UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~March~~September 3130, 2017

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

Commission File No. 333-127347

PROVISION HOLDING, INC.

(Exact name of Registrant as specified in its charter)

Nevada		20-0754724
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

9253 Eton Avenue, Chatsworth, California

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (818) 775-1624

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes ☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☒
		Emerging growth company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~There~~ As of November 27, 2017 there were ~~123~~141,~~052~~318,~~303~~ 208 shares of the Registrant’s $0.001 par value common stock outstanding ~~as of May 22, 2017~~.

~~TABLE OF CONTENTS~~INDEX

		Page No.
Part I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2017 (Unaudited) and June 30, 2016	1
	Condensed Consolidated Balance Sheets as of September 30, 2017 (Unaudited) and June 30, 2017	1
	Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2017 and 2016 (Unaudited)	2
	Condensed Consolidated Statements of Operations for the three months ended September 30, 2017 and 2016 (Unaudited)	2
	Condensed Consolidated Statement of Stockholders’ Deficit for the nine months ended March 31, 2017 (Unaudited)	3
	Condensed Consolidated Statement of Stockholders’ Deficit for the three months ended September 30, 2017 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2017 and 2016 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2017 and 2016 (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3635
Item 4.	Controls and Procedures	3635
Part II. Other Information
Item 1.	Legal Proceedings	3736
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3736
Item 3.	Default Upon Senior Securities	3736
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	3837
Signatures		3938

ITEM 1. FINANCIAL STATEMENTS

PROVISION HOLDING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2017 (Unaudited)			June 30, 2016
	September 30, 2017			June 30, 2017
	Unaudited
ASSETS
CURRENT ASSETS
Cash	$	~~637~~43,~~629~~879		$	2310,~~175,543~~749
Accounts receivable		12,000			-
Inventory, net		2,201,759			2,201,759
Inventory, net		2,214,362			3,521,739
Prepaid expenses		196,240			196,240
Prepaid expenses		196,240			592,769
Other current assets		3,000			3,000
TOTAL CURRENT ASSETS		32,~~063~~444,~~231~~878			62,~~293~~711,~~051~~748
EQUIPMENT, net of accumulated depreciation		19,861			26,736
PROPERTY AND EQUIPMENT, net of accumulated depreciation		15,278			17,569
INTANGIBLES, net of accumulated amortization		~~170~~169,~~853~~605			~~172~~170,~~725~~229
TOTAL ASSETS	$	32,~~253~~629,~~945~~761		$	62,~~492~~899,~~512~~546
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	2,~~462~~961,~~887~~380		$	2,~~651~~753,~~657~~444
Payroll taxes, interest and penalties		~~622~~721,~~909~~157			~~590~~663,~~799~~840
Accrued interest		2,~~535~~660,~~305~~246			2,~~476~~557,~~036~~435
Unearned revenue		2,057,607			32,~~419~~057,~~616~~607
Debt settlement payable		-			16,795
Derivative liability		69,195			408,286
Derivative liability		427,824			188,128
Current portion of convertible debt, net of unamortized debt discount of $475,524 and $660,141 and net of unamortized warrant discount of $31,742 and $79,783 and net of financing costs of $163,129 and $322,229, respectively		7,339,290			7,216,032
Current portion of convertible debt, net of unamortized debt discount of $261,925 and $16,980 and net of unamortized warrant discount of $138,063 and $-0- and net of financing costs of $375,004 and $-0-		6,292,293			609,905
Notes payable, net of unamortized debt discount of $82,671 and $74,821, respectively		787,329			220,179
Notes payable, net of unamortized debt discount of $40,563 and $-0-		110,937			90,000
TOTAL CURRENT LIABILITIES		16,596,204			15,876,823
TOTAL CURRENT LIABILITIES		14,509,762			10,042,936
TOTAL LIABILITIES		16,596,204			15,876,823
CONVERTIBLE DEBT, net of current portion and unamortized debt discount of $703,655 and $1,291,892 and net of unamortized warrant discount of $12,690 and $363,663 and net of financing costs of $318,276 and $1,287,109		276,279			5,805,466
Nonconvertible series A preferred stock, related party		-			100
TOTAL LIABILITIES		14,786,041			15,848,502
STOCKHOLDERS’ DEFICIT
Preferred stock, par value $0.001 per share Authorized – 4,000,000 shares Designated 1,000 Series A preferred stock, Issued and outstanding – Nil and 1,000 shares, respectively		-			-
Preferred stock, par value $0.001 per share Authorized – 4,000,000 shares Designated 1,000 Series A preferred stock, Issued and outstanding – Nil and Nil shares, respectively		-			-
Common stock, par value $0.001 per share Authorized –300,000,000 shares - issued and outstanding – 122,798,480 and 89,242,624, respectively		122,798			89,242
Common stock, par value $0.001 per share Authorized –300,000,000 shares - issued and outstanding – 138,002,582 and 134,431,613, respectively		138,002			134,432
Common stock to be issued for services, par value $0.001 per share, 706,000 and 1,249,998, respectively		56,480			262,166
Common stock to be issued for services, par value $0.001 per share, 4,200,000 and 475,000, respectively		213,000			34,250
Additional paid-in capital		2829,~~303~~818,~~297~~399			2528,~~100~~987,~~864~~431
Less receivable for stock		(~~100~~50,000	)		(50,000	)
Accumulated deficit		(3944,~~914~~085,~~671~~844	)		(3442,~~758~~083,~~262~~390	)
TOTAL STOCKHOLDERS’ DEFICIT		(1113,~~532~~966,~~096~~443	)		(912,~~355~~977,~~990~~277	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	32,~~253~~629,~~945~~761		$	62,~~492~~899,~~512~~546

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

PROVISION HOLDING, INC. AND SUBSIDIARIES

~~CONDENSED~~ CONDENDSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED

	Three Months Ended						Nine Months Ended
	Three Months Ended September 30,
	March 31,						March 31,
	2017			2016
	2017			2016			2017			2016
REVENUES
REVENUES
Hardware revenues	$	15,750		$	8,870
Advertising revenues	$	185,317		$	-		$	344,017		$	-
Software revenues – related party		-			49,842
Hardware revenues		-			19,494			110,195			50,660
TOTAL REVENUES		15,750			58,712
Hardware revenues – related party		-			1,677,462			1,196,552			4,531,287
COST OF REVENUES		18,867			56,027
Service related revenues – related party		-			157,560			-			611,735
GROSS (LOSS) PROFIT		(3,117	)		2,685
Software revenues – related party		-			171,993			66,456			205,223
EXPENSES
TOTAL REVENUES		185,317			2,026,509			1,717,220			5,398,905
General and administrative		976,848			822,809
COST OF REVENUES		55,272			1,654,592			1,896,255			4,476,652
Research and development		88,629			150,132
GROSS PROFIT(LOSS)		130,045			371,917			(179,035	)		922,253
TOTAL OPERATING EXPENSES		1,065,477			972,941
EXPENSES
LOSS FROM OPERATIONS		(1,068,594	)		(970,256	)
General and administrative		833,681			722,162			2,350,220			1,471,810
OTHER INCOME (EXPENSE)
Research and development		37,934			119,407			257,838			216,306
Change in fair value of derivative liability		113,330			59,857
TOTAL EXPENSES		871,615			841,569			2,608,058			1,688,116
Debt modification expense		(40,000	)		-
LOSS FROM OPERATIONS		(741,570	)		(469,652	)		(2,787,093	)		(765,863	)
Amortization of debt and warrant discount and financing costs		(633,422	)		(458,855	)
OTHER INCOME (EXPENSE)
Interest expense		(373,768	)		(254,273	)
Derivative liability expense – insufficient shares		-			-			-			(85,960	)
TOTAL OTHER EXPENSE		(933,860	)		(653,271	)
Change in fair value of derivative		(18,584	)		-			43,834			–
LOSS BEFORE INCOME TAXES		(2,002,454	)		(1,623,527	)
Gain on forgiveness of debt		-			-			-			597,312
Income tax expense		-			-
Loss on settlement of debt		-			-			(48,000	)		-
NET LOSS	$	(2,002,454	)	$	(1,623,527	)
Amortization of debt and warrant discount and financing costs		(690,998	)		-			(1,608,708	)		-
NET LOSS PER COMMON SHARE
Other income		-			(823	)		-			2,053
Basic and diluted	$	(0.01	)	$	(0.02	)
Interest expense		(204,120	)		(443,268	)		(756,442	)		(1,182,116	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
TOTAL OTHER INCOME (EXPENSE)		(913,702	)		(444,091	)		(2,369,316	)		(668,711	)
Basic and diluted		136,233,921			93,155,328
LOSS BEFORE INCOME TAXES		(1,655,272	)		(913,743	)		(5,156,409	)		(1,434,574	)
Income tax expense		-			–			-			–
NET LOSS	$	(1,655,272	)	$	(913,743	)	$	(5,156,409	)	$	(1,434,574	)
NET LOSS PER COMMON SHARE
Basic and diluted	$	(0.02	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		106,217,807			78,773,014			99,364,166			77,797,425

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

PROVISION HOLDING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH 31~~SEPTEMBER 30, 2017

UNAUDITED

	Preferred A Stock					Common Stock				Additional Paid-in		Shares to be			Receivable for			Accumulated			Total Stockholders’
	Shares			Amount		Shares		Amount		Capital		Issued			Stock			Deficit			Deficit
Balance, June 30, 2016		1,000		$	–		89,242,624	$	89,242	$	25,100,864	$	262,166		$	(50,000	)	$	(34,758,262	)	$	(9,355,990	)
Balance, June 30, 2017		-		$	-		134,431,613	$	134,432	$	28,987,431	$	34,250		$	(50,000	)	$	(42,083,390	)	$	(12,977,277	)
Issuance of common stock on conversion of debt and accrued interest		-			-		152,~~124~~995,~~939~~969		152,~~125~~995		197,~~540,456~~005		-			-			-			1100,~~555,581~~000
Issuance of common stock for services received		-			-		4375,~~538,966~~000		~~4,539~~375		~~687~~25,~~037~~875		(~~254~~26,~~166~~250	)		-			-			~~437,410~~-
Issuance of common stock for cash, net		-			-		13,333,339		13,333		611,734		-			(50,000	)		-			575,067
Issuance of warrants for services received		-			-		-		-		530		-			-			-			530
Relative fair value of warrants issued with stock for cash		-			-		-		-		154,933		-			-			-			154,933
Issuance of common stock for cash, net		-			-		200,000		200		2,880		77,885						-			80,965
Issuance of options for services received		-			-		-		-		4,496		-			-			-			4,496
Relative fair value of warrants issued with stock for cash		-			-		-		-		6,920		22,115			-			-			29,035
Common stock issued for debt settlement		-			-		400,000		400		47,600		-			-			-			48,000
Relative fair value of warrants issued with promissory note		-			-		-		-		50,125		-			-			-			50,125
Common stock to be issued for services		-			-		-		-		-		48,480			-			-			48,480
Issuance of options for services received		-			-		-		-		352,483		-			-			-			352,483
Issuance of warrants		-			-		158,612		159		30,467		-			-			-			30,626
Common stock to be issued for finance fees		-			-		-		-		-		50,000			-			-			50,000
Derivative liability reclass to additional paid in capital upon notes conversion		-			-		-		-		125,710		-			-			-			125,710
Common stock to be issued for services		-			-		-		-		-		55,000			-			-			55,000
Repurchase of preferred stock		(1,000	)		-		-		-		-		-			-			-			-
Derivative liability reclass to additional paid in capital upon notes conversion		-			-		-		-		75,478		-			-			-			75,478
Net loss for the nine months ended March 31, 2017		-			-		-		-		-		-			-			(5,156,409	)		(5,156,409	)
Derivative liability reclass to additional paid in capital upon notes repayment		-			-		-		-		219,672		-			-			-			219,672
Balance, March 31, 2017		-		$	-		122,798,480	$	122,798	$	28,303,297	$	56,480		$	(100,000	)	$	(39,914,671	)	$	(11,532,096	)
Net loss for the three months ended September 30, 2017		-			-		-		-		-		-			-			(2,002,454	)		(2,002,454	)
Balance, September 30, 2017		-		$	-		138,002,582	$	138,002	$	29,818,399	$	213,000		$	(50,000	)	$	(44,085,844	)	$	(13,966,443	)

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

PROVISION HOLDING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

	Nine Months Ended March 31,
	Three Months Ended September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(52,~~156~~002,~~409~~454	)	$	(1,~~434~~623,~~574~~527	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash compensation		~~424~~55,~~390~~000			~~228~~219,~~333~~167
Loss on debt settlement		48,000			-
Debt modification expense		40,000			-
Gain on forgiveness of debt		-			(597,312	)
Depreciation expense		2,291			2,292
Depreciation expense		6,875			-
Amortization		624			624
Amortization		1,872			1,872
Amortization of prepaid financing cost		159,100			206,185
Amortization of prepaid financing cost		622,329			344,750
Amortization of debt discount		386,617			181,700
Amortization of prepaid expenses		396,529			-
Amortization of warrant discount		68,316			70,970
Amortization of debt discount		669,136			68,658
Fair value of options expense		352,483			1,320
Amortization of warrant discount		212,910			133,128
Fair value of warrants expense		530			-
Fair value of options expense		4,496			-
Change in the fair value of derivative liability		(113,330	)		(59,857	)
Fair value of warrants expense		30,626			-
Non-cash interest expense		19,389			-
Change in the fair value of derivative liability		(43,834	)		-
Non-cash interest expenses paid by promissory noteholder on behalf of the Company		87,485			-
Derivative liability expense – insufficient shares		-			85,960
Non-cash interest expenses		104,334			144,208
Changes in operating assets and liabilities:
Accounts receivable		(12,000	)		(365,366	)
Inventory		-			(10,082	)
Inventory		1,307,377			92,795
Prepaid expenses		-			49,842
Prepaid expenses		-			(126,298	)
Accounts payable and accrued liabilities		242,936			(121,004	)
Prepaid financing costs		-			(112,430	)
Payroll taxes, interest and penalties		57,317			(15,210	)
Accounts payable and accrued liabilities		(188,771	)		(280,673	)
Accrued interest		113,331			116,499
Preferred stock liability		(100	)		100
Unearned revenue		-			(49,842	)
Payroll taxes, interest and penalties		32,110			(29,154	)
NET CASH USED IN OPERATING ACTIVITIES		(530,365	)		(1,030,923	)
Accrued interest		234,520			383,989
Unearned revenue		(1,362,009	)		(59,639	)
NET CASH (USED IN) OPERATING ACTIVITIES		(2,667,619	)		(1,521,623	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		-			(13,750	)
NET CASH USED IN INVESTING ACTIVITIES		-			-
NET CASH (USED IN) INVESTING ACTIVITIES		-			(13,750	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable, net of fees		~~355~~50,000			~~3,600,690~~-
Payments on debt settlement		~~(16,795~~-	)		(~~151~~16,~~065~~795	)
Proceeds from promissory notes		61,500			-
Proceeds from promissory notes, net of fees		103,495			-
Proceeds from the sale of common stock, net of fees		~~730~~110,000			-
Payments on convertible notes payable		-			(27,500	)
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES		263,495			(16,795	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,129,705			3,422,125
NET DECREASE IN CASH AND CASH EQUIVALENTS		(266,870	)		(1,047,718	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,537,914	)		1,886,752
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		310,749			2,175,543
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		2,175,543			128,968
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	$	43,879		$	1,127,825
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	$	637,629		$	2,015,720

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

PROVISION HOLDING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED

UNAUDITED

	Nine Months Ended March 31,
	Three Months Ended September 30,
	2017		2016
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	~~521~~146,~~923~~232	$	~~114~~137,~~988~~775
Taxes paid	$	-	$	-
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of shares of common stock for debt and accrued interest conversion	$	1100,~~555,581~~000	$	~~149~~699,~~500~~575
Debt discount on convertible notes	$	-	$	38,493
Fair value of warrant issued for debt discount and deferred financing cost	$	50,125	$	-
Fair value of warrant issued for debt discount and deferred financing cost	$	-	$	931,391
Common stock to be issued now issued	$	26,250	$	248,333
Derivative liability expense – insufficient shares	$	-	$	85,960
Derivative liability reclass into additional paid in capital upon notes conversion	$	75,478	$	23,825
Common stock to be issued now issued	$	254,166	$	-
Payment of promissory note with issuance of promissory note	$	500,000	$	-
Initial derivative liability on the notes issuance date	$	409,240	$	182,701
Derivative liability reclass into additional paid in capital upon notes repayment	$	219,672	$	-
Derivative liability reclass into additional paid in capital upon notes conversion	$	125,710	$	182,701
Initial derivative liability and debt discount at the issuance of notes	$	50,000	$	-
Proceed from convertible notes directly paid to accounts payable balance	$	-	$	91,550
Debt discount on promissory note issuance	$	50,000	$	-
Re-class accrued interest into convertible debt	$	-	$	37,000
Convertible note reclassified into promissory notes	$	15,000	$	-
Stock issued in conjunction with cashless warrant exercise	$	159	$	-
Proceeds from promissory notes directly paid to convertible notes, accrued payable and expenses on behalf of the Company	$	329,020	$	-
Debt discount on non convertible notes	$	61,500	$	-
Debt discount on modified convertible note	$	50,000	$	-

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

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31~~SEPTEMBER 30, 2017 ~~AND 2016~~

UNAUDITED

NOTE 1

ORGANIZATION AND BASIS OF PRESENTATION

Business Description and Presentation

Provision Holding, Inc. (“Provision” or the “Company”) focused on the development and distribution of Provision’s patented three-dimensional, holographic interactive displays focused at grabbing and holding consumer attention particularly and initially in the advertising and product merchandising markets. The systems display a moving 3D image size to forty inches in front of the display, projecting a digital video image out into space detached from any screen, rendering truly independent floating images featuring high definition and crisp visibility from far distances. The nearest comparable to this technology can be seen in motion pictures such as Star Wars and Minority Report, where objects and humans are represented through full-motion holograms.

Provision’s proprietary and patented display technologies and software, and innovative solutions aim to attract consumer attention. Currently the Company has multiple contracts to place Provision’s products into large retail stores, as well as signed agreements with advertising agents to sell ad space to Fortune 500 customers. Given the technology’s potential in the advertising market, the Company is focused on creating recurring revenue streams from the sale of advertising space on each unit.

Corporate History

On February 14, 2008, MailTec, Inc. (now known as Provision Holding, Inc.) (the “Company”) entered into an Agreement and Plan of Merger, which was amended and restated on February 27, 2008 (as amended and restated, the “Agreement”), and closed effective February 28, 2008, with ProVision Merger Corp., a Nevada corporation and wholly owned subsidiary of the Company (the “Subsidiary”) and Provision Interactive Technologies, Inc., a California corporation (“Provision”). Pursuant to the Agreement, the Subsidiary merged into Provision, and Provision became a wholly owned subsidiary of the Company. As consideration for the merger of the Subsidiary into Provision, the Company issued 20,879,350 shares of the Company’s common stock to the shareholders, creditors, and certain warrant holders of Provision, representing approximately 86.5% of the Company’s aggregate issued and outstanding common stock, and the outstanding shares and debt, and those warrants whose holders received shares of the Company’s common stock, of Provision were transferred to the Company and cancelled.

Going Concern and Management Plans

These ~~unaudited condensed~~ consolidated ~~financial~~ financial statements are presented on the basis that the Company is a going concern. Going concern contemplates the realization of of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company had accumulated deficit at ~~March~~September 3130, 2017 of $3944,~~914~~085,~~671~~844. The Company has negative working capital of $1114,~~446~~151,~~531~~326 as of September ~~March~~30, 312017. Additionally, the Company has approximately $8,879,685 convertible debt and promissory notes currently ~~2017~~due. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The ~~unaudited condensed~~ consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded ~~asset~~ asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as as a going concern. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing or refinancing as may be required and, ultimately, to to attain profitable operations. Management’s plan to eliminate the going concern situation include, but are not limited to, the raise of additional capital through issuance of debt and equity, improved cash flow management, aggressive cost reductions, and the creation of additional sales and profits across its product lines.

Basis of presentation

Throughout this report, the terms “we”, “us”, “ours”, “Provision” and “company” refer to Provision Holding, Inc., including its wholly-owned subsidiary. The condensed consolidated balance sheet presented as of June 30, ~~2016~~2017 has been derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, (instructions to Form 10-Q and Article 8 of Regulation S-X). Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to those rules and regulations, but we believe that the disclosures are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the annual financial statements and notes for the fiscal year ended June 30, ~~2016~~2017 included in Provision’s Annual Report on Form 10-K filed with the SEC on October 13, ~~2016~~ 2017. In the opinion of management, all adjustments, consisting of normal, recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results of operations for the three ~~and~~months ~~nine month period~~ ended ~~March 31~~September 30, 2017 are not necessarily indicative of the results for the fiscal year ending June 30, ~~2017~~2018.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION (Continued)

Principles of Consolidation and Reporting

The condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiary. All significant inter-company balances and transactions have been eliminated in consolidation. The Company uses a fiscal year end of June 30.

There have been no significant changes in the Company'’s significant accounting policies during the three ~~and nine~~ months ended ~~March 31~~September 30, 2017 compared to what was previously disclosed in the Company'’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2016~~2017.

Basis of comparison

Certain prior-period amounts have been reclassified to conform to the current period presentation. None of the reclassification had an impact on net loss or shareholder equity.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and the disclosure of contingent assets and liabilities. These estimates and assumptions are based on the Company’s historical results as well as management’s future expectations. The Company’s actual results could vary materially from management’s estimates and assumptions.

Management makes estimates that affect certain accounts including, deferred income tax assets, estimated useful lives of property and equipment, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the year in which such adjustments are determined.

Cash and Cash Equivalents

The Company considers all highly liquid investments, with an original maturity of three months or less when purchased, to be cash equivalents. As of ~~March~~September 3130, 2017 and June 30, ~~2016~~2017, the Company’s cash and cash equivalents were on deposit in federally insured financial institutions, and at times may exceed federally insured limits.

Accounts Receivable

Accounts receivable are not collateralized and interest is not accrued on past due accounts. Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. After management has exhausted all collection efforts, management writes off receivables and the related reserve. Additionally, the Company may identify additional allowance requirements based on indications that a specific customer may be experiencing financial difficulties. Actual bad debt results could differ materially from these estimates.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market. The Company periodically reviews its inventories for indications of slow movement and obsolescence and records an allowance when it is deemed necessary.

Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Long-lived tangible assets are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment losses are recognized based on estimated fair values if the sum of expected future undiscounted cash flows of the related assets is less than their carrying values.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION (Continued)

Intangibles

Intangibles represent primarily costs incurred in connection with patent applications. Such costs are amortized using the straight-line method over the useful life of the patent once issued, or expensed immediately if any specific application is unsuccessful.

Revenue Recognition

The Company recognizes gross sales when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collection is probable. It recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”). Revenue from licensing, distribution and marketing agreements is recognized over the term of the contract. Revenue from the sale of hardware is recognized when the product is complete and the buyer has accepted delivery. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

Cost of Revenue

Cost of revenue in respect to sale of hardware consists of costs associated with manufacturing of 3D displays, Kiosk machine, transportation, and other costs that are directly related to a revenue-generating. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying income statement.

Depreciation and Amortization

The Company depreciates its property and equipment using the straight-line method with estimated useful lives from three to seven years. For federal income tax purposes, depreciation is computed using an accelerated method.

The Company amortizes is intangible assets using the straight-line method with estimated useful lives of 80 years. For federal income tax purposes, amortization is computed using the straight-line method.

Shipping and Handling Costs

The Company’s policy is to classify shipping and handling costs as a component of Costs of Revenues in the Statement of Operations.

Unearned Revenue

The Company bills customers in advance for certain of its services. If the customer makes payment before the service is rendered to the customer, the Company records the payment in a liability account entitled customer prepayments and recognizes the revenue related to the services when the customer receives and utilizes that service, at which time the earnings process is complete. The Company recorded $2,057,607 and $32,~~419~~057,~~616~~ 607 as of ~~March~~September 3130, 2017 and June 30, ~~2016~~2017, respectively as ~~deferred~~unearned revenue.

Significant Customers

During the three months ended ~~March 31~~September 30, 2017, the Company had one customer which accounted for more than 10% of the Company’s revenues (9474%). During the ~~nine~~ three months ended ~~March~~September 3130, ~~2017~~2016 the Company had ~~two~~one ~~customers~~customer which accounted for more than 10% of the Company’s ~~revenues~~ revenues (7485% ~~and 19%~~). ~~During~~As ~~the~~of ~~three~~September ~~and~~30, ~~nine~~2017 ~~months~~and ~~ended~~June ~~March~~30, 312017, ~~2016~~ the Company had ~~one~~no ~~customer~~accounts ~~which~~receivable ~~accounted for more than 10% of the Company’s revenues (99% and 99%, respectively)~~balance.

Research and Development Costs

The Company charges all research and development costs to expense when incurred. Manufacturing costs associated with the development of a new process or a new product are expensed until such times as these processes or products are proven through final testing and initial acceptance by the customer.

For the three months ended ~~March~~September 3130, ~~2017 and 2016, the Company incurred $37,934 and $119,407, respectively for research and development~~ ~~expense which are included in the unaudited condensed consolidated statements of operations. For the nine months ended March 31,~~ 2017 and 2016, the Company incurred $~~257~~88,~~838~~629 and $~~216~~150,~~306~~132, respectively for research and development expense which are included in the ~~unaudited condensed~~ consolidated statements of operations.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION (Continued)

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of ~~March~~September 3130, 2017 and June 30, ~~2016~~2017. The respective carrying value of certain on-balance-sheet financial instruments, approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses and notes payable. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand.

The following table provides a summary of the carrying value of the Company’s Convertible Promissory Notes, as of September 30, 2017:

Balance at June 30, 2017	$	7,216,032
Issuance of notes – net of financing costs		50,000
Extension of notes, increase in principal of $80,000 net of debt discount of $80,000		-
Payments on convertible notes payable		(283,500	)
Re-class convertible note to notes payable		(15,000	)
Debt discount on convertible notes due to beneficial conversion feature		(29,725	)
Debt discount on convertible notes due to warrants		(20,275	)
Accretion of debt and warrant discount and prepaid financing costs		521,758
Issuance of shares of common stock for convertible debt		(100,000	)
Balance September 30, 2017	$	7,339,290

There is no active market for the debt and the fair value was based on the delayed payment terms, the warrants issued as consideration of the debt issuance, the interest rate and the common stock issued as consideration of the debt issuance in addition to other facts and circumstances at the end of September 30, 2017 and June 30, 2017. The Company did not recognize a gain or loss on the valuation of debt during the three months ended September 30, 2017 and 2016.

