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. Common Shares Outstanding 516,974,596

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended April 30, 2019).

TABLE OF CONTENTS
		Page
PART I
Item 1.	Business	5
Item 1.A.	Risk Factors	14
Item 1.B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	29
Item 4.	Mine Safety Disclosures	30
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
Item 6.	Selected Financial Data	32
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 8.	Financial Statements and Supplementary Data	38
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	68
Item 9A.	Controls and Procedures	68
Item 9B.	Other Information	71
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	72
Item 11.	Executive Compensation	75
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	76
Item 13.	Certain Relationships and Related Transactions, and Director Independence	78
Item 14.	Principal Accounting Fees and Services	78
PART IV
Item 15.	Exhibits, Financial Statement Schedules	79
Signatures
Exhibit
3

FORWARD LOOKING STATEMENTS

This Annual Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") regarding management’s plans and objectives for future operations including plans and objectives relating to our planned marketing efforts and future economic performance. The forward-looking statements and associated risks set forth in this Annual Report include or relate to, among other things, (a) our growth strategies, (b) anticipated trends and regulations in the our industry, (c) our ability to obtain and retain sufficient capital for future operations, and (d) our anticipated needs for working capital. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Business” Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors”. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will in fact occur.

The forward-looking statements herein are based on current expectations that involve a number of risks and uncertainties. Such forward-looking statements are based on assumptions described herein. The assumptions are based on judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Accordingly, although we believe that the assumptions underlying the forward-looking statements are reasonable, any such assumption could prove to be inaccurate and therefore there can be no assurance that the results contemplated in forward-looking statements will be realized. In addition, as disclosed in “Risk Factors”, there are a number of other risks inherent in our business and operations, which could cause our operating results to vary markedly and adversely from prior results or the results contemplated by the forward-looking statements. Management decisions, including budgeting, are subjective in many respects and periodic revisions must be made to reflect actual conditions and business developments, the impact of which may cause us to alter marketing, capital investment and other expenditures, which may also materially adversely affect our results of operations. In light of significant uncertainties inherent in the forward-looking information included in the report statement, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

Any statement in this report that is not a statement of an historical fact constitutes a “forward-looking statement”. Further, when we use the words “may”, “expect”, “anticipate”, “plan”, “believe”, “seek”, “estimate”, “internal”, and similar words, we intend to identify statements and expressions that may be forward- looking statements. We believe it is important to communicate certain of our expectations to our investors. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions that could cause our future results to differ materially from those expressed in any forward-looking statements. Many factors are beyond our ability to control or predict. You are accordingly cautioned not to place undue reliance on such forward-looking statements. Important factors that may cause our actual results to differ from such forward-looking statements include, but are not limited to, the risks outlined under “Risk Factors” herein. The reader is cautioned that our Company does not have a policy of updating or revising forward-looking statements and thus the reader should not assume that silence by management of our Company over time means that actual events are bearing out as estimated in such forward-looking statements.

OTHER INFORMATION

Unless specifically set forth to the contrary, when used in this report, the terms “mCig, Inc.”, “mCig”, “we”, “our”, the “Company” and similar terms refer to mCig, Inc., a Nevada corporation. In addition, when used herein and unless specifically set forth to the contrary, “2018” refers to the year ended April 30, 2018, and “2019” refers to the year ended April 30, 2019.

PART I

Item 1. BUSINESS

HISTORY AND BACKGROUND

We were incorporated in the State of Nevada on December 30, 2010 originally under the name Lifetech Industries, Inc. All agreements related to the Lifetech business were terminated and closed as of April 30, 2014. Effective August 2, 2013, the name was changed from "Lifetech Industries, Inc." to "mCig, Inc." The Company's common stock is traded under the symbol "MCIG." The Company is based in Jacksonville, Florida. MCIG acts as a holding company that operates 10 subsidiaries. In FY2017 we began tracking income through segments. In FY2019 the company tracks its services and products through four segments and corporate. We track our financial records by the following segments:

	·	Cultivation, Manufacturing and Distribution ("CMD")
	·	Retail Sales
	·	Media and Technologies (NOTE: Final year due to spin-off of OBTIX, Inc. - any residual activity beginning May 1, 2019 shall be consolidated with Corporate)
	·	Agriculture (Cultivation)
	·	Corporate

GENERAL

Originally, we were formed to open and operate a full-service day spa in Montrose, California. In October 2013 we repositioned ourselves as a technology company focused on two long-term secular trends sweeping the globe: (1) The decriminalization and legalization of marijuana for medicinal or recreational purposes; and, (2) the adoption of electronic vaporizing cigarettes (commonly known as "eCigs").

The Company initially earned revenue through wholesale and retail sales of electronic cigarettes, vaporizers, and accessories in the United States. It offered electronic cigarettes and related products through its online store at www.mcig.org, as well as through the company's wholesale, distributor, and retail programs. We expanded operations to include the VitaCig brand in 2014.

In FY2015 we began offering hemp-based cannabinoid ("CBD") products through various websites.

In 2016 the Company expanded its products and services to include construction.

In 2017 we added consulting services in the cannabis industry. In addition, we launched a social media platform, 420Cloud, in the cannabis markets.

In 2018 we added agriculture by entering into a relationship with FarmOn! Foundation, a not-for-profit New York based business, planting approximately 13-acres of hemp crops under a license obtained by FarmOn! Foundation in New York state. FarmOn! Foundation has unilaterally attempted to terminate the agreement, has failed to compensate MCIG for the crop, and has failed to reimburse MCIG the funds paid for production of the hemp. MCIG has initiated legal action to protect its shareholders rights and to ensure MCIG is properly compensated for the endeavor (see legal proceeding).

In addition, we acquired approximately two acres of land in California City, California and obtained three cannabis licenses (cultivating, manufacturing, and distribution of cannabis products in California). In addition, the Company continues to look at strategic acquisitions in product and service developments for future growth. On June 30, 2018 we acquired 80% of CBJ Distributing, a cannabis supply company in Nevada.

During this fiscal year, we operated multiple websites (which are not incorporated as part of this Form 10K report). The Company's primary website is www.mciggroup.com.

INDUSTRY OVERVIEW

Cannabis Industry

In the United States, the use and possession of cannabis is illegal under federal law for any purpose, by way of the Controlled Substances Act of 1970. Under the CSA, cannabis is classified as a Schedule I substance, determined to have a high potential for abuse and no accepted medical use – thereby prohibiting even medical use of the drug. At the state level, however, policies regarding the medical and recreational use of cannabis vary greatly, and in many states conflict significantly with federal law.

The medical use of cannabis is legalized (with a doctor's recommendation) in 33 states, four out of five permanently inhabited U.S. territories, and the District of Columbia. Fourteen other states have laws that limit THC content, for the purpose of allowing access to products that are rich in cannabidiol (CBD), a non-psychoactive component of cannabis. Although cannabis remains a Schedule I drug, the Rohrabacher–Farr amendment prohibits federal prosecution of individuals complying with state medical cannabis laws.

The recreational use of cannabis is legalized in 11 states (Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington) the District of Columbia, the Northern Mariana Islands, and Guam. Another 15 states and the U.S. Virgin Islands have decriminalized. Commercial distribution of cannabis is allowed in all jurisdictions where cannabis has been legalized, except Vermont and the District of Columbia. Prior to January 2018, the Cole Memorandum provided some protection against the enforcement of federal law in states that have legalized, but it was rescinded by former Attorney General Jeff Sessions.

Although the use of cannabis remains federally illegal, some of its derivative compounds have been approved by the Food and Drug Administration for prescription use. Cannabinoid drugs which have received FDA approval are Marinol (THC), Syndros (THC), Cesamet (nabilone), and Epidiolex (cannabidiol). For non-prescription use, cannabidiol derived from industrial hemp is legal at the federal level but legality (and enforcement) varies by state.

The dichotomy between federal and state laws has also limited the access to banking and other financial services by marijuana businesses. The U.S. Department of Justice and the U.S. Department of Treasury issued guidance for banks considering conducting business with marijuana dispensaries in states where those businesses are legal, pursuant to which banks must now file a Marijuana Limited Suspicious Activity Report that states the marijuana business is following the government’s guidelines with regard to revenue that is generated exclusively from legal sales. However, since the same guidance noted that banks could still face prosecution if they provide financial services to marijuana businesses, it has led to the widespread refusal of the banking industry to offer banking services to marijuana businesses operating within state and local laws.

E-Cig Industry

The e-cigarette market was valued at $11.5 billion in 2018 and is anticipated to register a CAGR of 21.6% during 2019-2024. Rising awareness pertaining to harmful effects of smoking is one of the major drivers observed in the market. Moreover, changing consumer preferences, increasing number of vape shops and designated stores, as well as new product innovations are propelling the growth of the e-cigarette market.

Based on product, the e-cigarette market is categorized into cig-a-like, vaporizer, T-Vapor and vape mod; of which, vaporizer category accounted for the highest share in 2018, owing to its moderate cost, dense aerosol production, and flexibility where it can be used with different type of flavors. Development in vaping technology and increased flavor offerings are further expected to attract more users to the existing customer base. Furthermore, e-cigarette manufacturers have been promoting their offerings as an economical alternative to the traditional tobacco cigarettes, which might attract more users.

On the basis of distribution channel, e-cigarette market has been categorized into tobacconist, hypermarket/supermarket, vape shops, online, and others. Among these, tobacconist category has led the distribution channel, closely followed by vape shops. However, market for online channels is expected to witness the highest CAGR during the forecast period, owing to the increasing adoption of e-commerce; where manufacturers are either selling their product through online partner channels like Amazon, Alibaba, Craigslist or through their own online portals.

On the basis of region, Europe has been observed as the largest e-cigarette market, globally. Majority of the revenues can be attributed to the U.K., France, and Russian markets. The level of e-cigarette usage is increasing across the region, where according to European Union (EU), one in seven traditional cigarette smokers classify themselves as current e-cigarette smokers.

In the United States, in 2016, the Food and Drug Administration ("FDA") finalized a rule extending the regulatory authority to cover all tobacco products, including vaporizers, vape pens, hookah pens, electronic cigarettes (E-Cigarettes), e-pipes, and all other Electronic Nicotine Delivery Systems ("ENDS"). FDA now regulates the manufacture, import, packaging, labeling, advertising, promotion, sale, and distribution of ENDS. This includes components and parts of ENDS but excludes accessories.

Under the new guidance, all companies that make, modify, mix, manufacture, fabricate, assemble, process, label, repack, relabel, or import any tobacco product are considered tobacco product manufacturers. Importers of finished tobacco products may be distributors and manufacturers of tobacco products. Importers who do not own or operate a domestic establishment engaged in the manufacture, preparation, compounding or processing of a tobacco product are not required to register their establishment or provide product listing. However, they must comply with all other applicable tobacco product manufacturer requirements.

More than 95% of our e-cig sales are international sales.

Cannabidiol (CBD) Industry

Since 1992, when the Endocannabinoid System (ECS) was discovered, many different studies have been conducted on the role it plays in our health and disease management. Since we all possess an ECS, it makes logical sense that we would all benefit in some way with the inclusion of CBD and other cannabinoids in our daily lives.

This research coupled with the spreading legalization of recreational and medical cannabis is why CBD has become mainstream. The increasing worldwide access to CBD products is dispelling many of the myths around it. People who are new to cannabis are recognizing its benefits. The continued growth of the cannabis industry will rely on educating people who are unfamiliar or wary about the plant.

Additionally, the 2018 Farm Bill legalized hemp farming, removing this plant rich in CBD from the Controlled Substance Act and restoring it to its traditional place as an agricultural commodity. This bill will allow states to regulate hemp farming and move forward the industrialization of the hemp plant. As this scale up hemp-based CBD products will become ever more common. The hemp-CBD market is projected to grow from just under $600 million in 2018 to $22 billion by 2022.

Hemp Industry

There are an estimated 25,000 products derived from hemp, that fall into nine submarkets: agriculture, textiles, recycling, automotive, furniture, food and beverages, paper, construction materials, and personal care.

The estimated total retail value of hemp products sold in the U.S. in 2016 was $688 million, a 20% increase from the previous year. There is an average of 15% annual growth in U.S. retail sales from 2010-2105. China is the largest importer of raw and processed hemp fiber in the U.S. Canada is the predominant importer of hemp seed and oil cake.

DESCRIPTION OF SEGMENTS

Our segment gross revenue and contributions to consolidated gross revenue for each of the last three fiscal years were as follows:

Business Segments
	Total Revenue			Percentage of Total Revenue
	Year ended April 30,			The year ended April 30,
	2019	2018	2017	2019	2018	2017
CMD	$ 70,000	3,673,218	$ 2,327,144	3.0%	51.9%	48.7%
Retail Sales	2,190,223	2,041,616	2,449,928	94.6%	28.8%	51.3%
Media and Technologies	55,290	1,363,846	-	2.4%	19.3%	0.0%
Agriculture	-	-	-	0.0%	0.0%	0.0%
Corporate	-	-	-	0.0%	0.0%	0.0%
Total	$ 2,315,513	7,078,680	$ 4,777,072	100.0%	100.0%	100.0%

CMD Segment

Description

The CMD Segment consists of construction projects. We seek additional contracts in management services for cultivators, manufacturers, and distributors.

We build and operate commercial indoor buildings, greenhouses and modular buildings. The company acts as a design/build firm taking the customer from concept to full turnkey occupancy, typically utilizing modular technology, greenhouses and structural insulated panels. The Company has multiple experienced project managers who can take single buildings or ground-up entire projects from infancy to occupancy for those customers who desire to have a comprehensive building solution.

Competitive Strengths

The Company has competitive strength in that it maintains the ability to take projects from concept to occupancy, to provide architectural and engineering designs for the construction of commercial buildings. This one stop full-service line of comprehensive building solutions differentiates the Company within the marketplace.

Market

The Company completed projects in Nevada and Oregon but has subsequently left these markets. With the focus primarily on the consulting and management of cannabis facilities, we currently only provide construction services to those clients who wish to engage us in managing the facility upon completion. With the Company’s recent issues with Nevada and Oregon projects in which we did not have firm control of the process, we have been relatively unsuccessful and upon final settlement of this projects may not record any profits and may sustain massive losses. We have in excess of $1.1 million in potential bad debt from these construction projects.

We began construction in April 2016. Our construction arm has been idle since the departure of key personnel that led to multiple lawsuits currently pending. The lawsuits were settled in August 2019. We are currently pursuing an opportunity to obtain a construction license within the state of Nevada.

We continue to seek management opportunities from other cannabis companies in cultivation, manufacturing, and distribution.

This market continues to see expansive growth in infrastructure building and need for management expertise, even during this current time of economic downturn. The Company has licensed general contractors, designers, drafters, managers, and growers on staff or under consultation who builds and manage commercial structures. The Company utilizes architects and engineers who are qualified in all 48 continental states and partnership with suppliers in every aspect of equipment needs.

Retail Sales Segment

Description

Our retail sales include all products through distribution and online. We offer products for resale in the following categories:

· E-Cig

· CBD products

· Supplies for cannabis distributors, growers, and dispensaries

· Vaporizers

Our Products

E-Cig Products

Our e-Cig products are sold under the brand VitaCig. VitaCig® is an innovative tobacco-free, nicotine-free vitamin and essential oil inhalation, aromatherapy device. Instead of containing harmful substances, VitaCig® delivers vapor that is rich in taste, vitamins, natural aroma and natural plant constituents. VitaCig® embodies what you enjoy about smoking, but without the bad aftertaste, the tobacco smoke and the cigarette smell, and no harmful tar. Just natural ingredients and vapor! Our product is far ahead of conventional e-cigarettes and provides natural aroma, water vapor, plant constituents and valuable vitamins. We have 2 editions of the VitaCig product: Classic Edition and S Edition.

Classic Edition

The science behind the VitaCig was created by Dr. Khary Bryan, and first launched back in 2014. VitaCig is the first and original electronic vitamin and essential oil diffuser brought to market. In our sleek and stylish designed VitaCig® flavor waters device we united natural essential oils, plant extracts and flavors to create the world’s first electronic aromatherapy device to go. The VitaCig® device is designed to deliver the vapor of vitamins A,B,C,E, Coenzyme Q10, terpenes, and phytonutrients via direct inhalation. It uses water vaporization technology to deliver refreshing flavored water vapors created from vitamins and therapeutic essential oils. As the bearing liquid vaporizes at just 60 degrees, it allows for the preservation of a small amount of the vitamin absorbed via the mucus membrane of the oral cavity.

Phytonutrients and terpenes are compounds found in plants. Take for instance the Boisterous Berry flavor. It is a combination of Vitamin A, Vitamin B1, Vitamin C, Vitamin E, CoenzymeQ10, and B-Myrcene. In order to add the Berry flavor to it, we add blueberry and black currant extracts so that the vapor has an enjoyable, all-natural flavor. Each flavor has its own unique combination of vitamin supplements and flavored vapor to go along with its appropriate name.

S Edition

The S Edition is similar in the classic edition with the addition of natural ingredients that have been clinically tested to provide the known affect. The Company has completed no studies which demonstrate the effects of its product, but relies on the clinical studies of the ingredients that create energy, reduce stress, suppress appetites, speeds up metabolism, skin health, and improves sleep

We have distribution in 23 countries worldwide.

CBD Products

We are enmeshed in the Industrial Hemp Industry, both domestically and International. The CBD market grossed $202 million in 2015; however, the US CBD market alone is expected to reach $2.1 billion by 2020, of which it is estimated that $450 million of those sales will be in hemp-based sources. We are researching innovative and lucrative projects, partnering with like-minded companies in the Industry, and maximizing our presence in the CBD product markets. We are focused primarily on supplying and developing products for retail brick and mortar shops and online sales, along with Bulk Supply of Raw Hemp Extracts.

Vaporizers and Accessories

Hippy Trips vaporizers and Vapolution vaporizers are available through various websites. For information on our vaporizers brands please visit the websites www.hippytrips.com and www.vapolution.com. These websites are not incorporated as part of the annual filing.

Vapolution is operated in California, while Hippy Trips is Nevada based. Both offer a broad range of accessories in support of their main products. We currently offer 16 accessories to be sold with our Hippy Trips brand.

We have been making the only glass on glass vaporizer since inception. We have eliminated metals, ceramics and plastics from the air pathway. Our Vapolution 3 product has a precision digital temperature control, a removable glass heater liner with bigger loads and water filtration.

Cannabis Supply Products

We provide smell proof bags, labels, doob rubes, concentrate containers, pop top vials, and transportation bags to cultivation, manufacturers and dispensaries throughout Nevada and California. We currently supply approximate 57% of the dispensaries in the state of Nevada with supply products.

The Market

We compete in a highly competitive market. Our e-cigarette business competes with various marketing companies, as well as traditional tobacco companies. The United States is anticipated to continue to influence the global e-Cig market, which is poised to reach $20.17 billion in revenue by 2025 representing approximately 45% share of the total market. The involvement of the major tobacco companies through multiple acquisitions and brand image and the current legislation in the U.S. is expected to restrict the number of participants in the e-Cig market. As the market moves from a highly fragmented market, to a big brand environment, we have focused on building brand awareness early through viral adoption and word of mouth with our first to market of vitamin infused e-Cigs. In the future, we expect to employ additional marketing strategies while continuing to develop our supply chain and fulfillment capabilities.

We market our electronic cigarettes and vaporizers as an alternative to traditional tobacco cigarettes. Because electronic cigarettes offer a “smoking” experience without the burning of tobacco leaf, electronic cigarettes offer users the ability to satisfy their traditional cigarette cravings without smoke, tar, ash or carbon monoxide. In many cases electronic cigarettes may be used where tobacco-burning cigarettes may not. However, we cannot provide any assurances that future regulations may not affect where electronic cigarettes may be used.

Medical Cannabis Users and patients around the world are seeking CBD for many reasons. CBD gives them benefits of Cannabis without the aspects of THC that some people do not enjoy. Each day it seems more people learn about the benefits of CBD. There is even a large market of CBD for Pets. We plan to explore ways to continue to get CBD into the proper retail channels.

The Hemp CBD Industry is thick with competition. Some with large infrastructure, some with great products lines. There are companies with unique marketing and interesting packaging. Standing out in the crowd requires us to continue to assess our price points and constantly think about what we can do to stay on top. We stand next to the top companies in the world in quality and ability to deliver. As the Hemp CBD Industry grows and stabilizes, we have laid the foundation to build a strong and stable stance in this highly competitive, highly lucrative Industry.

Advertising

Currently, we advertise our products primarily through our direct marketing campaign, on the Internet. We also attempt to build brand awareness through social media marketing activities, web-site promotions, and pay-per-click advertising campaigns.

We intend to strategically expand our advertising activities in 2019 and also increase our public relations campaigns to gain editorial coverage for our brands. Some of our competitors promote their brands through print media and through celebrity endorsements and have substantial resources to devote to such efforts. We believe that our and our competitors’ efforts have helped increase our sales, our product acceptance and general industry awareness.

Media and Technologies Segment

Description

In 2017 we acquired 420Cloud and began operations under GigeTech, which later was changed to OBITX. We conducted a spin-off of MCIG’s ownership of OBITX and distributed 298,202 shares of its stock to MCIG shareholders. MCIG continues to retain voting control of the business after the effective spinoff due to its ownership of the OBITX Series A Preferred stock. For purposes of this report, the Company has determined that OBITX is a variable interest entity (VIE). Should we decide to convert our 100,000 Series A Preferred shares into 5,000,000 OBITX common shares, we would no longer control the entity and OBITX would no longer be a VIE. The Company currently has no plans to continue with this segment once OBITX is no longer a VIE.

OBITX provides advertising services in the cannabis and cryptocurrency markets. In addition, OBITX provide software solutions, website development, and other social media services.

Competitive Strengths

The Company believes its competitive strengths lie in its personnel and in its proprietary processes. We have engaged several key programmers for the development and upkeep of our 420Cloud community. In addition, we have developed two unique processes in how we transfer data and information that we believe will have a revolutionary effect on not just the cannabis community, but social media in general. We will continue to develop these processes and secure our intellectual property rights prior to disclosure.

Market

We consider our market to be the global cannabis community and cryptocurrencies.

Agriculture

In 2018 we added agriculture by entering into a relationship with FarmOn! Foundation, a not-for-profit New York based business, planting approximately 13-acres of hemp crops under a license obtained by FarmOn! Foundation in New York state. We harvested the 13-acres of industrial hemp under NYAcres, Inc. through a joint venture with FarmOn! Foundation in which approximately 28,000 hemp plants were harvested in November 2018.

