UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C., 20549


FORM 10-K


(Mark one)

[X]

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year endedMarch31, 2017

OR


[  ]For the fiscal year ended March 31, 2018

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission File Number: 000-55018


For the transition period from _________ to _________


Commission File Number:  000-55018


Holly Brothers Pictures, Inc.

(Exact name of registrant as specified in its charter)

_________________

Nevada

46-2111820

(State or Other Jurisdiction

(I.R.S. Employer

of Incorporation or Organization)

Identification No.)


8221 E. Washington Street, Chagrin Falls, OHNevada

 

4402346-2111820

(AddressState or Other Jurisdiction of principal executive offices)

Incorporation or Organization)

 

(Zip Code)I.R.S. Employer

Identification Number)


(440) 543-4645462 Stevens Ave, #310

Solana Beach, CA 92075

(858) 987-4910

(Address, Including Zip Code, and Telephone Number,

Including Area Code, of Registrant’s telephone number, including area code)Principal Executive Offices)


Securities registered pursuant to Section 12(b) of the Act: None


Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  YesYES [  ]  NoNO [X]


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YesYES [  ]  NoNO [X]


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







Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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).  YesYES [  ]  No [  ]  Not Applicable.NO [X]


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


Indicate by checkmark if disclosurecheck mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of delinquent filers pursuant to Item 405“large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [X]


Exchange Act.


Large accelerated filer   [  ]

Accelerated filer                    [  ]

Non-accelerated filer     [  ][X]

Smaller Reporting Companyreporting company   [X]

(Do not check if a smaller reporting company)

Emerging Growth Companygrowth company   [X]





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 shell company (as defined in Rule 12b-2 of the Exchange Act).  YesYES [  ]  NoNO [X]


The aggregate market value of the Company's common shares ofregistrant’s voting stockequity held by non-affiliates of the Company at July 11, 2017,registrant, computed by reference to the price at which the common stock was last salesold as of $0.97 per-share price quoted on the OTC-BBlast business day of the registrant’s most recently completed second fiscal quarter, was $197,880.


There were 2,710,000approximately $130,000. In determining the market value of the voting equity held by non-affiliates, securities of the registrant beneficially owned by directors, officers and 10% or greater shareholders of the registrant have been excluded. This determination of affiliate status is not necessarily a conclusive determination for other purposes. The number of shares of Common Stock issued andthe registrant’s common stock outstanding as of July 11, 2017.November 30, 2018 was 1,204,000.


















INDEX


TITLE

PAGE

ITEM 1.

Business

6

ITEM 1B.

Unresolved Staff Comments

24

ITEM 2.

Properties

24

ITEM 3.

Legal Proceedings

24

ITEM 4.

Submission of Matters to a Vote of Security Holders

24

ITEM 5.

Market for Common Equity and Related Stockholder Matters

25

ITEM 6.

Selected Financial Data

25

ITEM 7.

Management’s Discussion and Analysis of Financial Condition

26

ITEM 7A.

Quantitative and Qualitative Disclosures about Market Risk

28

ITEM 8.

Financial Statement and Supplementary Data

28

ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

30

ITEM 9A.

Controls and Procedures

30

ITEM 9B.

Other Information

32

ITEM 10.

Directors, Executive Officers and Corporate Governance

33

ITEM 11.

Executive Compensation

36

ITEM 12.

Security Ownership of Certain Beneficial Owners Management and Related Stockholder Matters

37

ITEM 13.

Certain Relationships and Related Transactions and Director Independence

38

ITEM 14.

Principal Accounting Fees and Services

40

ITEM 15.

Exhibits, Financial Statement Schedules

41





FORWARD-LOOKING STATEMENTS


This Annual Report on Form 10-K contains forward-looking statements.  When used in this Annual Report on Form 10-K, the words "may," "could," "estimate," "intend," "continue," "believe," "expect" or "anticipate" and similar expressions identify forward-looking statements.  Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, these plans, intentions, or expectations may not be achieved.  Our actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied, by the forward-looking statements contained in this Annual Report on Form 10-K. Important factors that could cause actual results to differ materially from our forward-looking statements are set forth in this Annual Report on Form 10-K.  Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made.  All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this Annual Report on Form 10-K.  Except as required by federal securities laws, we are under no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.


Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements.  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:


·

inability to raise additional financing for working capital;

·

inability to identify new customers;

·

deterioration in general or regional economic, market and political conditions;

·

the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

·

changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

·

inability to efficiently manage our operations;

·

inability to achieve future operating results;

·

our ability to recruit and hire key employees;

·

the inability of management to effectively implement our strategies and business plans; and

·

the other risks and uncertainties detailed in this report.


In this form 10-K references to "Holly Brothers Pictures, Inc.," "the Company," "we," "us," and "our" refer to Holly Brothers Pictures, Inc.







AVAILABLE INFORMATION


We file annual, quarterly and special reports and other information with the SEC.  You can read these SEC filings and reports over the Internet at the SEC's website at www.sec.gov.  You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm.  Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities.  We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt of a written request to us at Holly Brothers Pictures, Inc., 8221 E. Washington Street, Chagrin Falls, OH44023.



































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TABLE OF CONTENTS



PART I

1

ITEM 1. BUSINESS

1

ITEM 1A. RISK FACTORS

5

ITEM 1B. UNRESOLVED STAFF COMMENTS

11

ITEM 2. PROPERTIES

11

ITEM 3. LEGAL PROCEEDINGS

11

ITEM 4. MINE SAFETY DISCLOSURE

11

PART II

12

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

12

ITEM 6. SELECTED FINANCIAL DATA

13

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

13

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

16

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

16

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

16

ITEM 9A. CONTROLS AND PROCEDURES

17

ITEM 9B. OTHER INFORMATION.

17

PART III

18

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

18

ITEM 11. EXECUTIVE COMPENSATION

19

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

20

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

21

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

22

PART IV

23

ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS

23

SIGNATURES

25









iii




CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


The Securities and Exchange Commission, referred to herein as the SEC, encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. Certain statements that we may make from time to time, including, without limitation, statements contained in this report constitute “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.


We make forward-looking statements under the “Risk Factors,” “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this report. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “should,” “would,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described under “Risk Factors.”


While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Other sections of this report describe additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very highly regulated, competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.


Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this report to conform our prior statements to actual results or revised expectations, and we do not intend to do so.


PART I


References in this Annual Report on Form 10-K to the “Company”, “we”, “our” and “us” are used herein to refer to Holly Brothers Pictures, Inc.


ItemITEM 1. BusinessBUSINESS


HistoryOverview


Commencing in February 2018, through our subsidiary, Power Blockchain LLC (“Power Blockchain”), we began operating a start-up venture that specializes in blockchain mining for the Bitcoin network, the computer intensive process required to verify and Organizationrecord the digital exchange of money for crypto-currency transactions. In exchange for processing these complex mathematical equations, we will be rewarded with digital currency. We have yet to commence meaningful operations, and will require new capital investment to execute upon our business strategy.


Our business plan is to build a cryptocurrency mining operation, operating specialized computers (also known as “crypto-currency miners") that generate cryptocurrency (primarily Bitcoin).  A bitcoin is an asset that can be transferred among parties via the Internet, but without the use of a central administrator or clearing agency. The term decentralized is often used in descriptions of bitcoin, in reference to bitcoin’s lack of necessity for administration by a central party.




As further indicated below (see “Our Operations”), the results of our initial crypto-currency mining operations have been inconclusive to date, therefore, we are currently evaluating our strategic alternatives going forward.


Our Industry


Bitcoin mining utilizes a combination of computer hardware and software to accomplish a dual purpose: (i) to verify the authenticity and validity of bitcoin transactions (i.e. the movement of bitcoin between addresses), and (ii) the creation of new bitcoin. Bitcoin miners do not need permission to participate in verifying transactions.  Rather, miners compete to solve a prescribed and complicated mathematical calculation using computers dedicated to the task.  Rounds of the competition repeat approximately every ten minutes. In any particular round of the competition, the first miner to find the solution to the mathematical calculation is the miner who gains the privilege of announcing the next block to be added to the blockchain.


A new block that is added to the blockchain serves to take all of the recent-yet-unconfirmed transactions and verify that none are fraudulent.  The recent-yet-unconfirmed transactions also generally contain transaction fees that are awarded to the miner who produces the block in which the transactions are inserted, and thereby confirmed.  The successful miner also earns the so-called block reward, an amount of newly created bitcoin. Thus, bitcoin miners are financially incentivized to conduct their work.  The financial incentives received by bitcoin miners are a vital part of the process by which the Bitcoin network functions.


Upon successfully wining a round of the competition (winning a round is referred to as mining a new block), the miner then transmits a copy of the newly-formed block to peers on the Bitcoin network, all of which then update their respective copies of the blockchain by appending the new block, thereby acknowledging the confirmation of the transactions that had previously existed in an unconfirmed state. A recipient of bitcoin must wait until a new block is formed in order to see the transaction convert from an unconfirmed state to a confirmed state.


Bitcoin’s mining process is the innovation that allows it to function without a central arbiter. Transactions are initially in an unconfirmed state because they must be checked for any attempt at a so-called double-spend.  A double spend would occur if Party A were to send the same bitcoin both to Party B and to Party C.  No payment system can be sound if it permits double spends.  In a payment system with a central administrator (i.e., payments sent through a bank), the job of preventing double spends falls to the central administrator.  Bitcoin’s mining process is the mechanism by which it prohibits double spends yet remains without a central administrator.


Party A could attempt a double-spend - the sending of the same bitcoin both to Parties B and C - by creating two digitally signed transactions. The first transaction would propose to transfer the bitcoin from Party A to Party B and the second to Party C.  Party A would then broadcast both transactions to the Bitcoin network, and all participating computers would generally see both transactions in a matter of seconds.  The transactions would, initially, be in an unconfirmed state, and no participant on the Bitcoin network would be able to know which of the two transactions to verify and which to reject.  Participants would, however, know that only one of the transactions can be permitted to exist, and that all participants need somehow to agree which transaction to permit and which to reject.


When a miner successfully mines a new block, it eliminates the attempted double spend by choosing only one of the unconfirmed transactions and discarding the other. Thus, the miner serves as the arbiter in resolving any attempted double spends. The miner’s choice of which transaction to include in the block can be arbitrary. The only requirement, for the soundness of the system, is that only one of the two transactions is included.  When the miner broadcasts the newly created block to participants in the Bitcoin network, each participant will know which of the two transactions is valid and which is invalid.  If the miner were to attempt to include both transactions in the block, participants on the Bitcoin network would immediately know that the block is invalid, and they would discard it.  From a systemic perspective, the miner’s most important function is to be an arbiter in the case of any attempted double spend, thus maintaining the soundness of the Bitcoin network.





Beyond being the arbiter in case of an attempted double spend, miners also serve to generate newly created bitcoin. A miner’s probability of successfully generating a new block is proportional to the amount of computing power the miner employs as a proportion of the total amount of computing power dedicated to mining. Although the aggregate amount of computing power devoted to bitcoin mining tends to increase over time, the quantity of bitcoin generated each day does not. By design, the supply of bitcoin is finite, and the pace at which bitcoin is generated is fixed, and set to decrease by half every four years on a defined schedule.


If an individual miner adds computing power to its mining operation, it will increase its probability of successfully generating new blocks, and simultaneously reduce the probability of other miners generating new blocks, but the overall quantity of new blocks generated will not increase. By intention, bitcoin mining is setup to be a race amongst miners in which miners are incentivized to add computing power over time, in order to protect themselves from the consequences of increases in computing power by other miners. Since the number of blocks generated is fixed, a miner can gain only a temporary advantage by adding computing power, and the advantage dissipates as other miners add computing power to their own respective mining operations.


The race among miners to add processing power is a feature of Bitcoin that keeps the Bitcoin network secure. The protocol underlying Bitcoin operates safely so long as no miner gains control of more than 50 percent of the mining processing power.  If a miner gains control of more than 50 percent of mining processing power, the network will still operate safely, so long as the miner has no nefarious goals.  The addition of mining processing power makes it continuously more difficult for a nefarious miner to gain control of more than 50 percent of mining processing power.


Our Operations


On February 14, 2018, we were granted permission from the Kingdom of Lesotho to conduct crypto-currency mining operations in Lesotho.  As part of this permission, we were permitted to operate by the Lesotho Electricity Company and we negotiated an electric rate agreement.  As of the date of this report, we owned 70 crypto-currency miners and Power Control Units (PCU), 50 of which have been installed in Lesotho, 10 of which are in customs in South Africa, and 10 of which are in storage in South Africa.  We commenced mining operations in Lesotho but have not recorded any revenues to date.


We operate from a rented facility capable of hosting mining operations.  We secured this modest size space on an as needed basis without a long term lease agreement.   We have completed a space infrastructure build out to support our mining operations, such as electricity connections, sound proofing, air conditioning, de-humidification, and IT networking and engaged a manager for site supervision.


Due to various economic and market conditions, which have been largely out of our ability to control effectively, the results of our initial crypto-currency mining operations have been inconclusive to date.  Therefore, we are currently evaluating our strategic alternatives going forward.


Corporate History


We were incorporated on February 22, 2013 as PowerMedChairs, a Nevada corporation. OurSince our incorporation until February 2018, our plan of operation iswas to re-build primarily electric/power wheelchairs in disrepair. We plan to market our services to repair and sell wheelchairs. Electric wheelchairs are for people who need support for their upper body and who are unable to move a manual chair with their arms and hands. The electric wheelchair consists of a number of mechanical and electric components that need to be replaced every few year. In most cases, it is much more cost effective to repair a broken electric wheelchair than replace the entire unit. The Company plans to market its services to doctors, therapists, home health care agencies in the Ohio, Eastern Indiana and Northern Kentucky areas. On June 2, 2017, the Companywe changed itsour name to Holly Brothers Pictures, Inc. by filing a CertificateAs discussed above, in February 2018, we ceased this business and commenced our blockchain mining business through our acquisition of Amendment with the Nevada Secretary of State.


Implications of Being an “Emerging Growth Company


As a public reporting company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we:


·

are not required to obtain an attestation and report from our auditors on our managements assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

·

are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as compensation discussion and analysis);

·

are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the say-on-pay,” “say-on-frequency and say-on-golden-parachute votes);

·

are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

·

may present only two years of audited financial statements and only two years of related Managements Discussion & Analysis of Financial Condition and Results of Operations, or MD&A;

·

are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and

·

are exempt from any PCAOB rules relating to mandatory audit firm rotation and any requirement to include an auditor discussion and analysis narrative in our audit report.




6



We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.


Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules. For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.


Under the JOBS Act, we may take advantage of these reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, or such earlier time that we no longer meet the definition of an emerging growth company. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.0 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. Furthermore, under current SEC rules we will continue to qualify as a “smaller reporting company” for so long as we (1) have a public float (i.e., the market value of common equity held by non-affiliates) of less than $75 million as of the last business day of our most recently completed second fiscal quarter; or (2) for so long as we have a public float of zero, have annual revenues of less than $50 million during our most recently completed fiscal year.


Investors should be aware that we will be subject to the "Penny Stock" rules adopted by the Securities and Exchange Commission, which regulate broker-dealer practices in connection with transactions in Penny Stocks. These regulations may have the effect of reducing the level of trading activity, if any, in the secondary market for our stock, and investors in our common stock may find it difficult to sell their shares.  Please see the disclosures under "Penny Stock Regulations" on Page 23 of this Prospectus for more information.


Business of Issuer


Holly Brothers Pictures, Inc. plans to rebuild primarily electric/power wheelchairs in disrepair. Electric wheelchairs are for people who need support for their upper body and who are unable to move a manual chair with their arms and hands. A power chair has a more supportive seat and often a headrest for people who are not able to hold themselves upright. The electric wheelchair consists of a number of mechanical and electric components that need to be replaced every few year. In most cases, it is much more cost effective to repair a broken electric wheelchair than replace the entire unit.





7



Products and Services


A wheelchair is a chair with wheels, designed to be a replacement for walking. The device comes in variations where it is propelled by motors or by the seated occupant turning the rear wheels by hand. Often there are handles behind the seat for someone else to do the pushing. Wheelchairs are used by people for whom walking is difficult or impossible due to illness (physiological or physical), injury, or disability.


Everyday manual wheelchairs come in two major designs-folding or rigid. The rigid chairs, which are increasingly preferred by active users, have permanently welded joints and many fewer moving parts. This reduces the energy required to push the chair by eliminating many points where the chair would flex as it moves. Welding the joints also reduces the overall weight of the chair. Rigid chairs typically feature instant-release rear wheels and backrests that fold down flat, allowing the user to dismantle the chair quickly for storage in a car.


The primary design of a rigid wheelchair is to fit the body of the user. The primary design of a folding wheelchair is to fold. Folding wheelchairs are generally boxy, while rigid wheelchairs conform to the shape of the body. For example, with a rigid chair, one can taper the design to conform to the body shape (large at the hips, narrow at the knees) which can hold the users’ body in place. Also the aluminum between the knees and footrest can be tapered (wider at the knees, narrow at the feet) holding the feet in place. With a folding chair, you cannot taper it or it would not close completely.


Who is the right customer for a rigid wheelchair? Someone who:


·

Has good upper body strength

·

Wants to be independent

·

Is young and active (5-50 years)

·

Sees their wheelchair as part of their body and not just a piece of furniture


Who is the right customer for a folding wheelchair? Someone who:


·

Will never be independent or has no upper body strength

·

Has minimal upper body strength or coordination

·

Is very young (0-4) or older (60-90 years)


Rigid wheelchairs generally have more configurations and adjustments then folding chairs. Most folding wheelchairs have limits in their configurations and adjustments. For example, many folding wheelchairs do not allow for adjusting the angle between the backrest and the seat.


Many rigid models are now made with ultra-light materials such as aircraft aluminum and titanium. Another innovation in rigid chair design is the installation of polymer shock absorbers, which cushion the bumps over which the chair rolls. These shock absorbers may be added to the front wheels or to the rear wheels, or both. Rigid chairs also have the option for their rear wheels to have a camber. Wheels can have a camber, or tilt, which angles the tops of the wheels in toward the chair. This allows for better propulsion by the user which is desired by long-term users. Sport wheelchairs have large camber angles to improve stability.



8



An electric-powered wheelchair is a wheelchair that is moved via the means of an electric motor and navigational controls, usually a small joystick mounted on the armrest, rather than manual power. For users who cannot manage a manual joystick, headswitches, chin-operated joysticks, sip-and-puff or other specialist controls may allow independent operation of the wheelchair.


A power-assisted wheelchair is a recent development that uses the frame & seating of a typical manual chair while replacing the standard rear wheels with wheels that have small battery-powered motors in the hubs. A floating rim design senses the pressure applied by the users push & activates the motors proportionately. The result isa convenient, small size & light-weight manual chair providing motorized assistance for rough/uneven terrain & steep slopes that would otherwise be difficult or impossible to navigate, especially by those with limited upper-body function.