The Company uses fair value measurements under the three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure for fair value measures. The three levels are defined as follows:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

	Carrying		Fair Value Measurements Using Fair Value Hierarchy
	Value		Level 1		Level 2		Level 3
Derivative liability – September 30, 2017	$	69,195	$	-	$	-	$	69,195
Derivative liability – June 30, 2017	$	408,286	$	-	$	-	$	408,286

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

	Carrying		Fair Value Measurements Using Fair Value Hierarchy
	Value		Level 1		Level 2		Level 3
Convertible notes (net of discount) – March 31, 2017	$	6,568,572	$	-	$	-	$	6,568,572
Convertible notes (net of discount) – June 30, 2016	$	6,415,371	$	-	$	-	$	6,415,371
Derivative liability – March 31, 2017	$	427,824	$	-	$	-	$	427,824
Derivative liability – June 30, 2016	$	188,128	$	-	$	-	$	188,128

The following table provides a summary of the changes in fair value of the Company’s Promissory Notes, which are both Level 3 liabilities as of March 31, 2017:

Balance at June 30, 2016	$	6,415,371
Issuance of notes – net of discount		355,000
Derivative liability on issuance of notes		(304,906	)
Accretion of debt and warrant discount and prepaid financing costs		1,483,437
Issuance of shares of common stock for convertible debt		(1,380,330	)
Balance March 31, 2017	$	6,568,572

The Company determined the value of its convertible notes using a market interest rate and the value of the warrants and beneficial conversion feature issued at the time of the transaction less the accretion. There is no active market for the debt and the value was based on the delayed payment terms in addition to other facts and circumstances at the end of March 31, 2017 and June 30, 2016.

Derivative Financial Instruments

The Company evaluates our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION (Continued)

Certain of the Company’s embedded conversion features on debt and outstanding warrants are treated as derivative liabilities for accounting purposes under ASC 815 due to insufficient authorized shares to settle these outstanding contracts, or due to other rights connected with these contracts, such as registration rights. In the case of insufficient authorized share capital available to fully settle outstanding contracts, the Company utilizes the latest maturity date sequencing method to reclassify outstanding contracts as derivative instruments. These contracts are recognized currently in earnings until such time as the warrants are exercised, expire, the related rights have been waived and/or the authorized share capital has been amended to accommodate settlement of these contracts. These instruments do not trade in an active securities market.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the balance sheet date.

The Company estimates the fair value of these instruments using the Black-Scholes option pricing model and the intrinsic value if the convertible notes are due on demand.

We have determined that certain convertible debt instruments outstanding as of the date of these financial statements include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.”

The following table represents the Company’s derivative liability activity for the period ended:

Balance at June 30, 2016	$	188,128
Balance at June 30, 2017	$	408,286
Derivative liability reclass into additional paid in capital upon notes conversion		(~~125~~75,~~710~~478	)
Initial measurement at issuance date of the notes		409,240
Derivative liability reclass into additional paid in capital upon notes repayment		(219,672	)
Change in fair value of derivative at period end		(43,834	)
Derivative liability on new debt issuance		69,389
Balance March 31, 2017	$	427,824
Change in fair value of derivative		(113,330	)
Balance September 30, 2017	$	69,195

Commitments and Contingencies:

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, environment liability and tax matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated.

Basic and Diluted Income (Loss) per Share

Basic income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed similar to basic income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of ~~March~~September 3130, 2017, the Company had debt instruments, options and warrants outstanding that can potentially be converted into approximately 116,~~907~~942,~~345~~079 shares of common stock.

Anti-dilutive securities not included in diluted loss per share relating to:
Warrants outstanding			~~333~~1,~~333~~714,286
Options vested and outstanding			-8,899,908
Convertible debt and notes payable including accrued interest			172,~~454~~214,~~009~~909

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION (Continued)

Material Equity Instruments

The Company evaluates stock options, stock warrants and other contracts (convertible promissory note payable) to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for under the relevant sections of ASC 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity (“ASC 815”). The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

Certain of the Company’s embedded conversion features on debt and outstanding warrants are treated as derivative liabilities for accounting purposes under ASC 815-40 due to insufficient authorized shares to settle these outstanding contracts. Pursuant to SEC staff guidance that permits a sequencing approach based on the use of ASC 840-15-25 which provides guidance for contracts that permit partial net share settlement. The sequencing approach may be applied in one of two ways: contracts may be evaluated based on (1) earliest issuance date or (2) latest maturity date. In the case of insufficient authorized share capital available to fully settle outstanding contracts, the Company utilizes the earliest maturity date sequencing method to reclassify outstanding contracts as derivative instruments. These contracts are recognized currently in earnings until such time as the convertible notes or warrants are exercised, expire, the related rights have been waived and/or the authorized share capital has been amended to accommodate settlement of these contracts. These instruments do not trade in an active securities market.

Recent Accounting Pronouncements

In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). The effective date for ASU 2017-13 is for fiscal years beginning after December 15, 2018. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

In January 2016, the FASB issued an accounting standard update which requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Under the standard, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. For equity investments without readily determinable fair values the cost method of accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. The standard is effective for us on July 1, 2018 (the first quarter of our 2019 fiscal year). The Company is currently evaluating the anticipated impact of this standard on our financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our consolidated financial statements.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its consolidated financial statements.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION (Continued)

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our consolidated financial statements.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-10 on its consolidated financial statements.

In June 2016, the FASB Issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. The Company has not yet determined the impact of ASU 2016-12 on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, in an effort to reduce the diversity of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company has not yet determined the impact of ASU 2016-15 on its consolidated financial statements.11

~~In October~~There ~~2016,~~have ~~the~~been ~~FASB~~four new ASUs issued amending certain aspects of ASU No2014-09, ASU 2016-1608, -“Principal ~~Income~~versus ~~Taxes:~~Agent ~~Intra-Entity~~Considerations ~~Transfers~~(Reporting Revenue Gross Versus Net)” was issued in March 2016 to clarify certain aspects of ~~Assets~~the ~~Other~~principal ~~Than~~versus ~~Inventory~~agent guidance in ASU 2014-09. In addition, ASU 2016-1610, ~~will~~“Identifying ~~require~~Performance ~~the~~Obligations ~~tax~~and ~~effects~~Licensing,” ofissued ~~intercompany~~in ~~transactions~~April 2016, amends other ~~than~~sections ~~sales~~ of ~~inventory,~~ASU 2014-09 including clarifying guidance related to beidentifying ~~recognized~~performance ~~currently~~obligations and licensing implementation. ASU 2016-12, ~~eliminating~~“Revenue from anContracts ~~exception~~with ~~under~~Customers ~~current~~- ~~GAAP~~Narrow Scope Improvements and Practical Expedients” provides amendments and practical expedients to the guidance in ~~which~~ASU 2014-09 in the ~~tax~~areas ~~effects~~of assessing collectability, presentation of ~~intra-entity~~sales ~~asset~~taxes ~~transfers~~received ~~are~~from ~~deferred~~customers, ~~until~~noncash consideration, contract modification and clarification of using the ~~transferred~~full ~~asset~~retrospective approach to adopt ASU 2014-09. Finally, isASU ~~sold~~2016-20, “Technical Corrections and Improvements to aTopic ~~third~~606, ~~party~~Revenue orfrom ~~otherwise~~Contracts ~~recovered~~with ~~through~~Customers” ~~use.~~was ~~The~~issued in ~~guidance~~December ~~will~~2016, beand ~~effective~~provides ~~for~~elections regarding the ~~first~~disclosures ~~interim~~required ~~period~~for ofremaining ~~our~~performance obligations in certain cases ~~2019~~and ~~fiscal~~also ~~year,~~makes ~~with~~other ~~early~~technical ~~adoption~~corrections ~~permitted.~~and ~~The~~improvements ~~Company~~to ~~has~~the ~~not~~standard. ~~yet~~With ~~determined~~its evaluation of the impact of ASU ~~2016~~2014-1609, the Company will also consider the impact on its ~~consolidated~~ financial statements related to the updated guidance provided by these four new ASUs.

In January 2017, the FASB issued ASU ~~No.~~ 2017-~~01,~~04 which ~~Business~~removes ~~Combinations~~Step ~~(Topic~~2 ~~805):~~from ~~Clarifying~~ the ~~Definition~~goodwill ofimpairment atest. ~~Business,~~It inis aneffective ~~effort to~~for ~~clarify~~annual ~~the~~and ~~definition~~interim ofperiods abeginning ~~business~~after ~~with~~December 15, ~~the~~2019. ~~objective~~Early ofadoption ~~adding~~is ~~guidance~~permitted ~~to assist entities with evaluating whether transactions should be accounted~~ for asan ~~acquisitions~~interim (or ~~disposals)~~annual ofgoodwill ~~assets~~impairment ortest ~~businesses.~~performed ~~The~~with ~~amendments~~a ofmeasurement ~~this~~date ~~ASU are effective for fiscal~~after ~~years~~January ~~beginning after December 15~~1, 2017~~, and interim periods within those fiscal years~~. The Company ~~has~~does not ~~yet~~anticpate ~~determined the~~any material impact from the adoption of ASU 2017-0104 on its ~~consolidated~~ results of operations, statement of financial ~~statements~~position or financial statement disclosures.

In May 2017, the FASB issued ASU No. 2017-09 “Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting (ASU 2017-09).” ASU 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of its adoption of this standard on its financial statements.

In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. ASU 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The guidance in ASU 2017-11 can be applied using a full or modified retrospective approach. The Company has not yet determined the effect that ASU 2017-11 will have on its results of operations, statement of financial position or financial statement disclosures.

FASB ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” was issued June 2014. This guidance was issued to resolve diversity in accounting for performance targets. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition and should not be reflected in the award’s grant date fair value. Compensation cost should be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. This update did not have a significant impact upon early adoption.

FASB ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” was issued September 2014. This provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company does not have any significant impact upon adoption.

FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The ASU will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For public business entities, the ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact upon adoption.

FASB ASU No. 2015-15, Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” was issued in August 2015 which permits an entity to report deferred debt issuance costs associated with a line-of-credit arrangement as an asset and to amortize such costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the credit line. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company did not have any significant impact upon adoption.

~~PROVISION~~FASB ASU 2015-17, “Income Taxes Balance ~~HOLDING~~Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, ~~INC~~this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. ~~AND~~The ~~SUBSIDIARIES~~Company does not anticipate a significant impact upon adoption.

~~NOTES~~FASB ASU 2016-13, “Financial Instruments TO- ~~CONDENSED~~Credit ~~CONSOLIDATED~~Losses ~~FINANCIAL~~(Topic ~~STATEMENTS~~326)” was issued in June 2016. This ASU amends the Board’s guidance on the impairment of financial instruments. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption will be permitted. The Company does not anticipate a significant impact upon adoption.

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 2

INVENTORY

Inventory consists of raw materials; work in process and finished goods. The Company’s inventory is stated at the lower of cost ~~(FIFO cost basis)~~ or market on a First-in-First out basis.

The carrying value of inventory consisted of the following:

	March 31, 2017			June 30, 2016
	September 30, 2017			June 30, 2017
Raw materials	$	3630,~~794~~227		$	2630,~~619~~227
Finished goods		2,~~334~~328,~~933~~897			32,~~652~~328,~~485~~897
		2,371,727			3,679,104
		2,359,124			2,359,124
Less Inventory reserve		(157,365	)		(157,365	)
Total	$	2,~~214~~201,~~362~~759		$	32,~~521~~201,~~739~~759

At ~~March~~ 31September 30, 2017 and June 30, ~~2016~~2017, the inventory reserve remained unchanged, respectively.

NOTE 3

PREPAID EXPENSES

~~During the~~The ~~nine months ended March 31, 2017, the~~ Company prepaid certain expenses related to software licensing fees. At ~~March~~September 3130, 2017 and June 30, ~~2016~~2017, $196,240 and $~~592~~196,~~769~~240, respectively, of these expenses remains to be amortized over the useful life through ~~May~~ October 2017.

NOTE 4

PROPERTY and EQUIPMENT, net

Property and equipment consists of the following:

	March 31, 2017			June 30, 2016
	September 30, 2017			June 30, 2017
Furniture and fixtures	$	12,492		$	12,492
Computer equipment		39,180			39,180
Equipment		4,493			4,493
		56,165			56,165
Less accumulated depreciation		(3640,~~304~~887	)		(2938,~~429~~596	)
Total	$	1915,~~861~~278		$	2617,~~736~~569

The aggregate depreciation charge to operations was $2,~~292~~291 and $~~-0- and $6~~2,~~875~~292 ~~and $ -0-~~ for ~~the~~ three ~~and nine~~ months ended ~~March 31~~September 30, 2017 and 2016, respectively. The depreciation policies followed by the Company are described in Note 1.

NOTE 5

PREPAID FINANCING COSTS

The Company pays financing costs to consultants and service providers related to certain financing transactions. The financing costs are then amortized over the respective life of the financing agreements. As such, the Company has unamortized prepaid financing costs of $~~693~~163,~~280~~129 and $1322,~~287,109 in~~229 ~~financing costs~~ at ~~March 31~~September 30, 2017 and June 30, ~~2016~~2017, respectively. Prepaid financing costs are presented with the net convertible debt as appropriate.

The aggregate amortization of prepaid financing cost charged to operations was $~~209~~159,~~958~~100 and $~~169~~206,~~417~~185 ~~and $622,329 and $344,750~~ for three ~~and nine~~ months ~~period~~ ended ~~March~~September 3130, 2017 and 2016, respectively.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 6

INTANGIBLES, net of accumulated amortization

Intangibles consist of the following:

	March 31, 2017			June 30, 2016
	September 30, 2017			June 30, 2017
Patents in process	$	142,116		$	142,116
Patents issued		58,037			58,037
		200,153			200,153
Less accumulated amortization		(2930,~~300~~5,48	)		(2729,~~428~~924	)
Total	$	~~170~~169,~~853~~605		$	~~172~~170,~~725~~229

The aggregate amortization expense charged to operations was $624 and $624 ~~and $1,872 and $1,872~~ for three ~~and nine~~ months ended ~~March 31~~September 30, 2017 and 2016, respectively. The amortization policies followed by the Company are described in Note 1.

As of ~~March~~September 3130, 2017, the estimated future amortization expense related to finite-lived intangible assets was as follows:

Fiscal year ending,
June 30, 2017- remaining three months	$	624
June 30, 2018	$	1,872
June 30, 2018		2,496
June 30, 2019		2,496
June 30, 2020		2,496
June 30, 2021		2,496
Thereafter		160,245
June 30, 2022		2,496
Total	$	170,853
Thereafter		157,749
Total	$	169,605

NOTE 7 ~~DEBT~~CONVERTIBLE ~~SETTLEMENT~~DEBT

During February 2015 the Company settled with a convertible note holder to repay the principal and accrued interest due with an interest free scheduled payment plan. On the date of the settlement the principal and accrued interest had a total value of $333,563. The scheduled payment plan calls for payments totaling $260,000. Accordingly, the Company recorded $73,563 of gain on debt extinguishment in June 2015. The Company repaid $16,795 on this debt during the nine months ended March 31, 2017. The remaining balance is $-0- and $16,795 at March 31, 2017 and June 30, 2016, respectively.

During January 2017 the Company settled a prior debt. According to the settlement agreement, the Company is required to issue 400,000 shares of common stock to the recipient. The shares were valued at $48,000 and the Company has recorded the same as expense in the statement of operations for the nine months ended March 31, 2017.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 8 CONVERTIBLE DEBT

Convertible debt consists of the following:

	March 31, 2017			June 30, 2016
	September 30, 2017			June 30, 2017
Convertible notes payable, annual interest rate of 10% to 12%, due dates range from May 2010 to February 2019 and convertible into common stock at a rate of $0.04 to $1.00 per share.	$	7,628,185		$	8,625,015
Convertible notes payable, annual interest rate of 10% to 12%, due dates range from May 2010 to February 2019 and convertible into common stock at a rate of $0.04 to $1.00 per share. (a) (b).	$	7,259,685		$	7,528,185
Convertible note payable, annual interest rate of 10%, convertible into common stock at a rate of $1.00 per share and due July 2017.		750,000			750,000
Convertible note payable, annual interest rate of 10%, convertible into common stock at a rate of $1.00 per share and due July 2017. The note is in default.		750,000			750,000
Unamortized prepaid financing costs		(~~693~~163,~~280~~129	)		(1322,~~287,109~~229	)
Unamortized warrants discount to notes		(~~150~~31,~~753~~742	)		(~~363~~79,~~663~~783	)
Unamortized debt discount		(~~965~~475,~~580~~524	)		(1660,~~308,872~~141	)
		6,568,572			6,415,371
		7,339,290			7,216,032
Less current portion		(67,~~292~~339,~~293~~290	)		(~~609~~7,~~905~~216,032	)
Convertible debt, net of current portion and debt discount	$	~~276,279~~-		$	~~5,805,466~~-

~~During~~(a) ~~the~~ Out ~~nine~~of ~~month period ended March 31~~above, ~~2017 the few holders of the Notes converted~~ $1906,~~555,581~~855 ~~including accrued interest value into 15,124,939 shares~~ of ~~the~~these ~~Company's~~notes ~~common~~are ~~stock.~~in ~~The determined fair value of the debt derivatives of $125,710 was reclassified into equity during the period ended March 31, 2017~~default.

~~For~~(b) On August 29, 2017, the ~~three~~Company, ~~and~~The ~~nine~~collateral ~~months~~agent ~~ended~~(“Collateral ~~March~~Agent”) ~~31,~~for ~~2017~~the holders (the “Noteholders”) of the 12% Series A Senior Secured Convertible Promissory Notes (the “Notes”); and ~~2016~~Alexander Capital, ~~$70~~L.P.,~~970~~ ~~and~~representative for ~~$69,701~~the ~~and~~Noteholders ~~$212~~entered into the settlement agreement. WHEREAS,~~910~~ ~~and~~the Noteholders hold $~~133~~4,~~128~~887,800 ~~were~~in ~~expensed~~Notes, insecured by the ~~statement~~assets of ~~operation~~the asCompany ~~amortization~~and ofconvertible ~~warrant~~into ~~discount~~shares ~~and~~of ~~shown~~the asCompany’s ~~interest~~Common ~~expenses,~~Stock ~~respectively.~~at ~~For~~a ~~the~~conversion ~~three~~price ~~and~~of ~~nine~~$0.10 ~~months~~per ~~ended March 31~~share, ~~2017~~with due ~~and~~dates ~~2016,~~from ~~$284,799~~August ~~and $9~~28,~~982~~ ~~and~~2017 ~~$648,199~~to ~~and~~May ~~$68~~11,~~658~~ ~~was~~2018 ~~amortized~~and ofthe ~~debt~~Company ~~discount~~desires ~~and~~an ~~shown~~extension asof ~~interest~~the ~~expenses, respectively~~Notes.

~~The~~All ~~aggregate~~Notes ~~amortization~~shall ofbe ~~prepaid~~extended ~~financing~~for ~~cost~~one ~~charged~~year toby ~~operations~~Alexander ~~was~~Capital ~~$209,959~~L.P. ~~and~~as ~~$169,417~~they ~~and~~come ~~$622~~due. If Notes are extended for one year,~~329~~ ~~and~~the ~~$344~~extended Notes shall be on the same terms as the original Notes. The principal balance of each Note,~~750~~ ~~for~~however, shall be increased by 20%. ~~three~~For ~~and~~any ~~nine~~Note ~~month~~that ~~period~~is ~~ended~~extended ~~March~~for 31one year, ~~2017~~Alexander ~~and~~Capital ~~2016~~L.P. shall receive a 10% corporate structuring fee on the original Note principal balance less any Initial Payments received by Alexander Capital L.P. No additional compensation shall be requested by the Collateral Agent for the Noteholders or by Alexander Capital, ~~respectively~~L.P. for any future extensions beyond one year.

~~Accrued~~As ~~and~~of ~~unpaid~~September ~~interest~~30, ~~for~~2017, ~~convertible~~only $400,000 of notes ~~payable~~have atbeen ~~March~~extended ~~31,~~and ~~2017~~no others. The Company determined this settlement as a debt modification and ~~June~~was 30accounted $80,000 ~~2016~~as ~~was~~a debt discount on modified convertible debt and recorded $12,~~678,212~~367 and $13,~~678~~288 as interest expenses and amortization of debt discount,~~138,~~ respectively, as per the effective interest rate method.

~~For the three and nine months ended March 31, 2017 and 2016, $235,263 and $94,744 and $685,759 and $350,530, was charged as interest on debt and shown as interest expenses, respectively.~~14

~~NOTE~~The Company 9is ~~DERIVATIVE~~not ~~LIABILITY~~paying a fee unless notes are extended. During the three months ended September 30, 2017, the Company paid a $40,000 fee and accounted for the fee as debt modification expenses.

~~On June~~During ~~10, 2016,~~ the ~~Company~~three ~~entered~~months ~~into~~ended aSeptember ~~Loan~~30, ~~Agreement~~2017 ~~with~~holders anof ~~investor pursuant to which~~ the ~~Company~~Notes ~~reissued~~converted ~~a convertible promissory note from a selling investor in the principal amount of for up to~~ $~~160~~100,~~330.~~000 ~~The Note is convertible~~ into 2,995,969 shares of ~~common~~ ~~stock~~the atCompany's ancommon ~~initial conversion price subject to adjustment as contained in the Note~~stock. The ~~Conversion Price is the 80% of~~ ~~the~~determined ~~average~~fair ~~closing~~value ~~price~~ of the ~~last~~debt ~~thirty~~derivatives ~~trading days~~ of ~~the stock~~$75,478 ~~not~~was ~~lower~~reclassified ~~than~~into ~~$0.10.~~equity ~~The~~during ~~Note~~the ~~accrues~~three ~~interest~~months atended ~~a rate~~September ~~of 7% per annum and matures on December 10~~30, 2017.

~~Due to~~During the ~~variable~~three ~~conversion~~months ~~price~~ended ~~associated~~September 30, ~~with this convertible promissory note~~2017, the Company ~~has~~repaid ~~determined~~$283,500 ~~that~~of ~~the~~principal ~~conversion feature~~to isholders ~~considered~~of athe ~~derivative liability~~Notes. The ~~accounting~~determined ~~treatment of derivative financial instruments requires that the Company record the~~ fair value of the debt derivatives as of $219,672 ~~the~~was ~~inception~~reclassified ~~date~~into ofequity ~~the~~during ~~Convertible Promissory Note and to adjust~~ the ~~fair~~three ~~value as~~months ofended ~~each~~September ~~subsequent~~30, ~~balance sheet date~~2017.

15The Company entered into a convertible promissory note (the “Note”) on July 20, 2017 to obtain funding for working capital purposes. The Note is issued as a convertible promissory note in the principal amount of $50,000 (the “Note”). The principal amount under the Note accrues interest at a rate of 12% per annum and is due on July 20, 2018. The conversion price of the common stock into which the principal amount, or the then outstanding interest due thereon, of this note is convertible shall be the lesser of (i) $0.06 per share or (ii) 70% of the price per share of the Company’s next equity or convertible debt issuance greater than $250,000. The note holder also received a warrant to purchase the Company’s common stock equal to 50% of the shares of common stock issuable upon conversion of the note with the exercise price per share of common stock of the lesser of $0.06 per share or 70% of the price per share of the Company’s next equity or convertible debt issuance greater than $250,000. The Company valued the debt discount due to the beneficial conversion feature at $29,725. The Company valued the debt discount due to the warrants at $20,275.

~~PROVISION~~For the three months ended September 30, ~~HOLDING~~2017 and 2016, ~~INC~~$68,316 and $70,970 were expensed in the statement of operation as amortization of warrant discount and shown as interest expenses, respectively. ~~AND~~For ~~SUBSIDIARIES~~the three months ended September 30, 2017 and 2016, $291,054 and $181,700 was amortized of debt discount and shown as interest expenses, respectively.

~~NOTES~~The aggregate amortization of prepaid financing TOcost ~~CONDENSED~~charged ~~CONSOLIDATED~~to ~~FINANCIAL~~operations ~~STATEMENTS~~was $159,100 and $206,185 for three months ended September 30, 2017 and 2016, respectively.

~~FOR~~Accrued and unpaid interest for convertible ~~THE~~notes ~~THREE~~payable ~~AND~~at ~~NINE~~September ~~MONTHS~~30, ~~ENDED~~2017 ~~MARCH~~and 31June 30, 2017 ~~AND~~was ~~2016~~$1,733,358 and $1,678,992, respectively.

~~UNAUDITED~~For the three months ended September 30, 2017 and 2016, $257,628 and $182,624, was charged as interest on debt and shown as interest expenses, respectively.

NOTE 98 ~~DERIVATIVE~~DERIVATE LIABILITY ~~(Continued)~~

The initial fair value of the embedded debt derivative of $206,996 was allocated as a debt discount $76,163 was determined using intrinsic value with the remainder $130,833 charged to current period operations as interest expenses. The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions:

(1) dividend yield of		0%;
(2) expected volatility of		164%,
(3) risk-free interest rate of		0.87%,
(4) expected life of		36 months
(5) fair value of the Company’s common stock of		$0.26 per share.

During the period ended March 31, 2017, the above note was fully converted into shares and hence, now onwards no further derivative liability needs to accrue related to this note.

On February 7, 2017, the Company entered into a Loan Agreement with an investor pursuant to which the Company issued a convertible promissory note in the principal amount of for up to $158,500. The Note is convertible into shares of common stock at an initial conversion price subject to adjustment as contained in the Note. The Conversion Price is the 61% of the average closing price of the prior ten days. The Note accrues interest at a rate of 12% per annum and matures on November 12, 2017.

Due to the variable conversion price associated with this convertible promissory note, the Company has determined that the conversion feature is considered a derivative liability. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date.

The initial fair value of the embedded debt derivative of $158,670 was allocated as a debt discount $101,336 was determined using intrinsic value with the remainder $57,334 charged to current period operations as interest expenses. The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions:

(1) dividend yield of			0%;
(2) expected volatility of			149%,
(3) risk-free interest rate of			0.79%,
(4) expected life of			9 months
(5) fair value of the Company’s common stock of			$0.09 per share.

On August 8, 2017, the holder converted the principal of $50,000 into 1,428,571 shares of the Company’ common stock.

On August 18, 2017, the holder converted the principal of $50,000 into 1,567,398 shares of the Company’ common stock.

On August 31, 2017, the Company paid the remaining principal of $58,500.

On March 2, 2017, the Company entered into a Loan Agreement with an investor pursuant to which the Company issued a convertible promissory note in the principal amount of for up to $225,000. The Note is convertible into shares of common stock at an initial conversion price subject to adjustment as contained in the Note. The Conversion Price is the 60% of the average of the lowest three intra-day trading prices in the twenty days immediately preceding the applicable conversion. The Note accrues interest at a rate of 0% per annum and matures on September 2, 2017.

The initial fair value of the embedded debt derivative of $250,570 was allocated as a debt discount $203,571 was determined using intrinsic value with the remainder $46,999 charged to current period operations as interest expenses. The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions:

(1) dividend yield of			0%;
(2) expected volatility of			134%,
(3) risk-free interest rate of			0.84%,
(4) expected life of			6 months
(5) fair value of the Company’s common stock of			$0.08 per share.