Upon completion of the harvest. FarmOn! Foundation has unilaterally attempted to terminate the agreement, has failed to compensate MCIG for the crop, and has failed to reimburse MCIG the funds paid for production of the hemp. MCIG has initiated legal action to protect its shareholders rights and to ensure MCIG is properly compensated for the endeavor (see legal proceeding). Upon completion of this litigation, we will assess our position within the state of New York to determine if we will continue growing hemp in New York.

In addition, we acquired approximately 2 acres of land in California City, California where we have obtained three licenses in the cultivation, manufacturing, and distribution of cannabis through the CAL Foundation, (formerly NEWCO2, Inc., a California not-for-profit). We have entered into a joint venture between CAL Foundation and CAAcres, Inc. for the development of the California City project in which we intend to cultivate and grow cannabis, as well as manufacture and distribute cannabis-based products.

DESCRIPTION OF SUBSIDIARIES

Discontinued Subsidiary

VitaCBD, LLC

On January 31, 2017 we entered into an agreement with Stony Hill Corp (“STNY”) where we sold 80% of our VitaCBD brand in exchange for $850,000 in stock and cash. As a condition to entering into this Agreement STNY and the Company agreed to assign their interest of the VitaCBD brand to VitaCBD, LLC. VitaCBD, LLC was incorporated in March 2017 in the state of Nevada. VitaCBD, LLC operates and is consolidated under STNY financial statements. We account for the financials of VitaCBD as net revenue(loss) of non-controlling entity on our financial statements.

In February 2018 we were notified by STNY that they were ceasing operations of VitaCBD, LLC. As a result of this discontinued operation, we impaired our investment of $130,000 into VitaCBD, LLC.

mCig Limited

We incorporated in May 2017 to provide corporate oversight to MCIG, and its subsidiaries, operations within the European theatre. mCig Limited., was incorporated in the United Kingdom. mCig Limited, is a wholly owned subsidiary of the Company. The company no longer conducts business and has been administratively dissolved.

Tuero Capital, Inc.

We incorporated in May 2017 to provide financial services to our clients. Tuero Capital was formed to provide financial services and consulting to cannabis and cryptocurrency markets. MCIG has elected to not pursue this operation, and subsequently sold the control of this company. The company now operates under RedFern BioSystems, Inc. MCIG maintains a minority interest in the company.

Agri-Contractors, LLC

On November 18, 2016 we acquired, through a Purchase Agreement, Agri-Contractors, LLC. We combined the operations of Agri-Contractors with Grow Contractors Corp and expanded the services to include consulting. We merged the operations of Agri-Contractors, LLC with Grow Contractors in December 2016. Agri-Contractors, LLC ceased operations as part of the transaction.

VitaCig, Inc.

On May 26, 2016 we incorporated VitaCig, Inc., (“VitaCig”) in the state of Florida. VitaCig headquarters our global e-cig operations. VitaCig, Inc., is a wholly owned subsidiary of the Company. VitaCig ceased operations under MCIG on April 30, 2019. On May 1, 2019 the assets of VitaCig was transferred to Paul Rosenberg as settlement of debt.

mCig Internet Sales, Inc.

On June 1, 2016, the Company incorporated mCig Internet Sales, Inc., (“mCig Internet”) in the state of Florida in order to operate our CBD business and to consolidate all wholesale and online retail sales from various websites. mCig Internet is a wholly owned subsidiary of the Company. mCig Internet Sales, Inc., ceased operations under MCIG on April 30, 2019.

Grow Contractors Inc

The Company incorporated Grow Contractors Inc., (“Grow Contractors”) on December 5, 2016. On November 18, 2016, the Company purchased Agri-Contractors, LLC and assigned the Grow Contractors name and website to Grow Contractors Inc. Grow Contractors is a wholly owned subsidiary of the Company. Grow Contractors has halted its operations.

Subsidiaries Incorporated

Omni Health, Inc., (FKA - VitaCig, Inc.)

Omni Health was incorporated by MCIG on January 22, 2014. MCIG conducted a spin-off of OMHE on February 24, 2014. On June 22, 2016 VitaCig acquired Malecon Pharmacy located in Haleigh, Florida. Subsequently VitaCig changed its name to Omni Health, Inc.

Omni Health, Inc., a Nevada Corporation, is a public company trading under OMHE. As of April 30, 2019, the share price was $0.0006 per share. The company currently owns 72,677,058 shares (7.4%) valued as $43,606.23. As such, the Company has reduced its investment according and recorded a $108,416.47 loss on investment.

Tuero Asset Management, Inc.

We incorporated Tuero Asset Management, Inc., on September 1, 2017 in which to manage all our intellectual and intangible assets.

OBITX, Inc.

We incorporated GigETech, Inc., in the state of Delaware on April 3, 2017. We then assigned our newly acquired social media platform software to GigETech. We launched the social media platform on April 20, 2017. GigETech, Inc., subsequently changed its name to OBITX, Inc. Currently we have approximately 95% voting control and 47% ownership on a fully diluted basis of OBITX.

We conducted a spin-off of MCIG’s ownership of OBITX and distributed 298,202 shares of its stock to MCIG shareholders. MCIG continues to retain voting control of the business after the effective spinoff due to its ownership of the OBITX Series A Preferred stock.

NYAcres, Inc.

NYAcres, Inc., (“NYAcres”) was incorporated on November 20, 2017 under the laws of the state of New York. NYAcres was created to participate in a Joint Venture with FarmOn! Foundation. The joint venture is an agriculture venture for the planting and growing of industrial hemp. Pending legal outcome, we will evaluate operations of NYAcres to determine if we continue to operate this subsidiary.

CAL Acres Foundation (FKA Newco2, Inc)

Cal Foundation was created on January 19, 2018 as a California not-for-profit company. We own 80% of the not-for-profit business. Cal Foundation maintains three cannabis licenses in the State of California.

CAAcres, Inc.

CAAcres, Inc., (“CAAcres”) was incorporated on May 10, 2018 under the laws of the state of California. CAAcres was created to participate in the Joint Venture with Cal Foundation for the cultivation, manufacturing, and distribution of cannabis products within the state of California. CAAcres is an agriculture venture for the cultivation, manufacturing and distribution of cannabis products. We are currently assessing the requirements for the build out of the land acquired in California City, California for this project.

Subsidiaries Acquired

Vapolution, Inc.

On January 23, 2014, the Company entered into a Stock Purchase Agreement acquiring 100% ownership in Vapolution, Inc., which manufactures and retails home-use vaporizers. Effective January 17, 2017 we began consolidating Vapolution with the Company’s financial reports. Vapolution, Inc., is wholly owned by mCig, Inc.

Cannabiz Supply, LLC

On June 30, 2018 the company elected to exercise its option to acquired Cannabiz Supply with an effective date of May 1, 2018. The purchase price was $3,457,796.

BUSINESS MODEL

The Company continues to look at increasing revenue internally and through strategic acquisitions. The Company utilizes many methods of identifying new products to produce and potential companies to acquire. Our staff continually reviews current market trends to determine appropriate products to introduce. We have had them presented to us by business brokers, have reviewed competition and looked for compelling stories, or incorporated a subsidiary directly for a specific purpose. In some instances, the companies come looking to us for assistance. We will continue to finance additional acquisitions through private placements of stock, debt, or revenue from operations.

The mCig business model is built around developing and incubating self-sustaining business entities in the cannabis and e-Cig markets. We look for strong management teams that have expertise in their fields and want to operate within the cannabis and e-Cig industry. Once the entities are self-sustaining the company divest them either through i) a sale of the assets, ii) a spin-off into its own publicly traded entity, or iii) seek additional partners and privatize the business.

Our first successful spin off was in 2014 which now operates as Omni Health, Inc. In 2017 we sold our VitaCBD brand for $850,000 in cash and stock of Stony Hill Corp. We are currently developing and incubating entities specializing in i) construction and green houses, ii) social media, iii) retail sales, and iv) wholesale distribution.

Expansion through Acquisition

The Company continues to look for additional acquisition opportunities in the cannabis and e-Cig fields that will enhance our overall growth, complement our existing operations and increase shareholder value. MCIG considers acquisitions as a critical element to our strategic growth. We look for synergistic companies that will provide strength and growth opportunities to the developing products and services of MCIG. We will review current competition in many markets and determine if an acquisition or joint venture is in the best interest of MCIG.

Marketing and Sales Strategy

mCig and its subsidiaries evaluate the constant change of the cannabis and e-Cig business. As such, our marketing and sales strategy is subject to change quickly and often. When we evaluate a new product or service, we place considerable analysis on immediate return on investment (during initial 12-month period of launch) as the future long-term opportunities are uncertain and highly speculative. In instances where a client has demonstrated an ability to continue to control a market share the Company may consider long term sales as well.

Our products and services are marketed directly through each subsidiary. As we continue to acquire companies or services, we look for synergic growth opportunities that will allow for expansion of the multiple services available under our umbrella of companies. The growth in revenue created by the cross pollination of products and services are desirable.

The Company continues to utilize newsletters, advertisement, and viral knowledge of our services to expand our customer base. The Company utilizes all social media platforms to grow its customer awareness.

Competitive Environment

The cannabis and e-Cig service business is a highly competitive business. The Company attempts to reduce its competition through cross pollination of services. While the Company believes this will generate stability in its growth, there can be no assurances that the Company will succeed or overcome other competitive advantages.

Patents and Intellectual Properties

The Company looks to file two provisional patents in its e-Cig operations and two provisional patents in its social media platform operations. We continually review all products and services prior to introduction into the market for potential patent opportunities in order to provide us with a strategic and protected advantage.

We maintain copyright protection on all website designs, mobile applications, and software processes and tools designed by us.

In 2017 the Company embarked on a worldwide endeavor to protect its name and brands. We have recently obtained and/or filed for trademark protection in the USA, Europe, Germany, United Kingdom, Russia, Japan, Vietnam, China, Australia, Mexico, and Canada. We will continue to evaluate our brands and ensure they are globally protected.

EMPLOYEES AND CONSULTANTS

As of April 30, 2019, the Company has a total of 10 full-time/part-time employees and consultants throughout the various subsidiaries. The Company has 5 executive and office managers, 1 technical assistance employees that provide computer software and hardware installation, repairs, and maintenance, 3 sales representatives and 1 administrative/shipping clerk. None of our employees are covered by a collective bargaining agreement, and management believes its relationship with our employees is good.

The Company utilizes a considerable number of consultants to provide periodic work requirements. When workflow demands a fulltime or justifiable part-time employee the Company hires the appropriate person to fulfill the job requirements.

Available Information

All reports of the Company filed with the SEC are available free of charge through the SEC’s Web site at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

Item 1. A. RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the following risk factors as well as other information contained herein, including our financial statements and the related notes. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that affect us. If any of the following risks occur, our business, financial condition or results of operations could materially and adversely affected. In that case, the trading price of our securities could decline, and you may lose some or all of your investment.

RISK RELATED TO OUR BUSINESS AND INDUSTRY

We have incurred losses in the past and cannot assure you that we will achieve or maintain profitable operations.

As of April 30, 2019, we had an accumulated deficit of $9,265,671. Our accumulated deficit is primarily due to, among other reasons, the establishment of our business infrastructure and operations, stock-based compensation expenses and increases in our marketing expenditures to grow sales. For the year ended April 30, 2019, we had net loss of $3,057,240 compared to a net loss of $1,076,930 for the year ended April 30, 2018. We cannot assure you that we will generate operating profits now or in the immediate future, or be able to on, a sustainable basis, continue to expand our infrastructure, further develop our marketing efforts and otherwise implement our growth initiatives.

If we are not able to maintain and enhance our brands, or if events occur that damage our reputation and brands, our ability to expand our base of customers may be impaired, and our business and financial results may be harmed.

We believe that our brands have significantly contributed to, and will continue to contribute to the success of our business. We also believe that maintaining and enhancing our brands is critical to expanding our customer base. Many of our customers are referred by existing customers. Maintaining and enhancing our brands will depend largely on our ability to continue to provide useful, reliable, trustworthy, and innovative products, which we may not do successfully. We may introduce new products or terms of service or policies that customers do not like, which may negatively affect our brands. We will also continue to experience media, legislative, or regulatory scrutiny of our decisions regarding cannabis, CBD, e-Cig, user privacy and other issues, which may adversely affect our reputation and brands. We also may fail to provide adequate customer service, which could erode confidence in our brands. Our brands may also be negatively affected by the actions of customers that are deemed to be hostile or inappropriate to other customers, by the actions of customers acting under false or inauthentic identities, by the use of our products or services to disseminate information that is deemed to be misleading (or intended to manipulate opinions), by perceived or actual efforts by governments to obtain access to user information for security-related and law enforcement purposes, or by the use of our products or services for illicit, objectionable, or illegal ends.

Maintaining and enhancing our brands may require us to make substantial investments and these investments may not be successful. Certain of our past actions have eroded confidence in our brands, and if we fail to successfully promote and maintain our brands or if we incur excessive expenses in this effort, our business and financial results may be adversely affected.

We make product and investment decisions that may not prioritize short-term financial results.

We frequently make product and investment decisions that may not prioritize short-term financial results if we believe that the decisions are consistent with our mission and improve our financial performance over the long term. We may introduce changes to existing products, or introduce new stand-alone products, that direct our customers away from our current products. We are also investing in new products and services, and we may not successfully monetize such experiences. We also may take steps that result in limiting distribution of products and services in the short term in order to attempt to ensure the availability of our products and services to users over the long term. These decisions may not produce the long-term benefits that we expect, in which case our customer growth and our business results of operations could be harmed.

Our new products and changes to existing products could fail to attract or retain users or generate revenue and profits.

Our ability to retain, increase, and engage our customer base and to increase our revenue depends heavily on our ability to continue to evolve our existing products and to create successful new products, both independently and in conjunction with developers or other third parties. We may introduce significant changes to our existing products or acquire or introduce new and unproven products, including using technologies with which we have little or no prior development or operating experience. If new or enhanced products fail to engage our customers, or if we are unsuccessful in our monetization efforts, we may fail to attract or retain customers or to generate sufficient revenue, operating margin, or other value to justify our investments, and our business may be adversely affected.

If we experience product recalls, we may incur significant and unexpected costs and our business reputation could be adversely affected.

We may be exposed to product recalls and adverse public relations if our products are alleged to cause illness or injury, or if we are alleged to have violated governmental regulations. A product recall could result in substantial and unexpected expenditures that could exceed our product recall insurance coverage limits and harm to our reputation, which could have a material adverse effect on our business, results of operations and financial condition. In addition, a product recall may require significant management time and attention and may adversely impact on the value of our brands. Product recalls may lead to greater scrutiny by federal or state regulatory agencies and increased litigation, which could have a material adverse effect on our business, results of operations and financial condition.

We face intense competition and our failure to compete effectively could have a material adverse effect on our business, results of operations and financial condition.

Competition in the CBD and electronic cigarette industry is intense. We compete primarily on the basis of product quality, brand recognition, brand loyalty, service, marketing, advertising and price. We are subject to highly competitive conditions in all aspects of our business. The competitive environment and our competitive position can be significantly influenced by weak economic conditions, erosion of consumer confidence, competitors’ introduction of low-priced products or innovative products, excise taxes, higher absolute prices and larger gaps between price categories, and product regulation that diminishes the ability to differentiate products.

Our principal competitors in the e-Cig business are “big tobacco”, U.S. cigarette manufacturers of both conventional tobacco cigarettes and electronic cigarettes like Altria Group, Inc., Lorillard, Inc. and Reynolds American Inc. We compete against “big tobacco” who offers not only conventional tobacco cigarettes and electronic cigarettes but also smokeless tobacco products such as “snus” (a form of moist ground smokeless tobacco that is usually sold in sachet form that resembles small tea bags), chewing tobacco and snuff. Furthermore, we believe that “big tobacco” will devote more attention and resources to developing and offering electronic cigarettes as the market for electronic cigarettes grows. Because of their well-established sales and distribution channels, marketing expertise and significant resources, “big tobacco” is better positioned than small competitors like us to capture a larger share of the electronic cigarette market. We also compete against numerous other smaller manufacturers or importers of cigarettes. There can be no assurance that we will be able to compete successfully against any of our competitors, some of whom have far greater resources, capital, experience, market penetration, sales and distribution channels than us. If our major competitors were, for example, to significantly increase the level of price discounts offered to consumers, we could respond by offering price discounts, which could have a materially adverse effect on our business, results of operations and financial condition.

In social media, we compete with companies that sell advertising, as well as with companies that provide social and communication products and services that are designed to engage users and capture time spent on mobile devices and online. We face significant competition in every aspect of our business, including from companies that facilitate communication and the sharing of content and information, companies that enable marketers to display advertising, and companies that provide development platforms for applications developers. We compete with companies that offer products across broad platforms that replicate capabilities we provide. We also compete with companies that develop applications, particularly mobile applications, that provide social or other communications functionality, such as messaging, photo- and video-sharing, and micro-blogging, as well as companies that provide regional social networks that have strong positions in particular countries. In addition, we face competition from traditional, online, and mobile businesses that provide media for marketers to reach their audiences and/or develop tools and systems for managing and optimizing advertising campaigns.

Some of our current and potential competitors may have significantly greater resources or better competitive positions in certain product segments, geographic regions or user demographics than we do. These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market conditions. We believe that some of our users are aware of and actively engaging with other products and services similar to, or as a substitute for, our products and services, and we believe that some of our users have reduced their use of and engagement with our product in favor of these other products and services. In the event that our users increasingly engage with other products and services, we may not experience the anticipated growth, or see a decline, in use and engagement in key user demographics or more broadly, in which case our business would likely be harmed.

Our competitors may develop products, features, or services that are similar to ours or that achieve greater acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies.

We believe that our ability to compete effectively depends upon many factors both within and beyond our control, including:

∙ the popularity, usefulness, ease of use, performance, and reliability of our products compared to our competitors' products;

∙ the size and composition of our user base;

∙ the engagement of our users with our products and competing products;

∙ the timing and market acceptance of products, including developments and enhancements to our or our competitors' products;

∙ our ability to distribute our products to new and existing users;

∙ our ability to monetize our products;

∙ the frequency, size, format, quality, and relative prominence of the ads displayed by us or our competitors;

∙ customer service and support efforts;

∙ marketing and selling efforts, including our ability to measure the effectiveness of our ads and to provide marketers with a compelling return on their investments;

∙ our ability to establish and maintain developers' interest in building mobile and web applications that integrate with Facebook and our other products;

∙ our ability to establish and maintain publisher interest in integrating their content with Facebook and our other products;

∙ changes mandated by legislation, regulatory authorities, or litigation, including settlements and consent decrees, some of which may have a disproportionate effect on us;

∙ acquisitions or consolidation within our industry, which may result in more formidable competitors;

∙ our ability to attract, retain, and motivate talented employees, particularly software engineers, designers, and product managers;

∙ our ability to cost-effectively manage and grow our operations; and

∙ our reputation and brand strength relative to those of our competitors.

If we are not able to compete effectively, our user base and level of user engagement may decrease, we may become less attractive to developers and marketers, and our revenue and results of operations may be materially and adversely affected.

We expect that new products and/or brands we develop will expose us to risks that may be difficult to identify until such products and/or brands are commercially available.

We are currently developing, and in the future, will continue to develop, new products and brands, the risks of which will be difficult to ascertain until these products and/or brands are commercially available. For example, we are developing new formulations, packaging and distribution channels. Any negative events or results that may arise as we develop new products or brands may adversely affect our business, financial condition and results of operations.

Internet security poses a risk to our e-commerce sales.

At present, we generate a portion of our sales through e-commerce sales on our websites. We manage our websites and e-commerce platform internally and as a result any compromise of our security or misappropriation of proprietary information could have a material adverse effect on our business, financial condition and results of operations. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to effect secure Internet transmission of confidential information, such as credit and other proprietary information.

Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the technology used by us to protect client transaction data. Anyone who is able to circumvent our security measures could misappropriate proprietary information or cause material interruptions in our operations. We may be required to expend significant capital and other resources to protect against security breaches or to minimize problems caused by security breaches. To the extent that our activities or the activities of others involve the storage and transmission of proprietary information, security breaches could damage our reputation and expose us to a risk of loss and/or litigation. Our security measures may not prevent security breaches. Our failure to prevent these security breaches may result in consumer distrust and may adversely affect our business, results of operations and financial condition.

Credit card payment processors and merchant account pose a risk.

We accept credit cards as a means of payment for the sale of our products. If we are unable to find suitable providers or an alternative method of payment for our customers, our cash-flow will be constrained and our sales may be affected which may have a material adverse effect on our performance, financial condition and results of operations.

Product exchanges, returns, warranty claims, defect and recalls may adversely affect our business.

All products are subject to customer service claims, malfunctions and defects, which may subject us to requests for product exchanges, returns, warranty claims and recalls. If we are unable to maintain a certain degree of quality control of our products we will incur costs of replacing and or recalling our products and servicing our customers. Any product returns, exchanges, and or recalls we may make will have a material adverse effect on our business, our operations and our profitability and will likely result in the loss of customers and goodwill.

Moreover, products that do not meet our quality control standards and or those products that do not comply with U.S. safety and health standards or that may be defective may reduce the effectiveness, enjoyment and or cause harm to property, person and or death to persons who use the product. Any such instance will likely result in claims against us and potentially subject us to liability and legal claims which may cause injury to our reputation, goodwill and operating results.

Warranties

Warranty reserves include management’s best estimate of the projected costs to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact our evaluation of historical data. We review our reserves at least quarterly to ensure that our accruals are adequate in meeting expected future warranty obligations, and we will adjust our estimates as needed. Initial warranty data can be limited early in the launch of a product and accordingly, the adjustments that we record may be material. Because of the nature of our products, customers are made aware that as soon as a mCig is packed with marijuana, they automatically void their warranty, primarily because it is against federal laws to mail a product that has been in proximity of marijuana. As a result, the products that can be returned as a warranty replacement is extremely limited. As a result, due to the Company’s warranty policy, the Company did not have any significant warranty expenses to report as of Fiscal Year End April 30, 2019. Based on these actual expenses, the warranty reserve, as estimated by management as of April 30, 2019 was at $0. Any adjustments to warranty reserves are to be recorded in cost of sales.