We plan to rebuild wheelchairs in disrepair. These wheelchairs can be highly customized for the user's needs. Such customizations may encompass the seat dimensions, height, seat angle (also called seat dump or squeeze), footrests, leg rests, front caster outriggers, adjustable backrests and controls. Additional customizations can include various optional accessories, such as anti-tip bars or wheels, safety belts, adjustable backrests, tilt and/or recline features, extra support for limbs or neck, mounts or carrying devices for crutches, walkers or oxygen tanks, drink holders, and clothing protectors. Based on management’s past experience with A&A Medical Supply in repairing wheelchairs, the time needed to rebuild a wheelchair will take us 5-6 weeks, which includes the time needed to obtain prior approval from the patient’s insurance company. The basic cost to rebuild a wheel chair can be $2,000. If we were to add special features (tilt or recline chair) to the wheelchair, the price could increase by an additional $3,000.


Recent technological advances are improving wheelchairs and its technology. Some wheelchairs, incorporate gyroscopic technology and other advances, enabling the chair to balance and run on only two of its four wheels on some surfaces, thus raising the user to a height comparable to a standing person. They can also incorporate stair-climbing and four-wheel-drive feature motorized assists for hand-powered chairs are becoming more available and advanced.


There are three common frame failure points on a manual wheelchair.


1.

The Cross-Brace. The cross-bracebeneath the wheelchair is a prime site for failure. Many wheelchairs have two circular or square cross-braces that are connected by a bolt. Fatigue cracks can form near that bolt's hole on either cross-brace and ultimately cause the brace to fail. Cracks can also start at the welds that connect the cross-braces to the horizontal seat tubes. This renders the wheelchair inoperable and the entire cross-brace must then be replaced.


2.

The Caster Connections. Another common failure point is where the casters connect to the frame at the front of the wheelchair. Casters are connected to the frame either by bolts or welds. The bolt holes are areas of high stress concentrations and can often crack. Generated by everyday use, the forces or pressure on the casters are transmitted directly to the connecting bolts. This places a high amount of stress on the frame, which is already weakened by the bolt hole. Welds are also commonly used to attach the caster to the frame. Failures at or around the welds are common. A failure of this type renders the wheelchair useless and a new frame must be installed.




3.

The seat/backrest interface. The tubing that forms the area that holds the wheelchair seat connects to the tubing that forms the backrest. This is most often accomplished through welding or brazing. Brazing means a filler material was used to join two base materials. The filler material is different than the base materials. It has a lower melting point. Unlike normal welding, the base material does not reach its melting point during the process. This prevents changes in the properties of the base materials due to heating. During propulsion, the cyclic or repetitive force exerted on the backrest is transmitted to this joint. When the chair is propelled, it rocks back and forth against the backrest. This force is exerted on the backrest during every propulsion stroke. Because of this, high stress concentrations can develop at the weld and lead to failure. When this happens, the wheelchair becomes inoperable and a new frame is required.


Industry Background


An estimated 1.6 million Americans residing outside of institutions use wheelchairs, according to 199495 data from the National Health Interview Survey on Disability (NHIS-D) based on a study undertaken in 2002 and which relied upon data from 1994-1995. (A description of the NHIS-D and of the methods used in this analysis can be found in the report on which this abstract is based: Kaye, H.S., Kang, T., and LaPlante, M.P. 2000. Mobility Device Use in the United States. Disability Statistics Report 14. Washington, D.C: U.S. Department of Education, National Institute on Disability and Rehabilitation Research.) Most (1.5 million) use manual devices, with only 155,000 people using electric wheelchairs. Wheelchair users are among the most visible members of the disability community, experiencing among the highest levels of activity limitation and functional limitation and among the lowest levels of employment.


The proportion of the population using wheelchairs increases sharply with age by far the highest rates are found among the elderly population: 2.9 percent of those aged 65 or older use wheelchairs, or about 900,000 people. Women comprise a significant majority (58.8 percent) of wheelchair users, with 0.7 percent of the female population using a manual or electric wheelchair, compared to 0.5 percent of males. Much of the difference in rates is explained by the greater average longevity of women, coupled with the much higher rates of mobility device use among the elderly.


According to the U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, report entitled “Americans With Disabilities: 2005,” issued December 2008, people aged 15 and older, 27.4 million (11.9 percent) had difficulty with ambulatory activities of the lower body.. About 22.6 million people (9.8 percent) had difficulty walking a quarter of a mile; 12.7 million were not able to perform this activity. About 21.8 million people or (9.4 percent) had difficulty climbing a flight of stairs; 7.4 million of them were not able to do it at all. Roughly 3.3 million people (1.4 percent) used a wheelchair or similar device and 10.2 million (4.4 percent) used a cane, crutches, or walker to assist with mobility.Power Blockchain described below.







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Wheelchair ReimbursementOn February 1, 2018, we entered into an exchange agreement pursuant to which we acquired 100% of the equity interests in Power Blockchain from the owners of Power Blockchain in exchange for the issuance for convertible notes in aggregate principal amount of $2.2 million. The notes: (i) mature five years from the date of issuance: (ii) accrue interest at 5% per annum; (iii) require repayment in four equal installments on the second, third, fourth and fifth anniversary dates after issuance; and (iv) are convertible at the option of the holder into our common stock at a conversion price of $0.13 per share. Upon consummation of the exchange agreement, Power Blockchain became our wholly owned subsidiary.  Power Blockchain had outstanding debt obligations in aggregate principal amounts of $570,000, accruing interest at rates between 12-13% per annum, which obligations were overdue and in default. In March 2018, the Power Blockchain debt holders commenced a lawsuit against us in San Diego Superior Court, in connection with outstanding and overdue debt obligations. On March 22, 2018, we agreed to enter into a conditional settlement with the debt holders. The settlement agreement calls for the periodic issuance to the debt holders, subject to certain ownership and temporal limitations, of an aggregate of up to 3,078,000 and 3,157,000 shares respectively, exempted from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, and the California Corporations Code Section 25017(f)(3), as amended, after a fairness hearing evaluating the relative merits of the proposed agreement, which was held and approved on April 2, 2018.


The companyCompetition


In cryptocurrency mining, companies, individuals and groups generate units of cryptocurrency through mining. Miners can range from individual enthusiasts to professional mining operations with dedicated data centers.  Miners may organize themselves in mining pools. A mining pool is directly affectedcreated when cryptocurrency miners pool their processing power over a network and mine transactions together. Rewards are then distributed proportionately to each miner based on the work power contributed. Mining pools became popular when mining difficulty increased. Mining pools allow miners to pool their resources so they can generate blocks quickly and receive rewards (i.e., fractions or units of cryptocurrency) on a consistent basis instead of mining alone where rewards may not be received for long periods. We compete or may in the future compete with other companies that focus all or a portion of their activities on owning or operating cryptocurrency exchanges, developing programming for the blockchain, and mining activities.  At present, the information concerning the activities of these enterprises is not readily available as the vast majority of the participants in this sector do not publish information publicly or the information may be unreliable.


Government Regulation


Government Regulation of blockchain and cryptocurrency is largely non-existent at present and is being actively considered by government regulation and reimbursement policies in virtually every State in which the company operates. In the United States federal government via a number of agencies (SEC, CFTC, Federal Trade Commission and the growth of health care costs has increased at rates in excessFinancial Crimes Enforcement Network the U.S. Department of the rate of inflationTreasury) and in other countries. State government regulations also may apply to certain activities such as a percentage of GDP for several decades. A number of efforts to controlcryptocurrency exchanges (bitlicense, banking and money transmission regulations) and other activities in which we participate or may participate in the federal deficitfuture.  Other regulatory bodies are governmental or semi-governmental and have impacted reimbursement levels for government sponsored health care programs, and private insuranceshown an interest in regulating or investigating companies and state Medicaid programs peg their reimbursement levels to Medicare.engaged in the blockchain or cryptocurrency business.


Reimbursement guidelinesBlockchain and cryptocurrency regulations are in a nascent state with agencies investigating businesses and their practices, gathering information, and generally trying to understand the home health care industryrisks and uncertainties in order to protect investors in these businesses and in cryptocurrencies generally.  Regulations will certainly increase, in many cases, although it is presently not possible to know how they will increase, how regulations will apply to our businesses, or when they will be effective.  Various bills have a substantialalso proposed in congress for adoption related to our business which may be adopted and have an impact on us.  As the natureregulatory and type of equipment an end-user can obtainlegal environment evolves, we may become subject to new laws, further regulation by the SEC and thus, affect the product mix, pricingother agencies, including for our mining and payment patterns of the company’s customers who are medical equipment users.  Management believes its technical expertise will allow it to respond to ongoing regulatory reimbursement changes. However, the issues described above will likely continue to have significant impacts on the pricing of the company’s products.other activities.


Medicare Wheelchair Reimbursement


Manual wheelchairs are considered "Durable Medical Equipment" under Medicare guidelines. Most of the cost of a wheelchair will be covered under your Original Medicare Part B plan. A wheelchair user will have to pay 20 percent and meet your yearly Part B deductible.

In order for a wheelchair to be covered under Medicare, the requirements are:


·

It must be medically necessary, as determined by a doctor

·

A physician has documented this information for Medicare

·

The patient has a "Certificate of Necessity" (like a prescription)

·

The patient must purchase your wheelchair from a Medicare-approved supplier


Prior Approval


Before the Company can begin work on rebuilding a wheelchair, it must contact the patient’s insurance provider.  The insurance provider, based on the age, condition, and cost to repair the wheelchair will make a decision to approve the repairs. In many cases, where the power wheelchair is more than five (5) years old, the insurance carrier will not approve the repairs and recommend the patient purchases a new wheelchair.


Marketing Strategy


Our sole officer/director is also CEO of A&A Medical Supply, LLC, based at the same address as our company in Ohio. A&A Medical Supply, LLC is a growing medical supply company that services in the medical supply needs to patients in the Cleveland, OH area. Holly Brothers Pictures, Inc. entered into a separate Service Agreement with A&A Medical Supply to rebuild the wheelchairs brought into its shop for repairs. Currently, A&A Medical Supply receives approximately thirty (30) broken wheelchairs per month. There are no assurances, this number of repairs will remain at this level.






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Additionally, the Company plans to market its services to doctors, therapists, home health care agencies in the Ohio, Eastern Indiana and Northern Kentucky areas. It is these health care provides that are the first to recognize a wheelchair in disrepair.  The marketing to these individuals, will take place by sending them sales brochure on what the Company can do, and speaking directly with these providers.


If the Company’s can move its business forward, management would consider building and marketing its own branded wheelchair.


COMPETITIONIntellectual Property


We actively use specific hardware and software for our cryptocurrency mining operation.  In certain cases, source code and other software assets may be subject to an open source license, as much technology development underway in this sector is open source. For these works, we intend to adhere to the terms of any license agreements that may be in place. We do not currently own, and do not have any current plans to seek, any patents in connection with our existing and planned blockchain and cryptocurrency related operations.  We do expect to rely upon trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights and expect to license the use of intellectual property rights owned and controlled by others.


Employees


As of March 31, 2018, we had no permanent employees and two part-time contractors/consultants.


Legal Proceedings


We are not subject to any litigation.


ITEM 1A. RISK FACTORS


The following risks and uncertainties should be carefully considered. If any of the following occurs, our business, financial condition or operating results could be materially harmed. An investment in our securities is speculative in nature, involves a high degree of risk and should not be made by an investor who cannot bear the economic risk of its investment for an indefinite period of time and who cannot afford the loss of its entire investment.


Risks Relating to Our Business


We have a history of operating losses, and we may not be able to achieve or sustain profitability; we have recently shifted to an entirely new business and may not be successful in this new business.


We are not profitable and have incurred losses since our inception.  We expect to continue to incur losses for the foreseeable future, and these losses could increase as we continue to work to develop our business.  We were previously engaged in pursuing the business of re-building wheelchairs in disrepair and the sales of wheelchairs and were not successful in that business.  In January 2018, we determined to instead pursue a blockchain and digital currencyrelated business. Our initial efforts in this new business will focus primarily on bitcoin mining. Currently, our only operations are at our bitcoin mining facility in Lesotho, and that mine is still in a relatively early stage of development. Our current strategy is new and unproven, is in an industry that is itself new and evolving, and is subject to the risks discussed below.  This strategy, like our prior ones, may not be successful, and we may never become profitable.  Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.


As we attempt to expand our operations, our costs will grow rapidly, which could seriously harm our business or increase our losses.


Our mining operations are costly, and we expect our expenses, including those related to acquisitions, to grow in the future. This expense growth will continue if we are able to acquire additional crypto-currency miners, which will require more computing infrastructure, and as we hire additional employees to support potential future growth. Our costs will be based on development growth of operations and may not be offset by a corresponding growth of our revenue. Our expenses may be greater than we anticipate, and our investments to make our business more efficient may not succeed and may outpace monetization efforts.  Increases in our costs without a corresponding increase in our revenue would increase our losses and could seriously harm our business and financial performance.





We may be unable to raise additional capital needed to grow our business.


We will likely continue to operate at a loss, at least until our business becomes established, and we expect to need to raise additional capital to expand our operations and pursue our growth strategies, including potential acquisitions of complementary businesses, and to respond to competitive pressures or unanticipated working capital requirements.  We may not be able to obtain additional debt or equity financing on favorable terms, if at all, which could impair our growth and adversely affect our existing operations.  If we raise additional equity financing, our shareholders may experience significant dilution of their ownership interests, and the per share value of our common stock could decline. Furthermore, if we engage in additional debt financing, the holders of debt would have priority over the holders of common stock, and we may be required to accept terms that restrict our ability to incur additional indebtedness and take other actions that would otherwise be in the interests of our shareholders, forcing us to maintain specified liquidity or other ratios. We may not be able to compete with other companies, some of whom have greater resources and experience.


We may not be able to compete successfully against present or future competitors.


We do not have the resources to compete with our existing competitors or with any new competitors.  We intend to compete with many other competitors who perform wheelchair repairs, alllarger providers of similar services at this time. The cryptocurrency industry has attracted various highprofile and well-established operators, most of which have significantlysubstantially greater personnel,liquidity and financial and managerial resources than we do. With the limited resources we have available, we may experience great difficulties in expanding our operations. Competition from existing and future competitors could result in our inability to secure expand our business. This competition from other companiesentities with greater resources and reputationsexperience may result in our failure to maintain or expand our business.business, as we may never be able to successfully execute our business plan.


Moreover,Our rented facility in Lesotho that houses our equipment and is our sole facility may experience damages, including damages that are not covered by insurance.


Our current and sole operational facility is in Lesotho and is subject to a variety of risks including:


·

the presence of construction or repair defects or other structural or building damage;

·

any noncompliance with or liabilities under applicable environmental, health or safety regulations or requirements or building permit requirements;

·

any damage resulting from natural disasters; and

·

claims by employees and others for injuries sustained at our properties.


For example, a mine could be rendered inoperational, temporarily or permanently, as the demand for wheelchairs increases, new companies may enter the market and the influxa result of added competition will pose an increased risk to our Company. Increased competition may lead to price wars, which would harm us since we would be unable to compete with companies with greater resources. In addition, increased competition and increased demand may create a stressfire or other natural disaster or by a terrorist or other attack on the wheelchair manufacturers, output capabilities, which may lead to increased prices, which would also harm our ability to compete in the wheelchair market.


INTELLECTUAL PROPERTY


We rely or plan to rely on a combination of trademark, copyright, trade secretmine. The security and patent laws in the United States, as well as confidentiality procedures and contractual provisionsother measures we take to protect our wheelchair proprietary repair methodologies and any new wheelchair brand we might develop in the future. We currently have no pending patents nor trademarks.


From time to time, we expect that we may encounter disputes over rights and obligations concerning intellectual property. Also, the efforts management has taken to protect its proprietary rightsagainst these risks may not be sufficientsufficient. Additionally, our mines could be materially adversely affected by a power outage or effective. Any significant impairmentloss of its intellectual property rights could harmaccess to the existing business,electrical grid or loss by the brandgrid of cost-effective sources of electrical power generating capacity.  Given the power requirement, it would not be feasible to run miners on back-up power generators in the event of a power outage.  Our insurance does not cover any interruption of our mining activities, and reputation, andmay not be adequate to cover the abilitylosses we suffer as a result of any of these events.  In the event of an uninsured loss, including a loss in excess of insured limits, at any of the mines in our network, such mines may not be adequately repaired in a timely manner or at all and we may lose some or all of the future revenues anticipated to be derived from such mines. The potential impact on our business to compete onis currently magnified because we are only operating a going forward basis. Also, protecting our intellectual property rights could be costly and time consuming.single mine.


EmployeesSince our only facility is in Lesotho, we are subject to risks associated with international operations.


We currently has no employees, our CEO performs all duties relatedAs a company that operates in a foreign country, we are subject to the operationsa number of this business. We also plan to utilize additional independent contractors on a part-time/as needed basis.particular risks, including:


·

exposure to local economic conditions;

·

potential adverse changes in the diplomatic relations of foreign countries with the U.S.;

·

hostility from local populations;





RISK FACTORS·

restrictions and taxes on the withdrawal of foreign investments and earnings;

·

imposition of government policies and regulations against business and energy usage by foreigners;

·

foreign investment restrictions or requirements;

·

limitations on our ability to legally enforce our contractual rights in foreign countries;

·

lack of protection of intellectual property rights;

·

regulations prohibiting or restricting the mining of cryptocurrencies;

·

conflicts between local laws and U.S. laws;

·

exposure to currency fluctuations;

·

withholding and other taxes on remittances and other payments by our local subsidiary; and

·

changes in and application of foreign taxation structures.


RISK FACTORS RELATING TO OUR COMPANYAny international business operations will also be subject to various anti-corruption laws and regulations, including restrictions imposed by the Foreign Corrupt Practices Act (FCPA).  The FCPA and similar anticorruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or generating business.  We cannot provide assurance that our internal controls and procedures will protect us from the reckless or criminal acts that may be committed by our employees or third parties with whom we work.  If we are found to be liable for violations of the FCPA or similar anti-corruption laws in international jurisdictions, criminal or civil penalties could be imposed on us.


1. SINCE WE ARE A DEVELOPMENT STAGE COMPANY, THERE ARE NO ASSURANCES THAT OUR BUSINESS PLAN WILL EVER BE SUCCESSFUL.


FromRegulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our inception on February 22, 2013 through March 31, 2017, our audited financials show we have generated no revenues and we have incurred a net loss of $75,080.  As of March 31, 2017, our audited financials show we had $7,395 in cash on hand for total current assets of $7,395, total liabilities of $30,300, an accumulated deficit of $(75,080) and total stockholders' deficit of $(22,905).  We are subject to all of the risks inherent in the establishment of a new business, enterprise. Our operations have been limited to organizational, start-up, and capital formation activities. Our plan of operation is to re-build wheelchairs in disrepair, market our services and sell wheelchairs. There can be no assurance that we will ever achieve any revenuesprospects or profitability. The revenue and income potential of our proposed business and operations is unproven, and the lack of operating history makes it difficult to evaluate the future prospects of our business. Accordingly, our prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a new business, and our Company is a highly speculative venture involving a high degree of financial risk.