16On August 31, 2017, the Company paid the principal of $225,000.

~~PROVISION~~On July 20, 2017, the Company entered into ~~HOLDING~~a Loan Agreement with an investor pursuant to which the Company issued a convertible promissory note in the principal amount of $50,000. ~~INC~~The Conversion Price of the Common Stock into which the Principal Amount, or the then outstanding interest due thereon, of this Note is convertible shall be the lesser of (i) $0.06 ~~AND~~per ~~SUBSIDIARIES~~share or (ii) 70% of the price per share of the Company’s next equity or convertible debt issuance greater than $250,000. The Note accrues interest at a rate of 12% per annum and matures on July 20, 2017.

~~NOTES~~Due to the variable conversion price associated TOwith ~~CONDENSED~~this ~~CONSOLIDATED~~convertible ~~FINANCIAL~~promissory ~~STATEMENTS~~note, the Company has determined that the conversion feature is considered a derivative liability. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date.

~~FOR~~The initial fair value of the embedded ~~THE~~debt ~~THREE~~derivative ~~AND~~of ~~NINE~~$69,389 ~~MONTHS~~was ~~ENDED~~allocated ~~MARCH~~as 31a debt discount due to the beneficial conversion feature $29,725 ~~2017~~and ~~AND~~a ~~2016~~debt discount due to the warrants $20,275 and was determined using intrinsic value with the remainder $19,389 charged to current period operations as interest expenses. The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions:

UNAUDITED

(1) dividend yield of			0%;
(2) expected volatility of			130%,
(3) risk-free interest rate of			1.22%,
(4) expected life of			12 months
(5) fair value of the Company’s common stock of			$0.06 per share.

~~NOTE~~During 9the ~~DERIVATIVE~~three ~~LIABILITY~~months ~~(Continued)~~ended September 30, 2017 and 2016, the Company recorded the gain in fair value of derivative $113,330 and $59,857, respectively.

~~During~~ For the three ~~and nine~~ months ended ~~March~~September 3130, 2017 and 2016, ~~the~~$129,841 ~~Company~~and ~~recorded~~$-0-, ~~the~~respectively, ~~loss~~was ~~(gain)~~expensed in ~~fair~~the ~~value~~statement of ~~derivative~~operation ~~$18,584 and~~as ~~$(-0-)~~amortization of debt and ~~$(43,834)~~warrant discount related to above convertible notes portion and ~~$-0-~~shown as interest expenses, respectively.

For the three and nine months ended March 31, 2017 and 2016, $51,335 and $-0- and $126,107 and $-0-, respectively, was expensed in the statement of operation as amortization of debt discount related to above notes and shown as interest expenses, respectively.

The following table represents the Company’s derivative liability activity for the period ended:

Balance at June 30, 2016	$	188,128
Balance at June 30, 2017	$	408,286
Derivative liability reclass into additional paid in capital upon notes conversion		(~~125~~75,~~710~~478	)
Initial measurement at issuance date of the notes		409,240
Derivative liability reclass into additional paid in capital upon notes repayment		(219,672	)
Change in fair value of derivative at period end		(43,834	)
Derivative liability on new debt issuance		69,389
Balance March 31, 2017	$	427,824
Change in fair value of derivative		(113,330	)
Balance September 30, 2017	$	69,195

NOTE 109 NOTES PAYABLE

~~During February 2017, the Company entered into four promissory notes with investors pursuant to which the Company issued four promissory notes in the principal amount of $61,500.~~ The ~~notes~~following ~~accrue~~table ~~interest~~provides at a ~~rate of 5% per annum and mature in 120 days. As additional~~summary ~~consideration, the Company issued the investors 1,050,000 shares~~ of ~~common stock. The value of~~ the ~~stock~~changes ~~consideration was limited to the value~~ of the ~~promissory~~Company’s ~~notes,~~Promissory ~~$61,500.~~Notes ~~The~~liabilities ~~stock consideration was recorded~~ as ~~a discount against the notes. For the three and nine months ended March 31, 2017 and 2016, $20,938 and $-0- and $20,937 and $-0-, respectively, was expensed in the statement~~ of ~~operations~~September ~~as amortization of debt discount related to the notes and show as interest expenses. The unamortized debt discount was $40,563 and $-0- at March 31, 2017 and June~~ 30, 2017~~, respectively.~~:

At March 31, 2017 and June 30, 2016, $151,500 and $90,000, respectively, of debt was outstanding with interest rates of 5% to 8%.

Balance at June 30, 2017	$	220,179
Issuance of notes		1,060,000
Reclass notes payable from convertible notes		15,000
Debt discount / finance cost on notes		(100,125	)
Repayments on promissory notes		(500,000	)
Accretion of debt discount /financing costs		92,275
Balance June 30, 2017	$	787,329

~~Accrued and unpaid interest for these notes payable at March 31, 2017 and June 30, 2016 were $29,421 and $26,528, respectively.~~16

~~For~~On August 23, 2017, the Company entered into three promissory notes with investors pursuant to which the Company issued three ~~and~~promissory ~~nine~~notes ~~months~~in ~~ended~~the ~~March~~principal 31amount of $40,000. ~~2017~~The notes accrue interest at a rate of 5% per annum and ~~2016,~~mature $1in 120 days. As additional consideration,~~349~~ ~~and~~the $1Company issued the investors 700,~~694~~000 ~~and~~shares $3of common stock. The value of the stock consideration was limited to the value of the individual promissory notes,~~393~~ ~~and~~for a total of $535,~~111~~000. ~~was~~The ~~charged~~stock consideration will be recorded as ~~interest~~a ondiscount ~~debt~~against the notes. As of September 30, 2017, this stock was not issued and ~~shown~~was accounted for as ~~interest~~stock ~~expenses,~~to ~~respectively~~be issued.

~~NOTE~~On 11August ~~COMMITMENTS~~25, 2017, the Company entered into a promissory note with an investor pursuant to which the Company issued a promissory note in the principal amount of $20,000. The note accrues interest at a rate of 5% per annum and mature in 120 days. As additional consideration, the Company issued the investor 300,000 shares of common stock. The value of the stock consideration was limited to the value of the individual promissory note, for a total of $15,000. The stock consideration will be recorded as a discount against the note. As of September 30, 2017, this stock was not issued and was accounted for as stock to be issued.

~~Lease Agreement~~On -August ~~The Company leases its office space under a month-to-month lease. Rent expense was $25,030 and $18,456 and $73,129 and $55,368 for the three and nine months ended March~~ 31, 2017 ~~and 2016~~, ~~respectively. On March 2, 2016,~~ the Company entered ~~into~~ aninto ~~Amendment~~a tobridge ~~Lease~~note inwith ~~order~~an investor pursuant to ~~extend~~which the ~~current~~Company ~~lease~~issued ~~through~~a ~~March~~promissory ~~31,~~note ~~2019.~~in ~~The~~the ~~lease~~principal ~~calls~~amount ~~for monthly rent~~ of $6500,~~719~~000. ~~per~~The ~~month~~note ~~for~~does ~~the~~not ~~period~~accrue ~~of April 1, 2016 through March 31, 2017~~interest. The ~~monthly~~Company ~~rent~~repaid ~~increases~~the 4%note ~~for~~on ~~each~~September of13, ~~the next two years~~2017.

The Company entered into a promissory note (the “Note”) on September 13, 2017 to obtain funding for working capital purposes. The Note is issued as an unsecured, non-convertible promissory note in the principal amount of $500,000 (the “Note”). The principal amount under the Note accrues interest at a rate of 12% per annum and is due on May 13, 2018. The holder of the Note shall receive the right to buy 1.25 million shares of the Company’s common stock on September 13, 2017 and an additional 1.25 million shares for each month that the Note is outstanding up to a maximum of 10 million shares, all at a purchase price of $0.06 per shares and expiring on September 13, 2019.

For the three months ended September 30, 2017 and 2016, $92,275 and $77,242, respectively, was expensed in the statement of operations as amortization of debt discount related to the notes and show as interest expenses. The unamortized debt discount was $82,671 and $74,821 at September 30, 2017 and June 30, 2017, respectively.

At September 30, 2017 and June 30, 2017, $870,000 and $295,000, respectively, of debt was outstanding with interest rates of 5% to 12%.

Accrued and unpaid interest for these notes payable at September 30, 2017 and June 30, 2017 were $48,096 and $32,074, respectively.

For the three months ended September 30, 2017 and 2016, $16,022 and $2,652 was charged as interest on debt and shown as interest expenses, respectively.

NOTE 10

COMMITMENTS

Lease Agreement - The Company leases its office space under a month-to-month lease. Rent expense was $25,024 and $23,025 for the three months ended September 30, 2017 and 2016, respectively. On March 2, 2016, the Company entered into an Amendment to Lease in order to extend the current lease through March 31, 2019. The lease calls for monthly rent of $6,719 per month for the period of April 1, 2016 through March 31, 2017. The monthly rent increases 4% for each of the next two years.

The future minimum payments under this lease are as follows:

Fiscal year ending, June 30:
2017 – remaining three months	$	20,964
2018	$	63,732
2018		84,696
2019		65,412
Total	$	~~171~~129,~~072~~144

The Company is delinquent in remitting its payroll taxes to the applicable governmental authorities. Total due, including estimated penalties and interest is $~~622~~721,~~909~~ 157 and $~~590~~663,~~799~~840 at ~~March~~September 3130, 2017 and June 30, ~~2016~~2017, respectively.

On June 15, 2017, the Company entered into a five year Strategic Alliance Agreement (the “Agreement”) with Coinstar, LLC (“Coinstar”). Coinstar owns and operates approximately 17,000 self-service coin counting kiosks at retailer store locations in the United States.

The Company and Coinstar will work jointly to develop and integrate the Company’s free standing patented 3D holographic display systems, known as HoloVision™ (the “Systems”) into Coinstar’s kiosks, and will be installed and promoted at retailer store locations, the specifics of which will be mutually agreed to and summarized in a separate agreement (each a “Statement of Work”). The Systems will have a proprietary coupon/loyalty card software application and provide advertising and promotions through Coinstar kiosks. For all retailer store locations in which Coinstar kiosks are installed, Coinstar has been granted an exclusive first right of refusal to include such locations.

~~PROVISION~~The Company shall pay to Coinstar, and ~~HOLDING~~Coinstar shall pay to participating retailers a specified percentage of monthly Net Advertising Revenues, ~~INC~~per kiosk (the “Promotion Retailer Commission”) included in a Statement of Work, which shall be determined by mutual agreement of Coinstar and Provision. “Net ~~AND~~Advertising ~~SUBSIDIARIES~~Revenues” is defined as gross advertising revenues from Systems less any operational expenses incurred in connection with such Systems (for example: cost of paper, service, network connectivity, network administration). The Company shall evenly divide the remaining monthly Net Advertising Revenues after deducting the Promotion Retailer Commission).

~~NOTES~~Under the agreement, Provision and Coinstar TOwill ~~CONDENSED~~integrate ~~CONSOLIDATED~~Provision’s ~~FINANCIAL~~patented ~~STATEMENTS~~3D “Holovision” display systems into Coinstar kiosks nationwide. The Provision 3D holographic display will “bolt-on” to the top of the existing Coinstar kiosk as a “topper”. Our couponing and loyalty card system software will be integrated into the Coinstar touch-screen interface. The firms will evenly divide the monthly net advertising revenues, after deducting promotional retailer commissions. Provision believes that the monthly advertising revenue potential in this channel should exceed that of a retail pharmacy chain.

~~FOR~~The Provision “topper” has ~~THE~~been ~~THREE~~designed ~~AND~~by ~~NINE~~an ~~MONTHS~~award ~~ENDED~~winning ~~MARCH~~industrial designer, and we plan to assemble the prototype beginning in August, 2017. The software teams have begun the required integration work, and we anticipate a working prototype in October, 2017. We have targeted up to 300 locations for rollout by December 31, 2017, ~~AND~~with ~~2016~~broader deployment scheduled for the 2018 calendar year.

~~UNAUDITED~~On August 28, 2017, the Company entered into a consulting agreement with a software services consultant. The Company agreed to issue 800,000 shares of common stock in payment of services under this agreement.

~~NOTE~~On 12September ~~EQUITY~~18, 2017, the Company entered into an employment agreement with Mark Leonard providing for a salary of $144,000, the right to be reimbursed for health care and severance for termination without cause and resignation with cause

NOTE 11

EQUITY

Preferred Stock

The Company is authorized to issue 4,000,000 shares of Preferred Stock with a par value of $0.001 per share as of December 31, 2016. Preferred shares issued and outstanding at ~~March~~September 3130, 2017 and June 30, ~~2016~~2017 were Nil and ~~1,000~~Nil shares, respectively.

On December 30, 2015, the Company filed an amendment to the Company'’s Articles of Incorporation, as amended, in the form of a Certificate of Designation that authorized for issuance of up to 1,000 shares of Series A preferred stock, par value $0.001 per share, of the Company designated “Super Voting Preferred Stock” and established the rights, preferences and limitations thereof. The pertinent rights and privileges of each share of the Super Voting Preferred Stock are as follows:

(i) each share shall not be entitled to receive any dividends nor any liquidation preference;

(ii) each share shall not be convertible into shares of the Company’s common stock;

(iii) shall be automatically redeemed by the Company at $0.10 per share on the first to occur of the following triggering events: (a) 90 days following the date on which this Certificate of Designation is filed with the Secretary of State of Nevada or (b) on the date that Mr. Thornton ceases, for any reason, to serve as officer, director or consultant of the Company; and

(iv) long as any shares of the Series A Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote in an amount equal to 51% of the total vote (representing a majority voting power) effecting an increase in the authorized common stock of the Company. Such vote shall be determined by the holder(s) of the then issued and outstanding shares of Series A Preferred Stock. For example, if there are 10,000 shares of the Company’s common stock issued and outstanding at the time of a shareholder vote, the holders of the Series A Preferred Stock, will have the right to vote an aggregate of 10,408 shares, out of a total number of 20,408 shares voting. The amount of voting rights is determined based on the common shares outstanding and at the record date for the determination of shareholders entitled to vote at each meeting of shareholders of the Company or action by written consent in lieu of meetings with respect to effecting an increase in the authorized shares as presented to the shareholders of the Company. Each holder of Super Voting Preferred Stock shall vote together with the holders of Common Stock, as a single class, except (i) as provided by Nevada Statutes and (ii) with regard to the amendment, alteration or repeal of the preferences, rights, powers or other terms with the written consent of the majority of holders of Super Voting Preferred Stock.

OnThe Company is in process of the ~~December~~Series ~~31,~~B ~~2015,~~Preferred stock certificate of Designation and upon filing the Company ~~issued~~to issue 1,000 shares of ~~Super~~Series ~~Voting~~B ~~Preferred~~preferred ~~Stock~~stock, par ~~for~~value $0.10001 per share, toof ~~Curt~~the ~~Thornton,~~Company ~~President and~~designated ~~Chief~~“Super ~~Executive~~Voting ~~Officer~~Preferred Stock”, ~~and~~As ~~a director~~ of ~~the Company~~date, asthis ~~described~~was innot ~~Note~~filed and 13has ~~Related~~not ~~Party Transactions~~created.

~~The Preferred Stock – Series A has a mandatory redemption provision of $0.10 per share, accordingly it is classified as a liability in the balance sheet.~~18

During the period ended March 31, 2017, the Company repurchase the said 1,000 Preferred Stock at par value of $100. Preferred shares issued and outstanding at December 31, 2016 were Nil.

Common Stock

On December 31, 2015, the Company amended its Articles of Incorporation by filing a Certificate of Amendment with the Secretary of State of Nevada to effect an increase in the number of the Company’s authorized common shares from 100,000,000 to 200,000,000. The increase in the authorized number of shares of common stock was approved by the Board of Director of the Company on December 30, 2015 and holders of more than 50% of the voting power of the Company’s capital stock on December 31, 2015.

On June 30, 2016, the Company amended its Articles of Incorporation by filing a Certificate of Amendment with the Secretary of State of Nevada to effect an increase in the number of the Company’s authorized common shares from 200,000,000 to 300,000,000. The increase in the authorized number of shares of common stock was approved by the Board of Director of the Company on June 30, 2016 and holders of more than 50% of the voting power of the Company’s capital stock. The Company’s ticker symbol and CUSIP remain unchanged.

18As of September 30, 2017 and June 30, 2017, there were 138,002,582 and 134,431,613 shares of common stock issued and outstanding, respectively.

~~PROVISION~~During ~~HOLDING~~August 2017, ~~INC.~~the ~~AND~~Company issued ~~SUBSIDIARIES~~375,000 shares of common stock pursuant a consulting agreement, related to a prior year amount of $26,250.

~~NOTES~~During August 2017, the Company issued TO2,995,969 ~~CONDENSED~~shares ~~CONSOLIDATED~~of ~~FINANCIAL~~common ~~STATEMENTS~~stock for the conversion of debt and accrued interest in the amount of $100,000.

~~FOR~~On August 21, 2017, the Company accepted ~~THE~~and ~~THREE~~entered ~~AND~~into ~~NINE~~Subscription ~~MONTHS~~Agreements ~~ENDED~~(the ~~MARCH~~“Subscription 31Agreements”) for 1,000,000 ~~2017~~shares ~~AND~~of ~~2016~~Company’s common stock with accredited investors (the “Investors”) for an aggregate purchase price of $50,000 at a price of $0.05 per share. The Investor received warrants to purchase shares of Common Stock equal to 35% of the shares each purchased (the “Warrants”). The Warrants have an exercise price of $0.09 per share and are exercisable for three-years from the date of issuance of the Warrant. The Warrants are valued at $15,155. Net cash received after the warrant valuation of $15,155 was $34,845.

~~UNAUDITED~~On September 27, 2017, the Company accepted and entered into Subscription Agreements (the “Subscription Agreements”) for 200,000 shares of Company’s common stock with accredited investors (the “Investors”) for an aggregate purchase price of $10,000 at a price of $0.05 per share. The Investor received warrants to purchase shares of Common Stock equal to 100% of the shares each purchased (the “Warrants”). The Warrants have an exercise price of $0.10 per share and are exercisable for three-years from the date of issuance of the Warrant. The Warrants are valued at $6,920. Net cash received after the warrant valuation of $6,920 was $3,080.

~~NOTE~~On 12September ~~EQUITY~~29, 2017, the Company accepted and entered into Subscription Agreements (~~Continued~~the “Subscription Agreements”) for 1,000,000 shares of Company’s common stock with accredited investors (the “Investors”) for an aggregate purchase price of $50,000 at a price of $0.05 per share. The Investor received warrants to purchase shares of Common Stock equal to 20% of the shares each purchased (the “Warrants”). The Warrants have an exercise price of $0.10 per share and are exercisable for three-years from the date of issuance of the Warrant. The Warrants are valued at $6,960. Net cash received after the warrant valuation of $6,960 was $43,040.

~~As of~~During ~~March~~the ~~31,~~period ~~2017~~ended ~~and~~September ~~June~~ 30, ~~2016~~2017, the ~~there~~Company ~~were~~entered ~~122,798,480~~into ~~and~~consulting 89services arrangement in exchange issued 1,~~242~~100,~~624~~000 shares of common stock ~~issued~~valued ~~and~~at ~~outstanding,~~stock ~~respectively~~to be issued $55,000.

During the nine months ended March 31, 2017, the Company issued 4,538,966 shares of common stock in exchange for consulting services valued at $691,577, out of which $254,166 relates to prior period services.

During the nine months ended March 31, 2017 the Company issued 15,124,939 shares of its common stock in conversion of $1,555,581 debt and accrued interest.

On March 31, 2017, the Company accepted and entered into Subscription Agreements (the “Subscription Agreements”) for 13,333,339 shares of Company’s common stock with 15 accredited investors (the “Investors”) for an aggregate purchase price of $800,000 at a price of $0.06 per share. Each Investor received warrants to purchase shares of Common Stock equal to 20% of the shares each purchased (the “Warrants”). The Warrants have an exercise price of $0.09 per share and are exercisable for three-years from the date of issuance of the Warrant. The Warrants are valued at $154,933. Net cash received after fees of $20,000, the warrant valuation of $154,933 and a subscription receivable of $50,000 was $575,067.

Warrants

Warrant activity during the nine months ended March 31, 2017, is as follows:

	Warrants			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding and exercisable at June 30, 2016		26,396,958		$	0.14	$	3,695,574
Granted		3,041,667			0.04
Exercised (1)		(375,000	)		0.07
Expired		(1,050,000	)		0.05
Outstanding and exercisable at March 31, 2017		28,013,625		$	0.14	$	3,883,963

(1) Consists of cashless exercise of 375,000 warrants in exchange for 158,612 shares of Common Stock.

During the nine months ended March 31, 2017, the Company issued 375,000 warrants and recorded $30,626 of stock compensation expense.

The fair value of the described above warrants was determined using the Black-Scholes Model with the following assumptions:

(1) risk free interest rate of 0.44%;

(2) dividend yield of 0%;

(3) volatility factor of 151%;

(4) an expected life of the conversion feature of 3 months, and

(5) estimated fair value of the company’s common stock of $0.12 per share.

~~PROVISION HOLDING, INC. AND SUBSIDIARIES~~Warrants

~~NOTES~~Warrant activity during the three months TOended ~~CONDENSED~~September ~~CONSOLIDATED~~30, ~~FINANCIAL~~2017, ~~STATEMENTS~~is as follows:

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

	Warrants		Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding and exercisable at June 30, 2017		29,046,958	$	0.14	$	4,011,963
Granted		2,714,286		0.06		-
Exercised		-		-		-
Expired		-		-		-
Outstanding and exercisable at September 30, 2017		31,761,244	$	0.13	$	4,181,463

~~UNAUDITED~~On July 20, 2017, the Company issued a $50,000 convertible debenture. The note bears interest at 12%, is due on July 20, 2018 and, is convertible into shares of the Company’s common stock at $0.06 per share along with 714,286 warrants issued (see Note 7).

~~NOTE~~The 12fair ~~EQUITY~~value ~~(Continued)~~of the described above warrants during the three months ended September 30, 2017, was determined using the Black-Scholes Model with the following assumptions:

(1) risk free interest rate of			1.22%;
(2) dividend yield of			0%;
(3) volatility factor of			130%;
(4) an expected life of the conversion feature of			36 months, and
(5) estimated fair value of the company’s common stock of			$0.06 per share.

On September 13, 2017, the Company issued a $500,000 promissory note. The note bears interest at 12%, is due on May 13, 2018 along with 1,250,000 warrants issued (see Note 9).

The fair value of the described above warrants during the three months ended September 30, 2017, was determined using the Black-Scholes Model with the following assumptions:

(1) risk free interest rate of			1.16%;
(2) dividend yield of			0%;
(3) volatility factor of			138%;
(4) an expected life of the conversion feature of			24 months, and
(5) estimated fair value of the company’s common stock of			$0.06 per share.

During the three months ended September 30, 2017 and 2016, the Company recorded $530 and $-0- of stock compensation expense related to warrants issued in prior years, respectively.

Stock Option Plan

Stock option activity during the ~~nine~~ three months ended ~~March~~September 3130, 2017 is as follows:

	Stock Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding at June 30, 2016		-		$	-	$	-
Outstanding at June 30, 2017		150,000		$	0.26	$	38,500
Granted		508,~~000~~899,908			0.2305		11400,~~500~~496
Exercised		-			-		-
Expired		(150,000	)		-		-
Outstanding March 31, 2017		50,000		$	0.23	$	11,500
Outstanding September 30, 2017		8,899,908		$	0.05	$	400,496
Exercisable at March 31, 2017		34,000		$	0.23	$	5,060
Exercisable at September 30, 2017		8,899,908		$	0.05	$	400,496
Un-exercisable at March 31, 2017		16,000		$	0.23	$	6,440
Un-exercisable at September 30, 2017		-		$	-	$	-

The Company has one stock option plan: The Provision Interactive Technologies, Inc. 2002 Stock Option and Incentive Plan, (the “Plan”). As of ~~March~~September 3130, 2017, there were 3,324,149 shares available for issuance under the Plan. The Plan is administered by the Company’s Board of Directors, (the “Board”).

As of March 31, 2017, the Plan provides for the granting of non-qualified and incentive stock options to purchase up to 5,000,000 shares of common stock. Options vest at rates set by the Board, not to exceed five years and are exercisable up to ten years from the date of issuance. The option exercise price is set by the Board at time of grant. Options and restricted stock awards may be granted to employees, officers, directors and consultants.

During the nine months ended March 31, 2017 and 2016, the Company issued 50,000 and -0- options and recorded $4,496 and $-0- of stock compensation expense, respectively.

The fair value of options exercised in the nine months ended March 31, 2017 and 2016 was approximately $-0- and $-0-, respectively.

As of March 31, 2017, there was $2,120 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under existing stock option plans.

Restricted Stock

On June 1, 2016, the Company issued 1,500,000 restricted shares per rule 144 of its Common Stock, vesting in equal amounts over six (6) months to its consultant as partial compensation for services.

The fair value of the restricted stock granted during the nine month period ended March 31, 2017 was stated at market price on the date of vested. During the nine month period ended March 31, 2017 and 2016, the Company recorded expenses of $255,000 and $45,000, respectively, related to restricted stock vested to non-employees.

~~PROVISION~~As of September 30, 2017, the Plan provides ~~HOLDING~~for the granting of non-qualified and incentive stock options to purchase up to 5,000,000 ~~INC~~shares of common stock. ~~AND~~Options ~~SUBSIDIARIES~~vest at rates set by the Board, not to exceed five years and are exercisable up to ten years from the date of issuance. The option exercise price is set by the Board at time of grant. Options and restricted stock awards may be granted to employees, officers, directors and consultants.

~~NOTES~~During the three months September 30, 21017, the Company granted non statutory options to the board and officers TOwhich ~~CONDENSED~~were ~~CONSOLIDATED~~not ~~FINANCIAL~~issued ~~STATEMENTS~~as part of the above plan but were rather issued outside of the plan. The option has exercise price of $0.045 with the term of 5 years. During the three months ended September 30, 2017 and 2016, the Company issued 8,899,908 and 50,000 options outside the stock option plan and recorded $348,876 and $1,320 of stock compensation expense, respectively.

~~FOR~~During the three months ended September ~~THE~~30, ~~THREE~~2017 ~~AND~~and ~~NINE~~2016, ~~MONTHS~~the ~~ENDED~~Company ~~MARCH~~recorded 31$3,607 ~~2017~~and ~~AND~~$-0- ~~2016~~of stock compensation expense related to options issued in prior years, respectively.

~~UNAUDITED~~The fair value of options exercised in the three months ended September 30, 2017 and 2016 was approximately $-0- and $-0-, respectively.

~~NOTE~~As 13of ~~RELATED~~September ~~ENTITY~~30, ~~ACTIVITIES~~2017, there was $-0- of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under existing stock option plans.