It is likely that as we start selling higher priced products, that are not affected by federal shipping laws and/or are not single use items, we will acquire additional information on the projected costs to service work under warranty and may need to make additional adjustments. Further, a small change in our warranty estimates may result in a material charge to our reported financial results.

Product exchanges and product returns

The total for product exchanges and product returns as of April 30, 2019 was immaterial. As a result, all product exchanges and product returns were recorded as a reduction to revenues.

Our costs are continuing to grow, which could harm our business and profitability.

Operating our business is costly, and we expect our expenses to continue to increase in the future as we broaden our products and services, and as these services and products increase, the amount of customer support and management needed increases. The development of new products and services, expanding our technical infrastructure, and the hiring of additional personnel will add cost to our expanding operations. We expect to continue to invest in our global efforts and other initiatives, which may not have clear paths to monetization. We may also be subject to increased costs in order to obtain and attract third-party content or to facilitate the distribution of our products. Any investments may not be successful, and any such increases in our costs may adversely affect our business and profitability.

If we are unable to protect our intellectual property, the value of our brands and other intangible assets may be diminished, and our business may be adversely affected.

We rely and expect to continue to rely on a combination of confidentiality, assignment, and license agreements with our employees, consultants, and third parties with whom we have relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to

protect our proprietary rights. In the United States and internationally, we have filed various applications for protection of certain aspects of our intellectual property. Third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which we operate or intend to operate our business. In any or all of these cases, we may be required to expend significant time and expense in order to prevent infringement or to enforce our rights. Although we have generally taken measures to protect our proprietary rights, there can be no assurance that others will not offer products or concepts that are substantially similar to ours and compete with our business. Any of these events could have an adverse effect on our business and financial results.

We plan to continue to make acquisitions, which could harm our financial condition or results of operations and may adversely affect the price of our common stock.

As part of our business strategy, we have made and intend to continue to make acquisitions to add specialized employees and complementary companies, products, or technologies. We may not be able to find suitable acquisition candidates, and we may not be able to complete acquisitions on favorable terms, if at all. In some cases, the costs of such acquisitions may be substantial. There is no assurance that we will receive a favorable return on investment for these or other acquisitions.

We may pay substantial amounts of cash or incur debt to pay for acquisitions, which could adversely affect our liquidity. The incurrence of indebtedness would also result in increased fixed obligations, increased interest expense, and could also include covenants or other restrictions that would impede our ability to manage our operations. We may also issue equity securities to pay for acquisitions, which could increase our expenses, adversely affect our financial results, and result in dilution to our stockholders. In addition, any acquisitions we announce could be viewed negatively by customers, shareholders, or investors, which may adversely affect our business or the price of our common stock.

In the future, we may use shares of preferred stock as consideration in connection with acquisitions. However, we may not be able to issue shares of preferred stock because companies that we are interested in acquiring may not agree to accept shares that carry no voting rights, or for other reasons. Companies that we seek to acquire may also demand more shares in exchange for accepting such stock as consideration. In such instances, we may need to pay cash, issue common stock as consideration, or issue a relatively greater number of shares of preferred stock to consummate the acquisitions.

We may also discover liabilities or deficiencies associated with the companies or assets we acquire that were not identified in advance, which may result in significant unanticipated costs. The effectiveness of our due diligence review and our ability to evaluate the results of such due diligence are dependent upon the accuracy and completeness of statements and disclosures made or actions taken by the companies we acquire or their representatives, as well as the limited amount of time in which acquisitions are executed. In addition, we may fail to accurately forecast the financial impact of an acquisition transaction, including tax and accounting charges. Acquisitions may also result in our recording of significant additional expenses to our results of operations and recording of substantial finite-lived intangible assets on our balance sheet upon closing. Any of these factors may adversely affect our financial condition or results of operations.

We may not be able to successfully integrate our acquisitions, and we may incur significant costs to integrate and support the companies we acquire.

The integration of acquisitions requires significant time and resources, and we may not manage these processes successfully. Our ability to successfully integrate complex acquisitions is unproven, particularly with respect to companies that have significant operations or that develop products where we do not have prior experience.

We cannot assure you that these investments will be successful. If we fail to successfully integrate the companies we acquire, we may not realize the benefits expected from the transaction and our business may be harmed.

If our goodwill or finite-lived intangible assets become impaired, we may be required to record a significant charge to earnings.

We review our finite-lived intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable, such as a decline in stock price and market capitalization. We test goodwill for impairment at least annually. If such goodwill or finite-lived intangible assets are deemed to be impaired, an impairment loss equal to the amount by which the carrying amount exceeds the fair value of the assets would be recognized. We may be required to record a significant charge in our financial statements during the period in which any impairment of our goodwill or finite-lived intangible assets is determined, which would negatively affect our results of operations.

In addition, some members of our management do not have significant experience managing a large global business operation, so our management may not be able to manage such growth effectively. To effectively manage our growth, we must continue to improve our operational, financial, and management processes and systems and to effectively expand, train, and manage our employee base. As our organization continues to grow, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products. This could negatively affect our business performance.

We have significant international operations and plan to continue expanding our operations abroad where we have limited operating experience, and this may subject us to increased business and economic risks that could affect our financial results.

We have significant international operations and plan to continue the international expansion of our business operations. We have offices or data centers in two different countries and provide services and products on five continents. We may enter new international markets where we have limited or no experience in marketing, selling, and deploying our products. Our products are generally available globally through the web and on mobile, but some or all of our products or functionality may not be available in certain markets due to legal and regulatory complexities. We also outsource certain operational functions to third-party vendors globally. If we fail to deploy, manage, or oversee our international operations successfully, our business may suffer. In addition, we are subject to a variety of risks inherent in doing business internationally, including:

	∙	political, social, or economic instability;
	∙	risks related to legal, regulatory, and other government scrutiny applicable to U.S. companies with sales and operations in foreign jurisdictions, including with respect to privacy, tax, law enforcement, content, trade compliance, intellectual property, and terrestrial infrastructure matters;
	∙	potential damage to our brand and reputation due to compliance with local laws, including potential censorship or requirements to provide user information to local authorities;
	∙	fluctuations in currency exchange rates and compliance with currency controls;
	∙	foreign exchange controls and tax regulations that might prevent us from repatriating cash earned in countries outside the United States or otherwise limit our ability to move cash freely, and impede our ability to invest such cash efficiently;
	∙	higher levels of credit risk and payment fraud;
	∙	enhanced difficulties of integrating any foreign acquisitions;
	∙	burdens of complying with a variety of foreign laws;
	∙	reduced protection for intellectual property rights in some countries;
	∙	difficulties in staffing, managing, and overseeing global operations and the increased travel, infrastructure, and legal compliance costs associated with multiple international locations;
	∙	compliance with the U.S. Foreign Corrupt Practices Act, and similar laws in other jurisdictions; and
	∙	compliance with statutory equity requirements and management of tax consequences.

If we are unable to expand internationally and manage the complexity of our global operations successfully, our financial results could be adversely affected.

The Company has entered into indemnification agreements with the officers and directors and we may be required to indemnify our Directors and Officers, and if the claim is greater than $1,000,000, it may create significant losses for the Company.

We have authority under Nevada law to indemnify our directors and officers to the extent provided in that statute. Our Articles of Incorporation require the Company to indemnify each of our directors and officers against liabilities imposed upon them (including reasonable amounts paid in settlement) and expenses incurred by them regarding any claim made against them or any action, suit or proceeding to which they may be a party by reason of their being or having been a director or officer of the company.

We currently do not maintain officer's and director's liability insurance coverage. Consequently, any judgment against our Officers and Directors, the Company will be forced to pay. We have entered into indemnification agreements with each of our officers and directors containing provisions that may require us, among other things, to indemnify our officers and directors against certain liabilities that may arise because of their status or service as officers or directors (other than liabilities arising from willful misconduct of a culpable nature) and to advance their expenses incurred because of any proceeding against them as to which they could be indemnified. Management believes that such indemnification provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. We are subject to claims arising from disputes with employees, vendors and other third parties in the normal course of business. These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time. If the plaintiffs in any suits against us were to successfully prosecute their claims, or if we were to settle such suits by making significant payments to the plaintiffs, our operating results and financial condition would be harmed. In addition, our organizational documents require us to indemnify our senior executives to the maximum extent permitted by Nevada law. If our senior executives were named in any lawsuit, our indemnification obligations could magnify the costs of these suits.

Cannabis Industry

The industry faces intense media attention and public pressure.

The cannabis marketplace is controversial. Certain members of the media, politicians, government regulators and advocate groups, including independent doctors have called for an outright ban of all cannabis products, pending regulatory review and clinical studies. A ban of this type would likely have the effect of terminating our United States’ sales and marketing efforts of certain products and services which we may currently market or have plans to market in the future. Such a ban would have a material adverse effect on our business, financial condition and performance.

Cultivation, Manufacturing, and Distribution ("CMD") Industry

The nature of our businesses exposes us to the risk of litigation and liability under environmental, health and safety and product liability laws.

Certain aspects of our CMD projects involve risks of liability. In general, litigation in our industry, including class actions that seek substantial damages, arises with increasing frequency. Claims may be asserted under environmental, labor, or health and safety laws. Litigation is invariably expensive, regardless of the merit of the plaintiffs’ claims. We may be named as a defendant in the future, and there can be no assurance that regardless of the merit of such claims, we will not be required to pay substantial legal fees and/or settlement payments in the future.

If we do not effectively manage our credit risk or collect on our accounts receivable, it could have a material adverse effect on our operating results.

Currently we contract on a ‘pay as you go’ model; however, we may elect to bid on certain CMD projects which require us to bill on a percentage of completion basis. We will perform credit evaluation procedures on our customers on each transaction and require security deposits or other forms of security from our customers when a significant credit risk is identified. The Company expects to begin offering terms on purchases in an effort to increase CMD projects. As the Company exposes itself to greater risks we will have to further evaluate accounts receivable and increase our reserves for bad debt, as applicable.

The Company has implemented a policy of filing Notice to Owners (“NTO”) on each property in which it provides to customers to alleviate the inability to collect. However, if a customer fails to pay, there could be considerable time between the need to pay our vendors and the receipt of our final payment. Failure to manage our credit risk and receive timely payments on our customer accounts receivable may result in the write-off of customer receivables. If we are not able to manage credit risk issues, or if many customers should have financial difficulties at the same time, our credit losses could be substantial. If this should occur, our results of operations may be materially and adversely affected.

Public policies that create demand for our products and services may change, stall in Congress or State Legislation reducing leverage to enforce change thereby decreasing sales.

Like conventionally constructed buildings, the modular building industry and greenhouses used in cannabis grow and production are subject to evolving regulations by multiple governmental agencies at the state and local level. This oversight includes but is not limited to governing code bodies, environmental, health, safety and transportation. Failure by our customers to comply with these laws or regulations could impact our business.

Compliance with building codes and regulations have always entailed a certain amount of risk as municipalities do not necessarily interpret these building codes and regulations in a consistent manner, particularly where applicable regulations may be unclear and subject to interpretation. Many aspects of the construction and modular building industry have developed “best practices” which are constantly evolving.

Supply shortages and other risks related to the demand for skilled labor and building materials could increase costs and delay deliveries.

The CMD industry is highly competitive for skilled labor and materials. Labor shortages may become more acute as the supply chain adjusts to uneven industry growth. Additionally, the cost of certain building materials, especially lumber, steel, concrete, copper, and petroleum-based materials, is influenced by changes in local and global commodity prices. Increased costs or shortages of skilled labor and/or materials could cause increases in construction costs and / or construction delays. We may not be able to pass on increases in construction costs to customers. Sustained increases in construction costs may, over time, erode our margins, and pricing competition may restrict our ability to pass on any such additional costs, thereby decreasing our margins.

Social Media Industry

If we fail to retain existing users or add new users, or if our users decrease their level of engagement with our products, our revenue, financial results, and business may be significantly harmed.

The size of our user base and our users' level of engagement are critical to our success. Our financial performance will be significantly determined by our success in adding, retaining, and engaging active users of our products. We anticipate that our active user growth rate will continue to grow over time as the size of our active user base increases, and as we achieve higher market penetration rates. If people do not perceive our products to be useful, reliable, and trustworthy, we may not be able to attract or retain users or otherwise maintain or increase the frequency and duration of their engagement. A number of other social networking companies that achieved early popularity have since seen their active user bases or levels of engagement decline, in some cases precipitously. There is no guarantee that we will not experience a similar erosion of our active user base or engagement levels. Our user engagement can be difficult to measure, particularly as we introduce new and different products and services. Any number of factors could potentially negatively affect user retention, growth, and engagement, including if:

∙ users increasingly engage with other competitive products or services;

∙ we fail to introduce new products or services that users find engaging or if we introduce new products or services that are not favorably received;

∙ users feel that their experience is diminished as a result of the decisions we make with respect to the frequency, prominence, format, size, and quality of ads that we display;

∙ users have difficulty installing, updating, or otherwise accessing our products on mobile devices as a result of actions by us or third parties that we rely on to distribute our products and deliver our services;

∙ user behavior on any of our products changes, including decreases in the quality and frequency of content shared on our products and services;

∙ we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance;

∙ there are decreases in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing, safety, security, or other factors;

∙ we are unable to manage and prioritize information to ensure users are presented with content that is appropriate, interesting, useful, and relevant to them;

∙ we are unable to obtain or attract engaging third-party content;

∙ users adopt new technologies where our products may be displaced in favor of other products or services, or may not be featured or otherwise available;

∙ there are adverse changes in our products that are mandated by legislation, regulatory authorities, or litigation, including settlements or consent decrees;

∙ technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as security breaches or failure to prevent or limit spam or similar content;

∙ we adopt terms, policies, or procedures related to areas such as sharing or user data that are perceived negatively by our users or the general public;

∙ we elect to focus our user growth and engagement efforts more on longer-term initiatives, or if initiatives designed to attract and retain users and engagement are unsuccessful or discontinued, whether as a result of actions by us, third parties, or otherwise;

∙ we fail to provide adequate customer service to users, marketers, developers, or other partners;

∙ we, developers whose products are integrated with our products, or other partners and companies in our industry are the subject of adverse media reports or other negative publicity; or

∙ our current or future products, such as our development tools and application programming interfaces that enable developers to build, grow, and monetize mobile and web applications, reduce user activity on our products by making it easier for our users to interact and share on third-party mobile and web applications.

If we are unable to increase our user base and user engagement, our revenue and financial results may be adversely affected. Any decrease in user retention, growth, or engagement could render our products less attractive to users, marketers, and developers, which is likely to have a material and adverse impact on our revenue, business, financial condition, and results of operations. If our active user growth rate slows, we will become increasingly dependent on our ability to maintain or increase levels of user engagement and monetization in order to drive revenue growth.

We project to generate substantially all of our revenue from advertising. The loss of marketers, or reduction in spending by marketers, could seriously harm our business.

Substantially all of our revenue is currently projected to be generated from third parties advertising. As is common in the industry, our marketers do not have long-term advertising commitments with us. Many of our marketers spend only a relatively small portion of their overall advertising budget with us. In addition, marketers may view some of our products as experimental and unproven. Marketers will not continue to do business with us, or they will reduce the prices they are willing to pay to advertise with us or the budgets they are willing to commit to us, if we do not deliver ads in an effective manner, or if they do not believe that their investment in advertising with us will generate a competitive return relative to other alternatives.

Our advertising revenue could also be adversely affected by a number of other factors, including:

∙	decreases in user engagement, including time spent on our products;
∙	our inability to continue to increase user access to and engagement with our mobile products;
∙	product changes or inventory management decisions we may make that change the size, format, frequency, or relative prominence of ads displayed on our products or of other unpaid content shared by marketers on our products;
∙	our inability to maintain or increase marketer demand, the pricing of our ads, or both;
∙	our inability to maintain or increase the quantity or quality of ads shown to users;
∙	changes to third-party policies that limit our ability to deliver or target advertising on mobile devices;
∙	the availability, accuracy, and utility of analytics and measurement solutions offered by us or third parties that demonstrate the value of our ads to marketers, or our ability to further improve such tools;
∙	loss of advertising market share to our competitors, including if prices for purchasing ads increase or if competitors offer lower priced or more integrated products;
∙	adverse legal developments relating to advertising, including legislative and regulatory developments and developments in litigation;
∙	decisions by marketers to reduce their advertising as a result of adverse media reports or other negative publicity involving us, our advertising metrics, content on our products, developers with mobile and web applications that are integrated with our products, or other companies in our industry;
∙	the effectiveness of our ad targeting or degree to which users opt out of certain types of ad targeting;
∙	the degree to which users cease or reduce the number of times they click on our ads;
∙	changes in the way advertising on mobile devices or on personal computers is measured or priced; and
∙	the impact of macroeconomic conditions, whether in the advertising industry in general, or among specific types of marketers or within particular geographies.

The occurrence of any of these or other factors could result in a reduction in demand for our ads, which may reduce the prices we receive for our ads, or cause marketers to stop advertising with us altogether, either of which would negatively affect our revenue and financial results.

Our user growth, engagement, and monetization on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control.

The substantial majority of our revenue will be generated from advertising on mobile devices. There is no guarantee that popular mobile devices will continue to feature our products, or that mobile device users will continue to use our products rather than competing products. We are dependent on the interoperability of our products with popular mobile operating systems, networks, and standards that we do not control, such as the Android and iOS operating systems. Any changes, bugs, or technical issues in such systems, or changes in our relationships with mobile operating system partners, or in their terms of service or policies that degrade our products' functionality, reduce or eliminate our ability to distribute our products, give preferential treatment to competitive products, limit our ability to deliver, target, or measure the effectiveness of ads, or charge fees related to the distribution of our products or our delivery of ads could adversely affect the usage of our products and monetization on mobile devices.

Additionally, to deliver high quality mobile products, it is important that our products work well with a range of mobile technologies, systems, networks, and standards that we do not control. We may not be successful in maintaining or developing relationships with key participants in the mobile ecosystem or in developing products that operate effectively with these technologies, systems, networks, or standards. If it is more difficult for our users to access and use our products on their mobile devices, or if our users choose not to access or use our products on their mobile devices or use mobile products that do not offer access to our products, our user growth and user engagement could be harmed. From time to time, we may also take actions regarding the distribution of our products or the operation of our business based on what we believe to be in our long-term best interests. Such actions may adversely affect our users and our relationships with the operators of mobile operating systems, or other business partners, and there is no assurance that these actions will result in the anticipated long-term benefits. If our users are adversely affected by these actions or if our relationships with such third parties deteriorate, our user growth, engagement, and monetization could be adversely affected, and our business could be harmed.

Action by governments to restrict access to our products in their countries could substantially harm our business and financial results.

It is possible that governments of one or more countries may seek to censor content available on our other products in their country, restrict access to our products from their country entirely, or impose other restrictions that may affect the accessibility of our products in their country for an extended period or indefinitely. In addition, government authorities in other countries may seek to restrict access to our products if they consider us to be in violation of their laws. In the event that content shown on our products is subject to censorship, access to our products is restricted, in whole or in part, in one or more countries, or other restrictions are imposed on our products, or our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or where we face other restrictions, our ability to retain or increase our user base and user engagement may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected.

Security breaches and improper access to or disclosure of our data or user data, or other hacking and phishing attacks on our systems, could harm our reputation and adversely affect our business.

Our industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data. Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data could result in the loss or misuse of such data, which could harm our business and reputation and diminish our competitive position. In addition, computer malware, viruses, social engineering (predominantly spear phishing attacks), and general hacking have become more prevalent in our industry and may occur on our systems in the future. As a result of industry, we believe that we are a particularly attractive target for such breaches and attacks. Such attacks may cause interruptions to the services we provide, degrade the user experience, cause users to lose confidence and trust in our products, or result in financial harm to us. Our efforts to protect our company data or the information we receive may also be unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance; government surveillance; or other threats that evolve. In addition, third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to our data or our users' data. Although we have developed systems and processes that are designed to protect our data and user data, to prevent data loss, and to prevent or detect security breaches, we cannot assure you that such measures will provide absolute security.

In addition, some of our developers or other partners, such as those that help us measure the effectiveness of ads, may receive or store information provided by us or by our users through mobile or web applications. We provide limited information to such third parties based on the scope of services provided to us. However, if these third parties or developers fail to adopt or adhere to adequate data security practices, or in the event of a breach of their networks, our data or our users' data may be improperly accessed, used, or disclosed.

Affected users or government authorities could initiate legal or regulatory actions against us in connection with any security breaches or improper disclosure of data, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices. Any of these events could have a material and adverse effect on our business, reputation, or financial results.

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, competition, consumer protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business, including privacy, data protection, and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, personal information, electronic contracts and other communications, competition, protection of minors, consumer protection, telecommunications, product liability, taxation, economic or other trade prohibitions or sanctions, securities law compliance, and online payment services.

The introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other government scrutiny. In addition, foreign data protection, privacy, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States.

These U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices. For example, regulatory or legislative actions affecting the manner in which we display content to our users or obtain consent to various practices could adversely affect user growth and engagement. Such actions could affect the manner in which we provide our services or adversely affect our financial results.

We are also subject to laws and regulations that dictate whether, how, and under what circumstances we can transfer, process and/or receive transnational data that is critical to our operations, including data relating to users, customers, or partners outside the United States, and those laws and regulations are uncertain and subject to change. For example, in October 2015, the European Court of Justice invalidated the European Commission's 2000 Safe Harbour Decision as a legitimate basis on to rely for the transfer of data from the European Union to the United States.

The European Union and United States recently agreed to an alternative transfer framework for data transferred from the European Union to the United States, called the Privacy Shield, but this new framework is subject to an annual review that could result in changes to our obligations and also may be challenged by national regulators or private parties. In addition, the other bases on which we rely to legitimize the transfer of data, such as standard Model Contractual Clauses (MCCs), have been subjected to regulatory or judicial scrutiny. If one or more of the legal bases for transferring data from Europe to the United States is invalidated, or if we are unable to transfer personal data between and among countries and regions in which we operate, we could affect the manner in which we provide our services or adversely affect our financial results.

Proposed or new legislation and regulations could also significantly affect our business. There currently are a number of proposals pending before federal, state, and foreign legislative and regulatory bodies. In addition, the European Commission has approved a data protection regulation, known as the General Data Protection Regulation (GDPR), which has been finalized and is due to come into force in or around May 2018. The GDPR will include operational requirements for companies that receive or process personal data of residents of the European Union that are different than those currently in place in the European Union, and that will include significant penalties for non-compliance. Similarly, there are several legislative proposals in the United States, at both the federal and state level, that could impose new obligations in areas affecting our business, such as liability for copyright infringement by third parties. In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.