2. WE EXPECT LOSSES IN THE FUTURE BECAUSE WE HAVE INSUFFICIENT REVENUE TO OFFSET LOSSES.operations.


As wecryptocurrencies have not generated any revenues, we are expecting losses overgrown in both popularity and market size, governments around the next 12 months because we do notworld have sufficient revenuesreacted differently to offset the expenses associatedcryptocurrencies, with the developmentcertain governments deeming them illegal, and implementation of our business plan. We cannot guarantee that we will ever be successfulothers allowing their use and trade but, in generating revenuessome jurisdictions, such as in the future. We recognize that if we are unableU.S., subject to generate revenues, we will not be ableextensive, and in some cases overlapping, regulatory requirements, as well as unclear and evolving requirements.  Ongoing and future regulatory actions may impact our ability to earn profitscontinue to operate, and such actions could affect our ability to continue as a going concern or continue operations. There is no history uponto pursue our new strategy at all, which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unable to reverse our losses, we will have to discontinue operations.


3. WE EXPECT LOSSES OVER THE NEXT YEAR AND WE WILL NEED TO OBTAIN ADDITIONAL CAPITAL FINANCING IN THE FUTURE.


We expect to generate losses until such a time when we can become profitable in the distribution and selling of wheelchairs. As of the date of this filing, we cannot provide an estimate of the amount of time it will take to become profitable.


We will be required to seek additional financing in the future to respond to increased expenses or shortfalls in anticipated revenues, accelerate product development, respond to competitive pressures, develop new or enhanced products, or take advantage of unanticipated acquisition opportunities. In order for us to carry out our intended business plan, management believes that we need to raise approximately $200,000 over a two year period.



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Management anticipates that the $200,000 will go towards acquiring wheelchair components and parts, marketing its services and building its infrastructure. The Company anticipates obtaining the required funding through equity investment in the company. We cannot be certain we will be able to find such additional financing on reasonable terms, or at all. If we are unable to obtain additional financing when needed, we could be required to modify our business plan in accordance with the extent of available financing made available to our Company. If we obtain the anticipated amount of financing through the offering of our equity securities, this will result in substantial dilution to our existing shareholders, and should be considered a serious risk of investment.


4. OUR BUSINESS MAY REQUIRE ADDITIONAL CAPITAL AND IF WE DO OBTAIN ADDITIONAL FINANCING OUR THEN EXISTING SHAREHOLDERS MAY SUFFER SUBSTANTIAL DILUTION.


We may require additional capital to finance our growth, purchase wheelchair components and build our infrastructure. Our capital requirements may be influenced by many factors, including:


·

the demand for our wheelchairs;

·

the level and timing of revenue;

·

the expenses of sales and marketing and new product development;

·

the cost to accommodate a growing workforce;

·

the extent to which competitors are successful in developing new products and increasing their market shares; and

·

the costs involved in maintaining inventory.


To the extent that our resources are insufficient to fund our future activities, we may need to raise additional funds through public or private financing. However, additional funding, if needed, may not be available on terms attractive to us, or at all. Our inability to raise capital when needed could have a material adverse effect on our business, operating resultsprospects or operations.


Our change in our business strategy and financial condition. If additional funds are raisedname could subject us to increased SEC scrutiny.


We previously were engaged in the business of re-building wheelchairs in disrepair and the sales of wheelchairs. In February 2018, we determined to instead pursue a crypto-currency mining business, through our acquisition of Power Blockchain, LLC. The SEC has announced that it is scrutinizing public companies that change their name or business model in a bid to capitalize upon the issuancehype surrounding blockchain technology, and has suspended trading of equitycertain of such companies.  SEC Chairman Jay Clayton warned that it is not acceptable for companies without a meaningful track record in the sector to participate in blockchain technology, change their name and immediately offer investors securities without providing adequate disclosures about the percentage ownershiprisks involved.  As a result, we could be subject to substantial SEC scrutiny that could require devotion of significant management and other resources and potentially have an adverse impact on the trading of our company by our current shareholders would be diluted.stock.


5. WE MAY NOT BE ABLE TO RAISE SUFFICIENT CAPITAL OR GENERATE ADEQUATE REVENUE TO MEET OUR OBLIGATIONS AND FUND OUR OPERATING EXPENSES.We may face risks of Internet disruptions, which could have an adverse effect on the price of cryptocurrencies.


FailureA disruption of the Internet may affect the use of cryptocurrencies and subsequently the value of our securities.  Generally, cryptocurrencies are dependent upon the Internet. A significant disruption in Internet connectivity could disrupt a currency's network operations until the disruption is resolved and have an adverse effect on the price of cryptocurrencies.






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Cryptocurrency has a short history and acceptance and/or widespread use of cryptocurrency is uncertain.


Currently, there is a relatively limited use of any cryptocurrency in the retail and commercial marketplace, thus contributing to raise adequate capitalprice volatility that could adversely affect an investment in our securities. Banks and generate adequate sales revenuesother established financial institutions may refuse to meet our obligationsprocess funds for cryptocurrency transactions, process wire transfers to or from cryptocurrency exchanges, cryptocurrency-related companies or service providers, or maintain accounts for persons or entities transacting in cryptocurrency.  Conversely, a significant portion of cryptocurrency demand is generated by investors seeking a long-term store of value or speculators seeking to profit from the short- or long-term holding of the asset. The relative lack of acceptance of cryptocurrencies in the retail and developcommercial marketplace, or a reduction of such use, limits the ability of end users to use them to pay for goods and sustain our operationsservices. Such lack of acceptance or decline in acceptances could result in reducing or ceasing our operations. Additionally, even if we do raise sufficient capital and generate revenues to support our operating expenses, there can be no assurances that the revenue will be sufficient to enable us to develop business tohave a level where it will generate profits and cash flows from operations. These matters raise substantial doubt aboutmaterial adverse effect on our ability to continue as a going concern. Our independent auditors currently included an explanatory paragraph in their report onconcern or to pursue our financial statements regarding concerns about our ability to continue as a going concern.





6. WE EXPECT OUR OPERATING EXPENSES TO INCREASE, AND THIS MAY AFFECT PROFIT MARGINS AND THE MARKET VALUE OF THE COMPANY’S COMMON STOCK.


The Company expects to significantly increase its operating expenses to expand its business and marketing operations, and to increase its level of capital expenditures to further develop and maintain its wheelchair repair operations. Such increases in operating expense levels and capital expenditures may adversely affect the Company’s operating results and profit margins, which may in turn significantly affect the market value of the Company’s common stock. There can be no assurance that the Company will, one day, achieve profitability or generate sufficient profits from its wheelchair business operations in the future.


7. OUR LARGEST SHAREHOLDER OWNS APPROXIMATELY 55.3% OF THE CONTROLLING INTEREST IN OUR VOTING STOCK AND INVESTORS WILL NOT HAVE ANY VOICE IN OUR MANAGEMENT, WHICH COULD RESULT IN DECISIONS ADVERSE TO OUR GENERAL SHAREHOLDERS.


Our largest shareholder, Anton Yeranossian, our sole officer and director, beneficially has the right to vote approximately 55.3% of our outstanding common stock. As a result, this shareholder will have the ability to control substantially all matters submitted to our stockholders for approval including:


a.

election of our board of directors;


b.

removal of any of our directors;


c.

amendment of our Articles of Incorporation or bylaws; and


d.

adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.


As a result of his ownership and position as officer/director in the Company, Anton Yeranossian has the ability to influence all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. In addition, the future prospect of sales of significant amounts of shares held by our director and executive officer could affect the market price of our common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of your investment in the company may decrease. Management's stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.







8. CURRENT ECONOMIC CONDITIONS MAY PREVENT US FROM GENERATING REVENUE.


Our ability to generate or sustain revenues is dependent on a number of factors relating to discretionary consumer spending for wheelchairs. These include economic conditions and consumer perceptions of such conditions by consumers, employment, the rate of change in employment, the level of consumers' disposable income and income available for discretionary expenditure, business conditions, interest rates, consumer debt and asset values, availability of credit and levels of taxation for the economy as a whole and in regional and local markets where the Company operates.


The United States is currently recovering from an economic downturn, the extent and duration of which cannot be currently predicted with any degree of reasonable certainty, and which business environment includes record low levels of consumer confidence due, in part, to job losses. Due to these factors, consumers are less likely to purchase non-essential goods, including the Company’s products. If the current economic conditions do not improve, we may not achieve or be able to maintain profitability, which may negatively affect the liquidity and market price of our common stock.


In addition, as a result of the economic downturn in the United States, credit and private financing is becoming difficult to obtain at reasonable rates, if at all. Until we achieve profitability at sufficient levels, ifnew strategy at all, we will be required to obtain loans and/or private financings to develop and sustain its operations. If we are unable to achieve such capital infusions on reasonable terms, if at all, its operations may be negatively affected.


9. SINCE OUR SOLE OFFICER DOES NOT DEVOTE HIS FULL TIME TO THE COMPANY, HIS OTHER ACTIVITIES COULD SLOW DOWN OUR OPERATIONS.


Anton Yeranossian, the sole officer/director of Holly Brothers Pictures, Inc. does not plan to devote all of his time to the Company's operations. He also works for A&A Medical Supply has its Chief Executive Officer. Therefore, it is possible that a conflict of interest with regard to his time may arise based on his involvement in other activities. His other activities will prevent him from devoting full-time to Holly Brothers Pictures, Inc.'s operations which could slow our operations and may reduce its financial results because of the slow-down in operations.


Anton Yeranossian plans to devote approximately 10-hours a week to the Company’s business operations. The Company has no other employees. The responsibility of developing the company's business, and fulfilling the reporting requirements of a public company all fall upon Mr. Yeranossian. Mr. Yeranossian intends to limit his role with Holly Brothers Pictures, Inc. until such time as the Company can generate a sufficient level of revenues and cash flows to support new personnel. If he is unable to fulfill any aspect of his duties to the company, Holly Brothers Pictures, Inc. may experience a shortfall or complete lack of sales resulting in little or no profits and eventual closure of the business. If Mr. Yeranossian began working on other projects it could take away from the time he currently spends working on our business operations and could create a potential conflict of interest.




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We have not formulated a plan to resolve any possible conflict of interest with his other business activities. We do not have any employment agreement in place with Mr. Yeranossian, which means he is not obligated to continue to work for the Company and can resign his position whenever he is inclined to do so.


10. THERE MAY BE A POSSIBLE INABILITY TO FIND SUITABLE EMPLOYEES.


In order to implement our business plan, management recognizes that additional staff will be required to market its services and rebuild wheelchairs. No assurances can be given that we will be able to find suitable employees that can support our needs or that these employees can be hired on favorable terms. We do not plan to hire any additional employees until our cash flows can justify the expense.


11. IF WHEELCHAIR COMPONENT PRICES INCREASE, OUR MARGINS MAY SHRINK.


If the price of the components to rebuild wheelchairs increase, it will negatively impact our margins, as we are generally unable to pass all of these costs directly to consumers. Increasing prices in the component materials for the parts we sell may impact the availability, the quality and the price of our products, as suppliers search for alternatives to existing materials and as they increase the prices they charge. We cannot ensure that we can recover all the increased costs through price increases, and our suppliers may not continue to provide the consistent quality of product as they may substitute lower cost materials to maintain pricing levels, all of which may have a negative impact on our business and results of operations.


12. IF WHEELCHAIR COMPONENTS FROM OUR SUPPLIERS ARE INTERRUPTED FOR ANY SIGNIFICANT PERIOD OF TIME OR ARE NOT SUFFICIENT TO ACCOMMODATE INCREASED DEMAND, OUR SALES WOULD DECLINE AND OUR REPUTATION COULD BE HARMED.


Our success depends on our ability for our suppliers to fulfill orders and to promptly deliver wheelchair components to us. Our suppliers are susceptible to damage or interruption from human error, fire, flood, power loss, telecommunications failures, terrorist attacks, acts of war, break-ins, earthquakes and similar events. We do not presently have a formal disaster recovery plan in the event operations at our component supplies are interrupted. Any interruptions with our suppliers for any significant period of time, including interruptions resulting from the expansion of our existing facilities or the transfer of operations to a new facility, could damage our reputation and brand and substantially harm our business and results of operations.


13. BECAUSE WHEELCHAIRS ARE MADE FROM METALS AND PLASTICS, WE FACE THE RISK OF INTERRUPTION OF SUPPLY OR INCREASE IN COSTS, WHICH WOULD HARM OUR BUSINESS AND RESULTS OF OPERATION.


Wheelchairs are made from metals (steel, aluminum and titanium) and plastics. As a result, we face the risk of interruption of supply or increase in cost. The competition for metals and plastics could be intense, and we may not be able to compete effectively against other purchasers who have higher volume requirements or more established relationships.



17



Even if suppliers have adequate supplies of plastics and metals to produce wheelchairs, they may be unreliable in meeting delivery schedules, experience their own financial difficulties, provide products of inadequate quality, or provide them at prices, which reduce our profit. Any problems we face with regard to the supply of plastics and metals can be expected to affect our ability to source products, which could have a material adverse effect on our financial condition, business, results ofprospects or operations and continued growth prospects.potentially the value of bitcoin or any other cryptocurrencies we mine or otherwise acquire or hold for our own account.


14. ESTABLISHING A CUSTOMER BASE REQUIRES EFFECTIVE MARKETING, WHICH MAY TAKE A LONG PERIOD OF TIME.Transactional fees may decrease demand for bitcoin and prevent expansion.


Our principal business strategy isAs the number of bitcoin awarded for solving a block in a blockchain decreases, the incentive for miners to rebuild wheelchairscontinue to contribute to the bitcoin network will transition from a set reward to transaction fees. The requirement from miners of higher transaction fees in disrepair. The marketingexchange for recording transactions in a blockchain may decrease demand for bitcoin and prevent the expansion of the bitcoin network to retail merchants and commercial businesses, resulting in a reduction in the price of bitcoin that could adversely impact an investment in our securities. In order to incentivize miners to continue to contribute to the bitcoin network, the bitcoin network may either formally or informally transition from a set reward to transaction fees earned upon solving a block. This transition could be accomplished by miners independently electing to record in the blocks they solve only those transactions that include payment of a transaction fee. If transaction fees paid for bitcoin transactions become too high, the marketplace may be reluctant to accept bitcoin as a means of payment and existing users may be motivated to switch from bitcoin to another cryptocurrency or to fiat currency.  Decreased use and demand for bitcoin may adversely affect its value and result in a reduction in the price of bitcoin and the value of our wheelchairsecurities.


Political or economic crises may motivate large-scale sales of bitcoin or other cryptocurrencies, which could result in a reduction in value and adversely affect us.


As an alternative to fiat currencies that are backed by central governments, digital assets such as bitcoin are relatively new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is highly dependent on creating favorable consumer perception. Competitors have significantly greater advertising resourcesunclear how such supply and experience and enjoy well-established brand names. There can be no assurance that our initial advertising and promotional activitiesdemand will be successful in creating the desired consumer perception for our brand.


15. WE MAY NOT BE ABLE TO COMPETE WITH CURRENT AND POTENTIAL COMPETITORS, SOME OF WHO HAVE GREATER RESOURCES AND EXPERIENCE THAN WE DO.


Weimpacted by geopolitical events. Nevertheless, political or economic crises may not have the resources to compete with our existing competitorsmotivate large-scale acquisitions or with any new competitors. We intend to compete withsales of bitcoin and other companies that rebuild wheelchairs, allcryptocurrencies either globally or locally. Large-scale sales of which have significantly greater personnel, financial,bitcoin and managerial resources than we do. This competition fromether or other companies with greater resources and reputations maycryptocurrencies would result in our failure to maintain or expand our business.


Moreover, as the demand for wheelchair repair increases, new companies may enter the marketa reduction in their value and the influx of added competition will pose an increased risk to our Company. Increased competition may lead to price wars, which would harm us since we would be unable to compete with companies with greater resources. In addition, increased competition and increased demand may create a stress on the wheelchair repairs, which may lead to increased prices, which would also harm our ability to compete in the wheelchair market.


16. WE COULD BE SUBJECT TO SIGNIFICANT AND COSTLY PRODUCT LIABILITY CLAIMS.


We could be subject to significant product liability claims if the work we perform causes injury or illness. We do not have liability insurance with respect to product liability claims. The costs associated with product liability claims and product recalls could significantly reduce our operating results.


17. NATURAL DISASTERS OR ACTS OF TERRORISM COULD DISRUPT SERVICES.


Storms, earthquakes, drought, floods or other natural disasters or acts of terrorism may result in reduced revenues or property damage of our wheelchair components. Disasters may also cause economic dislocations throughout the country. In addition, natural disasters or acts of terrorism may increase the volatility of financial results, either due to increased costs caused by the disaster with partial or no corresponding compensation from clients.



18



Other issues and uncertainties may include:


·

New accounting pronouncements or changes in accounting policies;

·

Labor shortages that adversely affect our ability to employ entry level personnel;

·

Legislation or other governmental action that detrimentally impacts expenses or reduces revenues by adversely affecting our clients; and

·

The resignation, termination, death or disability of one or more key executives that adversely affects client retention or day-to-day management.


18. THE ADOPTION OF HEALTHCARE REFORM IN THE UNITED STATES MAY ADVERSELY AFFECT THE COMPANY’S BUSINESS, RESULTS OF OPERATIONS AND/OR FINANCIAL CONDITION.


Significant reforms to the healthcare system were adopted as law in the United States in March 2010. This new law includes provisions that reduce and/or limit Medicare reimbursement, require all individuals to have health insurance (with limited exceptions) and impose new and/or increased taxes. The impact of this law and these proposalsus. Such circumstances could have a material adverse effect on the company’s business, results of operations and/our ability to continue as a going concern or financial condition.


19. CHANGES IN GOVERNMENT AND OTHER THIRD-PARTY PAYOR REIMBURSEMENT LEVELS AND PRACTICES COULD CONTINUE NEGATIVELY IMPACT THE COMPANY’S REVENUES AND PROFITABILITY.


We anticipate thatto pursue our customers, as individual patients, will be reimbursed for wheelchair repair services from third-party-payors.  Third party-payors may include Medicare and Medicaid, private insurance plans and managed care programs.  Most of these programs set maximum reimbursement levels for wheelchair products sold and reimbursement of costs of repairs of wheelchairs.  If third-party payors deny coverage, make the reimbursement process or documentation requirements more uncertain or further reduce their current levels of reimbursement, or if the company’s costs of production increase faster than increases in reimbursement levels, the company may be unable to sell its services in repairing or selling wheelchairs on a profitable basis.