NOTE 12

RELATED ENTITY ACTIVITIES

ProDava 3D

DB Dava LLC, a Delaware limited liability company (“DB”), and the Company agreed to engage in a venture for the purpose of exploiting the Company’s technology and its agreement with a national pharmacy chain to place a number of its kiosks in stores. In June 2014, the Company and DB, caused ProDava LLC (“ProDava”) to be formed, and the parties entered into the ProDava LLC Agreement (the “LLC Agreement”) on June 30, 2014, which set out, among other things, the parties’ respective rights and obligations with respect to ProDava.

The two members of ProDava are the Company and DB. At the time of the formation of ProDava, the LLC Agreement originally provided that DB owned 80 percent of the membership interests of ProDava and the Company owned 20 percent of the membership interests of ProDava, assuming a $50,000,000 capital contribution by DB. Pursuant to the LLC Agreement, the Company made a capital contribution of $12,500,000, which represented the agreed upon value of a certain agreements which granted the Company rights to place kiosks in retail stores.

The Company’s motivation to enter into the LLC Agreement was to use DB’s financing to place kiosks into retail stores. Pursuant to LLC Agreement, DB agreed to make a capital contribution of up to US$50,000,000. It was understood and agreed between the parties that the Company’s role in ProDava was to provide, among other things, the kiosks, the content and the know-how as to the placement and maintenance of the kiosks in retail stores.

To that end, ProDava entered into a Professional Services Agreement, dated June 30, 2014 (the “PSA”) with the Company, whereby ProDava engaged the Company to provide services for ProDava with respect to the sourcing, due diligence, acquisition, management, construction and marketing of the kiosks financed and purchased by ProDava. As full compensation for rendering and performing such services under the PSA, the Company was entitled to receive from ProDava, the unreimbursed expenses incurred by the Company. It was agreed and understood that DB’s role in ProDava was to provide the funding necessary for the unreimbursable expenses and the production, manufacture and maintenance of the kiosks placed in stores. As a result of the ownership percentage in ProDava, DB would receive 80% of the profits of the ProDava including advertising related revenue.

For the ~~nine months ended March 31, 2017 and 2016 total revenue includes $1,263,008 and $5,348,245, respectively, revenue from a related party. For the~~ three months ended ~~March~~September 3130, 2017 and 2016 total revenue includes $-0- and $249,~~007~~842,~~015,~~ respectively, revenue from a related party. Also, total unearned revenue as of ~~March~~September 3130, 2017 of $2,057,607 includes $1,256,607 advance for sales order received from a related party.

~~Transactions with~~NOTE ~~Officers~~13 ~~and~~LEGAL ~~Directors~~PROCEEDINGS

On December 30, 2015, the Company entered into a Purchase Agreement with Curt Thornton, the Company's President and Chief Executive Officer for the sale of 1,000 shares of “Super Voting Preferred Stock – Series A” for $0.10 per share and the closing price of the Company's Common Stock was $0.08 per share, as reported on the Over-the-Counter Markets (OTCQB) on the date prior to the date the Board approved the transaction. The Series A Preferred Shares does not have a dividend rate or liquidation preference and are not convertible into shares of common stock. The shares of the Series A Preferred Stock shall be automatically redeemed by the Company at $0.10 per share on the first to occur of the following triggering events: (i) 90 days following the date on which this Certificate of Designation is filed with the Secretary of State of Nevada or (ii) on the date that Mr. Thornton ceases, for any reason, to serve as officer, director or consultant of the Company. For so long as any shares of the Series A Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote in an amount equal to 51% of the total vote (representing a majority voting power) effecting an increase in the authorized common stock of the Company. Such vote shall be determined by the holder(s) of the then issued and outstanding shares of Series A Preferred Stock. For example, if there are 10,000 shares of the Company’s common stock issued and outstanding at the time of a shareholder vote, the holders of the Series A Preferred Stock, will have the right to vote an aggregate of 10,408 shares, out of a total number of 20,408 shares voting. The adoption of the Series A Preferred Stock and its issuance to Mr. Thornton was taken solely to allow the Company to increase the Company’s authorized shares of common stock. As a result, the Company determined that there was no recorded a preferred stock control premium for the Preferred Stock – Series A that was issued to Mr. Thornton. The rights and preferences of the shares are described in Note 12 Equity. During the period ended December 31, 2016, the Company repurchase the said 1,000 Preferred Stock at par value of $100. Preferred shares issued and outstanding at March 31, 2017 were Nil.

PROVISION HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

UNAUDITED

NOTE 14 LEGAL PROCEEDINGS

On August 26, 2004, in order to protect its legal rights and in the best interest of the shareholders at large, the Company filed, in the Superior Court of California, a complaint alleging breach of contract, rescission, tortuous interference and fraud with Betacorp Management, Inc. In an effort to resolve all outstanding issues, the parties agreed, in good faith, to enter into arbitration in the State of Texas, domicile of the defendants. On August 11, 2006, a judgment was awarded against the Company in the sum of $592,312. A contingency loss of $592,312 was charged to operations during the year ended June 30, 2007. Subsequently, The Company filed a counter lawsuit and was awarded a default judgement in its favor, and as such removed the contingency loss during the year ended June 30, 2016.

Litigation

From time to time, we may become involved in various lawsuits and legal proceedings which 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. We are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

The Company initiated an action against DB in November 2016 seeking declaratory judgment. After the execution of the LLC Agreement, both DB and the Company performed their respective duties. The Company caused numerous kiosks to be manufactured for placement in retail stores in accordance with the PSA, maintained and serviced these kiosks. DB provided funds to ProDava for, the production of kiosks and for expenses incurred by the Company in connection with the maintenance of servicing of the kiosks. In total, DB provided sums totaling $6.5 million. In the first quarter of 2016, DB ceased providing the funding required by the LLC Agreement. DB advised The Company that DB was analyzing information and that it would make a determination as to whether it would continue to provide funding in accordance with the LLC Agreement. The Company has been incurring the reimbursable expenses that were to be reimbursed by DB. The LLC Agreement provides that, in the event that DB fails to fund any portion of the total amount is was required to provide in accordance with the terms of the LLC Agreement, the LLC Agreement provides for the recalculation of the parties’ membership interests in ProDava. The Company filed an action in the Supreme Court of the State of New York in New York County (Index No. 656127/2016) to seed to recalculate the ownership percentage of ProDava. DB filed a motion to dismiss and the Company filed an action opposing such motion. If successful, the Company will own a greater percentage of ProDava. If unsuccessful, the Company will have to continue to fund ProDava’s expenses until advertising income exceeds expenses.21

~~NOTE~~The 15Company ~~SUBSEQUENT~~initiated ~~EVENTS~~an action against DB in November 2016 seeking declaratory judgment. After the execution of the LLC Agreement, both DB and the Company performed their respective duties. The Company caused numerous kiosks to be manufactured for placement in retail stores in accordance with the PSA, maintained and serviced these kiosks. DB provided funds to ProDava for, the production of kiosks and for expenses incurred by the Company in connection with the maintenance of servicing of the kiosks. In total, DB provided sums totaling $6.5 million. In the first quarter of 2016, DB ceased providing the funding required by the LLC Agreement. DB advised The Company that DB was analyzing information and that it would make a determination as to whether it would continue to provide funding in accordance with the LLC Agreement. The Company has been incurring the reimbursable expenses that were to be reimbursed by DB. The LLC Agreement provides that, in the event that DB fails to fund any portion of the total amount is was required to provide in accordance with the terms of the LLC Agreement, the LLC Agreement provides for the recalculation of the parties’ membership interests in ProDava. The Company filed an action in the Supreme Court of the State of New York in New York County (Index No. 656127/2016) to seed to recalculate the ownership percentage of ProDava. DB filed a motion to dismiss and the Company filed an action opposing such motion. The court initially denied the recalculation of the ownership percentage but allowed the Company to proceed to collect monetary damages. Pro Dava and DB filed a counterclaim for breach of contract. The Company believes it has adequate defenses against any claims made by Pro Dava and DB.

~~During~~On ~~April~~June 19, 2017, the Company ~~issued~~received a letter from an attorney for Kiosk Information Systems (“KIS”) demanding payment of $1,~~038~~272,~~199~~360 ~~shares~~for ofthe ~~common~~balance ~~stock~~due on ~~pursuant~~kiosks toheld ~~consulting~~by ~~agreements~~KIS including $231,182 in interest. We are negotiating with KIS. No suit has been filed and the Company has accrued the full amount of the demand from KIS.

On September 5, 2017 the Company received a letter from an attorney representing Rite Aid Hdqtrs. Corp’s (“Rite Aid”), pursuant to which Rite Aid indicated its desire to terminate the Point of Sales Advertising Agreement (“Agreement”) with the Company. The Company is disputing Rite Aid’s ability to terminate the Agreement. Thereafter, on October 16, 2017, the Company initiated an arbitration before JAMS.

NOTE 14

SUBSEQUENT EVENTS

Stock Options

On October 3, 2017, the Company issued 4,000,000 stock options to an employee. The options have an exercise price of $0.045 and a term of five years.

On October 26, 2017, The Company entered into a convertible promissory note to obtain funding for working capital purposes. The Note is issued as a convertible promissory note in the principal amount of $128,000. The principal amount under the Note accrues interest at a rate of 12% per annum and is due on July 30, 2018. The conversion price of the common stock into which the principal amount, or the then outstanding interest due thereon, of this note is convertible shall be 61% multiplied by the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date.

On November 6, 2017, the Company issued 1,000,000 shares of common stock as payment of funding fees related to debts received in August 2017. The shares were previously recorded with a value of $50,000.

On November 6, 2017, the Company issued 1,000,000 shares of common stock in connection with a stock subscription received August 21, 2017 in the amount of $50,000.

On November 7, 2017, the Company issued 300,000 shares of common stock as payment of a consulting agreement previously recorded with a value of $15,000.

On November 22, 2017, the Company amended its Articles of Incorporation for the creation of its Series B Preferred Stock. Upon the issuance of the 1,000 shares of the Company’s Series B Preferred Stock, the holder, Curt Thornton, has the voting equivalent to greater than 51% of the Company's voting stock for the purposes of increasing the number of authorized shares of common stock and creating a Company policy on excluded corporate opportunities.

On November 27, 2015, the Company amended its Articles of Incorporation by filing a Certificate of Amendment with the Secretary of State of Nevada to effect an increase in the number of the Company’s authorized common shares from 300,000,000 to 400,000,000. The Company also amended its Articles of Incorporation, pursuant to Nevada Revised Statutes 78.070, to renounce any interest or expectancy of the Company in any Excluded Opportunity. An "Excluded Opportunity" is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of any director of the Company who is not an employee of the Corporation or any of its subsidiaries unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a director of the Company expressly and solely in his or her capacity as a director of the Company.

These amendments were approved by the Board of Director of the Company and holders of more than 50% of the voting power of the Company’s capital stock.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto included elsewhere in this quarterly report on Form 10-Q and in our annual report on Form 10-K filed with the Securities and Exchange Commission.

THIS FILING, INCLUDING BUT NOT LIMITED TO “MANAGEMENT’S DISCUSSION AND ANALYSIS”, CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN SOCIAL, AND ECONOMIC CONDITIONS, AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE MARKET PENETRATION AND CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD- LOOKING STATEMENTS AS A RESULT OF SEVERAL FACTORS, INCLUDING THE RISKS FACED BY US AS DESCRIBED BELOW AND ELSEWHERE IN THIS FORM 10-Q. IN LIGHT OF THESE RISKS AND UNCERTAINTIES THERE CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS FORM 10-Q WILL OCCUR. WE HAVE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE, EXCEPT AS REQUIRED BY FEDERAL SECURITIES LAWS AND WE CAUTION YOU NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS. WE MAY NOT UPDATE THESE FORWARD-LOOKING STATEMENTS, EVEN THOUGH OUR SITUATION MAY CHANGE.

Business History and Overview

Provision Holding, Inc. and its subsidiary, Provision Interactive Technologies, Inc. (“Provision”), is a purveyor of intelligent interactive 3D holographic display technologies, software, and integrated solutions for both commercial and consumer focused applications. Provision’s 3D holographic display systems projects full color, high resolution videos into space detached from the screen, without any special glasses. Provision is currently a market leader in true 3D consumer advertising display products.

We are focused on the development and distribution of our patented three-dimensional, holographic interactive video displays focused at grabbing and holding consumer attention particularly and initially in the advertising and product merchandising markets. The systems display a moving 3D image size to forty inches in front of the display, projecting a digital video image out into space detached from any screen, rendering truly independent floating images featuring high definition and crisp visibility from far distances. The nearest comparable to this technology can be seen in motion pictures such as Star Wars and Minority Report, where objects and humans are represented through full-motion holograms. In addition to selling the hardware for our patented three-dimensional, holographic interactive video displays, we are building our business into a digital media company offering advertising on a network of our 3D holographic video displays and integrating them into Provision’s 3D Savings Center kiosks.

We have a limited operating history upon which an investor can evaluate our business prospects, which makes it difficult to forecast our future operating results, in light of the risks, uncertainties and problems frequently encountered by companies with limited operating histories. These include, but are not limited to, competition, the need to develop customers and market expertise, market conditions, sales, and marketing and governmental regulation.

We were incorporated in Nevada under the name MailTec, Inc. on February 9, 2004. Pursuant to an Agreement and Plan of Merger, dated February 14, 2008, which was amended and restated on February 27, 2008 (as amended and restated, the “Agreement”), MailTec, Inc. with ProVision Merger Corp., a Nevada corporation and wholly owned subsidiary of the Company (the “Subsidiary”) and Provision Interactive Technologies, Inc., a California corporation (“ProVision”), the Subsidiary merged into ProVision, and ProVision became a wholly owned subsidiary of the Company. As consideration for the merger of the Subsidiary into ProVision, the Company issued 20,879,350 shares of the Company’s common stock to the shareholders, creditors, and certain warrant holders of ProVision, representing approximately 86.5% of the Company’s aggregate issued and outstanding common stock, and the outstanding shares and debt, and those warrants whose holders received shares of the Company’s common stock, of ProVision were transferred to the Company and cancelled. Effective February 28, 2008, pursuant to the Agreement, ProVision became a wholly owned subsidiary of the Company. At the time of the reverse acquisition, MailTec was not engaged in any active business.

Our corporate headquarters are located in Chatsworth, California and our phone number is (818) 775-1624.

Products and Services

We believe we are well positioned to capitalize on advertisers’ demands as ProVision’s HoloVision™ display and 3D Savings Center kiosks offer advertisers and customers an opportunity to reach a highly sought-after, captive audience outside the home, in familiar settings like grocery stores, malls, convenience stores, gas stations, banks and other retail locations. We reach the consumer and business professional at the critical time - when they are away from their homes and businesses and when they are making their buying decisions.

ProVision is marketing our patented three-dimensional, holographic interactive video display and is also developing and marketing several new point-of-purchase, and other devices, tailored to specific industries with major international companies or readying to begin shortly; including the medical, entertainment, government and home markets. ProVision’s ~~floating~~HoloVision™ ~~image~~ display ~~technologies~~ ~~have~~can ~~multiple~~be ~~potential~~used ~~market~~for ~~applications across~~ a ~~broad~~number ~~spectrum~~ of ~~industries. In addition to hardware sales~~applications, ~~we are initially focusing our efforts on the point-of-purchase and advertising markets.~~including:

~~ProVision’s HoloVision™~~Retail ~~display~~Education ~~can~~Medical beEntertainment ~~used~~Consumer ~~for~~Drug aStores ~~number~~/ ofConvenience ~~applications~~Stores Primary / Secondary Schools Doctors / Dentist Offices Slot Machines, ~~including:~~Pachinko Home Game Consoles Grocery Stores Universities Hospitals Casinos Computer Monitors Banking Museums Imaging Lottery TV Fast Food Libraries Movie Theaters Cell Phones Hotels / Hospitality Science Centers Video Games Electronics Theme Parks

~~Retail~~Business Education Medical Entertainment Consumer Drug Stores / Convenience Stores Primary / Secondary Schools Doctors / Dentist Offices Slot Machines, Pachinko Home Game Consoles Grocery Stores Universities Hospitals Casinos Computer Monitors Banking Museums Imaging Lottery TV Fast Food Libraries Movie Theaters Cell Phones Hotels / Hospitality Science Centers Video Games Electronics Theme ParksDevelopment

~~The projected~~Launching ~~and~~our ~~estimated~~first ~~economic~~products ~~model~~into ~~for~~grocery stores and retail ~~stores~~pharmacies, ~~utilizing~~we have developed a ~~kiosk~~new patented application. isKnown ~~(on~~as the “3D Savings Center”, this ProVision device projects 3D video advertisements and allows consumers to print coupons as well as receive non-cash awards. The 3D Savings Center kiosk provides consumer product goods companies and other advertisers with a ~~per~~new ~~machine~~way ~~basis~~of promoting their products at the point of purchase, where consumers are making 70% (seventy percent): of their buying decisions.

3D Hologram Ads	Rotation of 10 Second Hologram Ads @ $150 per Ad	$	1,500
Coupons	Issuance of 11 Coupon Programs @ $100 per Program	$	1,100
Net Revenue	Per Machine (net of agency fees)	$	2,600
Operating Costs	Monthly Paper, Service and Network Fees	$	150
	Retailer Share (estimated at 25% of Net Revenue)	$	650
Operating Costs	Per Machine	$	800
Monthly Operating Profit Per Machine		$	1,800

We tested our concept in Fred Meyer Stores, a division of The Kroger, Co., installing 3D Savings Center kiosks in the Pacific Northwest. We received advertising placements from some of the largest manufacturers in the country, including Unilever, Proctor & Gamble, Johnson & Johnson, BIC and Kimberly Clark. The Company has published a case study of this successful market trial which is available from the Company.

~~The~~We have now aligned a retail chain, a hardware ~~monthly~~purchaser ~~operating~~to ~~profit~~buy ~~per~~3D ~~machine~~Savings ~~would~~Center bekiosks ~~reduced~~to byinstall into the ~~financing~~retail ~~costs,~~chain ~~such~~and asadvertising aagencies ~~lease~~to ofsell ~~the~~ads ~~machine~~for orthe ~~funding~~3D ~~through~~Savings aCenter ~~joint~~kiosks. ~~venture~~We ~~such~~generated asrevenues ~~Pro~~from ~~Dava~~hardware 3Dsales and advertising sales in the year ended June 30, 2017.

~~Business Development~~Rite Aid Pharmacies

~~Launching~~We plan to build, own, and operate ~~our~~networks ~~first~~of ~~products~~3D ~~into~~Savings ~~grocery~~Center kiosks. In April 2013 we have an agreement with Rite Aid Pharmacies (“Rite Aid”) to install 3D Savings Centers kiosks in all participating Rite Aid stores ~~and~~throughout ~~retail~~the ~~pharmacies~~United States. We successfully completed the pilot test phase with nine stores in Los Angeles, weand have ~~developed~~completed athe ~~new~~manufacturing ~~patented~~of, ~~application.~~and received ~~Known~~payment asfor, the “first 200 3D Savings Center”, ~~this~~kiosks ~~ProVision~~in ~~device~~March ~~projects~~2015. 3DThe ~~video~~Company ~~advertisements~~began ~~and~~shipping ~~allows~~the ~~consumers~~first 200 kiosks to ~~print~~be ~~coupons~~installed asin ~~well~~stores ~~as receive~~at ~~non-cash~~the ~~awards~~end of March 2015. ~~The~~We 3Dhave now shipped an additional 2503D Savings Center kiosks to ~~kiosk~~its ~~provides~~retail ~~consumer~~partner. These ~~product~~kiosks ~~goods~~are ~~companies~~being installed in New York, Los Angeles, Detroit, Philadelphia and ~~other~~San Francisco ~~advertisers~~retail ~~with~~locations. Upon ainstallation, ~~new~~which will be an ongoing process through February 2016, the ~~way~~Company ofwill ~~promoting~~have ~~their~~450 ~~products~~3D atkiosks in five cities furthering its ability to promote both national and local consumer brands through paid advertising. With the ~~point~~successful incorporation of ~~purchase~~Rite Aid’s wellness and loyalty program, ~~where~~now ~~consumers~~known as ~~are~~“Plenti” ~~making~~onto ~~70%~~the ~~(seventy~~3D ~~percent)~~Savings ofCenter ~~their~~kiosks ~~buying~~in ~~decisions~~New York and Los Angeles, we will then continue to expand to 1,000 stores in Rite Aid’s top 10 demographic markets. The Company will earn advertising revenue from advertisements in Rite Aid.

~~We tested~~ProDava ~~our concept in Fred Meyer Stores, a division of The Kroger, Co., installing~~ 3D Savings Center kiosks in the Pacific Northwest. We received advertising placements from some of the largest manufacturers in the country, including Unilever, Proctor & Gamble, Johnson & Johnson, BIC and Kimberly Clark. The Company has published a case study of this successful market trial which is available from the Company.

WeOn June 30, 2014 the Company entered into ~~have~~an ~~now~~agreement ~~aligned~~with DB Dava, LLC (“DB”) to help the Company launch the 3D network in Rite Aid. The agreement creates a ~~retail~~newly-formed ~~chain~~entity, aProDava ~~hardware~~3D, ~~purchaser~~LLC (“ProDava 3D”), to ~~buy~~purchase Provision’s 3D Savings Center kiosks tofor ~~install~~ placement into ~~the~~Rite ~~retail~~Aid ~~chain~~stores. ~~and~~ProDava ~~advertising agencies~~3D tomay ~~sell~~purchase ~~ads~~up ~~for~~to ~~the~~$50 million in 3D Savings Center kiosks. ~~and~~The ~~expect~~Company togenerated ~~generate~~revenues ~~additional~~and gross ~~revenue~~profit from ~~hardware~~the ~~sales~~sale inof machines to ProDava 3D during the ~~year~~ three ended ~~June~~September 30, ~~2017~~2016. ~~and~~The ~~significant~~Company will also will earn advertising ~~sales~~revenue ~~thereafter~~from advertisements in Rite Aid earned by ProDava 3D.

24ProDava 3D is purchasing 3D Savings Center kiosks, manufactured by Provision. These will be placed in high traffic aisles of nationally recognized retail stores, initially Rite Aid, with advertisements of consumer packaged products, other consumer goods manufacturers along with local/regional advertisers. Ad sales inventory will include marquee 3D hologram images, coupons, and other rewards and transactions of products sold in the stores (focused on new product introductions).

~~Rite Aid Pharmacies~~24

~~We plan~~Provision’s contribution to ~~build, own, and operate networks of~~ ProDava 3D ~~Savings~~includes ~~Center~~Provision’s ~~kiosks.~~know-how, ~~In April 2013~~management, weand ~~had~~its an agreement with ~~Rite Aid Pharmacies (“Rite Aid”) to install 3D Savings Centers kiosks in all participating Rite Aid stores throughout~~ the ~~United~~national ~~States. We~~retail ~~successfully~~pharmacy ~~completed~~that ~~the~~will ~~pilot~~be ~~test phase with nine stores in Los Angeles, and have completed~~ the ~~manufacturing of, and received~~first ~~payment~~target for, the ~~first 200~~ 3D Savings Center ~~kiosks~~kiosk ~~in March 2015~~launch. ~~The~~Provision ~~Company~~will ~~began~~be ~~shipping~~responsible ~~the~~for ~~first~~manufacturing, ~~200~~installation, ~~kiosks~~service, ~~to be installed~~maintenance, intechnical ~~stores~~support, atnetwork ~~the~~management, ~~end~~advertising, ofmarketing, ~~March~~and ~~2015.~~accounting Weof ~~have~~each ~~now~~3D ~~shipped an additional 5003D~~ Savings Center ~~kiosks~~kiosk tofor ~~its~~the ~~retail~~joint ~~partner and have~~venture. ~~installed~~Provision ~~them~~will inbe ~~New~~compensated ~~York,~~for ~~Los~~rendering ~~Angeles, Detroit, Philadelphia~~ and ~~San~~performing ~~Francisco~~all ~~retail locations. With the successful incorporation~~ of ~~Rite~~these ~~Aid’s~~services. ~~wellness~~The advertising and ~~loyalty~~other ~~program,~~revenues ~~now~~generated from ~~known as “Plenti” onto~~ the 3D Savings Center kiosks ~~in New York and Los Angeles, we plan to continue to expand to 1,000 stores in Rite Aid’s top 10 demographic markets by the end of September 2017. The Company~~ will ~~earn~~be ~~advertising~~divided ~~revenue~~among ~~from~~Provision ~~advertisements~~and ~~in Rite Aid~~DB.

~~ProDava 3D~~Advertising Agencies

~~DB Dava~~Provision ~~LLC,~~has aengaged ~~Delaware~~TSQ ~~limited~~LL ~~liability company~~ (~~“DB”~~TSQ), and ~~the~~GRI ~~Company~~LLC ~~agreed~~(GRC) to ~~engage in a venture for the purpose~~provide ofnon-exclusive ~~exploiting the Company’s technology and its agreement with a~~ national ~~pharmacy~~advertising ~~chain~~sales to ~~place a number of its kiosks in stores. In June 2014,~~ the ~~Company~~OTC ~~and DB, caused ProDava LLC~~ (~~“ProDava”~~over-the-counter) ~~to be formed,~~ and ~~the~~DTC ~~parties entered into the ProDava LLC Agreement~~ (~~the “LLC Agreement”~~direct-to-consumer) onbrands ~~June~~in ~~30,~~support ~~2014,~~of ~~which set out, among other things,~~ the ~~parties’~~3D ~~respective~~Saving ~~rights~~Center ~~and~~kiosks ~~obligations~~being ~~with~~deployed ~~respect~~inside toRite ~~ProDava~~Aid.

~~The two~~We ~~members~~have ofalso ~~ProDava~~engaged ~~are~~Pharmark, ~~the Company and DB~~Inc. ~~At the time of the formation of ProDava, the LLC Agreement originally provided~~to ~~that~~provide DBlocal ~~owned 80 percent of the membership interests of ProDava~~ and ~~the~~regional ~~Company~~advertising ~~owned~~sales ~~20 percent of the membership interests of ProDava, assuming a $50,000,000 capital contribution by DB. Pursuant~~ to ~~the~~support ~~LLC Agreement,~~ the ~~Company~~3D ~~made~~Savings aCenter ~~capital contribution of $12,500,000, which represented the agreed upon value of a certain agreements which granted the Company rights to place~~ kiosks in retail stores. ~~There~~The ~~are~~clients ~~no overlapping members~~ of ~~management~~Pharmark will ~~who~~provide ~~control~~local ~~and~~coupons, ~~manage~~promotions ~~both the Company~~ and DBother ~~Dava~~advertising ~~LLC~~campaigns ~~and~~in ~~there are~~digital noformat ~~significant~~expanding ~~shareholders~~advertising ofto ~~the~~include ~~Company~~local merchants ~~who~~joining ~~also~~national ~~hold a significant interest in DB Dava LLC~~brands.

~~The Company’s~~Lifestyle ~~motivation~~Ventures ~~to enter into the~~ LLC Agreement was to use DB’s financing to place kiosks into retail stores. Pursuant to LLC Agreement, DB agreed to make a capital contribution of up to US $50,000,000. It was understood and agreed between the parties that the Company’s role in ProDava was to provide, among other things, the kiosks, the content, resources and the know-how as to the placement and maintenance of the kiosks in retail stores.