These laws and regulations, as well as any associated inquiries or investigations or any other government actions, may be costly to comply with and may delay or impede the development of new products, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines or demands or orders that we modify or cease existing business practices.

We may incur liability as a result of information retrieved from or transmitted over the Internet or published using our products or as a result of claims related to our products.

We may face claims relating to information that is published or made available on our products. In particular, the nature of our business exposes us to claims related to defamation, dissemination of misinformation or news hoaxes, intellectual property rights, rights of publicity and privacy, personal injury torts, or local laws regulating hate speech or other types of content. This risk is enhanced in certain jurisdictions outside the United States where our protection from liability for third-party actions may be unclear and where we may be less protected under local laws than we are in the United States. We could incur significant costs investigating and defending such claims and, if we are found liable, significant damages. We could also face orders restricting or blocking our services in particular geographies as a result of content hosted on our services. If any of these events occur, our business and financial results could be adversely affected.

Our products and internal systems rely on software that is highly technical, and if it contains undetected errors or vulnerabilities, our business could be adversely affected.

Our products and internal systems rely on software, including software developed or maintained internally and/or by third parties, that is highly technical and complex. In addition, our products and internal systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data. The software on which we rely has contained, and will in the future contain, undetected errors, bugs, or vulnerabilities. Some errors may only be discovered after the code has been released for external or internal use. Errors, vulnerabilities, or other design defects within the software on which we rely may result in a negative experience for users and marketers who use our products, delay product introductions or enhancements, result in targeting, measurement, or billing errors, compromise our ability to protect the data of our users and/or our intellectual property or lead to reductions in our ability to provide some or all of our services. In addition, any errors, bugs, vulnerabilities, or defects discovered in the software on which we rely, and any associated degradations or interruptions of service, could result in damage to our reputation, loss of users, loss of revenue, or liability for damages, any of which could adversely affect our business and financial results.

Technologies have been developed that can block the display of our ads, which could adversely affect our financial results.

Technologies have been developed, and will likely continue to be developed, that can block the display of our ads, particularly advertising displayed on personal computers. We project to generate substantially all of our revenue from advertising, including revenue resulting from the display of ads on personal computers. Revenue generated from the display of ads on personal computers has been impacted by these technologies from time to time. As a result, these technologies may have an adverse effect on our financial results and, if such technologies continue to proliferate, in particular with respect to mobile platforms, our future financial results may be harmed.

E-Cig Industry

The market for electronic cigarettes is a niche market, subject to a great deal of uncertainty and is still evolving.

Electronic cigarettes were first introduced into the market in 2006, and are at an early stage of development, represent a niche market and are evolving rapidly and are characterized by an increasing number of market entrants. Our future sales and any future profits in this segment are substantially dependent upon the widespread acceptance and use of electronic cigarettes. Rapid growth in the use of and interest in, electronic cigarettes is recent, and may not continue on a lasting basis. The demand and market acceptance for these products is subject to a high level of uncertainty.

Therefore, we are subject to all of the business risks associated with a new enterprise in a niche market, including risks of unforeseen capital requirements, failure of widespread market acceptance of electronic cigarettes, in general or, specifically our products, failure to establish business relationships and competitive disadvantages as against larger and more established competitors.

Electronic cigarettes have become subject to regulation by the FDA.

In the United States, in 2016, the FDA finalized a rule extending the regulatory authority to cover all tobacco products, including vaporizers, vape pens, hookah pens, electronic cigarettes (E-Cigarettes), e-pipes, and all other Electronic Nicotine Delivery Systems (“ENDS”). FDA now regulates the manufacture, import, packaging, labeling, advertising, promotion, sale, and distribution of ENDS. This includes components and parts of ENDS but excludes accessories. Under the new guidance, any company that make, modify, mix, manufacture, fabricate, assemble, process, label, repack, relabel, or import any tobacco product is considered a tobacco product manufacturer. Importers of finished tobacco products may be distributors and manufacturers of tobacco products. Importers who do not own or operate a domestic establishment engaged in the manufacture, preparation, compounding or processing of a tobacco product are not required to register their establishment or provide product listing. However, they must comply with all other applicable tobacco product manufacturer requirements.

However, recent statements by FDA have begun to clear up the U.S. federal agency’s position on nicotine free e-liquids and synthetic nicotine. According to court statements made by the FDA, some devices that truly contain no nicotine (or only synthetic nicotine) may not be subject to the deeming regulations, depending on the circumstances in which they are likely to be used. Some disposable, closed-system devices with zero-nicotine or synthetic nicotine e-liquids may also escape regulation as tobacco products if they meet certain further criteria. We believe our products fall under this guidance and not regulated by the FDA. However, even if products currently fall outside the scope of the deeming rule, the FDA could choose to regulate them later.

The recent development of electronic cigarettes has not allowed the medical profession to study the long-term health effects of electronic cigarette use.

Because electronic cigarettes were recently developed, the medical profession has not had a sufficient period of time to study the long-term health effects of electronic cigarette use. Currently, therefore, there is no way of knowing whether or not electronic cigarettes are safe for their intended use.

If the medical profession were to determine conclusively that electronic cigarette usage poses long-term health risks, electronic cigarette usage could decline, which could have a material adverse effect on our business, results of operations and financial condition.

We rely primarily on a Chinese factory for the production of our products.

We rely almost exclusively on a Chinese factory, specifically our principle supplier, Bauway H.K. Investments, for the manufacturing of mCig’s. Therefore, our ability to maintain operations is dependent on this third-party manufacturer. Bauway H.K. Investments has the capacity to produce 20,000 mCig’s per week. Currently, it takes our manufacturer approximately 8 hours to produce 1,000 mCig’s.

It currently involves the following raw materials: stainless-steel tubing for Battery housing and Atomizing Chambers. Atomizing Chambers are composed of a battery powered wire assembly housed on top of a ceramic base. Battery type used is Lithium Polymer 360mAh which is housed inside of the stainless steel tubing. The mouthpiece is made of food grade silicon.

Plastic USB Charger for battery assembly holds a small PCB to regulate charging. Another small PCB controls the battery function and voltage which is controlled by a clickable plastic power button seated in the stainless-steel tubing that can be pressed rapidly in succession to power on/power off the battery and adjust its voltage. A small stainless steel cleaning tool is included along with cardboard for packaging and plastic blister packaging printed with instructions and branding.

Significantly all of our raw materials are provided by Shenzhen Bauway Technology Co., Ltd. from the factory of Bauway H.K. Investment Limited in Shenzhen, China.

Further, the following represent the processes in this production by the manufacturer. Our average mCig orders of 5,000 units take around 3 weeks to come in to our warehouse from the time of the original order placement from our Chinese manufacturer. Furthermore, we do not currently have any exclusive product or distribution arrangements with our manufacturer and the loss or disruption of the production of our products could have a material adverse effect on our business, financial condition and results of operations.

The dollar amount of backlog orders believed to be firm, as of a recent date and as of a comparable date in the preceding fiscal year, together with an indication of the portion thereof not reasonably expected to be filled within the current fiscal year, and seasonal or other material aspects of the backlog. (There may be included as firm orders government orders that are firm but not yet funded and contracts awarded but not yet signed, provided an appropriate statement is added to explain the nature of such orders and the amount thereof. The portion of orders already included in sales or operating revenues on the basis of percentage of completion or program accounting shall be excluded.)

Potential risks in public perception associated with Chinese factories.

Should Chinese factories continue to draw public criticism for exporting unsafe products, we may be adversely and materially affected by the stigma associated with Chinese production. This in turn would negatively affect our business operations, our revenues, and our financial projections and prospects.

RISKS ASSOCIATED WITH OUR COMMON STOCK

The market price of our common stock has been and may continue to be volatile or may decline regardless of the Company’s operating performance, and you may not be able to resell your shares at or above the initial public offering price and the price of our common stock may fluctuate significantly.

Since the commencement of trading of our common stock on the OTC Markets, the market price of our common stock has been volatile and fluctuates widely in price in response to various factors, which are beyond our control. Since the commencement of trading of our common stock on the OTC Markets, the price of our common stock went from $0.02 per share to almost $0.90 per share. The price of the stock as of fiscal year ending April 30, 2018 was trading at $0.22 per share. We attribute this large fluctuation especially on the industry that we operate in. Management believes that when the industry is doing well, we believe our stock price will benefit but when the industry is experience a down turn, we will not be immune from the decline.

Furthermore, we must note that the price of our common stock is not necessarily indicative of our operating performance or long-term business prospects. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock. Factors such as the following could cause the market price of our common stock to fluctuate substantially:

Volatility in our common stock price may subject us to securities litigation.

The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities to us and could divert our management’s attention and resources from managing our operations and business.

The Company may issue more shares in connection with future mergers or acquisitions, which could result in substantial dilution to existing shareholders.

Our Certificate of Incorporation authorizes the issuance of 560,000,000 shares of common stock. Any future merger or acquisition effected by us may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then-current stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board of Directors has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection with a future business combination or otherwise, dilution to the interests of our stockholders will occur, and the rights of the holders of common stock could be materially and adversely affected.

We do not anticipate paying cash dividends for the foreseeable future, and therefore investors should not buy our stock if they wish to receive cash dividends.

We have not paid dividends in the past and do not expect to pay dividends for the foreseeable future, and any return on investment may be limited to potential future appreciation on the value of our common stock.

We currently intend to retain any future earnings to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after considering various factors, including without limitation, our financial condition, operating results, cash needs, growth plans, and the terms of any credit agreements that we may be party to at the time. To the extent we do not pay dividends, our stock may be less valuable because a return on investment will only occur if and to the extent our stock price increases, which may never occur. In addition, investors must rely on sales of their common stock after price appreciation as the only way to realize their investment, and if the price of our stock does not appreciate, then there will be no return on investment. Investors seeking cash dividends should not purchase our common stock.

Our common stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.

Our common stock is considered to be a “penny stock.” It does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Exchange Act. Our common stock is a “penny stock” because it meets one or more of the following conditions (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange or (iii) it is not quoted on the NASDAQ Global Market or has a price less than $5.00 per share. The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock are subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Securities Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

FINRA sales practice requirements may limit a shareholder’s ability to buy and sell our common shares.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Rule 144 sales in the future may have a depressive effect on the company's stock price as an increase in supply of shares for sale, with no corresponding increase in demand will cause prices to fall.

All of the outstanding shares of common stock held by the present officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act of 1933 and as required under applicable state securities laws. Rule 144 provides in essence that a person who is an affiliate or officer or director who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a Company's issued and outstanding common stock. There is no limit on the amount of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of six months if the Company is a current reporting company under the Securities Exchange Act of 1934. A sale under Rule 144 or under any other exemption from the Securities Act of 1933, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.

Future issuances of shares for various considerations including working capital and operating expenses will increase the number of shares outstanding which will dilute existing investors and may have a depressive effect on the company's stock price.

There may be substantial dilution to our shareholders purchasing in future offerings as a result of future decisions of the Board to issue shares without shareholder approval for cash, services, payment of debt or acquisitions.

There may in all likelihood be little demand for shares of our common stock and as a result investors may be unable to sell at or near ask prices or at all if they need to liquidate their investment.

There may be little demand for shares of our common stock on the OTC Bulletin Board, or OTC Markets.com, meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that it is a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if the Company came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of any of our Securities until such time as it became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in the Company's securities is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on the securities price. We cannot give investors any assurance that a broader or more active public trading market for the Company's common securities will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give investors no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their securities of the Company.

Public disclosure requirements and compliance with changing regulation of corporate governance pose challenges for our management team and result in additional expenses and costs which may reduce the focus of management and the profitability of our company.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team will need to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED

Item 1. B. UNRESOLVED STAFF COMMENTS

Not Applicable

Item 2. PROPERTIES

CORPORATE HEADQUARTERS

We currently lease our corporate office facilities at 10752 Deerwood Park Blvd, Suite 100, Jacksonville, Florida 32256. In addition to this facility. Our lease expires on December 31, 2019.

In addition to corporate headquarters we maintain an office in Athens, Greece for international intellectual property rights for Europe, Middle East, and Africa, where applicable. The facilities are co-located in the operations of our paid Consultants and all rent cost are incorporated in our payments to the Consultants.

RETAIL SALES

We currently lease 2,500 square feet of office and warehouse space in Las Vegas, Nevada through our subsidiary, CBJ Distributing. This is our current distribution center for shipment of our Hemp based CBD products and electronic cigarettes. The lease expires in 2022.

In addition to the distribution center, we maintain offices in Jacksonville and Melbourne, Florida for our retail segment. The facilities are co-located in the operations of our paid Consultants and all rent cost are incorporated in our payments to the Consultants.

AGRICULTURE

The company has acquired land in California City, California in which to fulfill its licenses for cannabis distribution, extraction, and cultivation within the state of California. The property is currently vacant land and has not yet been developed. We intend to establish a cultivation section and manufacturing facility in the future. This operation is conducted under CAAcres.

The company’s business location in Copake, New York in under dispute. We entered into an arrangement with FarmOn! Foundation where we were given unfettered access and control of the property in Copake, New York where we planted 13 acres of hemp crop under our subsidiary, NYAcres. FarmOn! Foundation has failed to abide by the terms of the agreement, no longer allows the company access to the site, and we believe currently holds the crop. We intend to enforce our rights and have brought legal action against FarmOn! Foundation. We may not be successful in this litigation.

Item 3. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. Except as set forth below we are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

The Company subsidiary, Grow Contractors, Inc., along with the Company and its officers was sued by APEX Management, LLC and Apex Operations, LLC (the “Solaris” project) for the return of approximately $600,000 in cash paid for services they allege were never provided. We have countersued for the payment of approximately $425,000 in services provided that have not yet been paid for. In addition, we have sued both Michael Sassano and Ronald Sassano individually for their roles in the alleged actions. The cases were settled in August 2019, which results have been reflected in this annual filing. The case files were sealed by the state and federal courts for the protection of all parties.

The Company subsidiary, Grow Contractors, Inc., was sued for alleged faulty services provided in the state of Oregon. Grow Contractors alleges it has outstanding, unpaid invoices and services were stopped for lack of payment. The case has been sent to arbitration which is expected to be conducted within the next calendar year.

The Company’s subsidiary, CBJ Distributing, has sued multiple customers in Las Vegas for the collection of unpaid invoices. We have created a reserve for the collection should we not prevail, or the customer is unable to pay should we win.

The company subsidiary, NYAcres, has filed a lawsuit against FarmOn! Foundation, Tessa Edick (our former NYACres CEO), and multiple FarmOn! Foundation board members. We are seeking enforcement of the agreement entered into by FarmOn! Foundation and Tessa Edick. The Company has invested approximately $900,000 into this venture and has harvested 28,000 hemp plants from approximately 13 acres of land. A condition to the agreement was that FarmOn! Foundation would obtain permission for both NYAcres and FarmOn! Foundation to grow Hemp through the New York state requirement process. FarmOn! Foundation obtain the license solely in their name. We have made massive improvement to the land, acquired equipment, and had various hemp seeds in inventory when FarmOn! Foundation removed NYAcres from the site. We believe FarmOn! Foundation has utilized our hemp seeds to plant its current crop in production. FarmOn! Foundation is seeking dismissal of the lawsuit.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

PART II

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

MARKET INFORMATION

Our common stock is quoted on the OTC Markets under the symbol MCIG. The following table sets forth for the periods indicated the range of high and low bid quotations per share as reported by the OTCQB. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not represent actual transactions.

Period	High		Low
May 1, 2017 through July 31, 2017	$	0.285	$	0.161
August 1, 2017 through October 31, 2017	$	0.287	$	0.130
November 1, 2017 through January 31, 2018	$	0.427	$	0.125
February 1, 2018 through April 30, 2018	$	0.280	$	0.175
May 1, 2018 through July 31, 2018	$	0.338	$	0.211
August 1, 2018 through October 31, 2018	$	0.350	$	0.220
November 1, 2018 through January 31, 2019	$	0.255	$	0.141
February 1, 2019 through April 30, 2019	$	0.180	$	0.067

The closing price of our common stock as reported on the OTCQB Marketplace was $0.033 on November 8, 2019.

HOLDERS

As of August 15, 2019, there were approximately 56 owners of record for our common stock. This does not include an indeterminate number of stockholders whose shares may be held by brokers in street name. The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There is no redemption or sinking fund provisions applicable to the common stock.

Transfer Agent and Registrar

Our independent stock transfer agent is Island Stock Transfer, 15500 Roosevelt Blvd., Suite 301Clearwater, FL 33760 Telephone: (727) 289-0010.

DIVIDENDS

We have never paid or declared any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to fund the expansion of our business, and we do not anticipate paying any cash dividends for the foreseeable future following this offering. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors deems relevant. In addition, the terms of any future debt or credit facility may preclude us from paying dividends.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Under its Year 2016 Stock Option Plan (the “Plan”), the Company grants stock options for a fixed number of shares to employees and directors with an exercise price equal to the fair market value of the shares at the date of grant.

Options granted under the Plan are exercisable at the exercise price of grant and, subject to termination of employment, expire five years from the date of issue, are not transferable other than on death, and vest in monthly installments commencing at various times from the date of grant. A summary of the Company’s stock option plan as of April 30, 2019 is presented below:

	Shares

Options outstanding at May 1, 2017		12,076,830
Granted in FY 2018		9,551,830
Forfeited in FY 2018		4,376,830
Exercised in FY 2018		3,450,000
Options outstanding at April 30, 2018		12,225,000
Options outstanding at May 1, 2018		12,225,000
Granted in FY 2019		-
Forfeited in FY 2019		-
Exercised in FY 2019		675,000
Options outstanding at April 30, 2019		11,550,000
Options exercisable at April 30, 2019		11,550,000

There are currently 24,576,830 unissued options under the 2016 Stock Option Plan.

RECENT SALES OF UNREGSTERED SECURITIES

In the year ended April 30, 2019, we issued an aggregate of 100,000 shares of common stock valued at approximately $28,890 for professional services to Jessica Gomez. In addition, the Company issued 5,416,551 common shares to Michael Hawkins through a reduction of accounts payable in the amount of $135,414 under his warrant agreement. We issued 596,249 shares through a cashless exercise of the 2016 Stock Option Plan to multiple individuals. We issued 12,450,987 shares of common stock in the acquisition of CBJ Distributing for a total value of $3,734,051. We cancelled 4,050,000 shares of common stock originally issued under a subscription agreement through the 2016 Stock Option Plan. The subscription agreement was unpaid, and the parties agreed to cancel the stock.

In the year ended April 30, 2018, we issued an aggregate of 4,750,000 shares of common stock valued at approximately $181,040 for professional services. In addition, the Company issued 2,600,000 common shares for investments in the amount of $650,000. Furthermore, we issued 2,300,000 in a legal settlement valued at $190,900.

The issuance of such shares of our common stock was effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933, as mended (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

ISSUER PURCHASES OF EQUITY SECURITIES

None.

ITEM 6. SELECTED FINANCIAL DATA.

We are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-K.

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

Management’s Discussion and Analysis of Results of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the financial statements included herein. Further, this MD&A should be read in conjunction with the Company’s Financial Statements and Notes to Financial Statements included in this Annual Report on Form 10-K for the years ended April 30, 2019 and 2018, as well as the “Business” and “Risk Factors” sections within this Annual Report on Form 10-K. The Company's financial statements have been prepared in accordance with United States generally accepted accounting principles.

Management’s Discussion and Analysis may contain various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-K, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company has adopted the most conservative recognition of revenue based on the most astringent guidelines of the SEC. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.

Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

Any future equity financing will cause existing shareholders to experience dilution of their interest in our Company. In the event we are not successful in raising additional financing, we anticipate that we will not be able to proceed with our business plan. In such a case, we may decide to discontinue our current business plan and seek other business opportunities in the resource sector. Any business opportunity would require our management to perform diligence on possible acquisitions.

During this period, we will need to maintain our periodic filings with the appropriate regulatory authorities and will incur legal and accounting costs. In the event no other such opportunities are available, and we cannot raise additional capital to sustain operations, we may be forced to discontinue business. We do not have any specific alternative business opportunities in mind and have not planned for any such contingency.

The Company's MD&A is comprised of significant accounting estimates made in the normal course of its operations, overview of the Company's business conditions, results of operations, liquidity and capital resources and contractual obligations.

The discussion and analysis of the Company’s financial condition and results of operations is based upon its financial statements, which have been prepared in accordance with generally accepted accounting principles generally accepted in the United States (or "GAAP"). The preparation of those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities at the date of its financial statements. Actual results may differ from these estimates under different assumptions or conditions.

OVERVIEW

We were incorporated in the State of Nevada on December 30, 2010 originally under the name Lifetech Industries, Inc. All agreements related to the Lifetech business were terminated and closed as of April 30, 2014. Effective August 2, 2013, the name was changed from "Lifetech Industries, Inc." to "mCig, Inc." The Company’s common stock is traded under the symbol “MCIG.” The Company is based in Jacksonville, Florida. MCIG acts as a holding company that operates 10 subsidiaries. In FY2017 we began tracking income through segments. In FY2019 the company tracks its services and products through four segments and corporate. We track our financial records by the following segments:

· Construction, Manufacturing and Distribution ("CMD")

· Retail Sales

· Media and Technologies (NOTE: Final year due to spin-off of OBTIX, Inc. – any residual activity beginning May 1, 2019 shall be consolidated with Corporate)

· Agriculture (Cultivation)

· Corporate

The Company initially earned revenue through wholesale and retail sales of electronic cigarettes, vaporizers, and accessories in the United States. It offered electronic cigarettes and related products through its online store at www.mcig.org, as well as through the company’s wholesale, distributor, and retail programs. We expanded operations to include the VitaCig brand in 2014.

In FY2015 we began offering hemp-based cannabinoid (“CBD”) products through various websites.

In 2016 the Company expanded its products and services to include construction.

In 2017 we added consulting services in the cannabis industry. In addition, we launched a social media platform, 420Cloud, in the cannabis markets.

In addition, the Company continues to look at strategic acquisitions in product and service developments for future growth. On June 30, 2018 we acquired 80% of CBJ Distributing, a cannabis supply company in Nevada.

RESULTS OF OPERATIONS

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our 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. On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation and contingencies.