Changes in state or federal Medicaid programs to reimbursement policies, and any additional unfavorable reimbursement policies or budgetary cuts that may be adopted in the future, could adversely affect the demand for the company’s repair services or wheelchair products that are dependent on reimbursement from the government-funded programs.  The percentage of the company’s overall sales that are dependent on Medicare or other insurance programs may increase as the portion of the U.S. population over age 65 continues to grow, making the company more vulnerable to reimbursement level reductions by these organizations.  Reduced government reimbursement levels also could result in reduced private payor reimbursement levels because some third-party payors index their reimbursement schedules to Medicare fee schedules. Reductions in reimbursement levels also may affect the profitability of the company’s customers and ultimately force some customers without strong financial resources to go out of business. The reductions that went into effect recently may prove to be so dramatic that some of the company’s customers may not be able to adapt quickly enough to survive.


The impact of government reimbursement policiesnew strategy at all, which could have a material adverse effect on our business, prospects or operations and potentially the company’svalue of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors.


Our operations, investment strategies and profitability may be adversely affected by competition from other methods of investing in cryptocurrencies.


We compete with other users and/or companies that are mining cryptocurrencies and other potential financial vehicles, including securities backed by or linked to cryptocurrencies through entities similar to us. Market and financial conditions, and other conditions beyond our control, may make it more attractive to invest in other financial vehicles, or to invest in cryptocurrencies directly, which could limit the market for our shares and reduce their liquidity. The emergence of other financial vehicles and exchangetraded funds have been scrutinized by regulators and such scrutiny and negative impressions or conclusions could be applicable to us and impact our ability to successfully pursue our new strategy or operate at all, or to establish or maintain a public market for our securities. Such circumstances could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, financial conditionprospects or operations and resultspotentially the value of operations.any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account, and harm investors.



198



RISKS RELATING TO OUR COMMON SHARESOur future success will depend in large part upon the value of bitcoin, and the value of bitcoin and other cryptocurrencies may be subject to pricing risk and has historically been subject to wide swings.


20. HOLDERS OF OUR COMMON STOCK HAVE A RISK OF POTENTIAL DILUTION IF WE ISSUE ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE.Our operating results will depend in large part upon the value of bitcoin. Specifically, our revenues from our bitcoin mining operations will be based upon two factors: (1) the number of bitcoins we mine and (2) the value of bitcoin.  In addition, our operating results will be directly impacted by changes in the value of bitcoin, because under the value measurement model, both realized and unrealized changes will be reflected in our statement of operations (i.e., we will be marking bitcoin to fair value each quarter).  This means that our operating results will be subject to swings based upon increases or decreases in the value of bitcoin.


AlthoughBitcoin and other cryptocurrency market prices, which have historically been volatile and are impacted by a variety of factors, are determined primarily using data from various exchanges, over-the-counter markets and derivative platforms.  Furthermore, such prices may be subject to factors such as those that impact commodities, more so than business activities, which could be subjected to additional influence from fraudulent or illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions.  Pricing may be the result of, and may continue to result in, speculation regarding future appreciation in the value of cryptocurrencies, or our Boardshare price, inflating and making their market prices more volatile or creating "bubble"type risks.


Cryptocurrency inventory, including that maintained by or for us, may be exposed to cybersecurity threats and hacks.


As with any computer code generally, flaws in cryptocurrency codes may be exposed by malicious actors. Despite our efforts and processes to prevent breaches, our devices, as well as our servers, computer systems and those of Directors intendsthird parties that we use in our operations, are vulnerable to utilize its reasonablecyber security risks, including cyber-attacks such as viruses and worms, phishing attacks, denial-of-service attacks, physical or electronic break-ins, employee theft or misuse, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations. Such events could have a material adverse effect on our ability to continue as a going concern or to pursue our new strategy at all, which could have a material adverse effect on our business, judgmentprospects or operations and potentially the value of any bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account.


We are subject to fulfill its fiduciary obligationsrisks associated with our need for significant electrical power.  Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations, such as ours.


The operation of a bitcoin or other cryptocurrency mine can require massive amounts of electrical power.  Further, our then existing stockholdersmining operations can only be successful and ultimately profitable if the costs, including electrical power costs, associated with mining a bitcoin are lower than the price of a bitcoin.  As a result, any mine we establish can only be successful if we can obtain sufficient electrical power for that mine on a cost-effective basis, and our establishment of new mines requires us to find locations at which that is the case.  There may be significant competition for suitable mine locations, and government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations in times of electricity shortage, or may otherwise potentially restrict or prohibit the provision or electricity to mining operations. Additionally, our mines could be materially adversely affected by a power outage.  Given the power requirement, it would not be feasible to run miners on back-up power generators in the event of a government restriction on electricity or a power outage.


Risks Relating to Our Common Stock


Your ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions.


We will need to raise additional funds to expand our operations or finance acquisitions by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders. Our board of directors has the authority, without action or vote of the stockholders, to issue all or any futurepart of our authorized but unissued shares of common. Our articles of incorporation authorizes us to issue up to 200,000,000 shares of common stock. Future issuances of common stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share.




9



Shares issuable upon the conversion of convertible notes may substantially increase the number of shares available for sale in the public market and depress the price of our common stock.


In connection with our acquisition of Power Blockchain, we issued convertible notes in aggregate principal amount of $2.2 million. The notes: (i) mature five years from the date of issuance: (ii) accrue interest at 5% per annum; (iii) require repayment in four equal installments on the second, third, fourth and fifth anniversary dates after issuance; and (iv) are convertible at the option of the holder into our common stock at a conversion price of $0.13 per share.


Power Blockchain had outstanding debt obligations in aggregate principal amounts of $570,000, accruing interest at rates between 12-13% per annum, which obligations were overdue and in default. In March 2018, the Power Blockchain debt holders commenced a lawsuit against us in San Diego Superior Court, in connection with outstanding and overdue debt obligations. On March 22, 2018, we agreed to enter into a conditional settlement with the debt holders. The settlement agreement calls for the periodic issuance to the debt holders, subject to certain ownership and temporal limitations, of an aggregate of up to 3,078,000 and 3,157,000 shares respectively, exempted from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, and the California Corporations Code Section 25017(f)(3), as amended, after a fairness hearing evaluating the relative merits of the proposed agreement, which was held and approved on April 2, 2018.


To the extent any of these foregoing notes are converted into common stock and as and when the shares issuable pursuant to the foregoing lawsuit settlement are issued, there will be dilution to stockholders.


The concentration of our common stock ownership by our current management will limit your ability to influence corporate matters.


Our directors and executive officers beneficially own and are able to vote in the future issuanceaggregate 83.1% of additionalour outstanding common stock. As such, our directors and executive officers, as stockholders, will continue to have the ability to exert significant influence over all corporate activities, including the election or removal of directors and the outcome of tender offers, mergers, proxy contests or other purchases of common stock that could give our stockholders the opportunity to realize a premium over the then-prevailing market price for their shares of common stock. This concentrated control will limit your ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial. In addition, such concentrated control could discourage others from initiating changes of control. In such cases, the perception of our prospects in the market may be adversely affected and the market price of our common stock would cause immediate, and potentially substantial, dilutionmay decline.


We have no intention of declaring dividends in the foreseeable future.


The decision to the net tangible book value of those shares ofpay cash dividends on our common stock that are issuedrests with our board of directors and outstanding immediately prior to such transaction. Any future decreasewill depend on our earnings, unencumbered cash, capital requirements and financial condition. We do not anticipate declaring any dividends in the net tangible book valueforeseeable future, as we intend to use any excess cash to fund our operations. Investors in our common stock should not expect to receive dividend income on their investment, and investors will be dependent on the appreciation of our issued and outstanding shares could havecommon stock to earn a material effectreturn on the market value of the shares.their investment.


21. IN THE FUTURE, WE WILL INCUR INCREMENTAL COSTS AS A RESULT OF OPERATING AS A PUBLIC COMPANY.


Upon the effectiveness of our registration, we will incur legal, accounting and other expenses as a fully-reporting public company. Moreover, the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), as well as new rules subsequently implemented by the SEC, have imposed various new requirements on public companies, including requiring changes in corporate governance practices. There may be further increases if and when we are no longer an "emerging growth company." Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We expectFailure to incur approximately $20,000 of incremental operating expenses in 2017-18. We project that the total incremental operating expenses of being a public company will be approximately $12,000 for 2017-18. The incremental costs are estimates, and actual incremental expenses could be materially different from these estimates. Unless we can generate sufficient revenues and profits, we may not be able to absorb the costs of being a public company.


22. AS A RESULT OF OPERATING AS A PUBLIC COMPANY, OUR MANAGEMENT AND INDEPENDENT CONTRACTED PERSONNEL WILL BE REQUIRED TO DEVOTE SUBSTANTIAL TIME TO NEW COMPLIANCE INITIATIVES.


We have never operated as a public company. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. There may be further increases if and when we are no longer an "emerging growth company". The Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, and rules subsequently implemented and yet to be implemented by the U. S. Securities and Exchange Commission have imposed and will impose various new requirements on public companies. Our management and other independent contracted personnel will need to devote a substantial amount of time to these new compliance initiatives. Management has already contracted the services of an accounting firm, auditor and corporate counsel to help him comply with the compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly, particularly after we are no longer an "emerging growth company." For example, we expect these new rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.



20



In addition, the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management, as required by Section 404 of the Sarbanes-Oxley Act. Compliance will require us to increase our general and administrative expense in order to pay added compliance personnel, outside legal counsel and consultants to assist us in, among other things, external reporting, instituting and monitoring a more comprehensive compliance function and board governance function, establishing and maintaining internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and preparing and distributing periodic publiccould cause our financial reports in compliance with our obligations under the U.S. federal securities laws. We currently do not have an internal audit group, and we will evaluate the need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, the market price of our stock could decline.be inaccurate.


However, for as long as we remain an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, we may take advantage of certain exemptions from various reporting requirements thatWe are applicablerequired pursuant to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act reducedof 2002, or Section 404, to maintain internal control over financial reporting and to assess and report on the effectiveness of those controls. This assessment includes disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until the earliest of (a) the last day ofmaterial weaknesses identified by our fiscal year during which we have total annual gross revenues of at least $1.0 billion; (b) the last day of our fiscal year ending after the fifth anniversary of the completion of this offering; (c) the date on which we have, during the previous three-year period, issued more than $1.0 billionmanagement in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer" under the Exchange Act.


23. WE ARE AN “EMERGING GROWTH COMPANY” AND OUR ELECTION TO DELAY ADOPTION OF NEW OR REVISED ACCOUNTING STANDARDS APPLICABLE TO PUBLIC COMPANIES MAY RESULT IN OUR FINANCIAL STATEMENTS NOT BEING COMPARABLE TO THOSE OF SOME OTHER PUBLIC COMPANIES. AS A RESULT OF THIS AND OTHER REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES, OUR SECURITIES MAY BE LESS ATTRACTIVE TO INVESTORS.


We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of exemptions from certain reporting requirements available to “emerging growth companies” under that Act, including but not limited to not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (relating to the effectiveness of our internal control over financial reporting), reduced disclosure obligations regarding executive compensation inreporting. Our management concluded that our periodic reportsinternal controls over financial reporting were, and any proxy statements we maycontinue to be required to file,ineffective, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, Section 107as of the JOBS Act providesyear ended March 31, 2018. While management is working to remediate the material weakness, there is no assurance that an “emerging growth company” can delaysuch changes, when economically feasible and sustainable, will remediate the adoption of certain accounting standards until those standards would apply to private companies.



21



We are electing to delay such adoption of newidentified material weaknesses or revised accounting standards and, as a result,that the controls will prevent or detect future material weaknesses. If we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies that are not “emerging growth companies.” Consequently,able to maintain effective internal control over financial reporting, our financial statements, may not be comparable to the financial statements of other public companies. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” In this regard, we will remain an “emerging growth company” for up to five years after the first sale of our common equity securities under an effective registration statement, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an “emerging growth company” as of the next following December 31.


We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions.


24. OUR STATUS AS AN “EMERGING GROWTH COMPANY” UNDER THE JOBS ACT OF 2012 MAY MAKE IT MORE DIFFICULT TO RAISE CAPITAL AS AND WHEN WE NEED IT.


Because of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will have an extended transition period for complying with new or revised financial accounting standards, weincluding related disclosures, may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.


RISK FACTORS RELATING TO OUR COMMON STOCK AND THIS OFFERING


25. FUTURE SALES OF SHARES BY EXISTING CONTROLLING STOCKHOLDERS COULD CAUSE OUR STOCK PRICE TO DECLINE, FURTHER, CERTAIN SHARES OF OUR COMMON STOCK ARE RESTRICTED FROM IMMEDIATE RESALE.


If our existing controlling stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stockinaccurate, which could decline. As of July 11, 2017, we have 2,710,000 common shares issued and outstanding. 2,500,000 shares of common stock, owned by three largest shareholders are restricted from immediate resale in the public market. If in the future, they decide to sell his shares or if it is perceived that they will be sold, to the extent permitted by the Rules 144 and 701 under the Securities Act, the trading price of our common stock could decline.


26. WE HAVE NEVER DECLARED DIVIDENDS ON OUR COMMON STOCK AND DO NOT PLAN TO DO SO IN THE FORESEEABLE FUTURE.


We intend to retain any future earnings to finance the operation and expansion of its business and do not anticipate paying any cash dividends in the foreseeable future.



22



As a result, stockholders will need to sell shares of common stock in order to realize a return on their investment, if any. You should not rely on an investment in our company if you require dividend income. The only possibility of any income to investors would come from any rise in the market price of your stock, which is uncertain and unpredictable.


A holder of common stock will be entitled to receive dividends only when, as, and if declared by the Board of Directors out of funds legally available therefore. We have never issued dividendsmaterial adverse effect on our common stock. Our Board of Directors will determine future dividend policy based upon our results of operations, financial condition, capital requirements, and other circumstances.


27. WE MAY SEEK TO RAISE ADDITIONAL FUNDS, FINANCE ACQUISITIONS OR DEVELOP STRATEGIC RELATIONSHIPS BY ISSUING CAPITAL STOCK.


We have financed our operations, and we expect to continue to finance our operations, acquisitions and develop strategic relationships, by issuing equity or debt securities, which could significantly reduce the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences and privileges senior to those of our existing stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of stock to decline.


28. LOW-PRICED STOCKS MAY AFFECT THE RESELL OF OUR SHARES.


Penny Stock Regulation Broker-dealer practices in connection with transactions in "Penny Stocks" are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risk associated with the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock; the broker-dealer must make a written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules.






business.





ItemITEM 1B. Unresolved Staff Comments.UNRESOLVED STAFF COMMENTS


None.


ItemITEM 2. Properties.PROPERTIES


Our corporate headquartersand executive offices are in located at: 8221 E. Washington Street, Chagrin Falls, OH 44023.in an office space in San Diego, California, provided by an attorney for the Company at no cost or commitment to the Company.


We operate from a rented facility in Lesotho capable of hosting mining operations.  We secured this modest size space on an as needed basis without a long term lease agreement.


We believe our facilities will be sufficient to meet our current needs and that suitable space will be available as and when needed. We do not own any real property.  This administrative office is being provided at no cost by the Officer of the Company. The Officer will not seek reimbursement for providing this administrative space.  Management believes that its current facilities are adequate for its needs through the next twelve months, and that, should it be needed, suitable additional space will be available to accommodate expansion of the Company's operations on commercially reasonable terms, although there can be no assurance in this regard.


ItemITEM 3. Legal Proceedings.LEGAL PROCEEDINGS


From time to time we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.  However,our business, we may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation is subject to inherent uncertainties, and an adverseare inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages, and until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these or otherproceedings involve matters may arise from timeof which the outcomes are inherently difficult to time that may harm our business.predict. We have insurance policies covering potential losses where such coverage is cost effective.


ThereWe are currently the following two cases pending which the Company is defending:


Mark DeStefano v. PowerMedChairs, A&A Medical Supply, LLC, Anushavan Yeranossian, and Anton Yeranossian, filed as Eighth Judicial District Court Case No. A-17-750526-C in which the Plaintiff alleges claims for Breach of Contract and Unjust Enrichment. The Company has filed an Answer denying all material allegations. The matter has been referred to the Court Annexed Non-Binding Arbitration Program. Discovery has not yet commenced. Management intends to contest this matter vigorously. Due to the early stage of this matter, the likelihood of an unfavorable outcome and any potential range of loss is too difficult to determine at this time.


Ed DeStefano, Mark DeStefano and T. J. Jesky v. Anton Yeranossian and PowerMedChairs, filed as Eighth Judicial District Court Case No. A-17-750604-Ctime involved in which the Plaintiffs allege claims for Breach of Fiduciary Duty (Against Defendant Yeranossian), Gross Negligence (Against Defendant PowerMedChairs) and Unjust Enrichment (Against Defendant Yeranossian). The Company has filed an Answer denying all material allegations. The matter has been referred to the Court Annexed Non-Binding Arbitration Program. Discovery has not yet commenced. Management intends to contest this matter vigorously. Due to the early stage of this matter, the likelihood of an unfavorable outcome and any potential range of loss is too difficult to determine at this time.legal proceedings.


ItemITEM 4. Submission of Matters to a Vote of Security Holders.MINE SAFETY DISCLOSURE


No matters were submitted to the shareholders for the period ending March 31, 2017.Not applicable.






















PART II


ItemITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


(a) Market Information


Holly Brothers Pictures, Inc. Common Stock, $0.001 par value, was cleared for quotationOur common stock is quoted on the OTC-BB on October 30, 2013,OTC bulletin board.  During fiscal years ended March 31, 2018 and 2017 our stock was quoted under the symbol “HLLY” until February 28, 2018 when our symbol was changed to “MINR”. The last trade of our common stock symbol PCHA.  occurred on August 13, 2018 and was $0.40 per share.


There have been only been avery few trades of theour common stock since it was cleared for quotation, and there are no assurances an active market will ever develop for the stock.


(b) Holders of Common Stock


As of July 11, 2017,November 30, 2018, there arewere approximately forty (40)35 holders of record of our Common Stock.common stock. In addition, we believe that additional beneficial owners of our common stock hold their shares in nominee or in “street name” accounts through brokers.


(c) Dividends


InWe have never paid any dividends on our common stock. The payment of dividends in the future we intend to follow a policy of retainingwill be contingent upon our revenues and earnings, if any, capital requirements and general financial condition. It is the present intention of our Board of Directors to finance the growthretain all earnings, if any, for use in our business operations and, accordingly, our Board of the business and doDirectors does not anticipate payingdeclaring any cash dividends in the foreseeable future.  The declaration and payment of future dividends on the Common Stock will be the sole discretion of board of directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.


(d) Securities Authorized for Issuance under Equity Compensation Plans


There are no outstanding grants or rights or anyThe following table sets forth information regarding our equity compensation plan in place.plans at March 31, 2018:


Plan category

Number of

securities to

be issued

upon exercise of

outstanding

options,

warrants

and rights

(a)

Weighted-

average

exercise

price of

outstanding

options,

warrants

and rights

(b)

Number of

securities (by

class) remaining

available

for future

issuance under

equity compensation

plans (excluding

securities reflected

in column (a))

(c)

Equity compensation plans approved by security holders (1)

--

--

1,000,000

Equity compensation plans not approved by security holders

--

--

--

Equity compensation plans not approved by security holders

--

--

--

Total

--

--

1,000,000


(1)

Represents shares of common stock that may be issuable under our 2018 Stock Plan, which has been approved by our stockholders. As of March 31, 2018, no securities had been issued pursuant to the 2018 Stock Plan.