~~To that~~The ~~end,~~Company ~~ProDava~~also ~~entered~~received ~~into~~ a ~~Professional Services Agreement~~$900,000 ~~dated June 30, 2014 (the “PSA”) with the Company,~~deposit ~~whereby~~from ~~ProDava~~Lifestyle ~~engaged~~Ventures ~~the~~LLC ~~Company to provide services~~ for ~~ProDava with respect to~~ the ~~sourcing,~~purchase ~~due diligence, acquisition, management, construction~~ and marketing of the kiosks financed and purchased by ProDava. As full compensation for rendering and performing such services under the PSA, the Company was entitled to receive from ProDava, the unreimbursed expenses incurred by the Company. It was agreed and understood that DBProvision’s ~~role~~3D inSavings ~~ProDava~~Center ~~was~~kiosk to ~~provide~~be ~~the~~installed ~~funding~~in ~~necessary for the unreimbursable~~approved ~~expenses~~retail ~~and~~store ~~the~~chains. Lifestyle ~~production,~~Ventures ~~manufacture~~LLC ~~and~~is ~~maintenance~~required ofto ~~the~~deposit ~~kiosks~~an ~~placed~~additional ~~in stores~~$1.1 Asmillion awith ~~result~~an ofoption ~~the~~to ~~ownership percentage~~increase inits ~~ProDava,~~investment DBup ~~would~~to ~~receive~~$20 ~~80% of the profits of the ProDava from advertising related revenue less expenses~~million.

~~ProDava 3D~~Coinstar is purchasing 3D Savings Center kiosks, manufactured by Provision. These will be placed in high traffic aisles of nationally recognized retail stores, initially Rite Aid, with advertisements of consumer packaged products, other consumer goods manufacturers along with local/regional advertisers. Ad sales inventory will include marquee 3D hologram images, coupons, and other rewards and transactions of products sold in the stores (focused on new product introductions).LLC

~~Provision’s contribution~~On toJune ~~ProDava~~15, 3D2017, ~~includes~~the ~~Provision’s~~Company ~~know-how,~~entered ~~management,~~into a ~~and~~five-year ~~its~~Strategic ~~agreement~~Alliance Agreement with ~~the~~Coinstar, ~~national~~LLC ~~retail~~(“Coinstar”). ~~pharmacy~~Coinstar owns and operates approximately ~~that~~17,000 ~~will~~self-service becoin ~~the~~counting ~~first~~kiosks ~~target~~at ~~for~~retailer ~~the~~store 3Dlocations ~~Savings~~in ~~Center~~the ~~kiosk~~United ~~launch~~States. ~~Provision~~The ~~will~~Company beand ~~responsible~~Coinstar ~~for~~will ~~manufacturing,~~work ~~installation,~~jointly ~~service,~~to ~~maintenance,~~develop ~~technical~~and ~~support,~~integrate ~~network~~the ~~management,~~Company’s ~~advertising~~free standing patented 3D holographic display systems, ~~marketing~~known as HoloVision™ (the “Systems”) into Coinstar’s kiosks, and ~~accounting~~will ofbe ~~each~~installed 3Dand ~~Savings~~promoted ~~Center kiosk~~at ~~for~~retailer ~~the~~store ~~joint~~locations, ~~venture.~~the ~~Provision~~specifics of which will be ~~compensated~~mutually ~~for~~agreed ~~rendering~~to and ~~performing~~summarized ~~all~~in ofa ~~these~~separate ~~services~~agreement (each a “Statement of Work”). The ~~advertising~~Systems will have a proprietary coupon/loyalty card software application and ~~other~~provide ~~revenues~~advertising ~~generated~~and ~~from~~promotions ~~the~~through 3DCoinstar ~~Savings~~kiosks. For ~~Center~~all retailer store locations in which Coinstar kiosks ~~will~~are beinstalled, ~~divided~~Coinstar ~~among~~has ~~Provision~~been ~~and~~granted DBan exclusive first right of refusal to include such locations.

~~Lifestyle~~The Company shall pay to Coinstar, and ~~Ventures~~Coinstar ~~LLC~~shall pay to participating retailers a specified percentage of monthly Net Advertising Revenues, per kiosk (the “Promotion Retailer Commission”) included in a Statement of Work, which shall be determined by mutual agreement of Coinstar and Provision. “Net Advertising Revenues” is defined as gross advertising revenues from Systems less any operational expenses incurred in connection with such Systems (for example: cost of paper, service, network connectivity, network administration). The Company shall evenly divide the remaining monthly Net Advertising Revenues after deducting the Promotion Retailer Commission).

~~The~~Under the agreement, Provision and Coinstar ~~Company~~will ~~also~~integrate ~~received~~Provision’s apatented ~~$900,000~~3D ~~deposit~~“Holovision” ~~from~~display ~~Lifestyle~~systems ~~Ventures~~into ~~LLC~~Coinstar ~~for~~kiosks ~~the~~nationwide. ~~purchase~~The ~~and~~Provision 3D ~~marketing~~holographic display will “bolt-on” to the top of ~~Provision’s~~the 3Dexisting ~~Savings Center~~Coinstar kiosk toas a “topper”. Our couponing and loyalty card system software will be ~~installed~~integrated ininto ~~approved~~the ~~retail~~Coinstar ~~store~~touch-screen ~~chains~~interface. ~~Lifestyle~~The ~~Ventures~~firms ~~LLC~~will isevenly ~~required~~divide tothe monthly ~~deposit~~net anadvertising ~~additional~~revenues, $1after deducting promotional retailer commissions.1 Provision believes that the monthly advertising ~~million~~revenue ~~with~~potential anin ~~option~~this tochannel ~~increase~~should ~~its~~exceed ~~investment~~that upof toa ~~$20~~retail ~~million~~pharmacy chain.

25The Provision “topper” has been designed by an award winning industrial designer, and we plan to assemble the prototype beginning in August, 2017. The software teams have begun the required integration work, and we anticipate a working prototype in October, 2017. We have targeted up to 300 locations for rollout by December 31, 2017, with broader deployment scheduled for the 2018 calendar year.

Other Business Arrangements

The Company has signed a Master Collaboration Agreement with Intel Corporation to identify and collaborate on certain technical and marketing activities as contained in the agreement. Collaboration includes joint technical development and marketing activities as determined by the two companies.

The ~~Company~~ Company has signed a Master Service Agreement with Fujifilm Corporation to provide to Company and its customers with installation and maintenance serves to the Company’s 3D Savings Center Kiosks inside Rite Aid retail stores.

Competition

Currently, Provision’s competition is ~~not~~no other 3D companies that may exist in the marketplace, but traditional advertising media like television, radio, newspapers and magazines. We also compete with companies that operate outdoor and Digital Out-Of-Home (DOOH) advertising media networks that can be seen at malls, gas stations, and retailers containing traditional 2D (two dimensional) TV screens or flat screens. We also compete for overall advertising spending with other alternative advertising media companies, such as Internet, billboard and public transport advertising companies.

~~The competition for ProVision’s patented (issued, approved and pending) and proprietary 3D floating image holographic technology includes alternative 3D displays currently in the marketplace:~~25

~~Employees~~The competition for ProVision’s patented (issued, approved and pending) and proprietary 3D floating image holographic technology includes alternative 3D displays currently in the marketplace:

As of May 18, 2017 we have eight employees. None of our employees is represented by a labor union. We have not experienced any work stoppages and we consider relations with our employees to be good. The company also uses independent contractors to support administration, marketing, sales and field support activities.Employees

~~Research~~As of September 30, 2017, we have eight employees. None of our employees is represented by a labor union. We have not experienced any work stoppages and ~~Development~~we consider relations with our employees to be good. The company also uses independent contractors to support administration, marketing, sales and field support activities.

Research and Development ~~Activities~~

~~At present,~~Research ~~Provision’s patents~~ and ~~patent~~Development applications are supplemented by substantial intellectual property we are currently protecting as trade secrets and proprietary know-how. This includes matter related to all product lines. We expect to file additional patent applications on a regular basis in the future.Activities

~~We believe~~At ~~that~~present, Provision’s ~~intellectual~~patents ~~property~~ and patent ~~expertise~~applications ~~constitutes~~are ansupplemented ~~important~~by ~~competitive~~substantial ~~resource,~~intellectual ~~and~~property we ~~continue to evaluate the markets and products that~~ are ~~most~~currently ~~appropriate~~protecting toas ~~exploit~~trade ~~this~~secrets ~~expertise.~~and ~~In addition, we maintain an active program~~proprietary ofknow-how. ~~intellectual~~This ~~property~~includes ~~protection,~~matter ~~both~~related to ~~assure~~all ~~that~~product ~~the~~lines. ~~proprietary~~We ~~technology~~expect ~~developed by us is appropriately protected and, where necessary,~~ to ~~assure~~file ~~that~~additional ~~there~~patent isapplications noon ~~infringement~~a ofregular ~~Provision’s~~basis in ~~proprietary~~the ~~technology by competitive technologies~~future.

~~Intellectual~~We believe that Provision’s intellectual ~~Property~~property and expertise constitutes an important competitive resource, and we continue to evaluate the markets and products that are most appropriate to exploit this expertise. In addition, we maintain an active program of intellectual property protection, both to assure that the proprietary technology developed by us is appropriately protected and, where necessary, to assure that there is no infringement of Provision’s proprietary technology by competitive technologies.

~~ProVision’s floating~~Intellectual image display systems project full-motion 3D digital streaming media 9”- 40” into space detached from the display unit into free space and should not be confused with autostereoscopic systems. Autostereoscopic 3D systems produced by various firms’ layer two or more LCD screens, or lenticular lens based screens, while utilizing filters and collumnators to provide the illusion of depth perception. Such systems are only capable of displaying digital content attached to layered screens with all images being contained within the actual display unit. Due to the inherent nature of this technology approach the end result of their product line results in the following characteristics: eye strain, nausea, low resolution, low brightness and poor quality imagery, all resulting in poor/low customer acceptance. The cost to produce custom and special content for these screens are excessively expensive and time consuming becoming a major hurdle to overcome for mass adoption. Their major advantage might be characterized by their “flat screens” and slightly wider viewing angles, however consumer acceptance has been limited due to the limitations and poor visual experience. Companies attempting to launch these screens include 3D Magnetec, Alisoscopy, Tridelity, and 3D Fusion. Companies that have tried to launch these types of screens, and have failed or ceased operations, include: Phillips, Sharp, and Newsight.Property

26ProVision’s floating image display systems project full-motion 3D digital streaming media 9”- 40” into space detached from the display unit into free space and should not be confused with autostereoscopic systems. Autostereoscopic 3D systems produced by various firms’ layer two or more LCD screens, or lenticular lens based screens, while utilizing filters and collumnators to provide the illusion of depth perception. Such systems are only capable of displaying digital content attached to layered screens with all images being contained within the actual display unit. Due to the inherent nature of this technology approach the end result of their product line results in the following characteristics: eye strain, nausea, low resolution, low brightness and poor quality imagery, all resulting in poor/low customer acceptance. The cost to produce custom and special content for these screens are excessively expensive and time consuming becoming a major hurdle to overcome for mass adoption. Their major advantage might be characterized by their “flat screens” and slightly wider viewing angles, however consumer acceptance has been limited due to the limitations and poor visual experience. Companies attempting to launch these screens include 3D Magnetec, Alisoscopy, Tridelity, and 3D Fusion. Companies that have tried to launch these types of screens, and have failed or ceased operations, include: Phillips, Sharp, and Newsight.

RESULTS OF OPERATIONS

THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2017 COMPARED TO THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2016

The following table sets forth, for the periods indicated, certain data derived from our Statements of Operations:

	Three Months Ended
	March 31,
	2017			2016
REVENUES
Advertising revenues	$	185,317		$	-
Hardware revenues	$	15,750		$	8,870
Hardware revenues		-			19,494
Software revenues – related party		-			49,842
Hardware revenues – related party		-			1,677,462
TOTAL REVENUES		15,750			58,712
Service related revenues – related party		-			157,560
COST OF REVENUES		18,867			56,027
Software revenues – related party		-			171,993
GROSS (LOSS) PROFIT		(3,117	)		2,685
TOTAL REVENUES		185,317			2,026,509
COST OF REVENUES		55,272			1,654,592
GROSS PROFIT		130,045			371,917
EXPENSES
General and administrative		~~833~~976,~~681~~848			~~722~~822,~~162~~809
Research and development		3788,~~934~~629			~~119~~150,~~407~~132
TOTAL EXPENSES		871,615			841,569
TOTAL OPERATING EXPENSES		1,065,477			972,941
LOSS FROM OPERATIONS		(~~741~~1,~~570~~068,594	)		(~~469~~970,~~652~~256	)
OTHER INCOME (EXPENSE)
Derivative liability expense – insufficient shares		-			-
Change in fair value of derivative liability		113,330			59,857
Change in fair value of derivative		(18,584	)		-
Debt modification expenses		(40,000	)		-
Amortization of debt and warrant discount and financing costs		(~~690~~633,~~998~~422	)		-(458,855	)
Other income (expense)		-			(823	)
Interest expense		(373,768	)		(254,273	)
Interest expense		(204,120	)		(443,268	)
TOTAL OTHER EXPENSE		(993,860	)		(653,271	)
TOTAL OTHER INCOME (EXPENSE)		(913,702	)		(444,091	)
LOSS BEFORE INCOME TAXES		(2,002,454	)		(1,623,527	)
NET LOSS	$	(1,655,272	)	$	(913,743	)
Income tax expense		-			-
NET LOSS	$	(2,002,454	)	$	(1,623,527	)

~~REVENUES~~26

The Company recognizes revenues from hardware sales, advertising and from licensing, distribution and marketing agreements. Revenues for the quarter ended March 31, 2017 were $185,317, a decrease from $2,026,509 generated in the quarter ended March 31, 2016. The decrease in revenues was primarily from a decrease in related party sales. The related party revenue is for sales to ProDava 3D, LLC to purchase Provision’s 3D Savings Center kiosks for placement into retail stores. During the three ended March 31, 2017 the Company had one customer which accounted for 94%of the Company’s revenues. During the three ended March 31, 2016 the Company had one customer which accounted for 99% of the Company’s revenues.REVENUES

~~COST~~The Company recognizes revenues from hardware OFsales, ~~REVENUES~~advertising and from licensing, distribution and marketing agreements. Revenues for the three months ended September 30, 2017 were $15,750, a decrease from $58,712 generated in the three months ended September 30, 2016. The decrease in revenues was primarily a result in the decrease of revenues from related party sales. The related party revenue is for sales to ProDava 3D, LLC to purchase Provision’s 3D Savings Center kiosks for placement into retail stores. During the three months ended September 30, 2017 the Company had one customers which accounted for more than 10% of the Company’s revenues (74%). During the three months ended September 30, 2016 the Company had one customer which accounted for more than 10% of the Company’s revenues (85%).

~~Cost~~COST ofOF revenues for the quarter ended March 31, 2017 was $55,272 from $1,654,592 incurred in the quarter ended March 31, 2016. Cost of revenues for the quarter ended March 31, 2017 decreased as a direct result of the minimal revenues.REVENUES

~~OPERATING~~Cost of revenues for the three months ended ~~EXPENSES~~September 30, 2017 was $18,867 from $56,027 incurred in the three months ended September 30, 2016.

~~The~~OPERATING Company incurred $871,615 in operating expenses for the quarter ended March 31, 2017, an increase from $841,569 incurred during the quarter ended March 31, 2016 primarily as a result of an increase in travel related expenses and professional fees offset by reduced research and development projects and related expenses. General and administrative expenses for the quarter ended March 31, 2017 decreased primarily as a result of the reduced professional fees associated with required filings.EXPENSES

27The Company incurred $1,065,477 in operating expenses for the three months ended September 30, 2017, an increase from $972,941 incurred during the three months ended September 30, 2016 primarily as a result of a $154,039 increase in general and administrative expenses offset by a decrease in research and development expenses of $61,503. General and administrative expenses for the three months ended September 30, 2017 increased primarily as a result of accounting and legal costs along with the non-cash compensation related to the issuance of options.

OTHER EXPENSES

The Company ~~recorded~~had ~~additional~~various ~~$451,850~~miscellaneous ~~of interest expense~~ income and ~~amortization of debt and warrant discounts and finance costs during the quarter ended March 31, 2017 compared to the comparable quarter in 2016, related to the convertible notes outstanding~~expenses. ~~Additionally, the Company recorded a $18,584 loss due to the change in fair value of the derivative during the three months ended March 31, 2017.~~

~~NET~~The Company recognized a gain of $113,330 ~~LOSS~~and $59,857 during the three months ended September 30, 2017 and 2016, respectively, from the change in fair value of derivative as a result of fluctuating market prices of the Company’s common stock.

The Company ~~had~~recorded adebt ~~net~~modification ~~loss of $1,655,272~~expenses ~~for~~in the ~~quarter~~amount ~~ended March 31, 2017 compared to net loss~~ of $~~913~~40,~~743~~000 ~~for~~during the ~~quarter~~three ~~ended~~months ~~March 31, 2016. The increase in net loss in the quarter~~ ended ~~March~~September 3130, 2017 ~~was primarily a result of minimal revenues and increased interest expense and amortization of debt and warrant discounts and finance costs~~.

~~NINE~~The Company recorded amortization of ~~MONTHS~~debt ~~ENDED~~and ~~MARCH~~warrant 31discounts and financing costs in the amounts of $633,422 ~~2017~~and ~~COMPARED~~$458,855 TOduring ~~NINE~~the ~~MONTHS~~three ~~ENDED~~months ~~MARCH~~ended September 3130, 2017 and 2016, respectively.

	Nine Months Ended
	March 31,
	2017			2016
REVENUES
Advertising revenues	$	344,017		$	-
Hardware revenues		110,195			50,660
Hardware revenues – related party		1,196,552			4,531,287
Service related revenues – related party		-			611,735
Software revenues – related party		66,456			205,223
TOTAL REVENUES		1,717,220			5,398,905
COST OF REVENUES		1,896,255			4,476,652
GROSS PROFIT (LOSS)		(179,035	)		922,253
EXPENSES
General and administrative		2,350,220			1,471,810
Research and development		257,838			216,306
TOTAL EXPENSES		2,608,058			1,688,116
LOSS FROM OPERATIONS		(2,787,093	)		(765,863	)
OTHER INCOME (EXPENSE)
Derivative liability expense – insufficient shares		-			(85,960	)
Change in fair value of derivative		43,834			-
Gain on forgiveness of debt		-			597,312
Loss on settlement of debt		(48,000	)		-
Amortization of debt and warrant discount and financing costs		(1,608,708	)		-
Other income (expense)		-			2,053
Interest expense		(756,442	)		(1,182,116	)
TOTAL OTHER INCOME (EXPENSE)		(2,369,316	)		(668,711	)
NET LOSS	$	(5,156,409	)	$	(1,434,574	)

The Company recorded interest expense of $373,768, primarily related to debt. This is an increase of $119,495 compared to the interest expense of $254,273 recorded during the three months ended September 30, 2016.

~~REVENUES~~NET LOSS:

The Company ~~recognizes~~had ~~revenues~~a ~~from~~net ~~hardware~~loss ~~sales,~~of ~~advertising and from licensing~~$2, ~~distribution and marketing agreements. Revenues~~002,454 for the ~~nine~~three months ended ~~March~~September 3130, 2017 ~~were~~compared ~~$1,717,220,~~to anet ~~decrease~~loss ~~from~~of $51,~~398~~623,~~905~~527 ~~generated~~for in the ~~nine~~three months ended ~~March 31~~September 30, 2016. The ~~decrease~~higher innet ~~revenues~~loss ~~was primarily from an increase in related party sales. The related party revenue is~~ for ~~sales to ProDava 3D, LLC to purchase Provision’s 3D Savings Center kiosks for placement into retail stores. During~~ the ~~nine~~three months ended ~~March~~September 3130, 2017 ~~the~~was ~~Company~~primarily ~~had~~a ~~two~~result ~~customers which accounted for more than 10%~~ of the ~~Company’s~~increased ~~revenues~~amortization ~~(74%~~of ~~and~~debt ~~19%).~~and ~~During~~warrant ~~the~~discount ~~nine~~and ~~months~~financing ~~ended~~costs ~~March~~as ~~31,~~well ~~2016~~as ~~the~~interest ~~Company had one customer who accounted for more than 10% of the Company’s revenues (99%)~~expense.

~~COST OF~~LIQUIDITY ~~REVENUES~~AND CAPITAL RESOURCES

~~Cost~~The condensed consolidated financial statements in this Form 10-Q are presented on the basis that the Company is a going concern. Going concern contemplates the realization of assets ~~revenues~~and ~~for~~the satisfaction of liabilities in the ~~nine~~normal ~~months~~course ~~ended~~of business over a reasonable length of time. The Company had accumulated ~~March~~deficit 31at September 30, 2017 ~~was~~of $144,~~896~~085,~~255~~844. ~~from~~The Company has negative working capital of $414,~~476~~151,~~652~~326 ~~incurred~~as of September 30, 2017. The largest balances in ~~the~~current ~~nine~~liabilities ~~months~~are ~~ended~~for ~~March~~current 31portion of convertible debt, ~~2016~~net ($7,339,290) accrued interest ($2,660,246) and unearned revenue ($2,057,607). ~~Cost~~The ofCompany ~~revenues~~is ~~for~~in the ~~fiscal nine~~process ~~months~~of ~~ended~~negotiating ~~March~~with ~~31,~~noteholders ~~2017~~to ~~was~~convert aaccrued ~~result~~interest ofinto long-term ~~the~~notes ~~uncollectibility~~to ofreduce ~~expenses~~current ~~paid~~liabilities onand ~~behalf~~plans ofto ~~ProDava~~ship goods to reduce the unearned revenue.

28The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing or refinancing as may be required and, ultimately, to attain profitable operations. Management’s plan to eliminate the going concern situation include, but are not limited to, the raise of additional capital through issuance of debt and equity, improved cash flow management, aggressive cost reductions, and the creation of additional sales and profits across its product lines.

~~OPERATING EXPENSES~~27

The Company ~~incurred~~does have $243,~~608,058~~879 in ~~operating~~cash as ~~expenses~~of ~~for~~September ~~the nine months ended March 31~~30, 2017, ~~an increase from $1,688,116 incurred during the nine months ended March 31, 2017 primarily~~ as a result of aan ~~$904,538~~issuance ~~increase~~of inconvertible ~~general~~debt. ~~and~~The ~~administrative~~Company ~~expenses~~has ~~and~~sufficient ~~increase~~cash into ~~research~~operate ~~and development expenses by $41,532. General and administrative expenses~~ for the ~~nine~~next 12 months. ~~ended~~Failure ~~March~~to ~~31,~~raise ~~2017~~additional ~~increased~~capital ~~primarily~~or asimprove aits ~~result of~~performance ~~accounting~~in ~~and legal costs due to~~ the ~~Company~~next ~~completing~~12 ~~several~~months, ~~overdue~~however, ~~SEC~~may ~~filings~~cause ~~and~~the ~~additional~~Company ~~travel expenses related~~ to curtail ~~the~~its ~~supervision~~business ofactivities ~~the~~and ~~installations~~expansion ofplans ~~kiosks~~within ~~during~~ the ~~nine~~next twelve months.

~~OTHER~~During the three months ended September ~~EXPENSES~~30, 2017, the Company used $530,365 of cash for operating activities compared to a use of $1,030,923 in the three months ended September 30, 2016. The decrease in cash used for operating activities was due a higher net loss offset by less cash to service accounts payable and accrued liabilities. Cash from financing activities was $263,495 in the three months ended September 30, 2017 compared to cash used by financing activities of $16,795 in the three months ended September 30, 2016. The increase in cash provided by financing activities was primarily due to proceeds from the issuance of convertible notes along with the issuance of promissory notes, offset by the repayments of both.

~~The~~DB Dava LLC, a Delaware limited liability company (“DB”), and the Company ~~had~~agreed ~~various~~to ~~miscellaneous~~engage ~~income~~in a venture for the purpose of exploiting the Company’s technology and ~~expenses.~~its ~~The~~agreement ~~largest~~with ~~gain~~a ~~was~~national pharmacy chain to place a ~~gain~~number of ~~$597,312~~its ~~during~~kiosks ~~the~~in ~~nine~~stores. ~~months~~In ~~ended~~June ~~March 31~~2014, ~~2017~~the onCompany ~~extinguishment~~and ofDB, ~~debt~~caused ProDava ofLLC a(“ProDava”) ~~previously~~to ~~recorded~~be ~~contingency~~formed, ~~loss~~and ~~after~~the itparties ~~filed~~entered ainto ~~lawsuit~~the ~~and~~ProDava ~~was~~LLC ~~awarded~~Agreement a(the ~~default~~“LLC Agreement”) ~~judgement~~on inJune ~~its~~30, ~~favor~~2014, ~~from~~which aset ~~dispute~~out, ~~that~~among ~~started~~other inthings, ~~2004~~the parties’ respective rights and obligations with ~~Betacorp~~respect ~~Management,~~to ~~Inc~~ProDava.

The ~~Company~~ ~~also~~two ~~recorded~~members ~~additional~~of ~~interest~~ProDava ~~expense~~are ofthe ~~$1,183,304~~Company and ~~primarily~~DB. ~~related~~At to the ~~issuance~~time of ~~convertible~~the ~~notes~~formation ~~during~~ of ProDava, the ~~nine~~LLC ~~months~~Agreement ~~ended~~originally ~~March~~provided ~~31,~~that ~~2017.~~DB ~~During~~owned ~~the~~80 ~~nine~~percent ~~months~~of ~~ended~~the ~~March~~membership interests ~~31,~~of ~~2016~~ProDava and the Company ~~recorded~~owned a20 ~~charge~~percent of the membership interests of ProDava, assuming a $8550,~~960~~000,000 ~~for~~capital contribution ~~the~~by ~~derivative~~DB. ~~liability~~Pursuant ~~resulting~~to ~~from~~the LLC Agreement, the Company ~~having~~made ~~insufficient~~a ~~shares~~capital ~~for~~contribution ~~issued~~of ~~and~~$12,500,000, ~~outstanding~~which ~~common~~represented ~~stock~~the ~~equivalents.~~agreed upon ~~The~~value ~~Company~~of ~~authorized~~a ~~additional~~certain ~~shares~~agreements ~~during~~which granted the ~~nine~~Company ~~months~~rights ~~ending~~to ~~March~~place ~~31,~~kiosks ~~2016.~~in ~~The~~retail ~~Company~~stores. ~~recognized~~There aare ~~gain~~no ofoverlapping ~~$43,834~~members ~~for~~of ~~the~~management ~~nine~~who ~~months~~control ~~ended~~and ~~March~~manage ~~31,~~both ~~2017 from~~ the ~~change~~Company inand ~~fair~~DB ~~value~~Dava ofLLC ~~derivative~~and asthere aare ~~result~~no ofsignificant ~~fluctuating~~shareholders ~~market prices~~ of the Company’s who ~~common~~also ~~stock~~hold a significant interest in DB Dava LLC.

