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. Yes [  ] No [  ]

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second quarter.

The market value of the voting and non-voting common stock held by non-affiliates totaled $4,870,728$4,774,524 based upon a valuation of $1.40 per$0.063per share, that being the closing price on June 30, 2016,December 31, 2018 the last business day of the registrant'sRegistrant's most recently completed fourthsecond fiscal quarter.

Not applicable.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

As of August 2, 2016,October 14, 2019, the registrant had 28,789,924242,901,397 shares of common stock outstanding.

In this Annual Report, references to "Grow Condos,Capital," the "Company," "we," "us," "our" and words of similar import) refer to Grow Condos,Capital, Inc., a Nevada corporation, the registrant and, when appropriate, its subsidiary.

Statements made in this Form 10-K which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of Grow Condos.Capital. Such forward-looking statements include those that are preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, in addition to those contained in this Annual Report: general economic or industry conditions nationally and/or in the communities in which we conduct business; legislation or regulatory requirements, including environmental requirements; conditions of the securities markets; competition; our ability to raise capital; changes in accounting principles, policies or guidelines; financial or political instability; acts of war or terrorism; and other economic, competitive, governmental, regulatory and technical factors affecting our operations, products, services and prices.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. Grow CondosCapital does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Grow Condos,Capital, Inc. (the "Company") was incorporated on October 22, 1999 as Calibrus, in the State of Nevada. From its inception, the Company was a call center that contracted out as a customer contact center for a variety of business clients throughout the United States. Over time our main business became a third partythird-party verification service.  After making a sale on the telephone, a company would send the call to a Company operator to confirm the order.  This process protected both the customer and the company selling services from telephone sales fraud.

While continuing to operate as a call center, in 2008 we expanded our business plan to include the development of a social networking site called JabberMonkey (Jabbermonkey.com) and the development of a location based social networking application for smart phones called Fanatic Fans.

In June 2014 we acquired WCS Enterprises, LLC ("WCS Enterprises") is, an Oregon limited liability company which was formed on September 9, 2013, and was acquired by us in June 2014 in exchange for shares of our common stock.  The acquisition of WCS Enterprises resulted in a change of control of the Company and at, or shortly after the closing of such acquisition, the persons designated by WCS Enterprises became the officers and directors of the Company.  As a result of our acquisition of WCS Enterprises in June 2014, we became engaged in the real estate purchaser, developer and managerbusiness of specific use industrial properties business.

tenants and reduce the risk of single tenant leases. In additionlarger 7,500 sq ft grow facility to our "Condo" turn-key growing facilities we intend to provide marijuana grow consulting servicesformer CEO and equipment and supplies as part of our turn-key offerings. We are aggressively out looking for our next property in the western area of the United States where medical cannabis has been legalized and where recreational cannabis has been or is in the process of legalization. On April 1, 2016 we closed escrow on our second project located in the Pioneer Business Park in Eugene, Oregon.Chairman. The Company iswas not directly involved in the growing, distribution or sale of cannabis.

We have secured real estateacquired a second development site in Eagle Point2016 located in Jackson County, Oregon representing our sole operating location.  The building is 15,000 square feet the Pioneer Business Park near Eugene, OR, which we intended to develop, howeverthe Company faced hostility from the local county government regarding the intended operations of the site, and zoned to meet the requirementsCompany abandoned its plans for specific purpose industrial usethis site in late calendar 2017 and is divided into four 1,500 square feet condo style grow rooms which, is being leased to four tenantslisted the property. In September 2018, the site was sold, and one 7,500 square feet grow facility leased to one tenant.

Smoke on the Water, Inc. (“SOTW”), was incorporated on October 21, 2016, in the cannabis production arena.State of Nevada as a second wholly owned subsidiary. SOTW was designed to capitalize on the country's growing level of recreational marijuana acceptance.  In March 2017, SOTW acquired the Lake Selmac Resort located at 2700 Lakeshore Drive, Selma, Oregon.  The company has relationships with tenants, brokers and investors across the cannabis industry to leverage successful transactions for both lease-to-own optionLake Selmac resort offered recreational facilities including fishing, swimming, boating, RV parking, tent camping & cabin accommodation, as well as investors lookinga small convenience store for sundry supplies.