(e)

12



Recent Sales of Unregistered Securities


None.On February 1, 2018, we entered into an exchange agreement pursuant to which we acquired 100% of the equity interests in Power Blockchain from the owners of Power Blockchain in exchange for the issuance for convertible notes in aggregate principal amount of $2.2 million. The notes: (i) mature five years from the date of issuance: (ii) accrue interest at 5% per annum; (iii) require repayment in four equal installments on the second, third, fourth and fifth anniversary dates after issuance; and (iv) are convertible at the option of the holder into our common stock at a conversion price of $0.13 per share. Upon consummation of the exchange agreement, Power Blockchain became our wholly owned subsidiary.  The convertible notes were sold without registration under the Securities Act in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering to accredited investors, and in reliance on similar exemptions under applicable state laws.


(f) Issuer Power Blockchain had outstanding debt obligations in aggregate principal amounts of $570,000, accruing interest at rates between 12-13% per annum, which obligations were overdue and in default. In March 2018, the Power Blockchain debt holders commenced a lawsuit against us in San Diego Superior Court, in connection with outstanding and overdue debt obligations. On March 22, 2018, we agreed to enter into a conditional settlement with the debt holders. The settlement agreement calls for the periodic issuance to the debt holders, subject to certain ownership and temporal limitations, of an aggregate of up to 3,078,000 and 3,157,000 shares respectively, exempted from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, and the California Corporations Code Section 25017(f)(3), as amended, after a fairness hearing evaluating the relative merits of the proposed agreement, which was held and approved on April 2, 2018.


Purchases of Equity Securities by the Issuer and Affiliated Purchasers


We did not repurchase anyOn January 25, 2018, we completed a share purchase agreement with Anton Yeranossian, Irina Seppanen and A&A Medical Supply, LLC pursuant to which the Company agreed to purchase from such shareholders an aggregate of our equity securities during the year ended March 31, 2017.2,661,172 shares of Company common stock for an aggregate purchase price of $340,000.


ItemITEM 6. Selected Financial Data.SELECTED FINANCIAL DATA


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







Item

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


OverviewThe following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this Form 10-K. The forward-looking statements included in this discussion and elsewhere in this Form 10-K involve risks and uncertainties, including those set forth under “Cautionary Statement About Forward-Looking Statements.” Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of Current Operationsa number of factors, including but not limited to those discussed in this Item and in Item 1A - “Risk Factors.”


Overview


Commencing in February 2018, through our subsidiary, Power Blockchain LLC (“Power Blockchain”), we began operating a start-up venture that specializes in blockchain mining for the Bitcoin network, the computer intensive process required to verify and record the digital exchange of money for crypto-currency transactions. In exchange for processing these complex mathematical equations, we will be rewarded with digital currency. We have yet to commence meaningful operations, and will require new capital investment to execute upon our business strategy.






Our business plan is to build a cryptocurrency mining operation, operating specialized computers (also known as “crypto-currency miners") that generate cryptocurrency (primarily Bitcoin).  A bitcoin is an asset that can be transferred among parties via the Internet, but without the use of a central administrator or clearing agency. The term decentralized is often used in descriptions of bitcoin, in reference to bitcoin’s lack of necessity for administration by a central party.


On February 14, 2018, we were granted permission from the Kingdom of Lesotho to conduct crypto-currency mining operations in Lesotho. As part of this permission, we were permitted to operate by the Lesotho Electricity Company and we negotiated an electric rate agreement.  As of the date of this report, we owned 70 crypto-currency miners and Power Control Units (PCU), 50 of which have been installed in Lesotho, 10 of which are in customs in South Africa, and 10 of which are in storage in South Africa. We commenced mining operations in Lesotho but have not recorded any revenues to date.


We operate from a rented facility capable of hosting mining operations.  We secured this modest size space on an as needed basis without a long term lease agreement. We have completed a space infrastructure build out to support our mining operations, such as electricity connections, sound proofing, air conditioning, de-humidification, and IT networking and engaged a manager for site supervision.


We were incorporated on February 22, 2013as2013 as PowerMedChairs, as a Nevada corporation, and subsequentlycorporation. Since our incorporation until February 2018, our plan of operation was to re-build primarily electric/power wheelchairs in disrepair. On June 2, 2017, we changed our name to Holly Brothers Pictures, Inc. We consider ourselvesAs discussed above, in February 2018, we ceased this business and commenced our blockchain mining business through our acquisition of Power Blockchain described below.


On February 1, 2018, we entered into an exchange agreement pursuant to be an emerging growth company under applicable federal securities lawswhich we acquired 100% of the equity interests in Power Blockchain from the owners of Power Blockchain in exchange for the issuance for convertible notes in aggregate principal amount of $2.2 million. The notes: (i) mature five years from the date of issuance: (ii) accrue interest at 5% per annum; (iii) require repayment in four equal installments on the second, third, fourth and will befifth anniversary dates after issuance; and (iv) are convertible at the option of the holder into our common stock at a conversion price of $0.13 per share. Upon consummation of the exchange agreement, Power Blockchain became our wholly owned subsidiary. Power Blockchain had outstanding debt obligations in aggregate principal amounts of $570,000, accruing interest at rates between 12-13% per annum, which obligations were overdue and in default. In March 2018, the Power Blockchain debt holders commenced a lawsuit against us in San Diego Superior Court, in connection with outstanding and overdue debt obligations. On March 22, 2018, we agreed to enter into a conditional settlement with the debt holders. The settlement agreement calls for the periodic issuance to the debt holders, subject to reduced public company reporting requirements.  We plancertain ownership and temporal limitations, of an aggregate of up to re-build primarily electric/power wheelchairs in disrepair. We plan3,078,000 and 3,157,000 shares respectively, exempted from registration pursuant to market our services to repairSection 3(a)(10) of the Securities Act of 1933, as amended, and sell wheelchairs.Electric wheelchairs are for people who need support for their upper bodythe California Corporations Code Section 25017(f)(3), as amended, after a fairness hearing evaluating the relative merits of the proposed agreement, which was held and who are unable to move a manual chair with their arms and hands. The electric wheelchair consists of a number of mechanical and electric components that need to be replaced every few year. In most cases, it is much more cost effective to repair a broken electric wheelchair than replace the entire unit.approved on April 2, 2018.


RESULTS OF OPERATIONSResults of Operations


ForThe following discussion pertains to the Company’s operating and other expenses for the years ended March 31, 2018 and 2017, as reported in our consolidated financial statements and notes thereto included in Item 8.


General and administrative expenses for the year ended March 31, 2018 were $135,682 compared to $21,616 for the year ended March 31, 2017. This increase was due to incremental overhead costs that were incurred in the Company’s transition to the bitcoin mining business, including non-cash stock compensation expense of $7,167 (see Note 5).


Depreciation expense for the year ended March 31, 2018 was $16,393 compared to zero for the year ended March 31, 2017. Depreciation for the year ended March 31, 2018 represents the initial period amount of such expense applicable to the Company’s computers and equipment deployed on the bitcoin mining operations in Lesotho.





Impairment of Goodwill for the year ended March 31, 2018 was $2,200,000 compared to zero for the year ended March 31, 2017. As of the fiscal year endingended March 31, 2017,2018, we determined that it would be appropriate to recognize an impairment adjustment in the Companyfull amount of $2,200,000 on the Goodwill that was originally established upon the Company’s acquisition of Power Blockchain in February 2018 in the amount of $2,200,000, due to unforeseen economic and market conditions that arose soon after the acquisition (see Note 4).


Impairments of property and equipment and of other intangible assets for the year ended March 31, 2018 were $170,186 and $2,044, respectively, compared to zero for both such impairment amounts in the year ended March 31, 2017.  Most significantly, we recognized no revenues.the impairment adjustment in the amount of $170,186 to reduce the carrying value of the property and equipment deployed in the bitcoin mining operations to zero as of March 31, 2018 (see Note 4).


Interest expense for the year ended March 31, 2018 was $28,609 compared to zero for the year ended March 31, 2017. Interest for the year ended March 31, 2018 reflects the initial period amount of such expense applicable to the Company’s long-term debt obligations incurred in the acquisition of Power Blockchain in February 2018 (see Note 6).


Liquidity and Capital Resources


Operating activities.  Net cash used in operating activities for the year ended March 31, 2018 was $129,854 compared to $21,843 for the year ended March 31, 2017. This increase was due to incremental overhead costs that were incurred in the Company’s transition to the bitcoin mining business.


Investing activities.  Net cash used in investing activities for the year ended March 31, 2018 was $38,620 compared to zero for the year ended March 31, 2017. For the for the fiscal year endingended March 31, 2017,2018, the Company incurred total operating expensescapital expenditures of $21,616,$186,579, on computers and equipment for its bitcoin mining operations in Lesotho, of which $38,620 was funded from its own cash resources and the remainder was funded by a group of investors to whom the Company issued short-term promissory notes bearing interest at 10% per annum.


Financing activities.  Net cash provided by financing activities for the year ended March 31, 2018 was $173,376 compared to $12,020$20,000 for the same period last year.  For the fiscal year endingended March 31, 2017,2017. This increase was largely due to short term borrowings provided by various related parties in order to fund the increased overhead costs that were incurred in the Company’s transition to the bitcoin mining business.


As disclosed in Note 6, the Company had a losshas incurred substantial long-term debt obligations in the acquisition of Power Blockchain in February 2018, as well as for increased overhead and other costs related to the Company’s transition to the bitcoin mining business. The following table sets forth the contractual obligations under our long-term debt agreements as of March 31, 2018 (in thousands):


 

 

 

Payments Due By Period

 

Total

 

2019

 

2020-2021

 

2022-2023

 

After 2023

 

 

 

 

 

 

 

 

 

 

Long-term debt

$

2,200

 

$

-

 

$

1,100

 

$

1,100

 

$

-

Interest on long-term debt

 

385

 

 

-

 

 

-

 

 

385

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

2,585

 

$

-

 

$

1,100

 

$

1,485

 

$

-


We are generating minimal revenue from our crypto-currency mining operations. Accordingly, we will need to raise additional capital to fund our future operations. Until such time that we can generate substantial revenue from operations, if ever, we expect to finance our operating activities through a combination of $(21,616) or $(0.01) per common share basicequity offerings and diluted as compareddebt financings and we may seek to a loss from operations of $(12,020) or $(0.00) per common share basic and diluted for the same period last year.raise additional capital through strategic collaborations.


Since inception




However, we may be unable to raise additional funds or enter into such arrangements when needed on February 22, 2013,favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our operations. Failure to receive additional funding could cause us to cease operations, in part or in full. Furthermore, even if we experienced anbelieve we have sufficient funds for our current or future operating loss of $(75,080).plans, we may seek additional capital due to favorable market conditions or strategic considerations, which may cause dilution to our existing stockholders.


DuringOff-Balance Sheet Transactions


We do not engage in off-balance sheet transactions.


Going Concern


The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the periodrealization of assets and satisfaction of liabilities in the normal course of business. The Company has reported net losses from ending March 31, 2017,continuing operations in the last two years and has suffered recurring losses totaling $2,627,994 since inception.  These factors, among others, indicate that the Company used net cash of $(21,843) in operations, and generated cash of $20,000 from financing activities.  This compares for the period ending March 31, 2016, where the Company used net cash of $(10,743) in operations and generated cash of $10,000 from financing activities.


Going Concern


Our abilitymay be unable to continue as a going concern is contingent uponfor a reasonable period of time.  The consolidated financial statements do not contain any adjustments to reflect the successful completionpossible future effects on the classification of additional financing arrangementsassets or the amounts and our ability to achieve and maintain profitable operations.


Therefore, management plans to raise equity capital to finance the operating and capital requirementsclassification of the Company.  Whileliabilities that may result should the Company is devoting its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations.  These conditions raise substantial doubt about the Company's abilityunable to continue as a going concern.


Summary of any product research and development that we will perform for the term of our plan of operation.


We have no plans to conduct any research, nor development based on the nature of our business.




Expected purchase or sale of plant and significant equipment


We do not anticipate the purchase or sale of any plant or significant equipment; as such items are not required by us at this time.


Significant changes in the number of employees


As of July 11, 2017, we have one employee who also serves as officer/director.  We are dependent upon our sole officer our future business development.  As our operations expand we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time.


LIQUIDITY AND CAPITAL RESOURCES


As of March 31, 2017, Holly Brothers Pictures, Inc. had $7,395 in cash and cash equivalentsfor total current assets of $7,395.  At the same date, Holly Brothers Pictures, Inc. had current liabilities of $30,300.


For the fiscal year ending March 31, 2017, the Company had no revenues.  Management intends to raise additional debt or equity financing to fund ongoing operations and necessary working capital. However, there is no assurance that such financing plans will be successful or be obtained in amounts sufficient to meet the Company’s needs.


Notwithstanding, Holly Brothers Pictures, Inc. anticipates generating losses and therefore may be unable to continue operations in the future. Holly Brothers Pictures, Inc. anticipates it will require additional capital in order to develop its business.  Holly Brothers Pictures, Inc. may use a combination of equity and/or debt instruments to funds its growth strategy or enter into a strategic arrangement with a third party.


Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.


Critical Accounting Policies and Estimates


Revenue Recognition:  The Company recognizes revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable,Significant Judgments and (iv) collectability is reasonably assured.For the period from February 22, 2013(inception) to March 31, 2017, the Company has not recognized any revenues.






Recent PronouncementsEstimates


The Company's management has evaluated allconsolidated financial statements have been prepared in accordance with generally accepted accounting principles in the recently issued accounting pronouncements throughUnited States, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the filingreported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of thesethe financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and doeson various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.


The current accounting polices surrounding the mining of crypto-currency are in a state of evolution and are subject to possible change by accounting standard setters and/or other legal or regulatory bodies in the future.  At the present time, we do not believe that any of these pronouncements will have a material impact on the Company's financial position and results of operations.


JOBS Act


On April 5, 2012, the Jumpstart Our Business Startups Act of 2012,such accounting policies applicable to our crypto-currency mining activities require any especially difficult, subjective or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would apply to private companies. We are electing to delay such adoption of new or revised accounting standards and, as a result, we may not comply with new or revised accounting standards at the same time as other public reporting companies that are not “emerging growth companies.”


In addition, we intend to rely on other exemptions from reporting and disclosure requirements that are offered by the JOBS Act, including (i) an exemptioncomplex judgments, resulting from the need to provide an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, and (ii) an exemption from the need to comply with any PCAOB requirement regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional informationmake estimates about the audit and our financial statements (auditor discussion and analysis).  These exemptions will apply for a periodeffect of five years following our first sale of common equity securities under an effective registration statement or until we no longer qualify as an “emerging growth company,” whichever is earlier.  For further information regarding disclosure and other exemptions available to us under the JOBS Act, please see “Prospectus Summary—The Company—Implications of Being an Emerging Growth Company.”matters that are inherently uncertain.


ItemITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS


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


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


The consolidated financial statements required by this item are set forth beginning in Item 8.15 of this report and are incorporated herein by reference.


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


There have been no disagreements with our independent registered public accountants on accounting or financial disclosure matters during our two most recent fiscal years.






ITEM 9A. CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures.


Our management, including our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Form 10-K. Based on this evaluation, our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), concluded that as a result of the material weakness in our internal controls over financial reporting discussed below, our disclosure controls and procedures were not effective at ensuring that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure.


Attestation Report of the Registered Public Accounting Firm


Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal controls over financial reporting.


Management's Report on Internal Control Over Financial Reporting


Our principal executive officer and our principal accounting and financial officer, are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management conducted an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2018. In making this assessment, management used the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Based on our assessment using those criteria, management concluded that our internal controls over financial reporting were not effective at the reasonable assurance level, primarily due to a lack of segregation of duties in financial reporting, as of March 31, 2018, and continue to be ineffective.  To the extent practical in light of its current financial condition, the Company will consider expanding financial reporting resources in the future.


It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.


In light of the material weakness described above, we performed additional analysis and other post-closing procedures to ensure our consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.


On February 1, 2018, the Company acquired 100% of the equity interests in Power Blockchain through an exchange agreement in a transaction that resulted in the transition from the Company’s existing business of repairing and selling wheelchairs to a new business of mining crypto-currency, as more fully described in Note 1 to the Company’s consolidated financial statements for the year ended March 31, 2018.  Except for those changes occasioned by that transition, there has been no change in our internal control over financial reporting during our most recent calendar quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


ITEM 9B. OTHER INFORMATION.


None.




PART III


ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


The following table sets forth certain information, with respect to our current directors and executive officers as of November 30, 2018.


Directors serve until the next annual meeting of the shareholders; until their successors are elected or appointed and qualified, or until their prior resignation or removal. Officers serve for such terms as determined by our board of directors. Each officer holds office until such officer’s successor is elected or appointed and qualified or until such officer’s earlier resignation or removal. No family relationships exist between any of our present directors and officers.


Name

Age

Position

Brent Willson

53

Director, President and Chief Executive Officer

Steve Bond

43

Director and Chief Financial Officer


The following is a brief account of the business experience during the past five years or more of each of our directors and executive officers.


Brent Willson. Brent Willson has served as a director and as our president, chief executive officer since January 2018. Col Willson recently retired after 30-years of distinguished service with the United States Marine Corps. Col Willson rose to the rank of USMC Colonel where he was responsible for large acquisitions, security, facilities and infrastructure. At the Office of the Secretary of Defense Acquisition, Col Willson was responsible for managing the DoD’s portfolio of helicopters and tilt-rotor aircraft.  Since March 2018, Col Willson has served as a director and as president and chief executive officer of NeoVolta, Inc., an intelligent home energy storage system company, and has accordingly devoted a lesser percentage of his time to the business affairs of the Company since then.  Col Willson holds a BS in Business Administration, a Masters of Military Science and a Masters of National Security and Strategic Studies. We believe Col Willson’s background in managing large portfolios and his educational background qualifies him to serve as a director of the company.


Steve Bond. Steve Bond has served as a director and as our chief financial officer since January 2018. Over the last 15 years, Steve Bond has worked with over 100 companies as a consulting executive in finance, strategy and revenue growth. Since March 2018, Mr. Bond has served as a director and as chief financial officer of NeoVolta, Inc., an intelligent home energy storage system company, and has accordingly devoted a lesser percentage of his time to the business affairs of the Company since then.  Mr. Bond has been active in the San Diego Rotary Club and serves on the Board of Promises to Kids. Mr. Bond graduated Summa Cum Laude in Finance from San Diego State University in 2000. We believe Mr. Bond’s consulting experience and his educational background qualifies him to serve as a director of the company.


Board Committees


We have not yet established any committees of our Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees in the future. We do not have a nominating committee or a nominating committee charter. The entire Board of Directors performs all functions that would otherwise be performed by committees. If we are able to grow our business and increase our operations, we intend to expand the size of our Board and allocate responsibilities accordingly.