~~Additionally,~~The Company’s motivation to enter into the ~~Company~~LLC ~~recorded~~Agreement was to use DB’s financing to place kiosks into retail stores. Pursuant to LLC Agreement, DB agreed to make a capital contribution of up to US$4850,000,000. ~~loss~~It ~~due~~was understood and agreed between the parties that the Company’s role in ProDava was to provide, among other things, the ~~settlement~~kiosks, ofthe acontent, ~~debt~~resources ~~during~~and the ~~nine~~know-how ~~months~~as ~~ended~~to ~~March~~the ~~31,~~placement ~~2017~~and maintenance of the kiosks in retail stores.

~~NET~~To that end, ProDava entered into a Professional ~~LOSS:~~Services Agreement, dated June 30, 2014 (the “PSA”) with the Company, whereby ProDava engaged the Company to provide services for ProDava with respect to the sourcing, due diligence, acquisition, management, construction and marketing of the kiosks financed and purchased by ProDava. As full compensation for rendering and performing such services under the PSA, the Company was entitled to receive from ProDava, the unreimbursed expenses incurred by the Company. It was agreed and understood that DB’s role in ProDava was to provide the funding necessary for the unreimbursable expenses and the production, manufacture and maintenance of the kiosks placed in stores. As a result of the ownership percentage in ProDava, DB would receive 80% of the profits of the ProDava from advertising related revenue less expenses.

~~The~~In ~~Company~~the ~~had~~best ainterests ~~net~~of ~~loss~~shareholders and to reflect expenses paid on behalf of $5ProDava,~~156,409~~ the Company initiated an action against DB in November 2016 seeking declaratory ~~for~~judgment. After the ~~nine~~execution ~~months~~of ~~ended~~the ~~March~~LLC 31Agreement, ~~2017~~both ~~compared~~DB and the Company performed their respective duties. The Company caused numerous kiosks to ~~net~~be ~~loss~~manufactured offor $1placement in retail stores in accordance with the PSA,~~434~~ maintained and serviced these kiosks. DB provided funds to ProDava for,~~574~~ the production of kiosks and for expenses incurred by the ~~nine~~Company ~~months~~in ~~ended~~connection ~~March~~with 31the maintenance of servicing of the kiosks. In total, DB provided sums totaling $6.5 million. In the first quarter of 2016, DB ceased providing the funding required by the LLC Agreement. DB advised The ~~higher~~Company that DB was analyzing information and that it would make a determination ~~net~~as ~~loss~~to ~~for~~whether it would continue to provide funding in accordance with the ~~nine~~LLC ~~months~~Agreement. ~~ended~~The ~~March~~Company 31has been incurring the reimbursable expenses that were to be reimbursed by DB. The LLC Agreement provides that, ~~2017~~in ~~was~~the ~~primarily~~event athat ~~result~~DB fails to fund any portion of the total ~~gain~~amount onis ~~forgiveness~~was required to provide in accordance with the terms of ~~debt~~the ~~partially~~LLC ~~offset~~Agreement, bythe LLC Agreement provides for the recalculation of the ~~uncollectibility~~parties’ membership interests in ProDava. The Company filed an action in the Supreme Court of ~~$320,073~~the State of ~~expenses~~New ~~paid~~York in onNew ~~behalf~~York County (Index No. 656127/2016) to seed to recalculate the ownership percentage of ProDava,. ~~higher~~DB ~~interest~~filed ~~expense~~a motion to dismiss and ~~increased~~the ~~operating~~Company ~~expenses~~filed an action opposing such motion. The court initially denied the recalculation of the ownership percentage but allowed the Company to proceed to collect monetary damages. Pro Dava and DB filed a counterclaim for breach of contract. The Company believes it has adequate defenses against any claims made by Pro Dava and DB.

~~Liquidity~~On June 19, 2017, the Company received a letter from an attorney for Kiosk Information Systems (“KIS”) demanding payment of $1,272,360 for the balance due on kiosks held by KIS including $231,182 in interest. We are negotiating with KIS. No suit has been filed and ~~Capital~~the ~~Resources~~Company has accrued the full amount of the demand from KIS.

~~The~~On ~~financial~~September ~~statements~~5, in2017 ~~this Form 10-Q are presented on~~ the ~~basis that the~~ Company ~~is a going concern. Going concern contemplates the realization of assets and~~received ~~the satisfaction of liabilities in the normal course of business over~~ a ~~reasonable~~letter ~~length~~from ofan ~~time.~~attorney ~~The~~representing ~~Company~~Rite ~~had~~Aid ~~accumulated deficit at March 31, 2017 of $39,914,671~~Hdqtrs. ~~The~~Corp’s ~~Company~~(“Rite ~~has negative working capital of $11~~Aid”),~~446,531~~ aspursuant ofto ~~March~~which ~~31,~~Rite ~~2017.~~Aid ~~The largest~~indicated ~~balances~~its indesire ~~current~~to ~~liabilities~~terminate ~~are~~the ~~for~~Point ~~current portion~~ of ~~convertible~~Sales ~~debt,~~Advertising ~~net~~Agreement (~~$6,292,293~~“Agreement”) ~~accrued~~with ~~interest~~the ~~($2,535,305) and unearned revenue ($2,057,607)~~Company. The Company is indisputing Rite ~~the~~Aid’s ~~process~~ability ~~of negotiating with noteholders~~ to ~~convert~~terminate ~~accrued~~the ~~interest~~Agreement. ~~into long-term~~Thereafter, ~~notes~~on toOctober ~~reduce~~16, ~~current~~2017, ~~liabilities~~the ~~and~~Company ~~plans~~initiated toan ~~ship~~arbitration ~~goods to reduce the unearned revenue~~before JAMS.

The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing or refinancing as may be required and, ultimately, to attain profitable operations. Management’s plan to eliminate the going concern situation include, but are not limited to, the raise of additional capital through issuance of debt and equity, improved cash flow management, aggressive cost reductions, and the creation of additional sales and profits across its product lines.28

ToThe ~~raise~~Company ~~cash~~entered into a convertible promissory note (the “Note”) on ~~March~~July 3120, 2017, ~~the~~to ~~Company~~obtain funding for working capital purposes. The Note is issued as ~~accepted~~a ~~and~~convertible ~~entered~~promissory ~~into~~note ~~Subscription~~in ~~Agreements~~the principal amount of $50,000 (the “~~Subscription Agreements~~Note”). ~~for~~The 13principal amount under the Note accrues interest at a rate of 12% per annum and is due on July 20,~~333,339~~ ~~shares~~2018. The conversion price of ~~Company’s~~ the common stock ~~with~~into 15which ~~accredited~~the principal ~~investors~~amount, (or the ~~“Investors”)~~then ~~for~~outstanding aninterest ~~aggregate~~due ~~purchase~~thereon, ~~price~~ of ~~$800,000~~this atnote ais ~~price~~ convertible shall be the lesser of (i) $0.06 per share or (ii) 70% of the price per share of the Company’s next equity or convertible debt issuance greater than $250,000. The ~~Each~~note ~~Investor~~holder also received ~~warrants~~a warrant to purchase ~~shares~~the ofCompany’s ~~Common~~common ~~Stock~~stock equal to 2050% of the shares ~~each~~of ~~purchased~~common stock ~~(the~~issuable ~~“Warrants”).~~upon ~~The~~conversion ~~Warrants~~of ~~have~~the annote with the exercise price ~~of $0.09~~ per share ~~and~~of ~~are~~common ~~exercisable~~stock ~~for~~of ~~three-years from~~ the ~~date~~lesser of ~~issuance~~$0.06 ofper ~~the~~share ~~Warrant. The~~or ~~Warrants~~70% of ~~are~~the ~~valued~~price atper ~~$154,933.~~share ~~Net~~of ~~cash~~the ~~received~~Company’s ~~after~~next ~~fees~~equity ofor ~~$20,000,~~convertible ~~the~~debt ~~warrant valuation~~issuance ofgreater than $~~154~~250,~~933~~000. ~~and~~The aCompany ~~subscription~~valued the ~~receivable~~debt ofdiscount ~~$50,000~~at ~~was~~ $~~575~~26,~~067~~963.

~~The~~On August 23, 2017, the Company ~~does~~entered into ~~have~~three ~~$637,629~~promissory notes with investors pursuant to which the Company issued three promissory notes in ~~cash as~~the principal amount of ~~March 31~~$40,000. ~~2017~~The asnotes accrue interest at a ~~result~~rate of an5% ~~issuance~~per ofannum ~~convertible~~and ~~debt.~~mature ~~The~~in ~~Company~~120 ~~has~~days. ~~sufficient~~As ~~cash~~additional toconsideration, ~~operate~~the ~~for~~Company issued the ~~next~~investors ~~12 months.~~700,000 ~~Failure~~shares toof ~~raise~~common ~~additional~~stock. ~~capital~~The orvalue ~~improve~~of ~~its~~the ~~performance~~stock inconsideration was limited to the ~~next~~value 12of ~~months,~~the ~~however~~individual promissory notes, ~~may~~for ~~cause~~a ~~the~~total ~~Company~~of ~~to curtail~~$35,000. ~~its~~The ~~business~~stock ~~activities~~consideration ~~and~~will ~~expansion~~be ~~plans~~recorded ~~within~~as ~~the~~a ~~next~~discount ~~twelve~~against ~~months~~the notes.

~~During~~On ~~the~~August ~~nine months ended March 31~~25, 2017, the Company ~~used~~entered into ~~$2,667,619~~a ofpromissory ~~cash~~note ~~for~~with ~~operating~~an ~~activities~~investor ~~compared~~pursuant to awhich ~~use~~the ofCompany ~~$1,521,623~~issued a promissory note in the ~~nine~~principal ~~months~~amount ~~ended~~of ~~March 31~~$20, ~~2016~~000. The ~~increase~~note inaccrues ~~cash~~interest ~~used~~at ~~for operating activities was due~~ a ~~higher~~rate ~~net loss and the use~~ of ~~cash~~5% toper ~~lower~~annum ~~accounts payable~~ and ~~accrued~~mature ~~liabilities~~in ~~and~~120 ~~the effect of higher accounts receivable due to higher sales~~days. ~~Cash~~As ~~from~~additional ~~financing activities was $1~~consideration,~~129,705 in~~ the ~~nine~~Company ~~months~~issued ~~ended~~the investor ~~March 31~~300,000 ~~2017~~shares ~~compared to cash from financing activities~~ of ~~$3,422,125~~common ~~in the nine months ended March 31, 2016~~stock. The ~~increase~~value inof ~~cash~~the ~~provided~~stock byconsideration ~~financing activities~~ was ~~primarily~~limited ~~due~~ to ~~proceeds from~~ the ~~issuance~~value of ~~convertible notes. During~~ the ~~nine~~individual ~~months ended March 31~~promissory note, ~~2016,~~for ~~the~~a ~~company~~total ~~used~~of $1315,~~750~~000. inThe ~~investing~~stock ~~activities~~consideration ~~for~~will ~~the~~be ~~purchase~~recorded ofas ana ~~immaterial amount~~discount ofagainst ~~fixed~~the ~~assets~~note.

29On August 31, 2017, the Company entered into a bridge not with an investor pursuant to which the Company issued a promissory note in the principal amount of $500,000. The note does not accrue interest. The Company repaid the note on September 13, 2017.

~~DB Dava~~The ~~LLC,~~Company aentered ~~Delaware~~into ~~limited~~a ~~liability~~promissory ~~company~~ note (the “DBNote”), ~~and~~on ~~the~~September ~~Company~~13, ~~agreed~~2017 to ~~engage~~obtain infunding afor ~~venture~~working ~~for~~capital ~~the~~purposes. ~~purpose~~The Note is issued as an unsecured, ofnon-convertible ~~exploiting~~promissory note in the ~~Company’s~~principal ~~technology~~amount ~~and~~of ~~its~~$500,000 ~~agreement~~(the ~~with~~“Note”). aThe ~~national~~principal ~~pharmacy~~amount ~~chain~~under tothe ~~place~~Note accrues interest at a ~~number~~rate of ~~its~~12% ~~kiosks in~~per ~~stores.~~annum Inand ~~June~~is ~~2014~~due on May 13, ~~the~~2018. ~~Company~~The ~~and~~holder ~~DB,~~of ~~caused~~the ~~ProDava~~Note ~~LLC~~shall ~~(“ProDava”)~~receive the right to bebuy ~~formed~~1.25 million shares of the Company’s common stock on September 13, 2017 and ~~the~~an ~~parties~~additional ~~entered into~~1.25 ~~the~~million ~~ProDava~~shares ~~LLC~~for ~~Agreement~~each (month that the ~~“LLC~~Note ~~Agreement”)~~is onoutstanding ~~June~~up ~~30,~~to ~~2014,~~a ~~which~~maximum ~~set~~of ~~out~~10 million shares, ~~among~~all ~~other~~at ~~things,~~a ~~the~~purchase ~~parties’ respective~~price ~~rights~~of ~~and~~$0.06 ~~obligations~~per ~~with~~shares ~~respect~~and toexpiring ~~ProDava~~on September 13, 2019.

~~The~~CRITICAL ~~two~~ESTIMATES ~~members~~AND of ProDava are the Company and DB. At the time of the formation of ProDava, the LLC Agreement originally provided that DB owned 80 percent of the membership interests of ProDava and the Company owned 20 percent of the membership interests of ProDava, assuming a $50,000,000 capital contribution by DB. Pursuant to the LLC Agreement, the Company made a capital contribution of $12,500,000, which represented the agreed upon value of a certain agreements which granted the Company rights to place kiosks in retail stores. There are no overlapping members of management who control and manage both the Company and DB Dava LLC and there are no significant shareholders of the Company who also hold a significant interest in DB Dava LLC.JUDGMENTS

The preparation of the Company’s financial ~~motivation~~statements requires management to ~~enter~~make ~~into~~estimates and assumptions that affect the ~~LLC~~reported ~~Agreement~~amounts ~~was~~of toassets ~~use~~and ~~DB’s~~liabilities at ~~financing~~the todate ~~place~~of ~~kiosks~~the ~~into~~financial ~~retail~~statements ~~stores~~and the reported amounts of revenues and expenses during the reporting period. Management ~~Pursuant~~evaluates toits ~~LLC~~estimates ~~Agreement~~and judgments, DBincluding ~~agreed~~those related to ~~make~~receivables aand ~~capital~~accrued ~~contribution~~expenses. ofManagement upbases its estimates and judgments on historical experience and on various other factors that are believed to ~~US$50,000,000~~be reasonable based on the circumstances. Actual Itresults ~~was~~may ~~understood~~differ ~~and~~from ~~agreed~~these ~~between~~estimates under different assumptions or conditions. The most significant accounting estimates inherent in the ~~parties~~preparation ~~that~~of the Company’s ~~role~~financial instatements ~~ProDava~~include ~~was~~estimates as to ~~provide,~~the ~~among~~appropriate ~~other~~carrying ~~things,~~value of the ~~kiosks~~Company’s intangible assets, the ~~content,~~amount ~~resources~~of stock compensation, and the ~~know-how~~amount asof toaccrued ~~the~~liabilities ~~placement~~that are not readily attainable from other sources. These accounting policies are described at relevant sections in this discussion and ~~maintenance~~analysis and ofin the ~~kiosks~~notes into ~~retail~~the ~~stores~~consolidated financial statements.

~~To that~~CRITICAL ~~end,~~ACCOUNTING ProDava entered into a Professional Services Agreement, dated June 30, 2014 (the “PSA”) with the Company, whereby ProDava engaged the Company to provide services for ProDava with respect to the sourcing, due diligence, acquisition, management, construction and marketing of the kiosks financed and purchased by ProDava. As full compensation for rendering and performing such services under the PSA, the Company was entitled to receive from ProDava, the unreimbursed expenses incurred by the Company. It was agreed and understood that DB’s role in ProDava was to provide the funding necessary for the unreimbursable expenses and the production, manufacture and maintenance of the kiosks placed in stores. As a result of the ownership percentage in ProDava, DB would receive 80% of the profits of the ProDava from advertising related revenue less expenses.POLICIES

~~In the~~Cash ~~best interests of shareholders~~ and toCash reflect expenses paid on behalf of ProDava, the Company initiated an action against DB in November 2016 seeking declaratory judgment. After the execution of the LLC Agreement, both DB and the Company performed their respective duties. The Company caused numerous kiosks to be manufactured for placement in retail stores in accordance with the PSA, maintained and serviced these kiosks. DB provided funds to ProDava for, the production of kiosks and for expenses incurred by the Company in connection with the maintenance of servicing of the kiosks. In total, DB provided sums totaling $6.5 million. In the first quarter of 2016, DB ceased providing the funding required by the LLC Agreement. DB advised The Company that DB was analyzing information and that it would make a determination as to whether it would continue to provide funding in accordance with the LLC Agreement. The Company has been incurring the reimbursable expenses that were to be reimbursed by DB. The LLC Agreement provides that, in the event that DB fails to fund any portion of the total amount is was required to provide in accordance with the terms of the LLC Agreement, the LLC Agreement provides for the recalculation of the parties’ membership interests in ProDava. The Company filed an action in the Supreme Court of the State of New York in New York County (Index No. 656127/2016) to seed to recalculate the ownership percentage of ProDava. DB filed a motion to dismiss and the Company filed an action opposing such motion. No claims were made against the Company. If successful, the Company will own a greater percentage of ProDava. If unsuccessful, the Company will have to continue to fund ProDava’s expenses until advertising income exceeds expenses.Equivalents

~~On February~~The 6,Company ~~2017,~~considers ~~the~~all ~~Company~~highly ~~issued~~liquid investments, awith ~~$158,500~~an ~~convertible~~original ~~debenture.~~maturity ~~The~~of ~~note~~three ~~bears~~months ~~interest~~or atless ~~12%~~when purchased, isto ~~due~~be oncash ~~November~~equivalents. ~~12, 2017~~As ~~and,~~of ifSeptember ~~not~~30, ~~paid~~2017 and byJune ~~August 6~~30, 2017, ~~is convertible into shares of~~ the Company’s ~~common~~cash ~~stock~~and atcash ~~61%~~equivalents ofwere ~~the~~on ~~average of~~deposit ~~the~~in ~~lowest~~federally ~~three~~insured ~~trading~~financial ~~prices~~institutions, ~~during~~and at ~~the~~times ~~ten~~may ~~days~~exceed ~~prior~~federally toinsured ~~the conversion date~~limits.

~~On March~~Accounts 2, 2017, the Company issued a $225,000 convertible debenture. The note does not bear interest but was issued with $20,000 of original issue discount. The note is due on September 2, 2017 and, if not paid by September 2, 2017, is convertible into shares of the Company’s common stock at 60% of the average of the lowest three trading prices during the twenty days prior to the conversion date.Receivable

OnAccounts ~~March~~receivable ~~31,~~are ~~2017,~~not ~~the Company accepted~~collateralized and ~~entered~~interest ~~into~~is ~~Subscription~~not ~~Agreements~~accrued ~~(the~~on ~~“Subscription~~past ~~Agreements”)~~due ~~for~~accounts. 13Periodically,~~333,339~~ ~~shares~~management ofreviews ~~Company’s common stock with 15 accredited investors (~~the ~~“Investors”)~~adequacy ~~for an aggregate purchase price~~ of ~~$800,000~~its atprovision afor ~~price~~doubtful accounts ofbased ~~$0.06~~on ~~per~~historical ~~share.~~bad ~~Each~~debt ~~Investor~~expense ~~received~~results ~~warrants~~and tocurrent ~~purchase~~economic ~~shares~~conditions ofusing ~~Common~~factors ~~Stock~~based ~~equal~~on tothe ~~20%~~aging of ~~the~~its ~~shares~~accounts ~~each purchased~~receivable. ~~(the~~After ~~“Warrants”).~~management ~~The~~has ~~Warrants~~exhausted ~~have~~all ancollection ~~exercise~~efforts, ~~price~~management ofwrites ~~$0.09~~off ~~per~~receivables ~~share~~ and ~~are~~the ~~exercisable~~related ~~for~~reserve. ~~three-years from~~Additionally, the ~~date~~Company ofmay ~~issuance~~identify ofadditional ~~the~~allowance ~~Warrant. The~~requirements ~~Warrants~~based ~~are~~on ~~valued~~indications atthat ~~$154,933.~~a ~~Net~~specific ~~cash~~customer ~~received~~may ~~after~~be ~~fees~~experiencing ~~of $20,000, the warrant~~financial ~~valuation~~difficulties. ofActual ~~$154,933~~bad ~~and~~debt aresults ~~subscription~~could ~~receivable~~differ ofmaterially ~~$50,000~~from ~~was~~these ~~$575,067~~estimates.

During February 2017, the Company entered into four promissory notes with investors pursuant to which the Company issued four promissory notes in the principal amount of $61,500. The notes accrue interest at a rate of 5% per annum and mature in 120 days. As additional consideration, the Company issued the investors 1,050,000 shares of common stock. The value of the stock consideration was limited to the value of the promissory notes, $61,500. The stock consideration was recorded as a discount against the notes. For the three and nine months ended March 31, 2017 and 2016, $20,938 and $-0- and $20,937 and $-0-, respectively, was expensed in the statement of operations as amortization of debt discount related to the notes and show as interest expenses. The unamortized debt discount was $40,563 and $-0- at March 31, 2017 and June 30, 2017, respectively.29

30Inventories

~~CRITICAL~~Inventories are stated at the lower of ~~ESTIMATES~~cost ~~AND~~(first-in, ~~JUDGMENTS~~first-out) or market. The Company periodically reviews its inventories for indications of slow movement and obsolescence and records an allowance when it is deemed necessary.

~~The preparation~~Property ~~of the Company’s financial statements requires management to make estimates~~ and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates its estimates and judgments, including those related to receivables and accrued expenses. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable based on the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates as to the appropriate carrying value of the Company’s intangible assets, the amount of stock compensation, and the amount of accrued liabilities that are not readily attainable from other sources. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the unaudited condensed consolidated financial statements.Equipment

~~CRITICAL~~Property and equipment are stated at cost. ~~ACCOUNTING~~When ~~POLICIES~~retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Long-lived tangible assets are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment losses are recognized based on estimated fair values if the sum of expected future undiscounted cash flows of the related assets is less than their carrying values.

~~Cash and Cash Equivalents~~Intangibles

~~The Company~~Intangibles ~~considers~~represent ~~all~~primarily ~~highly~~costs ~~liquid~~incurred in ~~investments,~~connection with anpatent ~~original~~applications. ~~maturity~~Such ofcosts ~~nine~~are ~~months~~amortized orusing ~~less~~the ~~when~~straight-line ~~purchased,~~method toover bethe ~~cash~~useful ~~equivalents. As~~life of ~~March 31, 2017 and June 30, 2016,~~ the ~~Company’s cash and cash equivalents were on deposit in federally insured financial~~patent ~~institutions~~once issued, ~~and~~or atexpensed ~~times~~immediately ~~may~~if ~~exceed~~any ~~federally~~specific ~~insured~~application ~~limits~~is unsuccessful.

~~Accounts Receivable~~Revenue Recognition

~~Accounts receivable~~The ~~are~~Company ~~not~~recognizes ~~collateralized~~gross ~~and~~sales ~~interest~~when persuasive isevidence ~~not~~of ~~accrued~~an onarrangement ~~past~~exists, ~~due~~title ~~accounts.~~transfer ~~Periodically~~has occurred, ~~management~~the ~~reviews~~price ~~the~~is ~~adequacy of~~fixed ~~its~~or ~~provision~~readily ~~for~~determinable, ~~doubtful~~and ~~accounts~~collection is ~~based~~probable. It onrecognizes ~~historical~~revenue ~~bad~~in ~~debt~~accordance ~~expense~~with ~~results~~Accounting ~~and~~Standards ~~current~~Codification ~~economic~~(“ASC”) ~~conditions~~605, ~~using~~Revenue ~~factors~~Recognition ~~based~~(“ASC on605”). ~~the~~Revenue ~~aging~~from oflicensing, ~~its~~distribution ~~accounts~~and ~~receivable.~~marketing ~~After~~agreements ~~management~~is ~~has~~recognized ~~exhausted~~over ~~all~~the ~~collection~~term ~~efforts,~~of ~~management~~the ~~writes off receivables~~contract. ~~and~~Revenue from the ~~related~~sale ~~reserve.~~of ~~Additionally,~~hardware is recognized when the ~~Company~~product ~~may~~is ~~identify~~complete ~~additional~~and ~~allowance~~the ~~requirements~~buyer ~~based~~has onaccepted ~~indications~~delivery. ~~that~~Provisions afor ~~specific~~discounts ~~customer~~and ~~may~~rebates beto ~~experiencing~~customers, ~~financial~~estimated ~~difficulties.~~returns ~~Actual~~and ~~bad~~allowances, ~~debt~~and ~~results~~other ~~could~~adjustments ~~differ~~are ~~materially~~provided ~~from~~for ~~these~~in ~~estimates~~the same period the related sales are recorded.

~~Inventories~~Cost of Revenue

~~Inventories~~Cost of revenue in respect to sale of hardware ~~are~~consists ~~stated~~of atcosts ~~the~~associated ~~lower~~with manufacturing of ~~cost~~3D ~~(first-in~~displays, ~~first-out)~~Kiosk ormachine, ~~market.~~transportation, ~~The~~and ~~Company~~other ~~periodically~~costs ~~reviews~~that ~~its~~are ~~inventories~~directly related ~~for~~to ~~indications of~~a ~~slow~~revenue-generating. ~~movement~~Such ~~and~~expenses ~~obsolescence~~are ~~and~~classified ~~records~~as ancost ~~allowance~~of ~~when~~revenue itin the corresponding period in which the revenue is ~~deemed~~recognized ~~necessary~~in the accompanying income statement.

~~Property~~ Depreciation and ~~Equipment~~Amortization

~~Property and~~The ~~equipment~~Company ~~are~~depreciates ~~stated~~its at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment ~~are recorded at cost and depreciated~~ using the straight-line method ~~over their~~with estimated useful lives. ~~Long-lived~~from ~~tangible~~three ~~assets~~to ~~are~~seven ~~reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable~~years. ~~Impairment~~For ~~losses~~federal ~~are~~income ~~recognized~~tax ~~based on estimated fair values~~purposes, ifdepreciation ~~the sum of expected future undiscounted cash flows of the related assets~~ is ~~less~~computed ~~than~~using ~~their~~an ~~carrying~~accelerated ~~values~~method.

~~Intangibles~~The Company amortizes is intangible assets using the straight-line method with estimated useful lives of 80 years. For federal income tax purposes, amortization is computed using the straight-line method.