We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances. These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We believe the following accounting policies are our critical accounting policies because they are important to the portrayal of our financial condition and results of operations and they require critical management judgments and estimates about matters that may be uncertain.

If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.

Revenue Recognition Policies

Revenues are presented net of discounts. In general, we recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based on the relative selling price method and revenue is recognized based on our policy for each respective element. We generate revenue primarily from sales of the electronic cigarettes, components for electronic cigarettes and related accessories. We recognize revenue when the product is shipped.

Amounts billed or collected in excess of revenue recognized are recorded as deferred revenue.

The Company measures construction revenue as a Cost-type contract in accordance with ASC 605, which discusses accounting for performance of construction contracts. The Company recognizes revenue on a cost-plus basis, provisions for reimbursable costs (which are generally spelled out in the contract), overhead recovery percentages, and fees. A fee may be a fixed amount or a percentage of reimbursable costs or an amount based on performance criteria. Generally, percentage fees may be accrued as the related costs are incurred, since they are a percentage of costs incurred, and profits therefore are recognized as costs are incurred.

Our operating results for the years ended April 30, 2019 and 2018 are summarized as follows:

Operating Results
	For the year ended April 30,
	2019	2018
Revenue	$ 2,315,513	$ 7,078,680
Cost of goods sold	2,080,021	4,471,393
Gross profit	235,492	2,607,287
Expenses	3,493,271	3,812,290
Net (loss) from operations	(3,257,779)	(1,205,003)

Revenue

Our revenue from continuing operations for the year ended April 30, 20198 was $2,325,513 compared to $7,078,680, a decrease of $4,763,167 or approximately 67.3%, from the year ended April 30, 2018. Revenues consists of $70,000 in CMD, $2,190,223 in retail sales, and $55,290 in technology and media sales.

Cost of Goods Sold

Our cost of goods sold for the year ended April 30, 2019 was $2,080,021 compared to $4,471,393 for the year ended April 30, 2018. The cost of goods consisted of $186,686 in construction cost, $1,169,235 in resale products, $59,215 in commissions, $484,294 in software amortization, and $180,591 in other fees that include merchant fees and shipping. The decrease in cost of goods is due primarily to reduction of construction projects.

Gross Profit

Our gross profit for the year ended April 30, 2019 was $235,492 compared to $2,607,287 for the year ended April 30, 2018. The gross profit of $235,492 for the year ended April 30, 2019 represents approximately 10.2% as a percentage of total revenue. The gross profit of $2,607,287 for the year ended April 30, 2018 represents approximately 38.4% as a percentage of total revenue. This decrease in the gross profit is primarily attributed to decrease in sales and the higher cost of goods and services.

Operating Expenses

Our operating expenses decreased by $319,019 to $3,493,271 for the year ended April 30, 2019, from $3,812,290 for the year ended April 30, 2018.

The decrease was primarily due to the increases in selling, general and administrative expenses of $216,158, bad debts of $800,468, and amortization and depreciation of $97,228, with decreases in stock based compensation of $317,950, in consulting fees of $595,052, in professional fees of $507,546, in marketing and advertising of $5,713, and research and development of $6,612.

Our total operating expenses for the year ended April 30, 2019 of $3,493,271 consisted of $28,990 of stock based compensation, $536,735 of selling, general and administrative expenses, $413,831 in professional fees, $777,913 in consulting fees, $73,091 in marketing and advertising, $1,372,725 in bad debts, and $289,986 of amortization and depreciation expenses.

Our general and administrative expenses consist of bank charges, telephone expenses, meals and entertainments, computer and internet expenses, postage and delivery, travel, rent, office supplies and other expenses.

Net Loss

Our net loss increased by $2,052,776 to a net loss of $3,257,779 for the year ended April 30, 2019 from a net loss of $1,205,003 for the year ending April 30, 2018. The increase in net loss compared to the prior year is a result of the decrease in gross profit of $2,371,795 with a decrease in operating expenses of $319,019.

Liquidity and Capital Resources

Introduction

During the year ended April 30, 20198, we utilized $230,119 decreasing our cash on hand as of April 30, 2019 to $281,832.

Cash Requirements

We had cash available of $281,132 as of April 30, 2019. Based on our revenues, cash on hand and current monthly burn rate, the company has enough cash to sustain operations for 6 months. Without the use of stock based compensation and/or the raising of capital, the company projects it does not have enough capital to sustain operations for a period of approximately the next 12 months.

Sources and Uses of Cash

Operations

We used $3,062,453 in continuing operating activities for the year ended April 30, 2019, as compared to $1,989,038 for the year ended April 30, 2018.

Investments

Cash increased by investing activities was $297,531 for the year ended April 30, 2019, as compared to cash used in investing activities of $463,837 for the year ended April 30, 2018.

In the year ended April 30, 2018, the company issued stock in non-cash investing activities of $3,043,537 in the acquisition of CBJ Distributing; $292,500 in the acquisition of cannabis license in the state of California, and $67,500 in land purchase in California City, California.

Financing

We had net cash provided by continuing financing activities of $2,534,803 for the year ended April 30, 2019, as compared to $1,330,163 for the year ended April 30, 2018. Our financing activities consisted of borrowings from a related party, notes receivable and notes payable and net proceeds from the issuance and acquisition of stock.

Our adjusted operating results for the years ended April 30, 2019 and 2018 are summarized as follows:

Adjusted Operating Results
	For the year ended April 30,
	2019	2018
Revenue	$ 2,315,513	$ 7,078,680
Cost of goods sold	1,595,727	4,150,440
Gross profit	719,786	2,928,240
Expenses	1,548,716	1,952,513
Net (loss) from operations	(828,930)	975,727

Adjusted Revenue

Our adjusted revenue from continuing operations for the year ended April 30, 20198 was $2,315,513 compared to $7,078,680, a decrease of $4,763,167 or approximately 67.3%, from the year ended April 30, 2018. Revenues consists of $70,000 in CMD, $2,190,223 in retail sales, and $55,290 in technology and media sales.

Adjusted Cost of Goods Sold

Our adjusted cost of goods sold for the year ended April 30, 2019 was $1,595,727 compared to $4,150,440 for the year ended April 30, 2018. The cost of goods consisted of $186,686 in construction cost, $1,169,235 in resale products, $59,215 in commissions, and $180,591 in other fees that include merchant fees and shipping. The decrease in adjusted cost of goods is due primarily to reduction of construction projects.

Adjusted Gross Profit

Our adjusted gross profit for the year ended April 30, 2019 was $719,786 compared to $2,928,240 for the year ended April 30, 2018. The adjusted gross profit of $719,786 for the year ended April 30, 2019 represents approximately 31.1% as a percentage of total revenue. The adjusted gross profit of $2,928,240 for the year ended April 30, 2018 represents approximately 41.4% as a percentage of total revenue. This decrease in the gross profit is primarily attributed to decrease in sales and the higher cost of goods and services.

Adjusted Operating Expenses

Our adjusted operating expenses decreased by $403,797 to $1,548,716 for the year ended April 30, 2019, from $1,952,513 for the year ended April 30, 2018.

The increase was primarily due to the increases in selling, general and administrative expenses of $216,158, with decreases in consulting fees of $595,052, in professional fees of $498,546, in marketing and advertising of $5,713, and research and development of $6,612.

Our total adjusted operating expenses for the year ended April 30, 2019 of $1,595,727 consisted of $536,735 of selling, general and administrative expenses, $413,831 in professional fees, $777,913 in consulting fees, and $73,091 in marketing and advertisings.

Adjusted Net Income (Loss)

Our adjusted net loss increased by $1,804,657 to a net loss of $828,930 for the year ended April 30, 2019 from a net income of $975,727 for the year ending April 30, 2018. The increase in net loss compared to the prior year is a result of the decrease in gross profit of $2,208,454 with a decrease in operating expenses of $403,797.

Off-Balance Sheet Arrangements

None

Going Concern

Our financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is relatively new and has a short history and relatively few sales, no certainty of continuation can be stated. The accompanying consolidated financial statements for the years ended April 30, 2019 and 2018 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

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

We are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets	F-2

Consolidated Statements of Operations	F-3

Consolidated Statements of Stockholders' Equity	F-4

Consolidated Statements of Cash Flows	F-5

Notes to Consolidated Financial Statements	F-7

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

mCig, Inc.

Opinion on the Financial Statements

We have audited the accompanying the consolidated balance sheets of mCig Inc. and its subsidiaries ("the Company") as of April 30, 2019 and 2018 and the related statements of operations, changes in stockholders' deficit and cash flows, for each of the years then ended, and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended April 30 2019, in conformity with generally accepted accounting principles in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, as of April 30, 2019, the Company has negative cash flow and there are no assurances the Company will generate a profit or obtain positive cash flow, in addition the Company has a nominal working capital deficit. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plan regarding these matters is also described in Note 3 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Weinstein International CPA

We have served as the Company's auditor since 2019.

Tel Aviv, Israel

November 19, 2019

F-1

*mCig, Inc.*
*and SUBSIDIARIES*
*Consolidated Balance Sheets*
ASSETS
			As of April 30,
			2019	2018
Current Assets
	Cash and cash equivalents		$ 281,832	$ 511,950
	Accounts receivable, net		265,181	2,159,267
	Inventory		818,359	63,297
	Work in Progress		21,605	64,245
	Notes and other receivable		130,193	1,529
	Prepaid expenses		13,940	90,141
		Total current assets	1,531,110	2,890,429
Property, plant and equipment, net			2,676,734	3,138,019
Cost basis investment			911,534	967,608
Intangible assets, net			486,896	835,320
Total assets			$ 5,606,274	$ 7,831,376
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable and accrued expenses		$ 830,621	$ 218,703
	Due to shareholder		1,219,412	571,138
	Other current liabilities		391,885	-
	Reserve for uncollected accounts		-	586,560
	Reserve for legal settlements		-	750,579
	Deferred revenue		20,977	5,145
		Total current liabilities	2,462,895	2,132,125
Long term liabilities
	Notes payable		275,000	-
		Total long-term liabilities	275,000	-
		Total Liabilities	2,737,895	2,132,125
Stockholders' equity
	Preferred stock, $0.0001 par value; 50,000,000 shares authorized;		435	1,185
		4,350,000 and 11,850,000 shares issued and outstanding, as
		of April 30, 2019 and April 30, 2018, respectively.
	Common stock, $0.0001 par value; 560,000,000 shares authorized;		51,512	41,561
		515,124,596 and 415,610,809 shares issued and outstanding,
		as of April 30, 2019 and April 30, 2018, respectively.
	Treasury stock		(680,330)	(680,330)
	Additional paid in capital		13,968,212	12,673,339
	Accumulated deficit		(9,265,671)	(6,208,431)
		Total stockholders' equity	4,074,158	5,827,324
	Non-controlling interest		(1,205,779)	(128,073)
		Total equity	2,868,379	5,699,251
		Total liabilities and stockholders' equity	$ 5,606,274	$ 7,831,376

See accompanying notes to audited consolidated financial statements.

F-2

*mCig, Inc.*
*and SUBSIDIARIES*
*Consolidated Statements of Operations*


		For the year ended April 30,
		2019	2018
Sales		$ 2,315,513	$ 7,078,680
	Construction costs	186,686	2,732,011
	Merchandise	1,169,235	1,252,142
	Commissions	59,215	59,844
	Merchant fees, shipping, and other costs	180,591	106,443
	Amortization and depreciation as a COG	484,294	320,953
Total Cost of Sales		2,080,021	4,471,393
Gross Profit		235,492	2,607,287
Selling, general, and administrative		536,735	320,577
Professional fees		413,831	921,377
Stock based compensation		28,990	346,940
Marketing & advertising		73,091	78,804
Research and development		-	6,612
Consultant fees		777,913	1,372,965
Bad Debts		1,372,725	572,257
Amortization and depreciation		289,986	192,758
Total operating expenses		3,493,271	3,812,290
Income (Loss) from operations		(3,257,779)	(1,205,003)
Other income (expense)		(397,923)	-
Net income from operations		(3,655,702)	(1,205,003)
Loss on discontinued operations		479,245	-
Net income(loss) before minority interest		(4,134,947)	(1,205,003)
Gain attributable to non-controlling interest		1,077,706	128,073
Net income (loss) attributable to controlling interest		$ (3,057,241)	$ (1,076,930)
Basic and diluted (Loss) per share:
Income(Loss) per share from continuing operations		(0.0053)	(0.0027)
Income(Loss) per share		(0.0062)	(0.0027)
Weighted average shares outstanding - basic and diluted		493,439,072	392,843,133

See accompanying notes to unaudited consolidated financial statements.

F-3

*MCIG, INC.*
*and SUBSIDIARIES*
*Consolidated Statements of Changes in Stockholders’ Equity*

							Additional	Non-controlling		Total
	Preferred Stock		Common Stock		Treasury Stock		Paid-in	Non-controlling	Accumulated	Stockholders'
	Shares	Amount	Shares	Amount	Shares	Amount	Capital	Interest	Deficit	Equity (Deficit)
Balance – April 30, 2017	12,850,000	$ 1,285	386,094,258	$ 38,609	1,700,000	$(680,330)	$11,118,841	$ -	$ (5,131,501)	$ 5,346,904
Stock converted from preferred to common	(1,000,000)	(100)	10,000,000	1,000	-	-	(1,000)	-	-	(100)
Stock issued for services	-	-	3,750,000	375	-	-	155,690	-	-	156,065
Stock issued from warrant exercise	-	-	6,416,551	642	-	-	159,873	-	-	160,514
Stock issued from ESOP	-	-	3,450,000	345	-	-	(345)	-	-	-
Stock issued under legal settlement	-	-	2,300,000	230	-	-	190,670	-	-	190,900
Stock issued under private placement	-	-	2,600,000	260	-	-	649,740	-	-	650,000
Adjustment for Agri-Contractors acquisition	-	-	1,000,000	100	-	-	(100)	-	-	-
Net income(loss)	-	-	-	-	-	-	-	128,073	(1,205,003)	(1,076,930)
Capital raised by OBITX, Inc., net	-	-	-	-	-	-	399,970	-	-	399,970
Balance – April 30, 2018	11,850,000	1,185	415,610,809	41,561	1,700,000	(680,330)	12,673,339	128,073	(6,336,504)	5,827,324
Stock converted from preferred to common	(8,500,000)	(850)	85,000,000	8,500	-	-	(7,650)	-	-	-
Stock issued for services	-	-	100,000	10	-	-	28.980	-	-	28.980
Stock issued under private placement	1,000,000	100	-	-	-	-	199.900	-	-	200,000
Stock issued from warrant exercise	-	-	5,416,551	542	-	-	134,872	-	-	135,414
Stock issued from ESOP	-	-	596,249	60	-	-	20,272	-	-	20,332
Stock issued for acquisition	-	-	12,450,987	1,245	-	-	698,245	-	-	699,490
Stock cancelled	-	-	(4,050,000)	(405)	-	-	(116,895)	-	-	(117,300)
Adjustment for OBITX spin-off dividend							337,149			337,149
Net income(loss)	-	-	-	-	-	-	-	1,077,706	(4,134,947)	(3,057,241)
Balance – April 30, 2019	4,350,000	435	515,124,596	51,512	1,700,000	(680,330)	13,968,212	1,205,779	(10,471,451)	4,074,158

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

F-4

*mCig, Inc.*
*and SUBSIDIARIES*
*Statements of Cash Flows*
*For the Year Ended April 30,*
				2019	2018
Cash flows from operating activities:
Net (Loss)				(4,134,959)	$ (1,076,930)
Adjustments to reconcile net loss to net
	Cash provided by (used in) operating activities:
		Depreciation and amortization		762,821	513,712
		Common stock issued for services		28,990	346,940
	Decrease (Increase) in:
		Accounts receivable, net		448,613	(1,915,868)
		Other receivable		(128,664)	(93,431)
		Inventories		(797,831)	(73,264)
		Prepaid expenses and other current assets		72,361	56,874
		Accounts payable, accrued expenses and taxes payable		(138,661)	(561,292)
		Deferred revenue		15,832	(511,888)
		Reserve for uncollectable accounts		809,045	1,326,109
	Total adjustment to reconcile net income to net cash			1,072,506	(912,108)
			Net cash provided in operating activities	(3,062,453)	(1,989,038)
Cash flows from investing activities:
	Increase (Decrease) in:
		Cost basis investments		718,025	(65,585)
		Acquisition of property, plant and equipment		(505,720)	(390,872)
		Acquisition of intangible assets		85,227	(7,380)
			Net cash received in investing activities	297,532	(463,837)

See accompanying notes to audited consolidated financial statements.

F-5

*mCig, Inc.*
*and SUBSIDIARIES*
*Statements of Cash Flows*
*For the Year Ended April 30,*
*continued*
			2019	2018

Cash Flows from Financing Activities:
	Borrowing from related party, net		648,274	397,826
	Notes Payable		666,885	(150,000)
	Advances from related party		-	(128,073)
	Proceeds from issuance of stock, net		1,219,644	1,210,410
		Net cash provided by financing activities	2,534,803	1,330,163
Net Change in Cash			(230,118)	(1,122,712)
Cash at Beginning of Year			511,950	1,634,662
Cash at End of Period			281,832	511,950

Supplemental Disclosure of Cash Flows Information:
	Cash paid for interest		7,827	-
	Cash paid for income taxes		-	-
Non-cash Investing and Financing Activities:
Stock issued for cannabis licenses in California			292,500	-
Stock issued for purchase of CBJ Distributing			3,043,537	-
Stock issued for land acquisition in California			67,500	-
See accompanying notes to audited consolidated financial statements.

F-6

mCig, INC.

And SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

The accompanying consolidated audited financial statements of mCig, Inc., (the “Company”, “we”, “our”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”).

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany accounts and transactions have been eliminated.

The consolidated financial statements include the accounts of the Company and its subsidiaries:

· Agri-Contractors, LLC (“AGRI”)

· CAAcres, Inc., (“CAAcres”) – 80% ownership

· CAL Foundation (FKA NewCo2, Inc.,) (“CALF”) – 80% ownership

· CBJ Distributing, LLC (“CBJ”) – 80% ownership

· Grow Contractors Inc., (“GROW”)

· mCig Internet Sales, Inc., (“MINT”)

· mCig Limited (“MCIGL”)

· NYAcres, Inc., (“NYAcres”)

· OBITX, Inc., (FKA GigeTech, Inc.) (“GIGE”) – 53% ownership and 95% voting control

· Tuero Asset Management, Inc. (“TAMI”)

· Tuero Capital, Inc., (“TUERO”)

· Vapolution, Inc., (“VAPO”)

· VitaCig, Inc., (“VITA”)

Description of Business

The Company initially earned revenue through wholesale and retail sales of electronic cigarettes, vaporizers, and accessories in the United States. It offered electronic cigarettes and related products through its online store at www.mcig.org, as well as through the company’s wholesale, distributor, and retail programs. We expanded operations to include the VitaCig brand in 2014.

In FY2015 we began offering hemp-based cannabinoid (“CBD”) products through various websites.

In 2016 the Company expanded its products and services to include construction.

In 2017 we added consulting services in the cannabis industry. In addition, we launched a social media platform, 420Cloud, in the cannabis markets.

F-7

We acquired approximately two acres of land in California City, California and obtained three cannabis licenses (cultivating, manufacturing, and distribution of cannabis products in California).

During this fiscal year, we operated multiple websites (which are not incorporated as part of this Form 10K report). The Company’s primary website is www.mciggroup.com.

Subsidiaries of the Company

Operating Subsidiaries: The following companies currently operating are consolidated with mCig, Inc., financial statements:

CAAcres, Inc.

CAL Foundation (FKA Newco2, Inc)

NewCo2, Inc., was created on January 19, 2018 as a California not-for-profit company. We own 80% of the not-for-profit business. NewCo2, Inc., maintains three cannabis licenses in the State of California. On August 6, 2018 the name was changed to Cal Acres Foundation, Inc.

CBJ Distributing, LLC

On June 30, 2018 the company elected to exercise its option to acquired Cannabiz Supply with an effective date of May 1, 2018. The purchase price was $3,457,796.

mCig Internet Sales, Inc.

OBITX, Inc.

Tuero Asset Management, Inc.

We incorporated Tuero Asset Management, Inc., in which to manage all our intellectual and intangible assets.

Vapolution, Inc.

Effective January 17, 2017 we began consolidating Vapolution with the Company’s financial reports. Vapolution, Inc., is wholly owned by mCig, Inc.

F-8

VitaCig, Inc.

On May 26, 2016 we incorporated VitaCig, Inc., (“VitaCig”) in the state of Florida. VitaCig headquarters our global e-cig operations. VitaCig, Inc., is a wholly owned subsidiary of the Company.

Discontinued subsidiaries: The following companies are no longer operating but are consolidated due to activity conducted during the fiscal years ending April 30, 2019 and April 30, 2018:

Agri-Contractors, LLC

Grow Contractors Inc

The Company incorporated Grow Contractors Inc., on December 5, 2016. Grow Contractors Inc, operates the construction and consulting segment. On November 18, 2016, the Company purchased Agri-Contractors, LLC and assigned the Grow Contractors name and website to Grow Contractors Inc. Grow Contractors Inc. is a wholly owned subsidiary of the Company.

mCig Limited

NYAcres, Inc.

NYAcres, Inc., (“NYAcres”) was incorporated on November 20, 2017 under the laws of the state of New York. NYAcres was created to participate in the Joint Venture NYAcres with FarmOn! Foundation. The joint venture is an agriculture venture for the planting and growing of industrial hemp.

Tuero Capital, Inc.

We incorporated in May 2017 to provide financial services to our clients. Tuero Capital provides financial services and consulting to cannabis and cryptocurrency markets.

Subsidiaries owned but not consolidated: The following companies are not consolidated with the financial statements as the Company does not have control of the entities, nor directs their operations:

Omni Health, Inc., (FKA - VitaCig, Inc.)

Omni Health, Inc., a Nevada Corporation, is a public company trading under OMHE. The current OMNI management team has elected to discontinue its reporting process and is no longer a fully reporting public entity. As such, the Company, which treats its ownership as a cost basis investment, has elected to impair its cost basis (see Footnote: 9)

Note 2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates include: revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation and recoverability of long-lived assets; property and equipment; contingencies; and income taxes.

F-9

On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

Revenue Recognition Policies

We intend to earn revenue from the subscription, non-software related hosted services, term-based and perpetual licensing of software products, associated software maintenance and support plans, consulting services, training, and technical support.