Audit Committee Financial Expert


We have no separate audit committee at this time. The entire Board of Directors oversees our audits and auditing procedures. Given the present size of our Board, we do not believe that it is practical for us to have committees.




18



Shareholder Communications


We do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, no security holders have made any such recommendations.


Code of Ethics


We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. We intend to adopt a code of ethics in the near future.


Compliance with Section 16(a) of the Exchange Act


Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers and directors, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based upon a review of the copies of such forms furnished to us and written representations from our executive officers and directors, we believe that all reports were filed for the fiscal year, except for a Form 3 and Form 4, which reported one transaction, for each of Col Willson and Mr. Bond, which forms were filed on February 21, 2018.


ITEM 11. EXECUTIVE COMPENSATION


Effective January 25, 2018, our board of directors appointed Brent Willson and Steve Bond as members of the board of directors, and on such date, Anton Yeranossian resigned from the board of directors and as CEO of the Company. On January 29, 2018, we appointed Col Willson to serve as our Chief Executive Officer and President, and Steve Bond to serve as our Chief Financial Officer.


Our named executive officers for the fiscal year ended March 31, 2018, which consist of all individuals that served as our principal executive officer during the fiscal year and our other most highly compensated executive officer, are: (i) Brent Willson, our director, president and chief executive officer; (ii) Steve Bond, our director and chief financial officer; and (ii) Anton Yeranossian, our former chief executive officer.


Summary Compensation Table


Name and Principal Position

Year

Salary($)

Stock award ($)(1)

Total ($)

Brent Willson, President and Chief Executive Officer(2)

2018

$22,178

$5,375

$27,553

 

 

 

 

 

Steve Bond, Chief Financial Officer

2018

$12,087

$1,792

$13,879

 

 

 

 

 

Anton Yeranossian, Former Chief Executive Officer(4)

2018

-

-

-

 

2017

-

-

-


(1)

Represents the amortized portion of the grant date fair value of the stock awards granted calculated in accordance with FASB ASC Topic 718. These amounts are determined in accordance with the provisions of FASB ASC Topic 718, rather than an amount paid to or realized by the executive officer.  For a description of these stock awards, see Note 5 to the Company’s consolidated financial statements.


(2)

Col Willson joined the Company on January 25, 2018.   The amount shown in the first column represents the payments made by the Company to Col Willson from the start date of his engagement through March 31, 2018.  Such payments were made to Col Willson in his capacity as a contractor, not as an employee, and include $12,512 paid to his personal consulting company.





(3)

Mr. Bond joined the Company in January 25, 2018.  The amount shown in the first column represents the payments made by the Company to Mr. Bond from the start date of his engagement through March 31, 2018.  Such payments were made to Mr. Bond in his capacity as a contractor, not as an employee.


(4)

For the years ended March 31, 2017 and 2016, Mr. Yeranossian was the Company’s sole executive officer and director. The Company did not pay Mr. Yeranossian any compensation for his services as an executive officer or director of the Company.


Equity Awards


The Company: (i) did not grant any stock options to its executive officers or directors from inception through fiscal year end March 31, 2018 and March 31, 2017; (ii) did not have any outstanding equity awards as of March 31, 2018; and (iii) had no options exercised by its named executive officer in fiscal years ending March 31, 2018 and March 31, 2017.


Employment and Consulting Agreements


On January 29, 2018, the Company entered into an at-will employment agreement, which was subsequently amended, with Colonel Brent Willson pursuant to which Col. Willson agreed to serve as Chief Executive Officer and President of the Company commencing on such date.  Contemporaneous with Col. Willson’s execution of the agreement, Col. Willson purchased from the Company 750,000 shares of Company common stock at a purchase price of $0.001 per share. This stock grant was structured so that it is fully vested over a three year period and is subject to buyback by the Company if Col. Willson should leave the Company before then.  Further, the Company entered into a subsequent consulting agreement with Canmore International Inc., an entity controlled by Col. Willson, to provide it with consulting, marketing, design and public relations work, pursuant to which it has agreed to pay Canmore International Inc. fees generally equal to 66-2/3% of the amount to which Col. Willson would otherwise be entitled to receive for his services. The consulting agreement is terminable by either party at any time upon 30 days’ notice.


On January 29, 2018, the Company entered into an at-will employment agreement with Mr. Steve Bond pursuant to which Mr. Bond agreed to serve as Chief Financial Officer of the Company commencing on such date. Contemporaneous with Mr. Bond’s execution of the agreement, Mr. Bond purchased from the Company 250,000 shares of Company common stock at a purchase price of $0.001 per share. This stock grant was structured so that it is fully vested over a three year period and is subject to buyback by the Company if Mr. Bond should leave the Company before then.


Compensation of Directors


Our directors do not receive any compensation for serving as such.  As of the date hereof, there were no other arrangements between us and our directors that resulted in our making payments to any of our directors for any services provided to us by them as directors.


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


The following tables set forth certain information regarding the beneficial ownership of our common stock as of November 30, 2018 of (i) each person known to us to beneficially own more than 5% of our common stock, (ii) our directors, (iii) each named executive officer, and (iv) all directors and named executive officers as a group. As of November 30, 2018, there were a total of 1,204,000 shares of common stock outstanding. Each share of common stock is entitled to one vote on matters on which holders of voting stock of the Company are eligible to vote. The column entitled “Percent” shows the percentage of voting common stock beneficially owned by each listed party.






The number of shares beneficially owned is determined under the rules promulgated by the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which a person or entity has sole or shared voting power or investment power plus any shares which such person or entity has the right to acquire within sixty (60) days of November 30, 2018, through the exercise or conversion of any stock option, convertible security, warrant or other right. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares such power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity.


 

 

Beneficial Ownership

Directors and Executive Officers

 

Amount

 

Percent

 

 

 

 

 

Brent Willson (1)

 

750,000

 

62.3

Steve Bond (1)

 

250,000

 

20.8

Anton Yeranossian (2)

 

--

 

--

Directors and Executive Officers as a Group (3)

 

1,000,000

 

83.1


(1)

The shares in the table are subject to the Company’s right to buyback the shares as described in Item 11. Executive Compensation under the section “Employment and Consulting Agreements.”


(2)

Mr. Yeranossian resigned as a director and officer on January 25, 2018.


(3)

Includes the shares held by Col Wilson and Mr. Bond.


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


Prior Office Space


Until January 25, 2018, the Company’s former director, Anton Yeranossian, contributed office space for the Company’s use at no charge to the Company. The office space contributed was at the same location as A&A Medical Supply, a medical supply company managed by Anton Yeranossian.


Prior Service Agreement


The Company was party to a Service Agreement with A&A Medical Supply, LLC until the agreement was terminated on January 25, 2018.  The Company’s former officer and director, Mr. Yeranossian, is CEO of A&A Medical Supply and A&A Medical Supply is owned by the parents of Mr. Yeranossian.  The material terms of the Service Agreement between the Company and A&A Medical Supply were as follows: (i) the agreement gave the Company the right of first refusal to rebuild any wheelchairs returned to A&A Medical Supply, LLC; (ii) A&A agreed to provide the Company with wheelchairs in need of repair and provide the Company the specifications to rebuild the wheelchair for A&A’s client; (iii) the Company agreed to provide overall quality control, logistics in ordering the replacement components, the management and administrative duties with respect to rebuilding wheelchairs; and (iv) the wheelchairs must meet the specifications to qualify for Medicare/insurance reimbursement. When the wheelchairs were rebuilt to the satisfaction of A&A, the Company was permitted to bill A&A for parts and labor.


Director Independence


We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the Board of Directors be “independent” and, as a result, we are not at this time required to (and we do not) have our Board of Directors comprised of a majority of “Independent Directors.”





Our Board of Directors has considered the independence of its Directors in reference to the definition of “Independent Director” established by the Nasdaq Marketplace Rule 5605(a)(2). In doing so, the Board of Directors has reviewed all commercial and other relationships of each director in making its determination as to the independence of its Directors. After such review, the Board of Directors has determined none of our directors qualifies as independent under the requirements of the Nasdaq listing standards.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


Aggregate fees for professional services rendered by AMC Auditing for their services for the fiscal years ended March 31, 2018 and 2017, respectively, were as follows:


 

 

2018

 

2017

Audit and Quarterly Review Fees

 

$

12,000

 

$

9,773

Audit-related fees

 

 

-

 

 

-

Tax fees

 

 

-

 

 

-

All other fees

 

 

-

 

 

-

TOTAL

 

$

12,000

 

$

9,773


Audit and Quarterly Review Fees


Audit fees represent the aggregate fees billed for professional services rendered by our independent accounting firm for the audit of our annual financial statements, review of financial statements included in our quarterly reports, review of registration statements or services that are normally provided in connection with statutory and regulatory filings or engagements for those fiscal years.


Audit-Related Fees


Audit-related fees represent the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under Audit Fees.


Tax Fees


Tax fees represent the aggregate fees billed for professional services rendered by our principal accountants for tax compliance, tax advice, and tax planning for such years.


All Other Fees


All other fees represent the aggregate fees billed for products and services other than the services reported in the other categories.


Audit Committee Pre-Approval Policies and Procedures


We do not have an audit committee. Our Board of Directors performs the function of an audit committee. Section 10A(i) of the Exchange Act prohibits our auditors from performing audit services for us as well as any services not considered to be audit services unless such services are pre-approved by our audit committee or, in cases where no such committee exists, by our Board of Directors (in lieu of an audit committee) or unless the services meet certain de minimis standards.











PART IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS


(a)

Documents filed as part of this Report


1.

Financial Statements


The consolidated financial statements and notes thereto which are attached hereto beginning on page F-1 have been included by reference into Item 8 of this part of the annual report on Form 10-K. See the Index to Consolidated Financial Statements and Supplementary Data.on page F-1.


2.

Financial Statement Schedules


All schedules are omitted because they are inapplicable or not required or the required information is shown in the consolidated financial statements or notes thereto.


3.

Exhibits


The information required by this Item is set forth in the Exhibit Index that follows the signature page of this Annual Report.


EXHIBIT INDEX


Exhibit

Number

Description

3.1

Articles of Incorporation (incorporated by reference to exhibit 3.1 of the Form S-1 filed May 23, 2013)

3.2

Bylaws (incorporated by reference to exhibit 3.2 of the Form S-1 filed May 23, 2013)

4.1

Form of five-year Note issued in Exchange Agreement between Holly Brothers Pictures, Inc., PBC Group, LLC and Black Car, Inc. dated February 1, 2018 (incorporated by reference to exhibit 10.4 of the Form 8-K) filed February 2, 2018)

10.1 **

Holly Brothers Pictures, Inc. 2018 Incentive Plan (incorporated by reference to Annex B to the Definitive Information Statement filed March 5, 2018)

10.2 **

Employment Agreement between Holly Brothers Pictures, Inc. and Brent Willson dated January 29, 2018 (incorporated by reference to exhibit 10.1 of the Form 8-K filed February 2, 2018)

10.3 **

Employment Agreement between Holly Brothers Pictures, Inc. and Steve Bond dated January 29, 2018 (incorporated by reference to exhibit 10.2 of the Form 8-K filed February 2, 2018)

10.4

Exchange Agreement between Holly Brothers Pictures, Inc., PBC Group, LLC and Black Car, Inc. dated February 1, 2018 (incorporated by reference to exhibit 10.3 of the Form 8-K filed February 2, 2018)

10.5

Form of promissory notes due July 31, 2018 issued effective January 25, 2018 (incorporated by reference to exhibit 10.5 of the Form 8-K filed February 2, 2018)

10.6 **

Consulting Agreement between Holly Brothers Pictures, Inc. and Canmore International, Inc. dated February 15, 2018 (incorporated by reference to exhibit 10.1 of the Form 8-K filed March 9, 2018)





Exhibit

Number

Description

10.7 **

Amendment to the Employment Agreement between Holly Brothers Pictures, Inc. and Brent Willson dated February 15, 2018 (incorporated by reference to exhibit 10.2 of the Form 8-K filed March 9, 2018)

10.8

Settlement and Mutual Release Agreement, dated March 22, 2018 (incorporated by reference to exhibit 10.1 of the Form 8-K filed March 30, 2018)

10.9

Stipulation and Proposed Order Thereon, dated March 22, 2018 (incorporated by reference to exhibit 10.2 of the Form 8-K filed March 30, 2018)

21

Subsidiaries of the Registrant

Power Blockchain, LLC (Wyoming)

31.1*

Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes- Oxley Act of 2002

31.2*

Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1*

Certification of Principal Executive Officer Pursuant to Section  906 of the Sarbanes-Oxley Act of 2002

32.2*

Certification of Principal Financial Officer 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.PRE *

XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF *

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB *

XBRL Taxonomy Extension Label Linkbase Document


*

Filed herewith.


**

Denotes a management contract or compensatory plan or arrangement.
















SIGNATURES


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


HOLLY BROTHERS PICTURES, INC.

Date: December 6, 2018

By:

/s/ Brent Willson

Brent Willson,

Chief Executive Officer, President and Director



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


Signature

Title

Date

/s/ Brent Willson

Chief Executive Officer, President, and Director

December 6, 2018

Brent Willson

(Principal Executive Officer)

/s/ Steve Bond

Chief Financial Officer and Director

December 6, 2018

Steve Bond

(Principal Financial and Accounting Officer)


























Holly Brothers Pictures, Inc.

(formerlyPowerMedChairs)

Financial Statements



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Financial Statements:


Report of Independent Registered Public Accounting Firm for the year ended March 31, 2016

F-1

 

Report of Independent Registered Public Accounting Firm for the yearyears ended March 31, 2018 and 2017

F-2

 

 

 

 

Consolidated Balance Sheets as of March 31, 20172018 and 20162017

F-3

 

 

 

 

Consolidated Statements of Operations for the years ended March 31, 20172018 and March 31, 20162017

F-4

 

 

 

 

Consolidated Statements of Stockholders’ Deficit for the years ended March 31, 20172018 and March 31, 20162017

F-5

 

 

 

 

Consolidated Statements of Cash Flows for the years ended  March 31, 20172018 and March 31, 20162017

F-6

 

 

 

Notes to the Consolidated Financial Statements

F-7




























29



Seale & Beers, CPAs

Certified Public Accountants

PCAOB Registered Auditors - www.sealebeers.com


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of

PowerMedChairsHolly Brothers Pictures, Inc.


Opinion on the Financial Statements


We have audited the accompanying balance sheets of PowerMedChairsHolly Brothers Pictures, Inc. (the “Company”) as of March 31, 20152018 and 2016March 31, 2017 and the related statements of income,operations, stockholders’ equity, (deficit), and cash flows for each of the years in the two-year period ended March 31, 2016.  PowerMedChairs’s management is responsible2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2018 and March 31, 2017, and the results of its operations and its cash flows for theseeach of the years in the two-year period ended March 31, 2018 in conformity with accounting principles generally accepted in the United States of America.


Basis for Opinion


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


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits, we are required to obtain an understanding of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’sCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes


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


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PowerMedChairs as of March 31, 2015 and 2016, and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended March 31, 2016 in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has no revenues, has negative working capital at March 31, 2016,2018, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern.  Management’s plans concerning these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Seale and Beers, CPAs


Seale and Beers, CPAs

Las Vegas, Nevada

June 15, 2016



F-1



AMC Auditing

Certified Public Accountants

PCAOB Registered Auditors - www.amclasvegas.com


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of

Holly Brothers Pictures, Inc.


We have audited the accompanying balance sheet of Holly Brothers Pictures, Inc. as of March 31, 2017 and the related statements of operations, stockholders’ equity (deficit), and cash flows for year ended March 31, 2017. Holly Brothers Pictures, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.


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


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Holly Brothers Pictures, Inc. as of March 31, 2017, and the results of its operations and its cash flows for the year ended March 31, 2017 in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has no revenues, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern.  Management’s plans concerning these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ AMC Auditing


AMC Auditing

We have served as the Company’s auditor since 2016

Las Vegas, Nevada

July 11, 2017November 30, 2018





Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Consolidated Balance Sheets



 

 

March 31, 2017

 

March 31, 2016

 

 

 

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

  Cash and cash equivalents

 

$

7,395

 

$

9,238

  Prepaid expense

 

 

-

 

 

750

    Total current assets

 

 

7,395

 

 

9,988

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

7,395

 

$

9,988

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

  Accounts payable

 

$

300

 

$

1,277

  Due to related party

 

 

30,000

 

 

10,000

    Total current liabilities

 

 

30,300

 

 

11,277

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

2,710

 

 

2,710

  Common stock, $0.001 par value, 200,000,000 shares

    authorized, 2,710,000 and 2,710,000 issued and outstanding

    as of 3/31/2017 and 3/31/2016, respectively

 

 

 

 

 

 

  Additional paid-in capital

 

 

49,465

 

 

49,465

  Retained deficit

 

 

(75,080)

 

 

(53,464)

    Total stockholders’ equity

 

 

(22,905)

 

 

(1,289)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

7,395

 

$

9,988








 

 

March 31, 2018

 

March 31, 2017

 

 

 

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

12,297

 

$

7,395

 

Prepaid insurance

 

 

10,184

 

 

-

 

 

Total current assets

 

 

22,481

 

 

7,395

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

 

Computers, equipment and software

 

 

186,579

 

 

-

 

Accumulated depreciation and impairment

 

 

(186,579)

 

 

-

 

 

Net property and equipment

 

 

-

 

 

-

 

 

 

 

 

 

 

Other indefinite-lived intangible assets:

 

 

 

 

 

 

 

Internally-generated Bitcoin

 

 

3,761

 

 

-

 

 

Total other assets

 

 

3,761

 

 

-

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

26,242

 

$

7,395

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable - other

 

 

$11,550

 

$

300

 

Accounts payable - related party

 

 

3,400

 

 

-

 

Notes payable - related parties

 

 

645,335

 

 

30,000

 

Accrued interest payable

 

 

28,609

 

 

-

 

 

Total current liabilities

 

 

688,894

 

 

30,300

 

 

 

 

 

 

 

Other liabilities:

 

 

 

 

 

 

 

Non-current convertible notes payable - related parties

 

 

2,200,000

 

 

-

 

 

Total liabilities

 

 

2,888,894

 

 

30,300

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized,

  1,204,000 and 2,710,000 shares issued and outstanding as of

  3/31/2018 and 3/31/2017, respectively

 

 

1,204

 

 

2,710

 

Additional paid-in capital

 

 

101,477

 

 

49,465

 

Accumulated deficit

 

 

(2,627,994)

 

 

(75,080)

 

Treasury stock

 

 

(337,339)

 

 

-

 

 

Total stockholders’ equity

 

 

(2,862,652)

 

 

(22,905)

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

26,242

 

$

7,395






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




Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Consolidated Statements of Operations



 

For the year ended

March 31, 2017

 

For the year ended

March 31, 2016

 

For the year ended

March 31, 2018

 

For the year ended

March 31, 2017

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

-

 