~~Intangibles represent~~Shipping ~~primarily~~and ~~costs~~Handling incurred in connection with patent applications. Such costs are amortized using the straight-line method over the useful life of the patent once issued, or expensed immediately if any specific application is unsuccessful.Costs

~~Revenue~~The Company’s policy is to classify ~~Recognition~~shipping and handling costs as a component of Costs of Revenues in the Statement of Operations.

~~The Company~~Unearned recognizes gross sales when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collection is probable. It recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”). Revenue from licensing, distribution and marketing agreements is recognized over the term of the contract. Revenue from the sale of hardware is recognized when the product is complete and the buyer has accepted delivery. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

31The Company bills customers in advance for certain of its services. If the customer makes payment before the service is rendered to the customer, the Company records the payment in a liability account entitled customer prepayments and recognizes the revenue related to the services when the customer receives and utilizes that service, at which time the earnings process is complete. The Company recorded $2,057,607 and $2,057,607 as of September 30, 2017 and June 30, 2017, respectively as unearned revenue.

~~Cost of~~Significant ~~Revenue~~Customers

~~Cost of~~During ~~revenue~~the inthree ~~respect~~months toended ~~sale~~September 30, of2017, ~~hardware~~the ~~consists~~Company ofhad ~~costs~~one ~~associated~~customer ~~with~~which ~~manufacturing~~accounted for more than 10% of 3Dthe ~~displays,~~Company’s ~~Kiosk~~revenues ~~machine,~~(74%). ~~transportation,~~During the three ~~and~~months ~~other~~ended ~~costs~~September ~~that~~30, ~~are~~2016 ~~directly~~the ~~related~~Company tohad aone ~~revenue-generating.~~customer ~~Such~~which ~~expenses~~accounted ~~are~~for ~~classified~~more asthan ~~cost~~10% of ~~revenue in~~ the ~~corresponding~~Company’s revenues ~~period~~(85%). inAs ~~which~~of ~~the~~September ~~revenue~~30, is2017 ~~recognized~~and inJune 30, 2017, the ~~accompanying~~Company ~~income~~had ~~statement~~no accounts receivable balance.

~~Depreciation and Amortization~~30

~~The Company~~Research ~~depreciates its property~~ and ~~equipment~~Development ~~using the straight-line method with estimated useful lives from three to seven years. For federal income tax purposes, depreciation is computed using an accelerated method.~~Costs

~~Shipping~~The Company charges all research and development costs to expense when incurred. Manufacturing costs associated with the development of a new process or a new product are expensed until such times as these processes or products are proven through final testing and ~~Handling~~initial ~~Costs~~acceptance by the customer.

~~The~~For the three months ended September 30, ~~Company’s~~2017 ~~policy~~and is2016, tothe ~~classify~~Company ~~shipping~~incurred $88,629 and ~~handling~~$150,132, ~~costs~~respectively asfor aresearch ~~component~~and ofdevelopment ~~Costs~~expense ofwhich ~~Revenues~~are included in the ~~Statement~~consolidated statements of ~~Operations~~operations.

~~Unearned Revenue~~Fair Value of Financial Instruments

~~The Company~~Fair ~~bills~~value ~~customers~~estimates indiscussed ~~advance~~herein ~~for~~are based upon certain ofmarket ~~its~~assumptions ~~services.~~and Ifpertinent ~~the~~information ~~customer~~available ~~makes~~to ~~payment~~management ~~before~~as ~~the~~of ~~service~~September is30, ~~rendered~~2017 ~~to the~~and ~~customer~~June 30, ~~the~~2017. The ~~Company~~respective ~~records~~carrying ~~the~~value ~~payment~~of incertain aon-balance-sheet ~~liability~~financial ~~account~~instruments, ~~entitled~~approximate ~~customer~~their ~~prepayments~~fair ~~and~~values. ~~recognizes~~These ~~the revenue~~financial ~~related~~instruments toinclude ~~the~~cash, ~~services~~accounts ~~when~~receivable, ~~the~~accounts ~~customer~~payable, ~~receives~~accrued expenses and ~~utilizes~~notes ~~that~~payable. ~~service,~~Fair atvalues ~~which~~were ~~time~~assumed ~~the~~to approximate ~~earnings~~carrying ~~process~~values isfor ~~complete. The~~these ~~Company~~financial ~~recorded~~instruments ~~$2,057,607~~because ~~and~~they ~~$3,419,616~~are asshort ofterm ~~March~~in ~~31,~~nature ~~2017~~ and ~~June~~their ~~30,~~carrying ~~2016,~~amounts ~~respectively~~approximate fair asvalues ~~deferred~~or ~~revenue~~they are receivable or payable on demand.

~~Significant~~The following table provides a summary ~~Customers~~of the carrying value of the Company’s Promissory Notes, as of September 30, 2017:

During the three ended March 31, 2017 the Company had one customer which accounted for more than 10% of the Company’s revenues (94%). During the nine months ended March 31, 2017 the Company had two customers which accounted for more than 10% of the Company’s revenues (74% and 19%). During the three and nine months ended March 31, 2016 the Company had one customer which accounted for more than 10% of the Company’s revenues (99% and 99%, respectively).

Balance at June 30, 2017	$	7,216,032
Issuance of notes – net of financing costs		50,000
Extension of notes, increase in principal of $80,000, net of debt discount of $80,000		-
Payments on convertible notes payable		(283,500	)
Re-class convertible note to notes payable		(15,000	)
Debt discount on convertible notes due to beneficial conversion feature		(29,725	)
Debt discount on convertible notes due to warrants		(20,275	)
Accretion of debt and warrant discount and prepaid financing costs		521,758
Issuance of shares of common stock for convertible debt		(100,000	)
Balance September 30, 2017	$	7,339,290

~~Research~~There is no active market for the debt and ~~Development~~the ~~Costs~~fair value was based on the delayed payment terms, the warrants issued as consideration of the debt issuance, the interest rate and the common stock issued as consideration of the debt issuance in addition to other facts and circumstances at the end of September 30, 2017 and June 30, 2017. The Company did not recognize a gain or loss on the valuation of debt during the three months ended September 30, 2017 and 2016.

The Company ~~charges~~uses ~~all~~fair ~~research~~value ~~and~~measurements under ~~development~~the ~~costs~~three-level tovaluation ~~expense~~hierarchy ~~when~~for ~~incurred.~~disclosures ~~Manufacturing~~of ~~costs~~fair ~~associated~~value ~~with~~measurement ~~the~~and ~~development of~~enhances adisclosure ~~new~~for ~~process~~fair orvalue ameasures. The ~~new~~three ~~product~~levels are ~~expensed~~defined ~~until such times~~ as ~~these processes or products are proven through final testing and initial acceptance by the customer.~~follows:

~~For the~~● ~~three~~Level ~~months~~1 ~~ended~~inputs ~~March~~to ~~31,~~the ~~2017~~valuation ~~and~~methodology ~~2016,~~are ~~the~~quoted ~~Company~~prices ~~incurred~~(unadjusted) ~~$37,934~~for ~~and~~identical ~~$119,407,~~assets ~~respectively~~or ~~for~~liabilities ~~research~~in ~~and~~active ~~development expense~~markets. ~~which~~● ~~are~~Level ~~included~~2 ininputs to the ~~unaudited~~valuation ~~condensed~~methodology ~~consolidated~~include ~~statements~~quoted ofprices ~~operations.~~for ~~For~~similar ~~the~~assets ~~nine~~and ~~months~~liabilities ~~ended~~in ~~March~~active 31markets, ~~2017~~ and ~~2016,~~inputs that are observable for the ~~Company~~assets ~~incurred~~or ~~$257~~liability,~~838~~ ~~and~~either ~~$216,306,~~directly ~~respectively~~or indirectly, for ~~research~~substantially ~~and~~the ~~development~~full ~~expense~~term ~~which~~of ~~are~~the ~~included in~~financial instruments. ● Level 3 inputs to the ~~unaudited~~valuation ~~condensed~~methodology ~~consolidated~~are ~~statements~~unobservable ofand ~~operations~~significant to the fair value.

Fair Value of Financial Instruments

	Carrying		Fair Value Measurements Using Fair Value Hierarchy
	Value		Level 1		Level 2		Level 3
Derivative liability – September 30, 2017	$	69,195	$	-	$	-	$	69,195
Derivative liability – June 30, 2017	$	408,286	$	-	$	-	$	408,286

~~Fair value~~Derivative ~~estimates~~Financial discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2017 and June 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments, approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses and notes payable. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand.Instruments

The Company ~~uses~~evaluates ~~fair~~our ~~value~~financial ~~measurements~~instruments to ~~under~~determine ~~the~~if ~~three-level~~such ~~valuation~~instruments ~~hierarchy~~are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for ~~disclosures~~as ofliabilities, the derivative instrument is initially recorded at its fair value ~~measurement~~ and ~~enhances~~is then ~~disclosure~~re-valued ~~for~~at each reporting date, with changes in the fair value ~~measures~~reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The ~~three~~classification of ~~levels~~derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are ~~defined~~classified in the balance sheet as ~~follows:~~current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

32Certain of the Company’s embedded conversion features on debt and outstanding warrants are treated as derivative liabilities for accounting purposes under ASC 815 due to insufficient authorized shares to settle these outstanding contracts, or due to other rights connected with these contracts, such as registration rights. In the case of insufficient authorized share capital available to fully settle outstanding contracts, the Company utilizes the latest maturity date sequencing method to reclassify outstanding contracts as derivative instruments. These contracts are recognized currently in earnings until such time as the warrants are exercised, expire, the related rights have been waived and/or the authorized share capital has been amended to accommodate settlement of these contracts. These instruments do not trade in an active securities market.

	Carrying		Fair Value Measurements Using Fair Value Hierarchy
	Value		Level 1		Level 2		Level 3
Convertible notes (net of discount) – March 31, 2016	$	6,568,572	$	-	$	-	$	6,568,572
Convertible notes (net of discount) – June 30, 2016	$	6,415,371	$	-	$	-	$	6,415,371
Derivative liability – March 31, 2017	$	427,824	$	-	$	-	$	427,824
Derivative liability – June 30, 2016	$	188,128	$	-	$	-	$	188,128

The ~~following~~ ~~table~~Company ~~provides~~estimates ~~a summary of~~ the ~~changes in~~ fair value of these instruments using the ~~Company’s~~Black-Scholes ~~Promissory~~option ~~Notes,~~pricing ~~which~~model ~~are~~and ~~both~~the ~~Level 3~~intrinsic ~~liabilities~~value asif ofthe ~~March~~convertible ~~31,~~notes ~~2017:~~are due on demand.

Balance at June 30, 2016	$	6,415,371
Issuance of notes – net of discount		355,000
Derivative liability on issuance of notes		(304,906	)
Accretion of debt and warrant discount and prepaid financing costs		1,483,437
Issuance of shares of common stock for convertible debt		(1,380,330	)
Balance March 31, 2017	$	6,568,572

The ~~Company~~ ~~determined~~following ~~the~~table ~~value~~represents ~~of its convertible notes using a market interest rate and~~ the ~~value of the warrants and beneficial~~Company’s ~~conversion~~derivative ~~feature~~liability ~~issued~~activity ~~at the time of the transaction less the accretion. There is no active market~~ for the ~~debt~~period ~~and the value was based on the delayed payment terms in addition to other facts and circumstances at the end of March 31, 2017 and June 30, 2016.~~ ended:

Derivative Financial Instruments

Balance at June 30, 2017	$	408,286
Derivative liability reclass into additional paid in capital upon notes conversion		(75,478	)
Derivative liability reclass into additional paid in capital upon notes repayment		(219,672	)
Derivative liability on new debt issuance		69,389
Change in fair value of derivative liability		(113,330	)
Balance September 30, 2017	$	69,195

~~The Company~~Commitments evaluates our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.Contingencies:

~~Certain of~~In the ~~Company’s~~normal ~~embedded~~course ~~conversion~~of ~~features~~business, onthe ~~debt and outstanding warrants are treated as derivative liabilities for~~Company ~~accounting~~is ~~purposes~~subject ~~under ASC 815 due~~ to ~~insufficient~~loss ~~authorized~~contingencies, ~~shares~~such toas ~~settle~~legal ~~these~~proceedings ~~outstanding~~and ~~contracts,~~claims orarising ~~due~~out toof ~~other rights~~its ~~connected with these contracts~~business, ~~such~~that ascover ~~registration~~a ~~rights.~~wide Inrange ~~the case~~ of ~~insufficient authorized share capital available~~ tomatters, ~~fully~~including, ~~settle~~among ~~outstanding contracts~~others, ~~the~~government ~~Company~~investigations, ~~utilizes~~environment ~~the~~liability ~~latest~~and ~~maturity~~tax ~~date~~matters. ~~sequencing~~An ~~method~~accrual tofor ~~reclassify~~a ~~outstanding~~loss contingency ~~contracts~~is ~~as derivative instruments. These contracts are~~ recognized ~~currently~~when init ~~earnings~~is ~~until~~probable ~~such~~that ~~time~~an asasset ~~the~~had ~~warrants~~been ~~are exercised,~~impaired ~~expire,~~or ~~the~~a ~~related~~liability ~~rights~~had ~~have~~ been ~~waived~~incurred and~~/or~~ the ~~authorized~~amount ~~share~~of ~~capital~~loss ~~has~~can ~~been amended to accommodate settlement~~be ofreasonably ~~these contracts~~estimated. ~~These instruments do not trade in an active securities market.~~

~~The classification~~Basic ofand ~~derivative~~Diluted ~~instruments,~~Income ~~including~~(Loss) ~~whether~~per such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the balance sheet date. Share

~~The~~Basic income (loss) per common share is ~~Company~~computed ~~estimates~~by dividing net income (loss) available to common stockholders by the ~~fair~~weighted ~~value~~average number of ~~these~~common ~~instruments~~shares ~~using~~outstanding. Diluted ~~the~~income ~~Black-Scholes~~(loss) ~~option~~per ~~pricing~~common ~~model~~share ~~and~~is computed similar to basic income per common share except that the ~~intrinsic~~denominator ~~value~~is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the ~~convertible~~additional ~~notes~~common ~~are~~shares ~~due~~were ondilutive. ~~demand~~As of September 30, 2017, the Company had debt instruments, options and warrants outstanding that can potentially be converted into approximately 116,992,079 shares of common stock.

Anti-dilutive securities not included in diluted loss per share relating to:
Warrants outstanding			1,714,286
Options vested and outstanding			8,899,908
Convertible debt and notes payable including accrued interest			2,214,909

33Material Equity Instruments

The Company evaluates stock options, stock ~~following~~warrants ~~table~~and ~~represents~~other contracts (convertible promissory note payable) to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for under the ~~Company~~relevant sections of ASC 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity (“ASC 815”). The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. ~~activity~~In ~~for~~the event that the ~~period~~fair ~~ended:~~value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

Balance at June 30, 2016	$	188,128
Derivative liability reclass into additional paid in capital upon notes conversion		(125,710	)
Initial measurement at issuance date of the notes		409,240
Change in fair value of derivative at period end		(43,834	)
Balance March 31, 2017	$	427,824

~~Commitments~~Certain of the Company’s embedded conversion features on debt and ~~Contingencies~~outstanding warrants are treated as derivative liabilities for accounting purposes under ASC 815-40 due to insufficient authorized shares to settle these outstanding contracts. Pursuant to SEC staff guidance that permits a sequencing approach based on the use of ASC 840-15-25 which provides guidance for contracts that permit partial net share settlement. The sequencing approach may be applied in one of two ways: contracts may be evaluated based on (1) earliest issuance date or (2) latest maturity date. In the case of insufficient authorized share capital available to fully settle outstanding contracts, the Company utilizes the earliest maturity date sequencing method to reclassify outstanding contracts as derivative instruments. These contracts are recognized currently in earnings until such time as the convertible notes or warrants are exercised, expire, the related rights have been waived and/or the authorized share capital has been amended to accommodate settlement of these contracts. These instruments do not trade in an active securities market.

~~In the~~Recent ~~normal~~Accounting course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, environment liability and tax matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated.Pronouncements

~~Basic~~In September 2017, ~~and~~the ~~Diluted~~FASB ~~Income~~issued ASU 2017-13, Revenue Recognition (~~Loss~~Topic 605), ~~per~~Revenue ~~Share~~from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). The effective date for ASU 2017-13 is for fiscal years beginning after December 15, 2018. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

~~Basic~~In January 2016, the FASB issued an accounting ~~income~~standard ~~(loss)~~update ~~per~~which ~~common~~requires, ~~share~~among isother ~~computed~~things, bythat ~~dividing~~entities ~~net~~measure ~~income~~equity investments (~~loss)~~except ~~available~~those toaccounted ~~common~~for ~~stockholders~~under the byequity ~~the~~method ~~weighted~~of ~~average number~~accounting or those that result in consolidation of ~~common~~the ~~shares~~investee) ~~outstanding~~at fair value, with changes in fair value recognized in earnings. ~~Diluted~~Under ~~income~~the ~~(loss)~~standard, ~~per~~entities ~~common~~will ~~share~~no islonger ~~computed~~be ~~similar~~able to ~~basic~~recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. ~~per~~For ~~common~~equity ~~share~~investments without ~~except~~readily ~~that~~determinable fair values the ~~denominator~~cost method of accounting is ~~increased~~also eliminated, however subject to ~~include~~certain ~~the~~exceptions, ~~number~~entities will ofbe ~~additional~~able ~~common~~to ~~shares~~elect ~~that~~to ~~would~~record ~~have~~equity ~~been~~investments ~~outstanding~~without ~~if the~~readily ~~potential~~determinable ~~common~~fair ~~shares~~values ~~had~~at ~~been~~cost, ~~issued~~less impairment and ifplus ~~the~~or minus ~~additional~~adjustments ~~common~~for ~~shares~~observable ~~were~~price ~~dilutive~~changes, with all such changes recognized in earnings. AsThis ofnew ~~March~~standard ~~31,~~does ~~2017,~~not change the ~~Company had~~guidance for classifying and measuring investments in debt ~~instruments~~securities and loans. The standard is effective for us on July 1, 2018 ~~options~~(the ~~and~~first ~~warrants~~quarter ~~outstanding~~of ~~that~~our ~~can~~2019 ~~potentially~~fiscal beyear). ~~converted~~The ~~into~~Company ~~approximately~~is ~~116,907,345~~currently ~~shares~~ evaluating the anticipated impact of ~~common~~this ~~stock~~standard on our financial statements.

Anti-dilutive securities not included in diluted loss per share relating to:
Warrants outstanding			333,333
Options vested and outstanding			-
Convertible debt and notes payable including accrued interest			17,454,009

~~Material~~In ~~Equity~~March ~~Instruments~~2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its consolidated financial statements.

~~The~~In March 2016, the FASB issued ASU No. ~~Company~~2016-09, ~~evaluates~~Compensation ~~stock~~– ~~options~~Stock Compensation, ~~stock~~or ~~warrants~~ASU ~~and~~No. ~~other~~2016-09. ~~contracts~~The ~~(convertible~~areas ~~promissory~~for ~~note~~simplification ~~payable)~~in tothis ~~determine~~Update ifinvolve ~~those~~several ~~contracts~~aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or ~~embedded~~liabilities, ~~components~~and classification on the statement of ~~those~~cash ~~contracts~~flows. ~~qualify~~For aspublic ~~derivative~~entities, ~~financial~~the ~~instruments~~amendments toin bethis Update ~~separately~~are ~~accounted~~effective for ~~under~~ ~~the~~annual ~~relevant~~periods ~~sections~~beginning ~~of ASC~~after ~~815-40~~December 15, ~~Derivative~~2016, ~~Instruments~~ and ~~Hedging:~~interim ~~Contracts~~periods inwithin ~~Entity’s~~those ~~Own~~annual ~~Equity~~periods. Early ~~(“ASC~~adoption ~~815”)~~is permitted in any interim or annual period. ~~The~~ ~~result~~If ofan ~~this~~entity ~~accounting~~early ~~treatment~~adopts ~~could~~the amendments in an interim period, any adjustments should be ~~that~~reflected ~~the~~as ~~fair~~of ~~value~~the beginning of athe ~~financial~~fiscal ~~instrument~~year that includes that interim period. An entity that elects early adoption ismust ~~classified~~adopt asall aof ~~derivative~~the ~~financial~~amendments ~~instrument~~in ~~and~~the issame ~~marked-~~period. Amendments related to~~-market~~ atthe ~~each~~timing ~~balance~~of ~~sheet~~when ~~date~~excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and ~~recorded~~intrinsic asvalue should be applied using a ~~liability.~~modified retrospective transition Inmethod ~~the~~by ~~event~~means ~~that~~of ~~the~~a ~~fair~~cumulative-effect ~~value~~adjustment isto ~~recorded~~equity as aof ~~liability,~~the beginning of the ~~change~~period in ~~fair~~which ~~value~~the guidance is ~~recorded~~adopted. Amendments inrelated to the ~~statement~~presentation of ~~operations as~~employee ~~other~~taxes ~~income~~paid oron ~~other~~the ~~expense.~~statement ~~Upon~~of ~~conversion~~cash orflows ~~exercise~~when ofan aemployer ~~derivative~~withholds ~~financial~~shares to ~~instrument,~~meet the ~~instrument~~minimum isstatutory ~~marked~~withholding torequirement should be applied retrospectively. Amendments requiring recognition of excess ~~fair~~tax ~~value~~benefits atand tax deficiencies in the ~~conversion~~income ~~date~~statement and ~~then~~the ~~that~~practical ~~fair~~expedient ~~value~~for isestimating ~~reclassified~~expected toterm ~~equity.~~should ~~Financial~~be ~~instruments~~applied prospectively. ~~that~~An ~~are~~entity ~~initially classified~~may aselect ~~equity~~to ~~that~~apply ~~become~~the ~~subject~~amendments related to ~~reclassification~~the ~~under~~presentation ~~ASC~~of ~~815~~excess ~~are~~tax ~~reclassified~~benefits toon the statement of cash flows using either a ~~liability~~prospective ~~account~~transition atmethod ~~the~~or ~~fair~~a retrospective transition method. We are currently evaluating the ~~value~~impact of ~~the~~adopting ~~instrument~~ASU No. 2016-09 on ~~the~~our ~~reclassification~~consolidated ~~date~~financial statements.

~~During September~~In ~~2015,~~April ~~the Company had recorded a charge for the derivative liability resulting from the Company having insufficient shares of $85~~2016,~~960.~~ ~~This derivative liability is a result of~~ the ~~embedded~~FASB ~~conversion~~issued ~~features of the notes payable to convert 18,231,003~~ASU ~~shares~~2016-10, atRevenue ~~fixed prices ranging~~ from ~~$0.04~~Contracts towith ~~$1.00~~Customers ~~per~~(Topic ~~share.~~606): ~~The~~Identifying ~~liability~~Performance ~~was~~Obligations ~~recorded~~and ~~at the fair market value~~Licensing, which ~~estimated~~ ~~value,~~provides ~~was~~further ~~based~~guidance ~~upon~~on ~~the~~identifying ~~remaining~~performance ~~contractual~~obligations ~~life~~and ofimproves the ~~convertible~~operability ~~notes~~and ~~payable~~understandability ~~(the host instrument), using the Black-Scholes~~of ~~pricing~~licensing ~~model,~~implementation ~~and since these earlier notes had reached maturity and were now due on demand the intrinsic value was also considered~~guidance. The ~~conversion~~effective ~~exceeded~~date ~~the~~for ~~market~~ASU ~~price~~2016-10 ~~accordingly~~is the ~~intrinsic~~same ~~value~~as ~~was also zero. Accordingly~~ the ~~reclassification~~effective ofdate ~~the value~~ of ~~these~~ASU ~~derivatives~~2014-09 as amended ~~had~~by noASU ~~impact~~2015-14, for onannual ~~the~~reporting ~~Company’s~~periods beginning ~~financial~~after ~~statements. On~~ December 3115, ~~2015~~2017, ~~the~~including ~~Company~~interim ~~amended~~periods within those ~~its~~years. The ~~Articles~~Company ofhas ~~Incorporation~~not byyet ~~filing~~determined ~~a Certificate of Amendment with~~ the ~~Secretary~~impact of ASU ~~State~~2016-10 ~~of Nevada to effect an increase~~on inits consolidated financial ~~the number of the Company’s authorized common shares from 100,000,000 to 200,000,000~~statements. ~~As such, the related derivative liability has been revalued to $0 at March 31, 2017.~~

34In June 2016, the FASB Issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. The Company has not yet determined the impact of ASU 2016-12 on its consolidated financial statements.

OnThere have been four new ASUs issued amending ~~June~~certain 30aspects of ASU 2014-09, ASU 2016-08, ~~the~~“Principal ~~Company~~versus ~~again~~Agent ~~amended~~Considerations ~~its~~(Reporting ~~Articles~~Revenue ofGross ~~Incorporation~~Versus byNet)” was ~~filing~~issued ain ~~Certificate~~March of2016 ~~Amendment~~to ~~with~~clarify certain aspects of the ~~Secretary~~principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10, of“Identifying ~~State~~Performance Obligations and Licensing,” issued in April 2016, amends other sections of ~~Nevada~~ASU 2014-09 including clarifying guidance related to ~~effect~~identifying anperformance ~~increase~~obligations and licensing implementation. ASU 2016-12, “Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients” provides amendments and practical expedients to the guidance in ASU 2014-09 in the ~~number~~areas of ~~the~~assessing ~~Company’s~~collectability, ~~authorized~~presentation ~~common~~of ~~shares~~sales taxes received from ~~200~~customers,~~000~~ noncash consideration,~~000~~ contract modification and clarification of using the full retrospective approach to ~~300,000,000~~adopt ASU 2014-09. Finally, ~~The~~ASU ~~increase~~2016-20, in“Technical ~~the~~Corrections ~~authorized~~and ~~number~~Improvements ofto ~~shares~~Topic of606, ~~common~~Revenue ~~stock~~from Contracts with Customers” was ~~approved~~issued in byDecember ~~the~~2016, ~~Board~~and ofprovides ~~Director~~elections ofregarding the ~~Company~~disclosures onrequired ~~June~~for ~~30,~~remaining performance obligations in certain cases ~~2016~~and also makes other technical corrections and ~~holders~~improvements ofto ~~more~~the ~~than~~standard. ~~50%~~With its evaluation of the ~~voting~~impact ~~power~~ of ASU 2014-09, the Company’s ~~capital~~will ~~stock.~~also ~~The~~consider ~~Company’s~~the ~~ticker~~impact ~~symbol and~~on ~~CUSIP~~its ~~remain~~financial ~~unchanged~~statements related to the updated guidance provided by these four new ASUs.

~~Recent~~In January 2017, the FASB issued ASU 2017-04 ~~Accounting~~which ~~Pronouncements~~ removes Step 2 from the goodwill impairment test. It is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for an interim or annual goodwill impairment test performed with a measurement date after January 1, 2017. The Company does not anticpate any material impact from the adoption of ASU 2017-04 on its results of operations, statement of financial position or financial statement disclosures.