On February 1, 2018, we adopted Topic 606, using the modified retrospective transition method applied to those contracts which were not completed as of February 1, 2018. Results for reporting periods beginning after February 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on February 1, 2018.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

· identification of the contract, or contracts, with a customer;

· identification of the performance obligations in the contract;

· determination of the transaction price;

· allocation of the transaction price to the performance obligations in the contract; and

· recognition of revenue when, or as, we satisfy a performance obligation.

Research and Development

Research and Development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as an expense as incurred.

Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized only if the product or process is technically and commercially feasible, if development costs can be measured reliably, if future economic benefits are probable, if the Company intends to use or sell the asset and the Company intends and has sufficient resources to complete development. For the year ended April 30, 2019 the Company has recognized zero, and for the year ended April 30, 2018 the Company has recognized zero as a capital asset.

For the years ended April 30, 2019 and April 30, 2018, all research and development costs have been expensed in profit or loss.

Concentration of Credit Risk and Significant Customers

Financial instruments which potentially subject the Company to a concentration of credit risk consist principally of temporary cash investments and accounts receivable. The Company places its temporary cash investments with financial institutions insured by the FDIC.

Concentrations of credit risk with respect to trade receivables are limited due to the diverse group of customers to whom the Company sells. The Company establishes an allowance for doubtful accounts when events and circumstances regarding the collectability of its receivables warrant based upon factors such as the credit risk of specific customers, historical trends, other information and past bad debt history. The outstanding balances are stated net of an allowance for doubtful accounts.

For the years ended April 30, 2019 and April 30, 2018, the Company has no customers who impact the Company’s revenues or receivables more than 5%.

Segment Information

In accordance with the provisions of SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, the Company is required to report financial and descriptive information about its reportable operating segments. The Company identifies its operating segments as divisions based on how management internally evaluates separate financial information, business activities and management responsibility. In addition to the corporate segment, the Company segments are as follows:

· Construction, Manufacturing and Distribution ("CMD")

· Retail Sales

· Media and Technologies

· Agriculture (Cultivation)

· Corporate

F-10

Business Segments
	Total Revenue			Percentage of Total Revenue
	Year ended April 30,			The year ended April 30,
	2019	2018	2017	2019	2018	2017
CMD	$ 70,000	3,673,218	$ 2,327,144	3.0%	51.9%	48.7%
Retail Sales	2,190,223	2,041,616	2,449,928	94.6%	28.8%	51.3%
Media and Technologies	55,290	1,363,846	-	2.4%	19.3%	0.0%
Agriculture	-	-	-	0.0%	0.0%	0.0%
Corporate	-	-	-	0.0%	0.0%	0.0%
Total	$ 2,315,513	7,078,680	$ 4,777,072	100.0%	100.0%	100.0%

Stock-Based Compensation

The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718, Compensation – Stock Compensation. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 505-50, Equity Based Payments to Non-Employees, with respect to options and warrants issued to non-employees.

Deferred Revenue

Payments received by the Company in advance are recorded as deferred revenue until the merchandise has shipped to the customer.

Cost of Goods Sold

The Company recognizes the direct cost of purchasing product for sale, including freight-in and packaging, as cost of goods sold in the accompanying statement of operations.

Cost of Revenue

Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by OEMs, to drive traffic to our websites and products, and to acquire online advertising space; costs incurred to support and maintain Internet-based products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Capitalized software development costs are amortized over the estimated lives of the products.

Cash and Cash Equivalents

The Company includes in cash and cash equivalents all short-term, highly liquid investments that mature within three months of the date of purchase. Cash equivalents consist principally of investments in interest-bearing demand deposit accounts and liquidity funds with financial institutions and are stated at cost, which approximates fair value. For cash management purposes, the company concentrates its cash holdings in multiple FDIC insured state and federal banking institutions. The Company had no cash equivalents at April 30, 2019 or 2018.

Inventory

In accordance with ASU 2015-11 – Inventory (Topic 330) – Simplifying the Measurement of Inventory, the Company’s inventory consists of finished product, mCig products valued at the lower of cost or market valuation under the first-in, first-out method of costing.

As of April 30, 2019, the Company had no allowance for obsolescence.

F-11

Property, Plant, and Equipment

Property, plant and equipment (“PPE”) are stated at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, improvements and major replacements that extend the life of the asset are capitalized.

Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of depreciable assets, which are generally three to five years.

The Company classifies its software under the Financial Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No. 10, Accounting for Internal Use Software, and the Governmental Accounting Standards Board (GASB) Statement No. 42, Accounting of Costs of Computer Software Developed or Obtained for Internal Use. When software is used in providing goods and services it is classified as PPE. The Company considers its 420 Cloud software as a major part of the Company’s operations that is intended to provide profits.

Accounts Receivable

The Company’s accounts receivables are primarily through its construction and media and technologies segments. As the retail division is either paid through credit card processing and prepaid wholesale purchases, the Company projects insignificant amounts of outstanding accounts receivable for its retail division. The Company recognizes receipt of payment at the time the funds are deposited with the merchant services account of the Company. When the merchant services vendor determines to maintain a reserve for potential refunds and chargebacks, the Company reviews the reserve, to i) determine if the reserve is probably uncollectible, and ii) if a loss is probable, a reasonable estimate of the amount of the loss. We then allocate a portion or all of the reserve for bad debt, in accordance with FASB ASC 450-20-25-2. Once the vendor releases the funds, the bad debt reserve is appropriately reversed. The Company recognized $1,395,605 and $0 as an uncollectable reserve for the periods ending April 30, 2019 and April 30, 2018, respectively.

Advertising Costs and Expense

The advertising costs are expensed as incurred. During the years ended April 30, 2019 and 2018, the advertising costs were $73,091 and $78,801, respectively.

Foreign Currency Translation

The Company’s functional currency and its reporting currency is the United States Dollar.

Intangible Assets

The Company’s intangible assets consist of certain website development costs that is amortized over their useful life in accordance with the guidelines of ASC 350-30 General Intangible Other than Goodwill and ASC 350-50 Website Development Costs. In addition to these finite intangible assets, the Company accounts for its infinite intangible assets without depreciation and/or amortization. These assets are reviewed annually by an independent review to determine if an impairment should be recognized. The Company determined impairments were warranted for the Company’s intangible assets (see Note 9 for further information).

Research and Development

The costs of research and development are expensed as incurred. During the years ended April 30, 2019 and 2018, the research and development costs were $0 and $6,612, respectively.

Financial Instruments

The carrying amounts reflected in the balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

F-12

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

Basic and Diluted Net Loss Per Share

The Company follows ASC Topic 260 – Earnings Per Share, and FASB 2015-06, Earnings Per Share to account for earnings per share. Basic earnings per share (“EPS”) calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Basic net earnings (loss) per common share are computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Dilutive common stock equivalent shares consist of Series A convertible preferred stock, convertible debentures, stock options and warrant common stock equivalent shares.

Concentration of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade receivables. Concentrations of credit risk with respect to trade receivables are limited due to the clients that comprise our customer base and their dispersion across different business and geographic areas. We estimate and maintain an allowance for potentially uncollectible accounts and such estimates have historically been within management's expectations.

We rely almost exclusively on one Chinese factory as our principle supplier for our e-cig products. Therefore, our ability to maintain operations is dependent on this third-party manufacturer.

Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company may occasionally maintain amounts on deposit with a financial institution that are in excess of the federally insured limit of $250,000. The risk is managed by maintaining all deposits in high quality financial institutions. The Company had $0 in excess of federally insured limits at April 30, 2019 and 2018.

Impairment of Long-lived Assets

The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, “Accounting for the Impairment of Long-Lived Assets”. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset.

In accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, ASU 2011-08, Intangible-Goodwill and Other (Topic 350)” Testing Goodwill for Impairment, and ASU 2012-02 Intangibles-Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment our intangible assets are evaluated for potential impairment annually, generally during the fourth quarter, by comparing the fair value of a reporting unit to its carrying value.

F-13

If the carrying value exceeds the fair value, impairment is measured by comparing the derived fair value of to its carrying value, and any impairment determined would be recorded in the current period. The Company recognized no impairment on its intangible assets for the periods ending April 30, 2018 and April 30, 2017.

Cost-Basis Investments

The Company’s non-marketable equity investment in Omni Health, Inc., and Stony Hill Corp is recorded using the cost-basis method of accounting and is classified within other long-term assets on the accompanying balance sheet as permitted by FASB ASC 325, “Cost Method Investments”. The Company elected to purchase CBJ Distributing under its Option Agreement subsequent to this reporting period, as such we maintain the cost-basis for this option. During 2019 we impaired a total of $386,031 (See Note 7). We impaired $152,023 of our investment in Omni Health, Inc., $24,000 of our Stony Hill stock, $160,008 of our investment in the acquisition of Agri-Contractors, and $50,000 in our OBITX investment.

Equity-Basis Investments

The Company accounted for its ownership of VitaCig, Inc., (Nevada) as an equity-basis investment. As of April 30, 2019, and April 30, 2018, there is no net book value of the ownership of VitaCig, as the pro-rata value after the Spin-off and the impairment of the investment in VitaCig.

On June 22, 2016, the Company reduced its ownership of VitaCig, Inc., to 57,500,000 through a Separation and Transfer Agreement where the Company acquired the business operations of VitaCig in exchange for selling back to the treasury of VitaCig, Inc., (Nevada) 172,500,000.

Warranties

Warranty reserves include management’s best estimate of the projected costs to repair or to replace any items under warranty, based on actual warranty experience as it becomes available and other known factors that may impact the Company’s evaluation of historical data. Management reviews mCig’s reserves at least quarterly to ensure that its accruals are adequate in meeting expected future warranty obligations, and the Company will adjust its estimates as needed. Initial warranty data can be limited early in the launch of a product and accordingly, the adjustments that are recorded may be material. As a result, the products that can be returned as a warranty replacement are extremely limited. As a result, due to the Company’s warranty policy, the Company did not have any significant warranty expenses to report for the year ended April 30, 2019. Based on these actual expenses, the warranty reserve, as estimated by management as of April 30, 2019 and April 30, 2018 were at $0. Any adjustments to warranty reserves are to be recorded in cost of sales.

It is likely that as we start selling higher priced products, that are not affected by federal shipping laws and/or are not single use items, we will acquire additional information on the projected costs to service work under warranty and may need to make additional adjustments. Further, a small change in the Company’s warranty estimates may result in a material charge to the Company’s reported financial results.

Commitments and Contingencies

The Company reports and accounts for its commitments and contingencies in accordance with ASC 440 – Commitments and ASC 450 – Contingencies. We recognize a loss on a contingency when it is probable a loss will incur and that the amount of the loss can be reasonably estimated. As of April 30, 2019, and April 30, 2018, the Company recognized a loss on contingencies of zero and $0, respectively.

Stock Options

In September 2016, we adopted a stock option plan. We account for stock options in accordance with ASC 718 – Compensation – Stock Compensation for employees. The company incorporates ASC Subtopic 505-50, Equity – Equity Based Payments to Non-Employees for issuance of stock options to non-employees.

Recent Accounting Pronouncements

The Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations, or cash flows of the Company.

F-14

On December 15, 2016, the following two ASU’s became effective, ASU 2015-11, Simplifying the Measurement of Inventory issued July 2015 and ASU 2014-09, Revenue From Contracts With Customers, issued May 2014, and must be utilized in fiscal years beginning after the effective date. The company has adopted and implemented the standards as part of its 2017 fiscal year. The early implementation had no effect on the financial performance of the Company. The Company reports its inventory by segments.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Components of an Entity, which updates the definition of discontinued operations. Going forward, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity's operations and financial results will be reported as discontinued operations in the financial statements. Previously, a component of an entity that is a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. Additionally, the condition that the entity not have any significant continuing involvement in the operations of the component after the disposal transaction has been removed. The effective date for the revised standard is for applicable transactions that occur within annual periods beginning on or after December 15, 2014. We do not expect the guidance to have a material impact on the Company.

In June 2014, the FASB issued ASU No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as “Development Stage Entities” (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard and will not report inception-to-date information.

On May 28, 2014, the FASB issued ASU No. 2015-08 a standard on recognition of revenue from contracts with customers (Topic 606). An issue discussed relates to when another party, along with the entity, is involved in providing a good or a service to a customer. In those circumstances, Topic 606 requires the entity to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). This determination is based upon whether the entity controls the good or the service before it is transferred to the customer. Topic 606 includes indicators to assist in this evaluation. The Company evaluated all its contracts to determine if the Company was a principal or agent. The Company has determined it was the principal in all its contracts.

In March 2016, the FASB issued ASU No. 2015-03 implementing the effective dates of Intangible – Goodwill and Other (Topic 350), Business Combinations (Topic 805), Consolidation (Topic 810) and Derivatives and Hedging (Topic 815) immediately. The Company has reviewed the topics and in compliance. The effects of the immediate implementation of these topics have had no effect on the financial statements of the Company.

In March 2016, the FASB issued ASU No. 2015-09, Compensation-Stock Compensation (Topic 718): “Improvements to Employee Share-Based Payment Accounting.” This ASU makes targeted amendments to the accounting for employee share-based payments. This guidance is to be applied using various transition methods such as full retrospective, modified retrospective, and prospective based on the criteria for the specific amendments as outlined in the guidance. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted, as long as all of the amendments are adopted in the same period. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company’s financial statements and disclosures.

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15, which is effective for annual reporting periods ending after December 15, 2015, extends the responsibility for performing the going-concern assessment to management and contains guidance on how to perform a going-concern assessment and when going-concern disclosures would be required under GAAP. We do not anticipate that the adoption of ASU 2014-15 will have a material impact on our consolidated financial condition or results from operations. Management’s evaluations regarding the events and conditions that raise substantial doubt regarding our ability to continue as a going concern as discussed in the notes to our consolidated financial statements included elsewhere.

We have implemented all other new accounting pronouncements that are in effect and that may impact our financial statements and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations.

F-15

Note 3. Going Concern

The Company's financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is new and has a limited history, no certainty of continuation can be stated. The accompanying financial statements for the years ended April 30, 2019 and 2018 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company has negative cash flow and there are no assurances the Company will generate a profit or obtain positive cash flow. The Company has a nominal working capital deficit, which raise substantial doubt about its ability to continue as a going concern.

Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. The financial statements contain no adjustments for the outcome of this uncertainty.

Note 4. Inventory and Work in Progress

The early implementation of ASU 2015-11, Simplifying the Measurement of Inventory had no effect on the financial performance of the Company. The Company reports its inventory by segments. The inventory levels for the segments for previous years are based upon best estimates of management and are provided for quality review measures only.

Inventory Overview
For the year ended April 30,
	2019		2018		2019		2018
	Retail Sales				Total
Inventory	$	410,193	$	63,297	$	410,193	$	63,297
Assets held for sale	-		-		408,166		-
Total Inventory	$	410,193	$	63,297	$	818,359	$	63,297

NOTE: The Company had $24,450 of Hemp seeds and other agriculture inventory with FarmOn! Foundation. While the Company continues to seek restitution of these seeds, fertilizers, and other inventoried items, it has elected to discontinue the operations (see Footnote: 12).

The Company reports its agriculture crop growth as work-in-progress until such time as the crop has been harvested and either sold or utilized by the Company. The crop associated with the agriculture materials, labor, and seeds have been harvested; however, the Company has been unable to validate or verify the crop. Prior to discontinuing the operation of the Joint Venture with FarmOn! Foundation the Company had $450,286 in seeds, labor, and materials for work in progress, (see Footnote 12). These numbers are not included below.

Work in Progress Overview

		As of April 30,
		2019		2018
	Agriculture
Labor	$	-	$	30,000
Materials and supplies		-		34,865
Site Development		21,605		-
Total work in progress	$	21,605	$	64,865

Note 5: Accounts Receivable

The Company’s has accounts receivable in media and technologies, retail sales, and corporate.

F-16

In its retail sales the accounts receivable is primarily from its vendor tasked with accepting all credit card payments for purchases from its customers, and are held in escrow for potential chargebacks, and are reported at the amount due from the vendor. While the Company expects these receivables to be fully collectible it has created an allowance for doubtful accounts for the period. The Company has created a reserve of $27,462. The Company has expensed this as bad debt in order to record the loss during the year in which it occurred. Management does not believe these funds will be collected and is currently weighing legal options and other methods available to collect. Should we collect any of these funds in subsequent years we will reverse the bad debt.

In addition to the merchant services, the Company has $1,369,143 in outstanding debt from 15 direct customers, with one customer accounting for $1,250,000. These accounts are older than one year, and the Company has not conducted any business with the customers during that time frame. Management does not believe these funds will be collected and is currently weighing legal options and other methods available to collect. Should we collect any of these funds in subsequent years we will reverse the bad debt.

Accounts Receivable
	For the year ending April 30,
		2019		2018
A/R from credit card reserve	$	27,462	$	28,431
A/R from direct customers		1,633,324		2,061,352
Subscription receivables		-		186,784
Allowance for bad debt		(1,395,605)		-
Subscription receivable not received by time of filing		-		(117,300)
Total Accounts Receivable	$	265,181	$	2,159,167

Note 6. Property, Plant and Equipment

The following is a detail of equipment at April 30, 2019 and April 30, 2018:

Property, Plant, and Equipment
	As of April 30,
		2019		2018
Office furniture	$	29,090	$	29,090
Rollies machine		5,066		5,066
Computer equipment		1,544		1,544
420 Cloud		3,129,412		3,127,251
ATM Machines		-		299,970
Farm equipment		30,765		-
Warehouse equipment		67,471		-
Land		292,500		-
Total acquisition cost	$	3,555,848	$	3,462,921
Accumulated depreciation		835,986		324,902
Write-downs		43,128		-
Total property, plant, and equipment	$	2,676,734	$	3,138,019

Depreciation expense on property, plant and equipment was $835,986 and $324,902 for the years ended April 30, 2019 and 2018, respectively. We wrote down assets no longer in our possession due to the discontinued operations of Grow and NYAcres. We wrote down $10,588 from Grow in office furniture and $32,540 from NYAcres in farm equipment.

Note 7. Cost Basis Investments

The Company has invested $1,297,565 through April 30, 2019 through various nonmonetary transactions. The Company has elected to impair a portion of its investments (see Note 9). A breakdown of these investments includes:

F-17

Cost Basis Investments
		As of		As of
		April 30, 2019		April 30, 2018
Stony Hill Corp	$	700,000	$	700,000
Omni Health, Inc		152,023		152,023
CBJ Distributing Option		-		50,000
New York Hemp Pilot Program		50,000		50,000
California City Cannabis Licenses		225,585		15,585
Agri-Contractors, LLC		160,008		-
Redfern BioSystems, Inc.		9,949
Total acquisition cost	$	1,297,565	$	967,608
Impairment		(386,031)		-
Total current value	$	911,534	$	967,608

Note 8. Intangible Assets

The intangible assets consist of:

Intangible Assets

		As of		As of
		April 30, 2019		April 30, 2018
Domains	$	365,847	$	363,348
Trademarks		455,860		455,637
Website		30,491		41,760
VitaCBD		200,000		200,000
Total acquisition cost	$	1,052,198	$	1,060,745
Less: Amortization		(486,447)		(225,425)
Adjustment for sale of asset		(72,880)		-
Write-offs		(5,975)		-
Current Intangible Assets	$	486,896	$	835,320

Amortization expense on intangible assets was $263,197 and $2,758 for the years ended April 30, 2019 and 2018, respectively. The weighted average remaining useful life on intangible assets at April 30, 2019 is approximately 24 months.

The Company was amortizing VitaCBD, LLC at the rate of $10,000 per quarter and had expensed $50,000 through the end of April 30, 2018. As a result of our annual impairment review, we determined that our partner, Stony Hill Corporation, has elected to close its operations through VitaCBD, LLC in which we were a minority 20% owner. We elected to impair the remaining $150,000 in intangible value.

We wrote down assets no longer of value due to the discontinued operations of Grow. We wrote down $5,975 from Grow in website design work.

The table below represents the estimated amortization of intangible assets for each of the next five years.

Year		Amortization
2020		$ 233,448
2021		233,448
2022		-0-
2023		-0-
2024		-0-
Total		$ 486,896

F-18

Note 9. Impairment Analysis

The following chart is a summary of the impairment analysis conducted and the recommended impairment per asset. When a fair value was easily obtainable through third party independent resources it was utilized in calculating impairment. In addition to the fair value method, the company conducted an analysis utilizing the value in use method. We utilized gross revenue, EBIDTA, free cash flow, discount rate and factors and present value of free cash flow for a five-year period to determine current value of assets. Based upon the analysis the following chart shows the impairments that were recognized.

Name of Individual Assets	Omni Stock	Stony Hill Stock	Agri-Contractors	NY Hemp License	CA Hemp License	OBITX	CBJ
CARRYING AMOUNT	152,023	700,000	160,008	50,000	225,585	2,879,273	2,966,029
Fair value less costs to sell	-	676,000	-	-	XCEEDS	2,799,159	-
Value in use	-	-	-	-	-	-	1,198,272
RECOVERABLE AMOUNT	-	676,000	-	-	XCEEDS	2,799,159	1,198,272
Impairment losses recognized	(152,023)	(24,000)	(160,008)	(50,000)	-	(80,114)	(1,767,757)

NOTE: So long as OBITX is consolidated with the financial statements, it will have no effect on the financial statements as the cost of investment is eliminated during consolidation.

Note 10: Liabilities

Notes Payable

The notes payable of $151,885 consists of $135,750 owed to APO Holdings, Inc (APO). MCIG owes $58,706 to APO while OBITX owes $77,044 for a total of $135,570. In addition, we owe $9,775 owed to two credit card companies. CBJ owes $8,455 and VAPO owes $1,320. The remaining $6,000 is owed to website programmers.

In addition to these amounts, we owe Paul Rosenberg (see Related Party) $1,219,412. The Company is currently in default of this agreement.