$

-

Revenue

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

General & administrative

 

 

21,616

 

 

12,020

Total expenses

 

 

21,616

 

 

12,020

 

 

 

 

 

 

General & administrative

 

 

135,682

 

 

21,616

Loss from operations

 

 

(21,616)

 

 

(12,020)

Depreciation expense

 

 

16,393

 

 

-

 

Total operating expenses

 

 

152,075

 

 

21,616

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

Impairment expense:

 

 

 

 

 

 

  Goodwill

 

 

(2,200,000)

 

 

-

  Property and equipment

 

 

(170,186)

 

 

-

  Other intangible assets

 

 

(2,044)

 

 

-

Interest expense

 

 

(28,609)

 

 

-

 

Total other income (expense)

 

 

(2,400,839)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss)

 

$

(21,616)

 

$

(12,020)

Net (Loss)

 

$

(2,552,914)

 

$

(21,616)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common

shares outstanding- basic

 

 

2,710,000

 

 

2,710,000

Weighted average number of common

shares outstanding- basic

 

 

2,466,090

 

 

2,710,000

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share

 

$

(0.01)

 

$

(0.00)

Net loss per share

 

$

(1.04)

 

$

(0.01)





















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




Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Consolidated Statement of Stockholder’sStockholders’ Equity


 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Additional

 

During

 

Total

 

 

Common Stock

 

Paid-In

 

Development

 

Stockholders'

 

 

Shares

 

Amount

 

Capital

 

Stage

 

Equity

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2015

 

2,710,000

 

2,710

 

49,465

 

(41,444)

 

10,731

 

 

 

 

 

 

 

 

 

 

 

Net (loss)

 

-

 

-

 

-

 

(12,020)

 

(12,020)

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2016

 

2,710,000

 

2,710

 

49,465

 

(53,464)

 

(1,289)

 

 

 

 

 

 

 

 

 

 

 

Net (loss)

 

-

 

-

 

-

 

(21,616)

 

(21,616)

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2017

 

2,710,000

 

$2,710

 

$49,465

 

$(75,080)

 

$(22,905)




 

 

Common Stock

 

Additional

Paid-In

Capital

 

Accumulated

Deficit

Treasury

Stock

Stockholders'

Equity

Shares

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2016

 

2,710,000

 

$

2,710

 

$

49,465

 

$

(53,464)

$

-

$

(1,289)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss)

 

-

 

 

-

 

 

-

 

 

(21,616)

 

-

 

(21,616)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2017

 

2,710,000

 

 

2,710

 

 

49,465

 

 

(75,080)

 

-

 

(22,905)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued to settle

notes payable

 

155,172

 

 

155

 

 

44,845

 

 

-

 

-

 

45,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of treasury stock

 

(2,661,172)

 

 

(2,661)

 

 

-

 

 

-

 

(337,339)

 

(340,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares to officers

 

1,000,000

 

 

1,000

 

 

7,167

 

 

-

 

-

 

8,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss)

 

-

 

 

-

 

 

-

 

 

(2,552,914)

 

-

 

(2,552,914)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2018

 

1,204,000

 

$

1,204

 

$

101,477

 

$

(2,627,994)

$

(337,339)

$

(2,862,652)






















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




Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Consolidated Statements of Cash Flows



 

For the year ended

March 31, 2017

 

For the year ended

March 31, 2016

 

 

 

 

OPERATING ACTIVITIES

 

 

 

Net loss

$

(21,616)

 

$

(12,020)

Adjustment to reconcile net loss to net cash

  used by operating activities:

 

 

 

 

 

  Changes in operating assets and liabilities:

 

 

 

 

 

    Accounts payable

 

(977)

 

 

1,277

    Prepaid expense

 

750

 

 

-

Cash (used) by operating activities

 

(21,843)

 

 

(10,743)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

  Due to related party

 

20,000

 

 

10,000

Net cash provided by financing activities

 

20,000

 

 

10,000

 

 

 

 

 

 

NET DECREASE IN CASH

 

(1,843)

 

 

(743)

  CASH - BEGINNING OF THE PERIOD

 

9,238

 

 

9,981

  CASH - END OF THE PERIOD

$

7,395

 

$

9,238

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES:

 

 

 

  Interest paid

-

 

-

  Income taxes paid

-

 

-








 

For the year ended

March 31, 2018

 

For the year ended

March 31, 2017

 

 

 

 

OPERATING ACTIVITIES

 

 

 

Net loss

$

(2,552,914)

 

$

(21,616)

Adjustment to reconcile net loss to net cash

  used by operating activities:

 

 

 

 

 

 

Impairment expense:

 

 

 

 

 

 

  Goodwill

 

2,200,000

 

 

-

 

  Property and equipment

 

170,186

 

 

-

 

Depreciation expense

 

16,393

 

 

-

 

Stock compensation expense

 

7,167

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accrued interest payable

 

28,609

 

 

-

 

 

Accounts payable - other

 

11,250

 

 

(977)

 

 

Accounts payable - related party

 

3,400

 

 

-

 

 

Prepaid expense

 

(10,184)

 

 

750

 

 

Internally-generated Bitcoin

 

(3,761)

 

 

-

Net cash (used) by operating activities

 

(129,854)

 

 

(21,843)

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

  Purchase of computers and equipment

 

(38,620)

 

 

-

Net cash (used) in investing activities

 

(38,620)

 

 

-

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

  Issuance of notes payable to related parties

 

172,376

 

 

20,000

  Issuance of common stock to officers

 

1,000

 

 

-

Net cash provided by financing activities

 

173,376

 

 

20,000

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

4,902

 

 

(1,843)

  CASH - BEGINNING OF THE PERIOD

 

7,395

 

 

9,238

  CASH - END OF THE PERIOD

$

12,297

 

$

7,395

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

  Interest paid

$

-

 

$

-

  Income taxes paid

 

-

 

 

-

 

 

 

 

 

 

Non-Cash Investing and Financing Activities:

 

 

 

 

 

  Stock issued to settle Notes Payable

$

45,000

 

$

-

  Issuance of Notes Payable for Goodwill

 

2,200,000

 

 

-

  Issuance of Notes Payable for Treasury Stock

 

340,000

 

 

-

  Issuance of Notes Payable for computers and equipment

 

147,959

 

 

-






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



F-6



Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Notes to Consolidated Financial Statements

March 31, 2018 and 2017

(Audited)



NOTE 1. GENERAL ORGANIZATION AND BUSINESS


Holly Brothers Pictures, Inc. is a Nevada Corporation incorporated in the State of Nevada on February 22, 2013 as PowerMedChairs, and is considered to be an emerging growth company under applicable federal securities laws. The Company’s plan of operation is to re-build wheelchairs in disrepair, market its services and sell wheelchairs. On June 2, 2017, the Company changed its name to Holly Brothers Pictures, Inc.  On February 1, 2018, the Company acquired 100% of the equity interests in Power Blockchain, LLC (“Power Blockchain”) through an exchange agreement in a transaction that resulted in the transition from the Company’s existing business of repairing and selling wheelchairs to a planned new business of mining crypto-currency (see Note 4).



NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Accounting

The basis is United States generally accepted accounting principles.  The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Power Blockchain, since February 1, 2018.


Cash and Cash Equivalents

The Company considers all short-term investments with a maturity of three months or less at the date of purchase to be cash and cash equivalents.


Earnings per Share

The basic earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the weighted average number of common shares issued and outstanding during the year. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first year for any potentially dilutive debt or equity.


The Company has not issued any options or warrants or similar securities since inception.


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 2018 and 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.


Level 1:1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market.



F-7



Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Notes to Financial Statements

March 31, 2017

(Audited)



Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.


Level 2:2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.






Holly Brothers Pictures, Inc.

Notes to Consolidated Financial Statements

March 31, 2018 and 2017

(Audited)


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Fair value of financial instruments (Continued)


Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.


Revenue recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is a persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.


The Company will record revenue when it is realizable and earned and the services have been rendered to the customers.  TheBased on such criteria, the Company didhas not realizerecorded any revenues from Inception on February 22, 2013 through March 31, 2017.2018.


Goodwill

We periodically evaluate goodwill arising from business combinations by applying a goodwill impairment test, both qualitatively and, quantitatively, if necessary, in accordance with the provisions of ASC 350, Intangibles - Goodwill and Other (see Note 4).


Property and Equipment

Computers, equipment and software are generally depreciated on a straight-line basis over their estimated useful lives ranging up to three years (see Note 4).


Bitcoin

Internally-generated Bitcoin is recorded at the lower of cost or market value based on industry standard quoted prices for Bitcoin.


Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the period shown.


Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.


Year-end

The Company has selected March 31 as its fiscal year-end.



F-8



Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Notes to Financial Statements

March 31, 2017

(Audited)



Advertising

Advertising is expensed when incurred. There has been no advertising during the periods.





Holly Brothers Pictures, Inc.

Notes to Consolidated Financial Statements

March 31, 2018 and 2017

(Audited)


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.



NOTE 3. - GOING CONCERN


The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not commenced its planned principal operations and it has not generated any revenues and has suffered recurring losses totaling $75,080$2,627,994 since inception. In order to obtain the necessary capital, the Company is seeking equity and/or debt financing. There are no assurances that the Company will be successful, without sufficient financing it would be unlikely for the Company to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.



NOTE 4. -ACQUISITION OF POWER BLOCKCHAIN


Effective February 1, 2018, the Company acquired 100% of the equity interests in Power Blockchain through an exchange agreement between the Company and the two owners of Power Blockchain. Pursuant to the exchange agreement, the sole consideration in this transaction was the issuance by the Company of unsecured notes payable to the two owners of Power Blockchain in the amount of $2,200,000. Such notes payable were structured to: (i) mature five years from the date of issuance, (ii) accrue interest at the rate of 5% per annum, (iii) require repayment in four equal installments beginning on the second anniversary of issuance, and (iv) are convertible into the Company’s common stock at a conversion price of $0.13 per share.


We have accounted for the acquisition of Power Blockchain as a business combination, with the Company treated as the acquirer, in accordance with the provisions of ASC 805, Business Combinations.  At the time of the transaction, Power Blockchain was a start-up venture with little or no identifiable assets or operations, therefore, we allocated the entire merger consideration in the amount of $2,200,000 to the category of Goodwill for accounting purposes.  No pro forma financial information has been presented since Power Blockchain was a start-up venture.


Due to unforeseen economic and market conditions that arose soon after the acquisition, we believe that the results of the Company’s initial bitcoin mining operations through the Power Blockchain entity should be considered inconclusive to date, with no revenues yet recorded.  As a result of these conditions, we have determined that it would be appropriate to recognize an impairment adjustment in the full amount of $2,200,000, in order to reduce the carrying value of the Goodwill to zero as of March 31, 2018.  Additionally, we recognized an impairment adjustment in the amount of $170,186 to reduce the carrying value of the property and equipment deployed in the bitcoin mining operations to zero as of March 31, 2018.






Holly Brothers Pictures, Inc.

Notes to Consolidated Financial Statements

March 31, 2018 and 2017

(Audited)


NOTE 5. STOCKHOLDERS' EQUITY AND CONTRIBUTED CAPITAL


TheOn January 25, 2018, in conjunction with the acquisition of Power Blockchain, the Company is authorized to issue 200,000,000purchased a total of 2,661,172 shares of its $0.001 par value common stock.stock from the former management group for a negotiated payment in the amount of $340,000, or $0.13 per share, which has been accounted for as Treasury Stock.


On February 22, 2013,January 29, 2018, also in conjunction with the acquisition of Power Blockchain, the Company issued a foundertotal of 1,000,000 shares of common stock, at a purchase price of $0.001 per share, to two new officers who were engaged to affect the transition to the business of bitcoin mining. These stock grants were structured so that they are fully vested over a three year period and are subject to buyback by the Company if either officer should leave the Company before then. We have valued the stock grants at an incremental amount of $129,000, based on the negotiated price of the Company contributed capitalsimultaneously purchased treasury stock noted above, and are amortizing that amount as stock compensation expense over a period of $175 cash for incorporation fees.three years (of that amount, $7,167 was amortized in the last two months of the year ended March 31, 2018).


On February 27, 2013,Taking the above transactions into consideration, as well as the conversion of a founder of the Company contributed capital of $49,500 cash for working capital.


On February 27, 2013, the Company’s founders purchased 2,500,000$45,000 note payable into 155,172 shares of the Company’s $0.001 par value common stock in exchange for cash of $2,500.







F-9



Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Notes to Financial Statements

March 31,December 2017,

(Audited)



On March 26, 2013, the Company formed a subsidiary, PowerMedChairs Shareholder Acquisition Corporation. On March 29, 2013, Holly Brothers Pictures, Inc. Shareholder Acquisition Corporation purchased 25,000,000 shares of Tropical PC for $10,000, whereby it gained controlling interest in Tropical PC. The Company then cancelled those 25,000,000 shares on March 31, 2013, after which Tropical PC had 210,000 common shares issued and outstanding. The shareholders of Tropical PC exchanged all of their 210,000 shares for shares in the subsidiary on a one-for-one basis. Subsequently, the subsidiary collapsed into Holly Brothers Pictures, Inc., and the subsidiary’s shareholders received a one-for-one share exchange of Holly Brothers Pictures, Inc. shares for a total of 210,000 shares.1,204,000 shares of common stock issued and outstanding as of March 31, 2018.


There have been no issuances of stock options or warrants. However, in March 2018, the Board approved the establishment of a new 2018 Stock Option Plan with an authorization for the issuance of up to 1,000,000 shares of common stock. The Plan is designed to provide for future discretionary grants of stock options, stock awards and stock unit awards to key employees and non-employee directors.



NOTE 6. NOTES PAYABLE


As of March 31, 2018, the Company had the following long-term debt obligations:


Promissory notes issued to former owners in acquisition of Power Blockchain,

accruing interest at 5% per annum, principal repayments due in four equal

installments on 2nd, 3rd, 4th and 5th anniversaries, convertible into common

stock at $0.13 per share.

 

$

2,200,000

 

 

 

 

Other short term notes issued to various affiliates of the former owners of Power

Blockchain for  acquisition of Treasury Stock, computers and equipment, and

working capital financing, at stated interest rates of 10%.

 

 

645,335

 

 

 

 

 

 

 

2,845,335

Current portion of long term debt

 

 

(645,335)

 

 

 

 

Long term debt, net of current portion

 

$

2,200,000


Future maturities of long-term debt as of March 31, 2018 are as follows:







Holly Brothers Pictures, Inc.

Notes to Consolidated Financial Statements

March 31, 2018 and 2017 2,710,000 common shares were issued & outstanding.

(Audited)


NOTE 5.6. NOTES PAYABLE (CONTINUED)


Year ending March 31, 2019

 

$

--

Year ending March 31, 2020

 

 

550,000

Year ending March 31, 2021

 

 

550,000

Year ending March 31, 2022

 

 

550,000

Year ending March 31, 2023

 

 

550,000

 

 

$

2,200,000


At the time of the Power Blockchain acquisition, Power Blockchain had outstanding unsecured notes payable to the two owners in the amount of $570,000, which were overdue and in default. Shortly thereafter, the Company entered into negotiations with the note holders in an attempt to settle these obligations. As a result of those efforts, a settlement agreement was reached in March 2018 to convert the notes payable into the right for the two note holders to receive periodic issuances of the Company’s common stock of up to approximately 3,000,000 shares each, that would be exempted from registration pursuant to Section 3(a)(10) of the Securities Act of 1933.  The settlement agreement stipulated that the issuance of such shares shall occur in respective tranches such that the resulting number of shares owned by each holder would not exceed 4.9% of the Company’s then outstanding shares of common stock. To date, no such shares have been issued. Post-settlement, the Company has no further obligation to repay the notes, therefore, no accounting recognition was given to them in the purchase price allocation for the acquisition. No value has been given to the note holders’ rights to receive shares due to the wide range of possible variables that would need to be quantified in order to make such a valuation and the resulting inherent imprecision.


NOTE 7. RELATED PARTY TRANSACTIONS


On February 22, 2013, a founder ofIn the Company contributed capital of $175 cash for incorporation fees.


On February 27, 2013, a founder of the Company contributed capital of $49,500 cash for working capital.


On February 27, 2013, the Company’s founders purchased 2,500,000 shares of the Company’s $0.001 par value common stock in exchange for cash of $2,500.


On January 20, 2016 an entity associated with an officer loaned the Company $10,000 for working capital. An additional $20,000 for working capital was loaned during the fiscal year ended March 31, 2017. As2018, the Company entered into several transactions with various related parties to: (i) purchase shares of March 31, 2017, $30,000Treasury Stock from the former management team, (ii) issue new shares of this loan remained due. The loan bears no interestcommon stock to officers, and is due upon demand.(iii) convert notes payable into shares of common stock, as more fully described in Note 5.


The Company does not lease or rent any property.  Office services are provided without charge by a director. Such costs are immaterial to the consolidated financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.





F-10



Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Notes to Financial Statements

March 31, 2017

(Audited)



NOTE 6.8. PROVISION FOR INCOME TAXES


The Company accounts for income taxes under FASB Accounting Standard Codification ASC 740 "Income Taxes". ASC 740 requires use of the liability method. ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.


As of March 31, 2017,2018, the Company had net operating loss carry forwards of $21,616,approximately $345,747, after taking certain non-deductible items into account, as compared to $12,020$21,616 at March 31, 2016,2017, that may be available to reduce future years' taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. Net operating losses will begin to expire in 2030.2038.




Holly Brothers Pictures, Inc.

Notes to Consolidated Financial Statements

March 31, 2018 and 2017

(Audited)


NOTE 8. PROVISION FOR INCOME TAXES (CONTINUED)


Components of net deferred tax assets, including a valuation allowance, are as follows at March 31, 20172018 and March 31, 2016:2017:


2017

 

2016

2018

 

2017

Deferred tax assets:

 

 

 

 

 

 

 

 

Net operating loss carry forward

$

7,566

 

$

4,207

$

72,600

 

$

7,566

 

 

 

 

 

 

 

 

 

 

Total deferred tax assets

 

7,566

 

 

4,207

 

72,600

 

 

7,566

Less: valuation allowance

 

(7,566)

 

 

(4,207)

 

(72,600)

 

 

(7,566)

Net deferred tax assets

$

--

 

$

--

$

--

 

$

--


The valuation allowance for deferred tax assets for the year ending March 31, 20172018 was $(7,566)$(72,600), as compared to $(4,207)$(7,566) for the same period last year. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of March 31, 2017.





F-11



Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Notes to Financial Statements

March 31, 2017

(Audited)



2018. The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:


U.S federal statutory rate

 (35.0%(21.0%)

Valuation reserve

35.0%21.0%

Total

---%


At March 31, 2017,2018, we had an unused net operating loss carryover approximating $75,080$420,800, after taking certain non-deductible items into account, that is available to offset future taxable income which expires beginning 2030.2038.



NOTE 7.9. OPERATING LEASES AND OTHER COMMITMENTS


The Company has no lease or other obligations.