In ~~January~~ ~~2016~~May 2017, the FASB issued anASU ~~accounting~~No. ~~standard~~2017-09 “Compensation-Stock ~~update~~Compensation ~~which requires, among other things, that entities measure equity investments~~ (~~except~~Topic ~~those~~718) ~~accounted~~Scope ~~for under the equity method~~ of ~~accounting~~Modification orAccounting ~~those~~(ASU ~~that result in consolidation of the investee~~2017-09).” atASU ~~fair~~2017-09 clarifies ~~value,~~which ~~with~~ changes into ~~fair value recognized in earnings. Under~~ the ~~standard,~~terms ~~entities~~or ~~will~~conditions noof ~~longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as~~ a ~~component~~share-based ofpayment ~~other~~award ~~comprehensive~~require ~~income. For~~an ~~equity~~entity ~~investments~~to ~~without~~apply ~~readily~~modification ~~determinable fair values the cost method of~~ accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in ~~earnings.~~Topic ~~This new standard does not change the guidance for classifying and measuring investments in debt securities and loans~~718. The standard is effective for usinterim onand ~~July 1,~~annual ~~2018~~reporting ~~(the~~periods ~~first~~beginning ~~quarter~~after ofDecember ~~our~~15, ~~2019~~2017, ~~fiscal~~with ~~year)~~early adoption permitted. The Company is currently evaluating the ~~anticipated~~ impact of its adoption of this standard on ~~our~~its financial statements.

In ~~February~~ ~~2016~~July 2017, the FASB issued ASU No. ~~2016~~2017-0211, “Earnings ~~Leases~~Per Share (Topic ~~842~~260); toDistinguishing ~~increase~~Liabilities ~~transparency~~from Equity (Topic 480); Derivatives and ~~comparability~~Hedging ~~among~~(Topic ~~organizations~~815): by(Part ~~recognizing~~I) ~~lease~~Accounting ~~assets~~for ~~and~~Certain ~~lease~~Financial ~~liabilities~~Instruments onwith Down Round Features; (Part II) Replacement of the ~~balance~~Indefinite ~~sheet~~Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and ~~disclosing~~Certain ~~key~~Mandatorily ~~information~~Redeemable ~~about~~Noncontrolling Interests ~~leasing~~with ~~arrangements~~a Scope Exception”. ~~Topic~~ ~~842~~ASU ~~affects~~2017-11 ~~any~~allows ~~entity~~companies ~~that~~to ~~enters~~exclude ~~into~~a down round feature when determining whether a ~~lease,~~financial ~~with~~instrument ~~some~~(or ~~specified~~embedded ~~scope~~conversion ~~exemptions.~~feature) ~~The~~is ~~guidance~~considered inindexed ~~this~~to ~~Update~~the ~~supersedes Topic~~entity’s ~~840,~~own ~~Leases~~stock. ~~The~~As ~~core~~a ~~principle~~result, offinancial instruments ~~Topic~~(or ~~842~~embedded isconversion ~~that~~features) awith ~~lessee~~down ~~should~~round ~~recognize~~features ~~the~~may ~~assets~~no ~~and~~longer ~~liabilities~~be ~~that~~required ~~arise~~to ~~from~~be accounted for as derivative ~~leases~~liabilities. A ~~lessee~~company ~~should~~will recognize in the ~~statement~~value of ~~financial~~a ~~position~~down around ~~liability~~feature toonly ~~make~~when ~~lease~~it ~~payments~~is (triggered and the ~~lease~~strike ~~liability)~~price has been ~~and~~adjusted adownward. ~~right~~For equity-~~of-use~~classified ~~asset~~freestanding ~~representing~~financial ~~its~~instruments, ~~right~~an toentity ~~use~~will treat the ~~underlying~~value ~~asset~~of ~~for~~the effect of the down ~~lease~~round ~~term~~as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible ~~public~~instruments ~~companies~~with embedded conversion features containing down round provisions, entities will recognize the ~~amendments~~value of inthe ~~this~~down ~~Update~~round ~~are~~as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, ~~including~~and interim periods within those fiscal years. WeEarly ~~are~~adoption ~~currently~~is ~~evaluating~~permitted. ~~the~~The ~~impact~~guidance ofin ~~adopting~~ ASU No2017-11 can be applied using a full or modified retrospective approach. ~~2016~~The Company has not yet determined the effect that ASU 2017-0211 will have on ~~our~~its ~~consolidated~~results of operations, statement of financial ~~statements~~position or financial statement disclosures.

~~In March 2016, the~~ FASB ~~issued~~ ASU ~~2016~~2014-0812, ~~Revenue~~ ~~from~~“Compensation ~~Contracts~~- Stock ~~with~~Compensation ~~Customers~~ (Topic ~~606~~718):, ~~Principal~~Accounting ~~versus~~for ~~Agent~~Share-Based ~~Considerations (Reporting~~Payments ~~Revenue~~When ~~Gross~~the ~~versus~~Terms ~~Net) that~~of ~~clarifies~~an ~~how~~Award toProvide ~~apply~~That ~~revenue~~a ~~recognition~~Performance ~~guidance~~Target Could ~~related~~Be toAchieved ~~whether~~after anthe ~~entity is~~Requisite aService ~~principal~~Period” orwas anissued ~~agent~~June 2014. ~~ASU~~This ~~2016-08~~guidance ~~clarifies~~was ~~that~~issued ~~the~~to ~~analysis~~resolve ~~must~~diversity in ~~focus~~accounting onfor ~~whether~~performance ~~the~~targets. ~~entity~~A ~~has~~performance ~~control~~target ofin ~~the~~a ~~goods or~~share-based ~~services~~payment ~~before~~that ~~they~~affects ~~are~~vesting ~~transferred~~and tothat ~~the~~could ~~customer~~be ~~and~~achieved after ~~provides~~the ~~additional~~requisite ~~guidance~~service ~~about~~period ~~how~~should tobe ~~apply~~accounted ~~the~~for ~~control~~as ~~principle when~~a ~~services~~performance ~~are~~condition ~~provided~~ and ~~when~~should ~~goods~~not orbe ~~services~~reflected ~~are~~in ~~combined~~the ~~with~~award’s grant ~~other~~date ~~goods~~fair ~~or services~~value. ~~The~~Compensation ~~effective~~cost ~~date~~should ~~for~~be ~~ASU~~recognized ~~2016-08 is~~over the ~~same~~required asservice ~~the~~period, ~~effective~~if ~~date~~it ofis ~~ASU~~probable ~~2014-09 as amended~~that the performance bycondition ~~ASU~~will ~~2015-14,~~ be achieved. The guidance is effective for annual ~~reporting~~ periods beginning after December 15, ~~2017, including~~2015 and interim periods within those ~~years~~annual periods. ~~The~~ ~~Company~~This ~~has~~update did not ~~yet~~have ~~determined the~~a significant impact ~~of ASU~~upon ~~2016-08~~early ~~on its consolidated financial statements~~adoption.

~~In March 2016, the~~ FASB ~~issued~~ ASU ~~No. 2016~~2014-0915, ~~Compensation~~“Presentation of –Financial ~~Stock~~Statements-Going ~~Compensation,~~Concern or(Subtopic ~~ASU No. 2016~~205-~~09.~~40), ~~The~~Disclosure ~~areas for simplification in this Update involve several aspects~~ of ~~the~~Uncertainties ~~accounting~~about ~~for~~an ~~share-based~~Entity’s ~~payment~~Ability ~~transactions,~~to ~~including the income tax consequences,~~Continue ~~classification~~as ofa ~~awards~~Going asConcern” was ~~either~~issued ~~equity~~September or2014. ~~liabilities,~~This ~~and~~provides ~~classification~~guidance on ~~the~~determining ~~statement~~when ofand ~~cash~~how ~~flows.~~to ~~For~~disclose ~~public entities,~~going-concern ~~the~~uncertainties ~~amendments~~ in ~~this~~the ~~Update~~financial ~~are~~statements. ~~effective~~The ~~for~~new ~~annual~~standard ~~periods~~requires ~~beginning~~management ~~after~~to ~~December~~perform ~~15,~~interim ~~2016,~~ and ~~interim periods within those~~ annual ~~periods.~~assessments ~~Early~~of ~~adoption is permitted in any interim or annual period. If~~ an entity’s ~~early~~ability ~~adopts~~to ~~the~~continue ~~amendments~~as ina angoing ~~interim period,~~concern ~~any~~within ~~adjustments~~one ~~should~~year ~~be reflected as~~ of the ~~beginning~~date of the ~~fiscal~~financial ~~year~~statements ~~that~~are ~~includes that interim period~~issued. An ~~entity~~ ~~that~~entity ~~elects early adoption~~ must ~~adopt~~provide ~~all~~certain ofdisclosures ~~the~~if ~~amendments~~conditions inor ~~the~~events ~~same~~raise ~~period.~~substantial ~~Amendments~~doubt ~~related~~about to the ~~timing~~entity’s ofability ~~when~~to ~~excess~~continue ~~tax~~as ~~benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using~~ a ~~modified~~going ~~retrospective~~concern. ~~transition~~The ~~method~~ASU byapplies ~~means of a cumulative-effect adjustment~~ to ~~equity~~all asentities ofand ~~the beginning of the period in which the guidance~~ is ~~adopted.~~effective ~~Amendments~~for ~~related~~annual toperiods ~~the~~ending ~~presentation~~after ofDecember ~~employee~~15, ~~taxes~~2016, paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and ~~tax deficiencies in the income statement and the practical expedient for estimating~~interim ~~expected~~periods ~~term~~thereafter, ~~should~~with beearly ~~applied~~adoption ~~prospectively~~permitted. AnThe ~~entity~~Company ~~may~~does ~~elect~~not tohave ~~apply~~any ~~the~~significant amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact ofupon ~~adopting ASU No~~adoption. ~~2016-09 on our consolidated financial statements.~~

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-10 on its consolidated financial statements.34

35FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The ASU will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For public business entities, the ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact upon adoption.

~~In June~~FASB ~~2016~~ASU No. 2015-15, Interest—Imputation of ~~the~~Interest: ~~FASB~~Presentation ~~Issued~~and ~~ASU~~Subsequent ~~2016-12,~~Measurement ~~“Revenue~~of ~~from~~Debt ~~Contracts~~Issuance Costs Associated with ~~Customers~~Line-of-Credit ~~(Topic~~Arrangements” was ~~606):~~issued ~~Narrow-Scope~~in ~~Improvements~~August ~~and~~2015 which permits an entity to report deferred debt issuance costs associated with a line-of-credit arrangement ~~Practical~~as ~~Expedients”~~an asset and ~~clarifies~~to amortize such costs over the ~~objective~~term of the ~~collectability~~line-of-credit ~~criterion~~arrangement, ~~presentation~~regardless of ~~taxes~~whether ~~collected~~there ~~from~~are any outstanding ~~customers,~~borrowings ~~non-cash~~under ~~consideration,~~the ~~contract~~credit ~~modifications~~line. atThe ~~transition,~~ASU ~~completed~~applies ~~contracts~~to atall ~~transition~~entities and ~~how~~is ~~guidance~~effective ~~in Topic~~for ~~606~~public isbusiness ~~retrospectively~~entities ~~applied.~~for ~~The~~annual ~~amendments~~periods beginning doafter ~~not~~December ~~change~~15, ~~the~~2015, ~~core~~and ~~principle~~interim ofperiods ~~the~~thereafter, ~~guidance~~with inearly ~~Topic~~adoption ~~606~~permitted. The ~~effective dates~~guidance ~~are~~should ~~the~~be ~~same~~applied on asa ~~those~~retrospective ~~for Topic 606~~basis. The Company ~~has~~did not ~~yet~~have ~~determined~~any ~~the~~significant impact ~~of ASU~~upon ~~2016-12 on its consolidated financial statements~~adoption.

~~In August 2016, the~~ FASB ~~issued~~ ASU ~~No. 2016~~2015-1517, ~~Statement~~“Income Taxes Balance Sheet Classification of ~~Cash~~Deferred ~~Flows~~Taxes” ~~(Topic~~was ~~230):~~issued ~~Classification~~in ofNovember ~~Certain~~2015. ~~Cash~~This ~~Receipts and~~requires ~~Cash~~entities ~~Payments,~~to inclassify andeferred ~~effort~~tax toliabilities and ~~reduce~~assets ~~the~~as ~~diversity~~noncurrent ofin ~~how~~a ~~certain~~classified ~~cash~~statement ~~receipts~~of financial position and ~~cash~~applies ~~payments~~to ~~are~~all ~~presented~~entities ~~and~~that ~~classified in~~present ~~the~~a classified statement of ~~cash~~financial ~~flows~~position. ~~The~~For ~~amendments~~public ofentities, this ~~ASU~~update ~~are~~is effective for ~~fiscal~~financial ~~years~~statements issued for annual periods beginning after December 15, ~~2017~~2016, and interim periods within those ~~fiscal~~annual ~~years~~periods. ~~Early adoption is permitted.~~ The Company ~~has~~does not ~~yet~~anticipate ~~determined~~a ~~the~~ significant impact ~~of ASU 2016-15~~upon ~~on its consolidated financial statements~~adoption.

~~In October 2016, the~~ FASB ~~issued~~ ASU No 2016-1613, “Financial Instruments - ~~Income~~Credit ~~Taxes:~~Losses ~~Intra-Entity~~(Topic ~~Transfers~~326)” ofwas ~~Assets~~issued ~~Other~~in ~~Than~~June ~~Inventory~~2016. This ASU ~~2016-16 will~~amends ~~require~~ the ~~tax~~Board’s ~~effects~~guidance ofon ~~intercompany~~the ~~transactions, other than sales~~ impairment of ~~inventory,~~financial toinstruments. beUnder ~~recognized~~the ~~currently~~new guidance, ~~eliminating~~ an ~~exception~~entity ~~under~~recognizes ~~current~~as ~~GAAP~~an inallowance ~~which~~its ~~the~~estimate ~~tax effects~~ of ~~intra-entity~~expected ~~asset~~credit ~~transfers~~losses, which ~~are deferred until~~ the ~~transferred~~FASB ~~asset is~~believes ~~sold~~will toresult ain ~~third~~more ~~party~~timely orrecognition ~~otherwise~~of ~~recovered~~such ~~through use~~losses. ~~The~~This ~~guidance~~ASU ~~will~~is be effective for ~~the~~fiscal ~~first~~years ~~interim period of our~~beginning ~~2019~~after ~~fiscal~~December ~~year~~15, ~~with~~2019. ~~early~~Early adoption will be permitted. The Company ~~has~~does not ~~yet~~anticipate ~~determined~~a ~~the~~significant impact ~~of ASU~~upon ~~2016-16 on its consolidated financial statements~~adoption.

~~In January~~ECONOMY ~~2017,~~AND FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has not yet determined the impact of ASU 2017-01 on its consolidated financial statements.INFLATION

~~ECONOMY~~Except as disclosed herein, we have not ~~AND~~experienced ~~INFLATION~~any significant cancellation of orders due to the downturn in the economy and only a small number of customers requested delays in delivery or production of orders in process. Our management believes that inflation has not had a material effect on our results of operations.

~~Except as~~OFF-BALANCE ~~disclosed~~SHEET ~~herein,~~AND weCONTRACTUAL have not experienced any significant cancellation of orders due to the downturn in the economy and only a small number of customers requested delays in delivery or production of orders in process. Our management believes that inflation has not had a material effect on our results of operations.ARRANGEMENTS

~~OFF-BALANCE~~We do not have any off balance sheet or ~~SHEET~~contractual ~~AND~~arrangements ~~CONTRACTUAL~~that ~~ARRANGEMENTS~~are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.

~~We do~~ITEM ~~not~~3. ~~have~~QUANTITATIVE ~~any~~AND ~~off-balance~~QUALITATIVE ~~sheet~~DISCLOSURES orABOUT ~~contractual~~MARKET ~~arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.~~RISK

~~ITEM 3.~~Not ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~applicable.

~~Not applicable~~ITEM 4. CONTROLS AND PROCEDURES

~~ITEM 4.~~Disclosure ~~CONTROLS~~Controls ~~AND~~and ~~PROCEDURES~~Procedures

~~Disclosure~~We carried out an evaluation, under the ~~Controls~~supervision and ~~Procedures~~with the participation of our Company’s Principal Executive Officer and Principal Financial Officer, of the design and effectiveness of our “disclosure controls and procedures” (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, these disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

~~We carried~~The ~~out~~matters aninvolving ~~evaluation,~~internal ~~under the supervision~~ controls and ~~with~~procedures that the ~~participation of our~~ Company’s ~~Principal~~management ~~Executive~~considered ~~Officer and~~to ~~Principal~~be ~~Financial~~material ~~Officer,~~weaknesses ofunder the ~~design~~standards ~~and effectiveness~~ of ~~our~~the ~~“disclosure~~Public ~~controls~~Company Accounting ~~and~~Oversight ~~procedures”~~Board (are as ~~defined under~~follows: ~~Rules 13a-15~~(e1) ~~and~~lack ~~15d-15(e)~~ of ~~the~~a ~~Securities~~functioning ~~Exchange~~audit ~~Act~~committee ofand ~~1934)~~lack as of ~~the~~a ~~end~~majority of ~~the~~outside ~~period covered by this report. Based~~directors on ~~this~~the ~~evaluation,~~Company’s ~~our~~board ~~Principal~~of ~~Executive Officer and Principal Financial Officer concluded that~~directors, asresulting ofin ~~the~~ineffective ~~end~~oversight ofin the ~~period covered~~establishment byand ~~this~~monitoring ~~report,~~of ~~these~~required ~~disclosure~~ internal controls and procedures; ~~were~~(2) ~~not~~inadequate ~~effective~~segregation toof ~~provide~~duties ~~reasonable~~consistent ~~assurance~~with ~~that~~control ~~information required~~objectives; to(3) beinsufficient ~~disclosed~~written inpolicies and ~~our~~procedures ~~Exchange~~for ~~Act~~accounting ~~reports is recorded, processed, summarized~~ and ~~reported~~financial ~~within~~reporting ~~the~~with ~~time~~respect ~~periods~~to ~~specified by~~ the ~~rules~~requirements and ~~forms~~application of ~~the~~US ~~SEC~~GAAP and isSEC ~~accumulated~~disclosure requirements; and ~~communicated~~(4) toineffective ~~management,~~controls ~~including~~over ~~the~~period ~~Principal~~end ~~Executive~~financial ~~Officer~~ disclosure and ~~Principal~~reporting ~~Financial~~processes. ~~Officer,~~The asCompany ~~appropriate~~intends to establish ~~allow~~policies ~~timely~~and ~~decisions~~procedures ~~regarding~~that ~~required~~will ~~disclosure~~remediate the related material weaknesses.

~~The matters~~Changes involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board are as follows: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ~~ineffective~~Internal ~~oversight~~Controls in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over ~~period end financial disclosure and reporting processes.~~Financial ~~The Company intends to establish policies and procedures that will remediate the related material weaknesses.~~Reporting

~~Changes~~ There have been no changes in ~~Internal~~our ~~Controls~~internal controls ~~Over~~over ~~Financial~~financial ~~Reporting~~reporting during our last fiscal three months that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal controls over financial reporting during our last fiscal three months that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.35

36PART II — OTHER INFORMATION

~~PART II~~ITEM —1. ~~OTHER~~LEGAL ~~INFORMATION~~PROCEEDINGS

~~ITEM~~On August 26, 2004, in order to protect 1its legal rights and in the best interest of the shareholders at large, the Company filed, in the Superior Court of California, a complaint alleging breach of contract, rescission, tortuous interference and fraud with Betacorp Management, Inc. ~~LEGAL~~In ~~PROCEEDINGS~~an effort to resolve all outstanding issues, the parties agreed, in good faith, to enter into arbitration in the State of Texas, domicile of the defendants. On August 11, 2006, a judgment was awarded against the Company in the sum of $592,312. A contingency loss of $592,312 was charged to operations during the year ended June 30, 2007. Subsequently, The Company filed a counter lawsuit and was awarded a default judgement in its favor, and as such removed the contingency loss during the year ended June 30, 2016.

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. 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. Litigation

~~On August~~From ~~26,~~time ~~2004, in order~~ to ~~protect~~time, ~~its~~we ~~legal~~may ~~rights~~become ~~and~~ involved in ~~the~~various ~~best~~lawsuits ~~interest~~and oflegal ~~the~~proceedings ~~shareholders~~which atarise ~~large, the Company filed,~~ in the ~~Superior~~ordinary ~~Court~~course of ~~California,~~business. ~~a complaint alleging breach of contract~~However, ~~rescission,~~litigation ~~tortuous~~is ~~interference~~subject ~~and~~to ~~fraud with~~inherent ~~Betacorp Management~~uncertainties, ~~Inc.~~and In an ~~effort~~adverse toresult ~~resolve~~in ~~all~~these ~~outstanding~~or ~~issues,~~other ~~the~~matters ~~parties~~may ~~agreed,~~arise infrom ~~good~~time ~~faith,~~ to ~~enter~~time ~~into~~that ~~arbitration in~~may ~~the~~harm ~~State~~our ~~of Texas, domicile of the defendants~~business. OnWe ~~August~~are ~~11,~~currently not ~~2006,~~aware ~~a judgment was awarded against the Company in the sum~~ of ~~$592,312.~~ ~~The~~any ~~Company~~such ~~believes~~legal ~~the~~proceedings ~~judgment~~that iswe ~~without~~believe ~~merit~~will ~~and has filed an appeal. A contingency loss of $592~~have,~~312~~ ~~was~~individually ~~charged to~~or ~~operations~~in ~~during~~ the ~~year ended June 30~~aggregate, ~~2007. Subsequently, The Company filed~~ a ~~counter~~material ~~lawsuit~~adverse ~~and was awarded a default~~effect ~~judgement~~on inour ~~its favor~~business, ~~and~~financial ascondition ~~such~~or ~~removed~~operating ~~the contingency loss during the year ended June 30, 2016~~results.

~~ITEM~~The Company initiated an action 2against DB in November 2016 seeking declaratory judgment. ~~UNREGISTERED~~ ~~SALES~~After OFthe ~~EQUITY~~execution ~~SECURITIES~~of ~~AND~~the ~~USE~~LLC OFAgreement, ~~PROCEEDS~~both DB and the Company performed their respective duties. The Company caused numerous kiosks to be manufactured for placement in retail stores in accordance with the PSA, maintained and serviced these kiosks. DB provided funds to ProDava for, the production of kiosks and for expenses incurred by the Company in connection with the maintenance of servicing of the kiosks. In total, DB provided sums totaling $6.5 million. In the first quarter of 2016, DB ceased providing the funding required by the LLC Agreement. DB advised The Company that DB was analyzing information and that it would make a determination as to whether it would continue to provide funding in accordance with the LLC Agreement. The Company has been incurring the reimbursable expenses that were to be reimbursed by DB. The LLC Agreement provides that, in the event that DB fails to fund any portion of the total amount is was required to provide in accordance with the terms of the LLC Agreement, the LLC Agreement provides for the recalculation of the parties’ membership interests in ProDava. The Company filed an action in the Supreme Court of the State of New York in New York County (Index No. 656127/2016) to seed to recalculate the ownership percentage of ProDava. DB filed a motion to dismiss and the Company filed an action opposing such motion. The court initially denied the recalculation of the ownership percentage but allowed the Company to proceed to collect monetary damages. Pro Dava and DB filed a counterclaim for breach of contract. The Company believes it has adequate defenses against any claims made by Pro Dava and DB.

~~During the~~On ~~nine~~June ~~months ended March 31~~19, 2017, the Company ~~issued~~received a ~~4,538,966~~letter ~~shares~~from ofan ~~common~~attorney ~~stock~~for inKiosk ~~exchange~~Information ~~for~~Systems ~~consulting~~(“KIS”) ~~services valued~~demanding atpayment of $~~691~~1,~~577~~272,360 ~~out~~for ofthe ~~which~~balance due on kiosks held by KIS including $~~254~~231,~~166~~182 ~~relates~~in tointerest. ~~prior~~We ~~period~~are ~~services~~negotiating with KIS. No suit has been filed and the Company has accrued the full amount of the demand from KIS.

~~During the~~On ~~nine~~September ~~months ended March 31~~5, 2017 the Company ~~issued~~received a 15letter from an attorney representing Rite Aid Hdqtrs. Corp’s (“Rite Aid”),~~124,939~~ ~~shares~~pursuant ofto which Rite Aid indicated its ~~common~~desire ~~stock~~to interminate ~~conversion~~the Point of $1Sales Advertising Agreement (“Agreement”) with the Company. The Company is disputing Rite Aid’s ability to terminate the Agreement. Thereafter,~~555~~ on October 16,~~581~~ ~~debt and~~2017, ~~accrued~~the ~~interest~~Company initiated an arbitration before JAMS.

~~During January~~ITEM ~~2017 the Company settled a prior debt~~2. ~~According~~UNREGISTERED toSALES ~~the~~OF ~~settlement~~EQUITY ~~agreement,~~SECURITIES ~~the~~AND ~~Company~~USE isOF required to issue 400,000 shares of common stock to the recipient. The shares were valued at $48,000 and the Company has recorded the same as expense in the statement of operations for the nine months ended March 31, 2017. PROCEEDS

~~ITEM~~Neither the Registrant nor any person acting 3on its behalf offered or sold the securities of the Company by means of any form of general solicitation or general advertising. ~~DEFAULT~~ No ~~UPON~~services ~~SENIOR~~were ~~SECURITIES~~performed by any purchaser as consideration for the shares issued.

~~None~~ITEM 3. DEFAULT UPON SENIOR SECURITIES

~~ITEM 4~~None. ~~MINE SAFETY DISCLOSURES~~

~~Not applicable.~~36

ITEM 5 4. ~~OTHER~~ ~~INFORMATION~~MINE SAFETY DISCLOSURES

~~None~~Not applicable.

37ITEM 5. OTHER INFORMATION

~~ITEM 6~~None. ~~EXHIBITS~~

31.1		Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS **		XBRL Instance Document
101.SCH **		XBRL Taxonomy Extension Schema Document
101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **		XBRL Taxonomy Extension Label Linkbase Document
101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

ITEM 6. EXHIBITS

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

31.1		Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS **		XBRL Instance Document
101.SCH **		XBRL Taxonomy Extension Schema Document
101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **		XBRL Taxonomy Extension Label Linkbase Document
101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

38** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

~~SIGNATURES~~37

~~In accordance with the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~SIGNATURES

	PROVISION HOLDING, INC.
Dated: May 22, 2017	By:	/s/ Curt Thornton
		Name: Curt Thornton Title: Chief Executive Officer
		(Principal Executive Officer and Principal Financial Officer)

In accordance with the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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 and in the capacities and on the dates indicated:

	PROVISION HOLDING, INC.

Dated: November 28, 2017	By:	/s/ Mark Leonard
	Name:	Mark Leonard
	Title:	Chief Executive Officer

~~/s/ Curt Thornton Curt Thronton Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) May 22, 2017~~38

/s/ Robert Ostrander Robert Ostrander Vice President May 22, 2017

Filing Compare · Provision Holding, Inc.