Accounts Payable

The following table represents the outstanding payables and accrued expenses:

Accounts Payable and Accrued Expenses
	As of April 30,
		2019		2018
Payroll liabilities	$	48,516	$	-
A/P to related parties		441,125		-
A/P for corporate		7,516		218,703
A/P for construction		74,251		-
A/P for retail sales		114,793		-
A/P for technologies		14,633		-
A/P for agriculture		129,787		-
Total Accounts Receivable	$	830,621	$	218,703

F-19

Note 11: Consolidated Statements of Operations Notes

Professional Fees

The Company’s professional fees consists of legal fees, accounting fees, securities fees, and other licensed professional fees. The legal fees include general corporate counsel fees, legal expenses associated with various lawsuits, and the preparation of SEC filings. Following is a breakdown of the professional fees for the periods ending April 30, 2019 and April 30, 2018:

Professional Fees
	For the year ending April 30,
	2019		2018
Legal fees associated with litigation	$	256,803	$	105,403
Corporate legal fees		69,965		-
Accounting fees		52,967		58,499
Securities fees		27,421		6,895
Reserve for Solaris action		-		592,924
Reserve for Oregon action		-		157,656
Other licensed professional fees		6,675		-
Total acquisition cost	$	413,831	$	921,377

Selling, General, and Administration

The Company’s selling, general, and administration expenses were $536,735 and $320,577 for the periods ending April 30, 2019 and April 30, 2018, respectively. The following chart is a breakdown of those expenses:

Selling, General, and Administration
	For the year ending April 30,
	2019		2018
Auto Expenses	$	12,729	$	-
Bank service charges		6,122		5,360
Business License		159		12,527
Payroll		331,090		83,643
Travel		50,596		75,043
Office Supplies		57,728		71,665
Computer and Internet Expenses		17,517		31,995
Shipping and Postage		737		1,757
Rent		55,509		37,078
Research and Development		710		-
Utilities		3,838		1,509
	$	536,735	$	320,577

Bad Debts

The Company has recorded bad debt in the amounts of $1,372,725 and $572,257 for the periods ending April 30, 2019 and April 30, 2018, respectively. The $1,372,725 of bad debt for the period ending April 30, 2019 consists of $1,254,500 of bad debt through OBITX, $113,833 with CBJ, and $4,392 of bad debt in MCIG. The $572,257 of bad debt for the period ending April 30, 2018 consists of $12,462 in uncollectable merchant fees from its online retail operations, and $559,795 from two customers in GROW.

Note 12: Discontinued Operations

The Company has elected to discontinue its operations in construction under GROW and agriculture under NYACRES. In addition, OBITX has discontinued its operations under altCUBE. The following chart shows the losses we have incurred as part of the discontinued operations.

F-20

Discontinued Operations
Grow Contractors	$	219,017
NYAcres		(681,694)
AltCUBE		(16,568)
Total	$	(479,245)

Grow Contractors

In addition to the discontinued operations loss, during the operations of GROW over a three-year period our net loss was $497,153.

NYAcres

In addition to the discontinued operations loss, during the operations of NYACRES over a one-year period our net loss was $121,405. We have identified $185,318 in unauthorized expenditures and $613,723 in assets that have been withheld from the Company. The initial crop has been harvested but the Company has been unable to verify its resale profitability. We have commenced legal actions in the state of New York to recoup these losses and assets. Should we be awarded or settle this action we will expense all future adjustments through discontinued operations.

Note 13. Business Segments

The Company operates primarily in four segments:

· Construction, Manufacturing and Distribution ("CMD")

· Retail Sales

· Media and Technologies

· Agriculture (Cultivation)

This summary reflects the Company's current segments, as described below. Information concerning the revenues and operating income (loss) for the year ending April 30, 2019 and 2018, and the identifiable assets for the segments in which the Company operates are shown in the following table:

Business Segments
For the year ended April 30, 2019	CMD	Retail	Technology	Agriculture	Corporate	Total
Revenue	$ 70,000	$ 2,190,223	$ 55,290	$ -	$ -	$ 2,315,513
Segment Income (Loss) from Operations	497,153	138,510	765;304	116,042	(4,574,251)	(3,057,241)
Total Assets	-	912,228	3,987,359	(6,704)	713,391	5,606,274
Capital Expenditures	-	-	277,966	(503,554)	(232,470)	(458,058)
Depreciation and Amortization	8,282	96,833	487,117	9,740	172,308	774,280


For the year ended April 30, 2018	CMD	Retail	Technology	Agriculture	Corporate	Total
Revenue	$ 3,673,218	$ 2,041,616	$ 1,363,846	$ -	$ -	$ 7,078,680
Segment Income from Operations	(698,351)	225,468	637,738	(121,405)	(1,120,379)	(1,076,929)
Total Assets	798,062	467,708	4,544,937	(77,680)	2,098,349	7,831,376
Capital Expenditures	15,715	225	403,186	86,363	(33,182)	472,307
Depreciation and Amortization	518	1,084	320,953	796	190,360	513,711

Note 14. Non-GAAP Accounting and GAAP Reconciliation – Net Income and EBITDA

The Company reports all financial information required in accordance with generally accepted accounting principles (GAAP). The Company believes, however, that evaluating its ongoing operating results will be enhanced if it also discloses certain non-GAAP information because it is useful to understand MCIG’s performance that many investors believe may obscure MCIG’s ongoing operational results.

For example, MCIG uses non-GAAP net income (Adjusted Net Income), which excludes stock-based compensation, amortization of acquired intangible assets, impairment of intangible assets, costs from acquisitions, restructurings and other infrequently occurring items, non-cash deferred tax provision and litigation and related settlement costs. MCIG uses EBITDA and Adjusted Net Income, which adjusts net income (loss) for amortization of intangible assets, impairment of intangible assets, stock-based compensation, costs related to acquisitions, restructuring and other infrequently occurring items, settlement of litigation, gains or losses on dispositions, pro forma adjustments to exclude lines of business that have been acquired during the periods presented, current cash tax provision, depreciation, and interest expense (income), net.

F-21

The company believes that excluding certain costs from Adjusted Net Income and EBITDA provides a meaningful indication to investors of the expected on-going operating performance of the company. Whenever MCIG uses such historical non-GAAP financial measures, it provides a reconciliation of historical non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measure.

The following tables reflect the non-GAAP Consolidated Statements of Operations for the years ending April 30, 2019 and April 30, 2018, respectively.

*mCig, Inc.*
*and SUBSIDIARIES*
*Adjusted Consolidated Statements of Operations*


		For the year ended April 30,
		2019	2018
Sales		$ 2,315,513	$ 7,078,680
	Construction costs	186,686	2,732,011
	Merchandise	1,169,235	1,252,142
	Commissions	59,215	59,844
	Merchant fees, shipping, and other costs	180,591	106,443
Total Cost of Sales		1,595,727	4,150,440
Gross Profit		719,786	2,928,240
Selling, general, and administrative		536,735	320,577
Professional fees		157,028	170,797
Marketing & advertising		73,091	78,804
Research and development		-	6,612
Consultant fees		777,913	1,372,965
Amortization and depreciation		3,949	2,758
Total operating expenses		1,548,716	1,952,513
Income (Loss) from operations		(828,930)	975,727
Other income (expense)		-	-
Net income(loss) before minority interest		(828,930)	975,727
Gain attributable to non-controlling interest		457,248	128,073
Net income (loss) attributable to controlling interest		$ (371,682)	$ 1,103,800
Basic and diluted (Loss) per share:
Income(Loss) per share from continuing operations		(0.0008)	0.0028
Income(Loss) per share		(0.0008)	0.0028
Weighted average shares outstanding - basic and diluted		489,360,474	392,843,133

The following tables is a reconciliation of the EBITDA and Adjusted Net Income (non-GAAP measures) to the Net Income with the GAAP Consolidated Statements of Operations for the years ending April 30, 2019 and April 30, 2018, respectively.

F-22

Adjusted Net Income Reconciliation
	As of April 30,
	2019	2018
CONSOLIDATED STATEMENT of OPERATIONS:
Net Income (Loss)	$ (4,824,998)	$ (1,076,930)
Depreciation and Amortization	774,280	513,711
EBITDA	$ (4,050,718)	$ (563,219)

Adjustment for Non-Intangible Asset Depreciation	(4,140)	(2,758)
Stock Based Compensation	28,990	346,940
Gains not in ordinary course of business	2,165,680	-
Loss on discontinued operations	479,245
Settlements, bad debts, and legal costs	1,629,719	1,322,837
Gain attributable to non-controlling interest	(620,458)	-
Adjusted net income	$ (371,682)	$ 1,103,800

Note 15. Sale of Asset

On September 15, 2018 the Company sold the domain name www.cbd.biz to Redfern BioSystems, Inc., for $90,000. The following chart represents that sale transaction.

Sale of CBD.BIZ
Notes receivable		100,000
Income for financing		(10,000)
Total sales price	$	90,000
Domain name acquisition cost		82,500
Accumulated amortization		(11,458)
Total reductions from sales price		71,042
Gain on asset	$	18,958

The Company entered into a secured convertible promissory note with Redfern. The note is due on September 14, 2019. Should Redfern default the Company may convert the secured promissory note into 40 million common shares of Redfern representing approximately 75% of the business. Should the Company not elect to convert in the event of nonpayment by Redfern, the Company may take possession of the domain www.cbd.biz and its business operations.

Note 16. Related Parties and Related Party Transactions

Related Parties

In addition to the subsidiaries of the Company, the following individuals/entities have been identified as related parties in accordance with the guidelines of ASC 850 – Related Party Disclosures:

Related Parties
Name/Entity	Position	Became	Ended
Paul Rosenberg	CEO/Director	Inception	Current
Michael Hawkins	CFO	April 8, 2016	August 31, 2019

Intercompany Transfer Balances

We are a holding company that operates 9 subsidiaries. The Company will provide intercompany transfers between itself and the subsidiaries as needed for operations. In addition, a subsidiary may provide an intercompany transfer to one of MCIG’s other subsidiary. The company documents these transfers as Intercompany Transfers which are eliminated under consolidation and eliminations. The following balances are recorded as Intercompany Transfers as of April 30, 2019:

Details of intercompany transfers balances between the Company and its subsidiaries consist of:

F-23

Intercompany Transfers
		As of
		April 30, 2019
Lender	Borrower	Amount
VitaCig, Inc.	mCig, Inc.	192,023
mCig, Inc.	mCig Internet Sales, Inc.	88,509
mCig, Inc.	Obitx, Inc. (F/K/A GigeTech, Inc.)	621,358
mCig, Inc.	Vapolutions, Inc.	95,863
VitaCig, Inc.	Vapolutions, Inc.	8,000
mCig, Inc.	Cal Acres Foundation	$225,585
mCig, Inc.	CaAcres	$320,809

		As of
		April 30, 2018
Lender	Borrower	Amount
mCig, Inc.	Grow Contractors Inc.	154
VitaCig, Inc.	mCig, Inc.	129,099
mCig, Inc.	mCig Internet Sales, Inc.	298,522
mCig, Inc.	Obitx, Inc. (F/K/A GigeTech, Inc.)	578,661
mCig, Inc.	Vapolutions, Inc.	46,729
VitaCig, Inc.	Vapolutions, Inc.	8,000
Obitx, Inc. (F/K/A GigeTech, Inc.)	mCig Internet Sales, Inc.	13,422
VitaCig, Inc.	NYAcres, Inc.	10,000
VitaCig, Inc.	Tuero Capital, Inc.	20,000
mCig, Inc.	NYAcres, Inc.	298,000
Tuero Capital, Inc.	mCig, Inc.	3,337
mCig, Inc.	Cal Acres Foundation	$15,585

Related Party Transactions

The Company entered a Line of Credit with Paul Rosenberg (see Subsequent Events) for up to $100,000 in funding on May 1, 2016. On May 1, 2017, the Company increased the amount of the Line of Credit and Convertible Promissory Note for up to $250,000 in funding by Paul Rosenberg to accurately record the day-to-day transactions of the Company and Paul Rosenberg. In February 2018 we increased the line of credit to $1,000,000. As of April 30, 2019, the Company owed Mr. Rosenberg $1,219,412, which includes the amount of $120,000 earned, covered under his employment agreement which was not paid to Mr. Rosenberg. The Company is in breach of the agreement.

On September 1, 2016, the Company entered into an employment agreement with Michael Hawkins, the Chief Financial Officer and an employment agreement with Paul Rosenberg, the Chief Executive Officer of the Company (“employees”). Mr. Hawkins was the Interim Chief Financial Officer which agreement was scheduled to expire on September 6, 2016. Mr. Rosenberg has been the CEO since inception and served without an agreement. The terms of the Agreement are the same. The agreements call for $156,000 per year base salary with a three-year term. Only $3,000 per month guaranteed to be paid in cash, while the remainder ($10,000 per month) is booked as a note due, which may be converted into shares of the company at then current price per share. The initial year’s conversion option was accrued upon entering into the agreement. The employees earn annual bonuses based upon gross sales, net profits, and annual increases in sales and profits. The Company and employees may elect to convert a portion of this salary into equity of the company. In addition, each employee was issued a seven-year warrant to acquire four percent (4%) of the Company Stock at the market price as of September 1, 2016 with 25% vested immediately and 25% on each subsequent year anniversary of employment. On September 1, 2017 Mr. Hawkins agreement was modified to $10,000 per month and his options vested. The employment agreements expire on August 30, 2019.

On August 2, 2018 Paul Rosenberg converted 8,000,000 Series A Preferred stock into 80,000,000 common shares of stock.

On August 15, 2018 Paul Rosenberg and Michael Hawkins became the majority owners of Tuero Capital, Inc., which subsequently changed its name to Redfern BioSystems, Inc. The Company converted its outstanding of $9,949 debt into equity and currently owns 1,902,375. Subsequently the company sold www.cbd.biz to Redfern BioSystems (see Note 15: Sale of Asset).

F-24

On August 1, 2018 the company’s Chief Financial Officer, Michael Hawkins, exercised a Warrant purchasing 5,416,551 shares of common stock at the price of $0.025, totaling $135,414. The purchase price was offset by the $135,414 owed to Mr. Hawkins under his employment agreement. The shares were issued to Epic Industry Corp, a private company owned 100% by Michael Hawkins.

On May 2, 2018 Paul Rosenberg converted 500,000 shares of Series A Preferred Stock into 5,000,000 common shares of stock.

On September 1, 2017 the company’s Chief Financial Officer, Michael Hawkins, exercised a Warrant purchasing 5,416,551 shares of common stock at the price of $0.025, totaling $135,414. The purchase price was offset by the $135,414 owed to Mr. Hawkins under his employment agreement.

Note 17. Commitments and Contingencies

Rent expense for the year ended April 30, 2019 and 2018 was $55,509 and $37,078, respectively. The company currently rents on a month-by-month basis.

Note 18. Acquisitions

The Company considers FASB 805-10-55, Implementation Guidance and Illustrations for Business Combinations when accounting for acquisitions. The Company has elected to implement ASU 2017-01, Clarifying the Definition of a Business although its required implementation date is for financial statements for periods beginning after December 15, 2017. The Company believes the early implementation of ASU 2017-01 has no material effect on its financial reporting.

On May 1, 2018, the Company exercised its option to acquire CBJ Distributing, LLC. The Company acquired all cash, inventory, prepaid expenses, inventory, fixed assets, and intellectual property for a total of $3,578,861. The Company issued $3,388,078 in MCIG stock at the rate of $0.29 per share and paid $190,783 in cash athrough reduction of loans, option price, and accounts receivable owed by CBJ Distributing to the Company. As a condition to this acquisition, the Company entered into Employment Agreements with Charlie Fox and Alex Levitsky.

In accordance to rule, the following table reflects the determination of the purchase price of the CBJ Distributing, LLC business. Subsequently, on April 30, 2019 we impaired $1,767,757 of the purchase price. This amount was eliminated during consolidation:

Acquisition of CBJ Distributing
Cash	$	112,557
Accounts Receivable		158,064
Prepaid Expenses		3,840
Inventory		385,379
Fixed Assets		47,758
Total assets acquired	$	707,598

Current Liabilities	$	94,226
Total liabilities assumed	$	94,226

Total Purchase Price
Stock issued as part of acquisition (11,293,593)	$	3,388,078
Reduction of Loan Receivable		1,529
Reduction of Accounts Receivable		139,254
Conversion of stock option		50,000
Total Purchase Price	$	3,578,861
Total assets acquired		(707,598)
Total liabilities assumed		94,226
Gains in assets		540
Investment into CBJ Distributing	$	2,966,029

F-25

Note 19. Stockholders’ Equity

Common Stock

As of April 30, 2019, the Company was authorized to issue 560,000,000 common shares at a par value of $0.0001. As of April 30, 2019, the Company had issued and outstanding, 515,124,596 common shares. During 2019 we issued 103,563,787 shares of common stock and cancelled 4,050,000 shares of common stock for a net gain of 99,513,787.

During the year ended April 30, 2019 the Company issued 100,000 shares of common stock for services rendered valued at $28,990; issued 5,416,551 shares of common stock to Epic Industry Corp through a stock warrant; issued 596,249 shares of common stock through its 2016 non-statutory stock option plan; and issued 12,150,987 shares of common stock valued at $3,664,274 for investment purposes. In addition, the Company issued 85,000,000 shares in conversion of Series A Preferred stock into common stock.

As of April 30, 2018, the Company was authorized to issue 560,000,000 common shares at a par value of $0.0001. As of April 30, 2018, the Company had issued and outstanding, 415,610,809 common shares. During 2018 we issued 29,516,551 shares of common stock.

During the year ended April 30, 2018 the Company issued 5,950,000 shares of common stock for services rendered valued at $346,940 and issued 13,566,551 shares of common stock valued at $927,714 for investment purposes. In addition, the Company issued 10,000,000 shares in conversion of Series A Preferred stock into common stock.

Preferred Stock

The Company has authorized 50,000,000 shares of preferred stock, of which it has designated 23,000,000 as Series A Preferred, at $0.0001 par value. The Company has 4,350,000 issued and outstanding as of April 30, 2019. There was a total of 11,850,000 issued and outstanding as of April 30, 2018. Each share of the Preferred Stock has 10 votes on all matters presented to be voted by the holders of the Company’s common stock.

During 2019 Mr. Rosenberg, the Company’s CEO elected to convert 8,500,000 shares of Series A Preferred stock into 85,000,000 shares of common stock.

On November 29, 2018 the Company issued 1,000,000 shares of Series A Preferred stock to APO Holdings, LLC in exchange for $200,000.

During 2018 Mr. Rosenberg, the Company’s CEO elected to convert 1,000,000 shares of Series A Preferred stock into 10,000,000 shares of common stock.

Note 20. Income Taxes

The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes were as follows:

	2019	2018

Statutory federal income tax rate	34.0%	34.0%
State income taxes, net of federal taxes	6.0%	6.0%
Non-deductible items	(1.0)%	(1.0)%
Valuation allowance	(39.0)%	(39.0)%
Effective income tax rate	0.0%	0.0%

The Company may not be able to utilize the net operating loss carry forwards for its U.S. income taxes in future periods should it experience a change in ownership as defined in Section 382 of the Internal Revenue Code (“IRC”). Under section 382, should the Company experience a more than 50% change in its ownership over a 3-year period, the Company would be limited based on a formula as defined in the IRC to the amount per year it could utilize in that year of the net operating loss carry forwards. Section 382 of the Internal Revenue Code (“IRC”) imposes limitations on the use of NOL’s and credits following changes in ownership as defined in the IRC.

F-26

The limitation could reduce the amount of benefits that would be available to offset future taxable income each year, starting with the year of an ownership change. The Company has not completed the complex analysis required by the IRC to determine if an ownership change has occurred.

Income Tax Computation
	2019	2018
	Tax Asset	Tax Asset
Income (Loss) per Books	(3,057,241)	(1,076,937)
Sales of non-taxable assets	-	-
Deferred Expenses	-	750,579
Stock-based compensation	28,990	346,940
Stock received for sales	-	-
Amortization	-	190,000
NOL (Net Income)	3,028,251	(210,582)
Prior NOL	413,977	624,569
Current NOL	3,422,228	413,977

At April 30, 2019 and 2018, the Company had net operating loss carry forwards available to offset future taxable income of approximately $3,422,228 and $413,977, respectively. These carry forwards will begin to expire in the year ending December 31, 2026. Utilization of the net operating loss carry forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions.

The Company has not performed a change in ownership analysis since its inception in 2010 and, accordingly, some or all of its net operating loss carry forwards may not be available to offset future taxable income. Even if the loss carry forwards are available, they may be subject to substantial annual limitations resulting from past ownership changes, and ownership changes occurring after April 30, 2019, that could result in the expiration of the loss carry forwards before they are utilized.

The nature of the components of the deferred tax asset is entirely attributable to the Net operating loss carry-forwards incurred by the Company less any permanent differences that maybe used in future years to offset future tax liabilities. We believe that it is more likely than not that the benefit from certain NOL carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance to offset the deferred tax assets relating to these NOL carryforwards.

The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors. At April 30, 2019 and 2018, deferred tax assets have been fully offset by a valuation allowance.

The Company files income tax returns in the U.S. federal jurisdiction, and with the State of California, Florida, New York, and Nevada. The Company is subject to U.S. federal and state income tax examinations by tax authorities for tax years 2014 through 2018 due to net operating losses that are being carried forward for tax purposes. The Company does not have any uncertain tax positions or unrecognized tax benefits at April 30, 2019 or 2018. The Company’s policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively.

Note 21. Basic Loss per Share before Non-Controlling Interest

Basic Loss Per Share - The computation of basic and diluted loss per common share is based on the weighted average number of shares outstanding during each period.

F-27

Basic Income (Loss) Per Common Share
	For the period ended April 30,
	2019	2018
Net income (loss) before non-controlling interest	(6,138,284)	(1,205,003)
Net income (loss) from non-controlling interest	1,077,706	128,073
Net income (loss)	$ (5,060,579)	$ (1,076,930)
Basic income (loss) per common share before non-controlling interest	(0.0124)	(0.0028)
Basic income (loss) per common share from non-controlling interest	0.0021	0.0003
Basic income (loss) per share	(0.0103)	(0.0025)
Basic weighted average number of shares outstanding	489,360,474	401,878,568

The computation of basic loss per common share is based on the weighted average number of shares outstanding during the year.

Note 22. Stock Option Plan

Options granted under the Plan are exercisable at the exercise price of grant and, subject to termination of employment, expire three years from the date of issue, are not transferable other than on death, and vest in monthly installments commencing at various times from the date of grant. As of April 30, 2019, the Company recorded compensation cost of $0 within operating expenses related to stock options granted in 2019.

The Company issued no options during fiscal year 2019. The weighted average fair value at date of grant for options granted during fiscal 2018 is $0.1362 per option. The fair value of each option at date of grant utilized the closing price of the stock on the date of issue.