NOTE 8.10. RECENT ACCOUNTING PRONOUNCEMENTS


The Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these consolidated financial statements and does not believe that any of these pronouncements will have a material impact on the Company's financial position and results of operations.


NOTE 9. LITIGATION


There are currently the following two cases pending which the Company is defending:


Mark DeStefano v. PowerMedChairs, A&A Medical Supply, LLC, Anushavan Yeranossian, and Anton Yeranossian, filed as Eighth Judicial District Court Case No. A-17-750526-C, filed February 2, 2017, in which the Plaintiff alleges claims for Breach of Contract and Unjust Enrichment. The Company has filed an Answer denying all material allegations. The matter has been referred to the Court Annexed Non-Binding Arbitration Program. Discovery has not yet commenced. Management intends to contest this matter vigorously. Due to the early stage of this matter, the likelihood of an unfavorable outcome and any potential range of loss is too difficult to determine at this time.






F-12



Holly Brothers Pictures, Inc.

(formerly PowerMedChairs)

Notes to Consolidated Financial Statements

March 31, 2018 and 2017

(Audited)


NOTE 11. LITIGATION


Ed DeStefano, Mark DeStefanoFrom time to time in the ordinary course of our business, we may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and T.J. Jesky v. Anton Yeranossianresult in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and PowerMedChairs, filed as Eighth Judicial District Court Case No. A-17-750604-C, filed February 3, 2017,estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages, and until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these proceedings involve matters of which the Plaintiffs allege claims for Breach of Fiduciary Duty (Against Defendant Yeranossian), Gross Negligence (Against Defendant PowerMedChairs) and Unjust Enrichment (Against Defendant Yeranossian). The Company has filed an Answer denying all material allegations. The matter has been referred to the Court Annexed Non-Binding Arbitration Program. Discovery has not yet commenced. Management intends to contest this matter vigorously. Due to the early stage of this matter, the likelihood of an unfavorable outcome and any potential range of loss is toooutcomes are inherently difficult to determinepredict. We have insurance policies covering potential losses where such coverage is cost effective.


We are not at this time.time involved in any legal proceedings.



NOTE 10.12. SUBSEQUENT EVENTS


The Company’s BoardDuring the months of Directors approved changingApril, May and June 2018, the nameCompany made additional short-term borrowings from a related party in the total amount of $72,000 on the Company’s name to Holly Brothers Pictures, Inc. on June 2, 2017.same terms as the borrowings made in the year ended March 31, 2018.  There have been no other reportable subsequent events that have occurred since March 31, 2018.




























Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure.F-13


Not Applicable.


Item 9A(T). Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the SEC, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.


Management, with the participation of the Chief Executive Officer and the Chief Financial Officer, who is also the sole member of our Board of Directors, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-K.  Based on such evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of March 31, 2017, our disclosure controls and procedures were not effective.  Our disclosure controls and procedures were not effective because of the "material weaknesses" described below under "Management's annual report on internal control over financial reporting," which are in the process of being remediated as described below under "Management Plan to Remediate Material Weaknesses."


Management's Report on Internal Control over Financial Reporting


Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in rules promulgated under the Exchange Act, is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and affected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that:


·

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

·

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and

·

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements



30



Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements.  Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.  Internal control over financial reporting also can be circumvented by collusion or improper override.  Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Further, over time control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.


Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2017.  In making its assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").  Based on its assessment, management has concluded that we had certain control deficiencies described below that constituted material weaknesses in our internal controls over financial reporting.  As a result, our internal controls over financial reporting were not effective as of March 31, 2017.


A "material weakness" is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis by the company's internal controls.  As a result of management's review of the investigation issues and results, and other internal reviews and evaluations that were completed after the end of fiscal year 2017 related to the preparation of management's report on internal controls over financial reporting required for this annual report on Form 10-K, management concluded that we had material weaknesses in our control environment and financial reporting process consisting of the following:


1.

lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and


2.

insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements;


We do not believe the material weaknesses described above caused any meaningful or significant misreporting of our financial condition and results of operations for the fiscal year ended March 31, 2017.  However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.






Management Plan to Remediate Material Weaknesses


Management is pursuing the implementation of corrective measures to address the material weaknesses described below.  In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:


We plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.  Additionally, we will create written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements


We believe the remediation measures described above will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting.  We are committed to continuing to improve our internal control processes and will continue to diligently and vigorously review our financial reporting controls and procedures.  As we continue to evaluate and work to improve our internal control over financial reporting, we may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.


Changes in Internal Control over Financial Reporting


There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


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


Changes in internal controls over financial reporting


There was no change in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.


Item 9B. Other Information


None.





PART III


Item 10. Directors, Executive Officers and Corporate Governance.


(a) Identification of Directors and Executive Officers.


The following table sets forth certain information regarding our current directors and executive officers.  Our executive officers serve one-year terms.


Name

Age

Positions and Offices Held

Anton Yeranossian

56

Director/Chairman/CEO/CFO


B. Work Experience


Biography of Anton Yeranossian, Director, Chairman, CEO, and CFO


Mr. Yeranossian is anexperienced businessman with over seven years working in the field of medical supplies and appliances. He was born in Nalband, Armenia, in January 19 1961.


In 2005, A&A Medical Supply LLC was opened in Chagrin Falls, Ohio.


2006-Present Mr. Yeranossian holds the position of Chief Executive Officer for A & A Medical Supply. A & A Medical Supply markets and sells medical supplies and appliances, these supplies include, but not limited to: canes, wheelchairs, prescription socks, bandages, braces, diabetic supplies, physical therapy supplies, compressors / Nebulizers, beds. A&A Medical Supply basically fulfills non-prescription medical aids.


Education:


Mr. Yeranossian, graduated from #137 High School in Yerevan Armenia in 1978. In 1984 he graduated from the University of Art in Yerevan, Armenia, and he received a Bachelors Degree in Industrial Design.


Mr. Yeranossian plans to devote approximately 10 hours a week to Holly Brothers Pictures, Inc. business operations.


(b) Involvement in Certain Legal Proceedings.


Our director, executive officer and control person have not been involved in any of the following events during the past ten years and which is material to an evaluation of the ability or the integrity of our directors or executive officers:


1.

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

2.

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);




3.

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

4.

being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

5.

any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity;

6.

Any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws and regulations, or any settlement to such actions; and

7.

Any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.


Section 16(a) Beneficial Ownership Reporting Compliance


Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our executive officers and directors, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.  Based upon a review of the copies of such forms furnished to us and written representations from our executive officers and directors, we believe that as of the date of this report they were not current in their 16(a) reports.


Board of Directors


Our board of directors currently consists of one member.  Our director serves one-year terms.


Audit Committee


The company does not presently have an Audit Committee.  No qualified financial expert has been hired because the company is too small to afford such expense.


Committees and Procedures


1.

The registrant has no standing audit, nominating and compensation committees of the Board of Directors, or committees performing similar functions.  The Board acts itself in lieu of committees due to its small size.

2.

The view of the board of directors is that it is appropriate for the registrant not to have such a committee because its directors participate in the consideration of director nominees and the board and the company is so small.




3.

The members of the Board who acts as nominating committee is not independent, pursuant to the definition of independence of a national securities exchange registered pursuant to section 6(a) of the Act (15 U.S.C. 78f(a).

4.

The nominating committee has no policy with regard to the consideration of any director candidates recommended by security holders, but the committee will consider director candidates recommended by security holders.

5.

The basis for the view of the board of directors that it is appropriate for the registrant not to have such a policy is that there is no need to adopt a policy for a small company.

6.

The nominating committee will consider candidates recommended by security holders, and by security holders in submitting such recommendations.

7.

There are no specific, minimum qualifications that the nominating committee believes must be met by a nominee recommended by security holders except to find anyone willing to serve with a clean background.

8.

The nominating committee's process for identifying and evaluation of nominees for director, including nominees recommended by security holders, is to find qualified persons willing to serve with a clean backgrounds.  There are no differences in the manner in which the nominating committee evaluates nominees for director based on whether the nominee is recommended by a security holder, or found by the board.


Code of Ethics


We have not adopted a Code of Ethics for the Board and any salaried employees.


Limitation of Liability of Directors


Pursuant to the Nevada General Corporation Law, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives an improper personal benefit.  This exclusion of liability does not limit any right which a Director may have to be indemnified and does not affect any Director's liability under federal or applicable state securities laws.  We have agreed to indemnify our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he acted in good faith and in a manner he believed to be in our best interests.







Nevada Anti-Takeover Law and Charter and By-law Provisions


The anti-takeover provisions of Sections 78.411 through 78.445 of the Nevada Corporation Law apply to Holly Brothers Pictures, Inc.  Section 78.438 of the Nevada law prohibits the Company from merging with or selling more than 5% of our assets or stock to any shareholder who owns or owned more than 10% of any stock or any entity related to a 10% shareholder for three years after the date on which the shareholder acquired the Holly Brothers Pictures, Inc. shares, unless the transaction is approved by Holly Brothers Pictures, Inc.'s Board of Directors.  The provisions also prohibit the Company from completing any of the transactions described in the preceding sentence with a 10% shareholder who has held the shares more than three years and its related entities unless the transaction is approved by our Board of Directors or a majority of our shares, other than shares owned by that 10% shareholder or any related entity.  These provisions could delay, defer or prevent a change in control of Holly Brothers Pictures, Inc.


Item 11. Executive Compensation.


The following table sets forth summary compensation information for the fiscal year ended March 31, 2017, for our Chief Executive Officer, was appointed on February 22, 2013.


Compensation


The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officer paid by Holly Brothers Pictures, Inc. for the last completed fiscal years.


Summary Compensation Table


 

 

Year

 

 

 

Compen-

 

 

Principal

Ending

Salary

Bonus

Awards

sation

Total

Name

Position

Mar 31,

($)

($)

($)

($)

($)

 

 

 

 

 

 

 

 

Anton Yeranossian

CEO/Dir.

2017

0

0

0

0

0

 

 

2016

0

0

0

0

0


We do not maintain key-man life insurance for our executive officer/director. We do not have any long-term compensation plans or stock option plans.


As of the date hereof, there have been no grants of stock options to purchase our Common Stock made to the executive officer named in the Summary Compensation Table at July 11, 2017.


Stock Option Grants


We did not grant any stock options to the executive officers or directors from inception through fiscal year end March 31, 2017 and March 31, 2016.





Outstanding Equity Awards at Fiscal Year-Ending March 31, 2017


We did not have any outstanding equity awards as of March 31, 2017.


Option Exercises for Fiscal Year-Ending March 31, 2017


There were no options exercised by our named executive officer in fiscal years ending March 31, 2017 and March 31, 2016.


Potential Payments upon Termination or Change in Control


We have not entered into any compensatory plans or arrangements with respect to our named executive officer, which would in any way result in payments to such officer because of his resignation, retirement, or other termination of employment with us or our subsidiaries, or any change in control of, or a change in his responsibilities following a change in control.


Director Compensation


We did not pay our directors any compensation during fiscal years ending March 31, 2017or March 31, 2016.


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


The following table presents information, to the best of our knowledge, about the ownership of our common stock on July 11, 2017 relating to those persons known to beneficially own more than 5% of our capital stock and by our named executive officer and sole director.


Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose.  Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power.  It also includes shares of common stock that the stockholder has a right to acquire within 60 days after July 11, 2017 pursuant to options, warrants, conversion privileges or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the U. S. Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of Holly Brothers Pictures, Inc.'s common stock.








37



We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.


Name of Beneficial

Owner and Position

Title of

Class

 

Amount and

Nature Of

Beneficial

Ownership

Percent

Of

Class(1)

Anton Yeranossian (2)

Chairman/CEO/CFOr

Common

 

1,500,000

55.3%

 

 

 

 

 

Irina Seppanen (3)

Shareholder

Common

 

506,000

18.7%

 

 

 

 

 

A&A Medical Supply, LLC(4)

Shareholder

Common

 

500,000

18.4%

 

 

 

 

 

DIRECTORS AND OFFICERS AS A GROUP (1 person)

1,500,000

 

 

55.3%

1)

Percent of Class is based on 2,710,000shares issued and outstanding.

2)

Anton Yeranossian, 8221 E. Washington Street, Chagrin Falls, OH 44023

3)

Irina Seppanen, 35595 Spatterdock Lane, Solon, OH 44139. Irina Seppanen, is the niece of Anton Yeranossian. Her father is Anton Yeranossian’s brother. Irina Seppanen was an original shareholder of Tropical PC, who owned 6,000 shares of Tropical PC before they were exchanged with Holly Brothers Pictures, Inc. Her original 6,000 shares are restricted, and are not being registered in this Registration Statement.

4)

A&A Medical Supply, LLC, an Ohio Limited Liability Company., 8221 E. Washington Street, Chagrin Falls, OH 44023. Mr. FrounzYeranossian is beneficial owner who has the ultimate voting control over the shares held by A&A Medical Supply. He is also the father of Anton Yeranossian, who is the sole officer of Holly Brothers Pictures, Inc.


We believe that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table.  Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security.  A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.


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


Ownership


Our sole officer/director controls 1,500,000 shares of our common stock, or approximately 55.3% of our outstanding common stock.



38



Office Space


The Registrant's director, Anton Yeranossian, has contributed office space for the Registrant's use for all periods presented. There is no charge to Holly Brothers Pictures, Inc. for the space. Management believes that its current facilities are adequate for its needs through the next twelve months, and that, should it be needed, suitable additional space will be available to accommodate expansion of the Company's operations on commercially reasonable terms, although there can be no assurance in this regard. The office space contributed is at the same location as A&A Medical Supply, a medical supply company managed by Anton Yeranossian. No written agreement exists that this officer/director will continue to donate office space to the operations. Therefore, there is no guarantee that he will not seek reimbursement for the donated office space in the future.


Service Agreement


The Company entered into a Service Agreement with A&A Medical Supply, LLC.  Our sole officer/director is CEO of A&A Medical Supply.  A&A Medical Supply is based in Chagrin Falls, OH, at the same location as Holly Brothers Pictures, Inc.  A&A Medical Supply is owned by the parents of Anton Yeranossian, the Company’s sole officer.  A&A Medical Supply currently sells and rebuilds wheelchairs.  A&A Medical Supply is giving Anton Yeranossian, the time needed to form Holly Brothers Pictures, Inc., and rebuild the wheelchairs that will be sold through A&A Medical.


The material terms of the Service Agreement between Holly Brothers Pictures, Inc. and A&A Medical Supply are as follows:


·

The agreement gives Holly Brothers Pictures, Inc. the right of first refusal to rebuild any wheelchairs returned to A&A Medical Supply, LLC.

·

A&A shall provide Holly Brothers Pictures, Inc. with wheelchairs in need of repair and provide Holly Brothers Pictures, Inc. the specifications to rebuild the wheelchair for A&A client.

·

Holly Brothers Pictures, Inc. shall provide overall quality control, logistics in ordering the replacement components, the management and administrative duties with respect to rebuilding wheelchairs.

·

The wheelchairs must meet the specifications to qualify for Medicare/insurance reimbursement.

·

Compensation:  When the wheelchairs are rebuilt to the satisfaction of A&A, Holly Brothers Pictures, Inc. will bill A&A for parts and labor.  The Agreement provides that the rate for labor and any mark-up of the parts we will bill A&A will reflect a discount still to be determined between the parties.


Promoters


Mr. Yeranossian, the sole officer/director of the Company, received 1,500,000 restricted common shares, Irina Seppanen received 500,000 restricted common shares, and FrounzYeranossian of A&A Medical Supply, LLC received 500,000 restricted common shares.  They paid, par value, $0.001, cash for their founder’s shares.  These are promoters of the Company, since they each own more than 10% of the issued and outstanding shares and each are considered founders of the Company.




Item 14. Principal Accountant Fees and Services.


AMC Auditing, 8250 W. Charleston Blvd., Suite 100, Las Vegas, Nevada 89117 served as our principal independent public accountants for the fiscal year ended March 31, 2017 while Seale & Beers, CPAs served as our principal independent public accountants for the fiscal year ended March 31, 2016.  Aggregate fees billed to us for the years ended March 31, 2017 and March 31, 2016were as follows:


 

For Year Ended

March 31, 2017

 

For the Year Ended

March 31, 2016

(1) Audit Fees (1)

$9,773

 

$8,023

(2) Audit-Related Fees

 

 

 

(3) Tax Fees

 

 

 

(4) All Other Fees

 

 

 


Total fees paid or accrued to our principal accountant


(1)

Audit Fees include fees billed and expected to be billed for services performed to comply with Generally Accepted Auditing Standards (GAAS), including the recurring audit of the Company's financial statements for such period included in this Annual Report on Form 10-K and for the reviews of the quarterly financial statements included in the Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.


Audit Committee Policies and Procedures


We do not have an audit committee; therefore our sole director pre-approves all services to be provided to us by our independent auditor.  This process involves obtaining (i) a written description of the proposed services, (ii) the confirmation of our Principal Accounting Officer that the services are compatible with maintaining specific principles relating to independence, and (iii) confirmation from our securities counsel that the services are not among those that our independent auditors have been prohibited from performing under SEC rules.  In fiscal year ending March, 2017, all fees paid to AMC Auditingwere unanimously pre-approved in accordance with this policy.


Less than 50 percent of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.












PART IV


Item 15. Exhibits, Financial Statement Schedules.


The following information required under this item is filed as part of this report:


(a) Financial Statements


Page

Report of Independent Registered Public Accounting Firm for the year ended March 31, 2016

F-1

Report of Independent Registered Public Accounting Firm for the year ended March 31, 2017

F-2

Balance Sheets as of March 31, 2017 and 2016

F-3

Statements of Operations for the years ended March 31, 2017 and March 31, 2016

F-4

Statements of Stockholders’ Deficit for the years ended March 31, 2017 and March 31, 2016

F-5

Statements of Cash Flows for the years ended March 31, 2017 and March 31, 2016

F-6

Notes to the Financial Statements

F-7


(b) Exhibits


The following exhibits are filed as part of this registration statement:


 

 

 

Incorporated by reference

Exhibit

Exhibit Description

Filed

herewith

Form

Period

Ending

Exhibit

Filing

Date

3.1

Articles of Incorporation, as currently in effect

 

S-1

 

3.1

05/23/2013

3.2

Bylaws, as currently in effect

 

S-1

 

3.1

05/23/2013

10.1

Service Agreement between Holly Brothers Pictures, Inc. and A&A Medical Supply, LLC  dated May 1, 2013

 

S-1

 

10.1

05/23/2013

31.1

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

X

 

 

 

 

32.1

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

X

 

 

 

 












SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Holly Brothers Pictures, Inc.

Registrant

Date:  July 11, 2017

/s/ Anton Yeranossian

Name: Anton Yeranossian

Title: Chairman, Chief Executive Officer, Chief

Financial Officer, Principal Accounting Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.


Signature

Title

Date

/s/ Anton Yeranossian

Anton Yeranossian

Chairman, Chief Executive Officer,

Chief Financial Officer and Principal

Accounting Officer

July 11, 2017
























42