A summary of the Company’s stock option plan as of April 30, 2019 is presented below:

Stock Option Summary
	Shares	Weighted Average Exercise Price
Options outstanding at May 1, 2017	12,076,830	$ 0.0485
Granted in FY 2018	9,551,170	0.1840
Forfeited in FY 2018	4,376,830	0.0583
Exercised in FY 2018	3,450,000	0.0340
Options outstanding at April 30, 2018	12,076,830	0.0485

Granted in FY 2018	-	0.1840
Forfeited in FY 2018	(69,419)	0.0340
Exercised in FY 2018	596,249	0.0340
Options outstanding at April 30, 2018	11,550,000	$ 0.0869

There are currently 14,400,000 unissued options under the 2016 Stock Option Plan.

F-28

The following table summarizes information for stock options outstanding at April 30, 2018:

Options Outstanding

Options Exercisable

Weighted-

Range of

Number

Average

Number

Average

Exercise

Outstanding

Remaining

Exercise

Exercisable

Exercise

Prices

@ 4/30/19

in years

Price

@ 4/30/18

Price

$0.034 - $0.244

11,550,000

1.00

0.0937

11,550,000

0.0937

Note 23. Warrants

A total of 43,332,412 warrants were issued on September 1, 2016 to various individuals/entities. These warrants were issued as a condition of employment agreements with the CEO and CFO. A total of 10,833,103 shares vest immediately with 10,833,103 vesting on the anniversary date for three years. The conversion price of the warrants is at $0.025.

On January 31, 2017, the company granted Mr. Rosenberg and Mr. Hawkins a five-year warrant to purchase 250,000 shares each of common stock at $0.75 per share.

On September 1, 2017 the remaining warrants issued to Michael W. Hawkins were vested in exchange for his reduction in salary.

A summary of warrant activity for period ended April 30, 2019 is as follows:

Stock Warrant Summary
	Shares	Weighted Average Exercise Price
Warrants outstanding at May 1, 2018	32,999,310	$ 0.0260
Granted in FY 2017	-	-
Exercised in FY 2017	6,416,551	0.0250
Warrants outstanding at April 30, 2017	26,582,759	0.0250

Granted in FY 2018	-	-
Exercised in FY 2018	5,416,551	0.0250
Options outstanding at April 30, 2018	21,166,208	$ 0.2060

Note 24. Subsequent Events

The Agreement between the Company and Michael Hawkins expired on August 30, 2019. Mr. Hawkins elected not to renew his agreement as Chief Financial Officer for the Company. Paul Rosenberg has assumed the duties as Acting Chief Financial Officer effective September 1, 2019.

On June 3, 2019 MCIG purchased all cryptocurrency-based automated teller machines from OBITX for the price of $408,166 as part of a reduction of debt owed by OBITX to MCIG. Subsequently MCIG sold the assets to Paul Rosenberg in exchange for a $408,166 reduction to the debt owed, which loan agreement expired. In addition to the purchase of the ATM machines, the Company reduced the debt owed to Paul Rosenberg further by transferring a parcel of land owned by the Company in California in exchange for a further reduction of $235,000. In exchange, Mr. Rosenberg extended the terms of the agreement for an additional period of time.

A settlement agreement was entered into with APEX Holdings, LLC. Grow Contractors agreed to pay Apex Holdings, LLC a total of $480,000 at the rate of $20,000 per month effective October 1, 2019. The payment amount is secured by MCIG and Paul Rosenberg, individually.

F-29

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

On November 15, 2016, and effective the same date, on the recommendation of the Registrant’s Board of Directors, the Registrant engaged Weinstein & Company, as its independent registered audit firm to audit the Registrant’s financial statements for the fiscal year ended April 30, 2019 and to perform procedures related to the financial statements included in the Registrant’s quarterly reports on Form 10-Q, beginning with the quarter ending October 31, 2019. The Company elected to utilize Weinstein & Company as its independent registered audit firm to audit the Registrant’s financial statements for the fiscal year ended April 30, 2018.

ITEM 9A. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures.

We carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of April 30, 2019. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. Based on the evaluation described above, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report because we did not document our Sarbanes-Oxley Act Section 404 internal controls and procedures.

As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures such as implementing and documenting our internal controls procedures.

SCOPE OF MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

N/A

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

		· Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
		· 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 our receipts and expenditures are being made only in accordance with authorizations of our management and board of directors; and
		· Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our Chief Executive Officer and Chief Financial Officer have performed an evaluation of our internal control over financial reporting under the framework in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective at April 30, 2019.

Based on the results of its assessment, our management concluded that our internal control over financial reporting was not effective as of April 30, 2018 based on such criteria. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were:

Risk Assessment

We did not have an effective risk assessment process. From a governance perspective, we historically did not have a formal process to identify, update and assess risks, including changes in our business practices that could significantly impact our consolidated financial statements as well as the system of internal control over financial reporting.

Control Environment

We did not maintain an effective control environment as evidenced by:

		Lack of majority independent board members.
		An insufficient number of personnel to adequately exercise appropriate oversight of accounting judgements and estimates.

Control Activities

We did not have control activities that were designed and operating effectively to identify and address all likely sources of material misstatements, including non-standard transactions. In addition, management review controls were not sufficient or in place to identify all potential accounting errors.

Information and Communications

We did not implement appropriate information technology controls related to access rights for certain financial spreadsheets that are relevant to the preparation of the consolidated financial statements and our system of internal control over financial reporting. In addition, we did not implement the appropriate information technology disaster recovery controls in place to ensure the completeness of financial information surrounding Terra Tech revenues and inventory.

Monitoring

We did not maintain effective monitoring of controls related to the financial close and reporting process. In addition, we did not maintain the appropriate level of review and remediation of internal control over financial reporting deficiencies throughout interim and annual financial periods.

We have not had sufficient time to fully remediate the aforementioned deficiencies and/or there was insufficient passage of time to evidence that the controls that were implemented during 2017 were effective. Therefore, the aforementioned control deficiencies continued to exist as of April 30, 2019. We believe the control deficiencies described herein, individually and when aggregated, represent material weaknesses in our internal control over financial reporting at April 30, 2019 since such deficiencies result in a reasonable possibility that a material misstatement in our annual or interim consolidated financial statements may not be prevented or detected on a timely basis by our internal controls. As a result of our assessment, we have therefore concluded that our internal control over financial reporting was not effective at April 30, 2019.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only the management's report in this annual report

MATERIAL WEAKNESS DISCUSSION AND REMEDIATION

We believe that the consolidated financial statements included in this Annual Report on Form 10-K for the year ended April 30, 2018 fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

We were not able to fully implement and/or test the design and the operating effectiveness of our control procedures as of April 30, 2019. This required us to design new processes and controls concurrently, and thus did not allow us sufficient time to fully implement and/or test the design and operating effectiveness of the new controls.

We intend to continue to take appropriate and reasonable steps to make necessary improvements to our internal control over financial reporting, including:

	•	Continuing to improve the control environment through (i) being staffed with sufficient number of personnel to address segregation of duties issues, ineffective controls and to perform control monitoring activities, (ii) increasing the level of GAAP knowledge through retaining of a technical accountant, (iii) implementing formal process to account for non-standard transactions, and (iv) implementing and formalizing management oversight of financial reporting at regular intervals;
	•	Continuing to update the documentation of our internal control processes, including implementing formal risk assessment processes;
	•	Implementing control activities that address relevant risks and assure that all transactions are subject to such control activities;
	•	Ensure systems that impact financial information and disclosures have effective information technology controls;
	•	Executing plan to increase number of independent directors to enhance corporate governance and Board composition;
	•	Implementing plan to increase oversight and review of ad hoc spreadsheets while also working to reduce their use.

We believe that the remediation measures described above will strengthen our internal control over financial reporting and remediate the material weaknesses we have identified. We expect that our remediation efforts, including design, implementation and testing will continue throughout fiscal year 2019.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting during the year ended April 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

INHERENT LIMITATION ON THE EFFECTIVENESS OF INTERNAL CONTROLS

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

All of our directors hold office until the next annual meeting of stockholders and until their successors have been elected and qualified or until their earlier resignation or removal unless his or her office is earlier vacated in accordance with our bylaws or he or she becomes disqualified to act as a director. Our officers shall hold office until the meeting of the Board of Directors following the next annual meeting of stockholders and until his successor has been elected and qualified or until his earlier resignation or removal. The Board of Directors may remove any officer for cause or without cause.

Our executive officers and directors and their respective ages as of the date of this Annual Report are as follows:

Name	Director or Officer Since	Age	Positions

Paul Rosenberg	2013	49	President and Chief Executive Officer, Acting Chief Financial Officer, and Chairman of the Board

Paul Rosenberg was appointed as our Chief Executive Officer, Treasurer, Secretary, and Director of mCig, Inc. on May 23, 2013. For the past 5 years Mr. Rosenberg has been a private investor focusing on the technology space where he has over two decades of experience as a software engineer specializing in complex distributed systems in C++, Delphi, VB, Java, and Oracle DB projects via his consulting company: PR Data Consulting. Since 1997, Mr. Rosenberg has worked as an independent consultant with both private and public enterprises including: The Federal Deposit Insurance Company (FDIC), The Zennstrom/Friis Group (Kazaa/Skype/Atomico Ventures), and Trust Digital (later sold to Mcafee in 2010), Dell, Inc., Boeing, and Microsoft Inc. as well as several other notable companies.

FAMILY RELATIONSHIPS

There are no family relationships between or among the above directors, executive officers or persons nominated or charged by us to become directors or executive officers.

BOARD LEADERSHIP STRUCTURE

Mr. Rosenberg currently serves as our chairman of our Board of Directors.

CONFLICTS OF INTEREST

Members of our management are associated with other firms involved in a range of business activities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our company. Although the officers and directors are engaged in other business activities, we anticipate they will devote an important amount of time to our affairs.

Our officers and directors are now and may in the future become shareholders, officers or directors of other companies, which may be formed for the purpose of engaging in business activities similar to ours. Accordingly, additional direct conflicts of interest may arise in the future with respect to such individuals acting on behalf of us or other entities. Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise. Currently, we do not have a right of first refusal pertaining to opportunities that come to their attention and may relate to our business operations.

Our officers and directors are, so long as they are our officers or directors, subject to the restriction that all opportunities contemplated by our plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to us and the companies that they are affiliated with on an equal basis. A breach of this requirement will be a breach of the fiduciary duties of the officer or director. If we or the companies with which the officers and directors are affiliated both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity. However, all directors may still individually take advantage of opportunities if we should decline to do so. Except as set forth above, we have not adopted any other conflict of interest policy with respect to such transactions.

INVOLVEMENT IN CERTAIN IN CERTAIN LEGAL PROCEEDINGS

Except as noted below, none of the following events have occurred during the past five years and are material to an evaluation of the ability or integrity of any director or officer of the Company:

	1.	A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
	2.	Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
	3.	Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

	a.	Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
	b.	Engaging in any type of business practice; or
	c.	Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

	4.	Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
	5.	Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
	6.	Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
	7.	Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

		a.	Any Federal or State securities or commodities law or regulation; or
		b.	Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
		c.	Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.	Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

COMMITTEES

Our Board of Directors as a whole acts as the audit and compensation committees.

CODE OF ETHICS

We adopted a code of ethics that applies to our officers and directors. Our code of ethics was filed with our Annual Report for the year ended April 30, 2014, as filed on August 14, 2014.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under the Nevada General Corporation Law, we can indemnify our directors and officers against liabilities they may incur in such capacities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Our amended and restated articles of incorporation provide that, pursuant to Nevada law, our directors shall not be liable for monetary damages for breach of the directors’ fiduciary duty of care to us and our stockholders. This provision in the articles of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Nevada law. In addition, each director will continue to be subject to liability for breach of the director’s duty of loyalty to us or our stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of law, for any transaction from which the director directly or indirectly derived an improper personal benefit, and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Nevada law. The provision also does not affect a director’s responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.

Our bylaws, as amended, provide for the indemnification of our directors and officers to the fullest extent permitted by the Nevada General Corporation Law. We are not, however, required to indemnify any director or officer in connection with any (a) willful misconduct, (b) willful neglect, or (c) gross negligence toward or on behalf of us in the performance of his or her duties as a director or officer. We are required to advance, prior to the final disposition of any proceeding, promptly on request, all expenses incurred by any director or officer in connection with that proceeding on receipt of any undertaking by or on behalf of that director or officer to repay those amounts if it should be determined ultimately that he or she is not entitled to be indemnified under our bylaws or otherwise.

We have been advised that, in the opinion of the SEC, any indemnification for liabilities arising under the Securities Act of 1933 is against public policy, as expressed in the Securities Act, and is, therefore, unenforceable.

ITEM 11. EXECUTIVE COMPENSATION.

The Company was formed on December 30, 2010.

The Company has no retirement, pension, or profit-sharing programs for the benefit of directors, officers or other employees, but our officers and directors may recommend adoption of one or more such programs in the future. In September 2016, the Company adopted a stock option plan. See Notes to Financial Statement in Item 8.

The Company does not have a standing compensation committee, audit committee, nomination committee, or committees performing similar functions. We anticipate that we will form such committees of the Board of Directors once we have a full Board of Directors.

The following table sets forth certain compensation information for: (i) the person who served as the Chief Executive Officer of mCig, Inc., during the year ended April 30, 2017, regardless of the compensation level, and (ii) each of our other executive officers, serving as an executive officer at any time during 2017. The foregoing persons are collectively referred to in this prospectus as the “Named Executive Officers.” Compensation information is shown for the year ended April 30, 2018 and April 30, 2017:

Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Comp ($)		Non- Qualified Deferred Comp Earnings ($)	All Other Comp ($)		Totals ($)
Paul Rosenberg,		2018		156,000		41,147		0		0		0	0		0	197,147
CEO		2018		156,000		41,147		0		0		0	0		0	197,147

Michael Hawkins		2018		132,000		41,147		0		0		0	0		0	173,147
CFO		2019		132,000		41,147		0		0		0	0		0	173,147

AGREEMENTS

On September 1, 2016, the Company entered into an employment agreement with Michael Hawkins, the Chief Financial Officer and an employment agreement with Paul Rosenberg, the Chief Executive Officer of the Company. Mr. Hawkins was the Interim Chief Financial Officer which agreement was scheduled to expire on September 6, 2016. Mr. Rosenberg has been the CEO since inception and served without an agreement. The terms of the Agreement are the same. The agreements call for $156,000 per year base salary with a three year term. Only $3,000 per month guaranteed to be paid in cash, while the remainder ($10,000 per month) is booked as a note due, which may be converted into shares of the company at then current price per share. The initial year’s conversion option was accrued upon entering into the agreement. The employees earn annual bonuses based upon gross sales, net profits, and annual increases in sales and profits. The Company and employees may elect to convert a portion of this salary into equity of the company. In addition, each employee was issued a seven-year warrant to acquire four percent (4%) of the Company Stock at the market price as of September 1, 2016 with 25% vested immediately and 25% on each subsequent year anniversary of employment. On September 1, 2017 Mr. Hawkins salary was reduced to $120,000 per year. In consideration, the warrants issued to Mr. Hawkins have been fully vested. The contracts expired on August 31, 2019. Mr. Hawkins elected not to renew his agreement and ceased being the Chief Financial Officer of the Company on that date.

OUTSTANDING EQUITY AWARDS

The Company issued 2,600,000 shares of common stock to APO Holdings, LLC in exchange for $650,000 through a Private Placement.

OPTION EXERCISES AND STOCKS VESTED

During 2019 a total of 596,249 shares were issued under the election of the option holder. .

The options granted under the planned based awards have varying vesting schedules and conditions.

GRANTS OF PLAN-BASED AWARDS

None

NON-QUALIFIED DEFERRED COMPENSATION

None.

GOLDEN PARACHUTE COMPENSATION

None.

DIRECTOR COMPENSATION

We currently do not compensate our directors. No director has received any compensation from the Company since the inception of the Company.

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

Under Rule 13d-3 under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

The following table indicates beneficial ownership of mCig’s common stock, as of April 30, 2019 by:

· Each person or entity known by mCig to beneficially own more than 5% of the outstanding shares of mCig’s common stock;

· Each executive officer and director of mCig; and,

· All executive officers and directors of mCig as a group.

· Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Percentage of beneficial ownership is based on 386,094,258 shares of common stock outstanding as of April 30, 2017.

Unless other indicated, the address of each beneficial owner listed below is c/o mCig, Inc., 4720 Salisbury Road, Jacksonville, Fl 32256.

Name of Beneficial Owner	Amount and Nature of	Percentage
Name of Beneficial Owner	Beneficial Ownership	of Class⁽¹⁾
Paul Rosenberg	92,738,238 common shares	17.93%
Paul Rosenberg	3,825,000 preferred shares	99.99%
Total as a group (1)	92,738,238 common shares	17.93%
Total as a group (1)	3,825,000 preferred shares	100.00%

TOTAL STOCK VOTING POWER
TOTAL STOCK VOTING POWER
Paul Rosenberg	130,988,238 stock voting power	23.8%
Total as a group (1)	130,988,238 stock voting power	23.8%

(1) Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock outstanding on April 30, 2019. As of April 30, 2019, there were 516,974,596 shares of our company’s common stock issued and outstanding.

REVIEW, APPROVAL AND RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS

All future related party transactions will be approved, if possible, by a majority of our directors who do not have an interest in the transaction and who will have access, at our expense, to our independent legal counsel.

DESCRIPTION OF CAPITAL STRUCTUREe

General

Our authorized capital stock consists of 560,000,000 shares of common stock, par value $ 0.0001.

Common Stock

The shares of our common stock presently outstanding, and any shares of our common stock issues upon exercise of common stock purchase options and/or warrants, will be fully paid and non-assessable. Each holder of common stock is entitled to one vote for each share owned on all matters voted upon by shareholders, and a majority vote is required for all actions to be taken by shareholders. In the event we liquidate, dissolve or wind-up our operations, the holders of the common stock are entitled to share equally and ratably in our assets, if any, remaining after the payment of all our debts and liabilities and the liquidation preference of any shares of preferred stock that may then be outstanding. The common stock has no preemptive rights, no cumulative voting rights, and no redemption, sinking fund, or conversion provisions. Holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors, out of funds legally available for such purpose, subject to the dividend and liquidation rights of any preferred stock that may then be outstanding.

Preferred Stock

The Series A Preferred shares of mCig, Inc. carry ten (10) votes per each share of Preferred stock while mCig, Inc’s common shares carry one (1) vote per each share outstanding.

Voting Rights

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders.

Dividends

Subject to preferences that may be applicable to any then-outstanding securities with greater rights, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds. The Company and its predecessors have not declared any dividends in the past and does not presently contemplate that there will be any future payment of any dividends on Common Stock.

Indemnification of Officers and Directors

As permitted by Nevada Revised Statutes, our Articles of Incorporation provide that we will indemnify our directors and officers against expenses and liabilities they incur to defend, settle, or satisfy any civil or criminal action brought against them on account of their being or having been Company directors or officers unless, in any such action, they are adjudged to have acted with gross negligence or willful misconduct.

Pursuant to the foregoing provisions, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable.

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

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On May 1, 2016, the Company entered into a Line of Credit Agreement for up to $100,000 with Paul Rosenberg, the Chairman and CEO. The Company utilized the Line of Credit as needed for day-to-day operations. On April 30, 2017, we amended the agreement to increase the authorized limit to $250,000 and simultaneously converted the outstanding payable to Mr. Rosenberg under his employment agreement to the Line of Credit leaving a balance owed, as of April 30, 2017, of $173,312. On February 1, 2018 we increased the amount of the Line of Credit to $1,000,000. As of April 30, 2019, we have an outstanding balance owed to Mr. Rosenberg of $1,219,412.

DIRECTOR INDEPENDENCE

Our Board of Directors is comprised of 1 member, who is not “independent” within the meaning of Marketplace Rule 5605 of the NASDAQ Stock Market.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

On October 9, 2019, we engaged, Weinstein International CPA to serve as our independent registered public accounting firm for the years ending April 30, 2018 and 2019.

The following table shows the fees that were billed for the audit and other services provided for 2018 and 2019:

	2019		2018
Audit Fees		$ 31,225		$ 32,200
Audit-Related Fees		-		-
Tax Fees		-		-
All Other Fees		-		-
Total		$ 31,225		$ 32,200

Audit Fees — This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related Fees — this category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under Audit Fees. The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting services.

Tax Fees — this category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees — this category consists of fees for other miscellaneous items.

Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of Board. The audit paid to the auditors with respect to 2019 and 2018 were pre-approved by the Board of Directors.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

	Exhibits	Description
	21.1	Notice of Entry of Stipulation and Order to Seal filings in the State Court lawsuit
	21.2	Notice of Entry of Stipulation and Order to Dismiss, with Prejudice, the State Court lawsuit
	21.3	Notice of Entry of Stipulation and Order to Dismiss, with Prejudice, the Federal Court lawsuit
	23.1 31 32	Consent of Weinstein International CPA Certification Pursuant to Section 302 of the Sarbanes-Oxley Act* Certification Pursuant to Section 906 of the Sarbanes-Oxley Act*
		XBRL Instance Document
		XBRL Taxonomy Extension Schema Document
		XBRL Taxonomy Calculation Linkbase Document
		XBRL Taxonomy Labels Linkbase Document
		XBRL Taxonomy Presentation Linkbase Document
		XBRL Definition Linkbase Document

79

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
		mCig Inc

	November 19, 2019	By: /s/ Paul Rosenberg
		Paul Rosenberg
		Chief Executive Officer (Principal Executive Officer)

	November 19, 2019	By: /s/ Paul Rosenberg
		Paul Rosenberg
		Chief Financial Officer and Chief Accounting Officer (Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Name	Position	Date

/s/ Paul Rosenberg	Chief Executive Officer	November 19, 2019
Paul Rosenberg	(Principal Executive Officer)

/s/ Paul Rosenberg	Chief Financial Officer and Chief Accounting Officer	November 19, 2019
Paul Rosenberg	(Principal Financial Officer)

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PART I

Item 1. A. RISK FACTORS

Item 1. B. UNRESOLVED STAFF COMMENTS

Item 2. PROPERTIES

Item 3. Legal Proceedings

ITEM 4. MINE SAFETY DISCLOSURES.

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

ITEM 9A. CONTROLS AND PROCEDURES.

ITEM 11. EXECUTIVE COMPENSATION.

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

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

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

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