On June 22, 2018, the Board of Directors of the Company approved an amendment to purchase facilitiesour articles of incorporation to increase our authorized capital to 180,000,000 shares, consisting of 175,000,000 shares of common stock (“Common Stock”), par value $0.001, and 5,000,000 shares of preferred stock (“Preferred Stock”), par value $0.001 (the “Recapitalization”) and to change the name of the Company to “Grow Capital, Inc.” as we intended to expand our business focus into the financial technology (“FinTech”) sector. The Company filed articles of amendment with qualified tenants providing positive cash-flow backed by commercial property.

In connection with its name change, the Company adopted a business plan focused on shifting the Company’s strategy away from rental activities focused in cannabis businessesindustry and into the FinTech sector and related sectors.  In connection with turnkey cultivationthis strategy, the Company hired a new Chief Executive Officer (“CEO”) and processing management services, including facility design, licensing support,Chief Financial Officer (“CFO”) and appointed a new chairman of the Company’s board of directors, all of whom have significant experience in the FinTech sector.  The Company intends to acquire FinTech companies with a clear niche and strong leadership and use its experience and understanding of the FinTech sector and access to the public markets to help its acquisitions grow.  

Keeping in line with our change of operational focus as set out above, on June26, 2019 the Company entered into a stock exchange agreement (the “Exchange Agreement”) with Bombshell Technologies, Inc. (“Bombshell”) and the operational management requiredshareholders of Bombshell (the “Bombshell Holders”).  Pursuant to produce premium cannabisthe Exchange Agreement, which closed on July 23, 2019, the Company acquired 100% of the outstanding shares of Bombshell (the “Bombshell Shares”) in exchange for the Bombshell Holders receiving the right to receive 110,675,328 shares (the “Consideration Shares”) of unregistered shares of the Company’s Common Stock on a pro rata basis (the “Exchange”), 33,000,000 of which were issued to the Bombshell Holders (the “Closing Shares”) at the Closing on a pro rata basis.  The remaining 77,675,328 Consideration Shares (the “Secondary Shares”) were issued on September 3, 2019 upon approval of the increase to the Company’s authorized common stock to 550,000,000 shares, consisting of 500,000,000 shares of Common Stock and 50,000,000 shares of Preferred Stock, effective August 29, 2019.  The Bombshell Holders are also eligible to receive earn-out consideration of up to an additional 36,769,215 shares of Common Stock (the “Earn-out Shares”) earnable in tranches of 12,256,405 shares of Common Stock in each of the second, third and fourth years after the Closing, based on whether Bombshell is able to meet certain Earnings Before Interest and Taxes thresholds in each year.  The Bombshell Holders include certain limited liability companies owned by (i) Jonathan Bonnette, the Company’s CEO (ii) Joel Bonnette, the Bombshell CEO and (iii) Terry Kennedy, a majority shareholder of the Company.  

Bombshell was formed as Bombshell Technologies, LLC on November 5, 2018 and converted into a corporation on June 24, 2019.  Bombshell is a full-service design and software development company focused on developing and selling software to financial services firms and advisors and is the first acquisition as part of our strategic shift into the FinTech sector and related productssectors.

On July 8, 2019, the Company entered into a non-binding letter of intent (the “LOI”) to acquire Encompass More Group, Inc. (“Encompass”), a Nevada corporation. In connection with the LOI, Encompass issued a promissory note

(the “Note”) to the Company pursuant to a loan agreement (the “Loan Agreement”), dated July 22, 2019, by and between Encompass and the Company, in exchange for a loan of $100,000 (the “Loan”).  Pursuant to the Loan Agreement, the proceeds of the Loan will be used by Encompass for working capital and general corporate purposes.  The Note has a twelve-month term, an efficient mannerinterest rate of 5.0%, and is payable in monthly installments of $2,000, with all remaining principal and interest due on the maturity date, unless paid earlier by Encompass.  The Board of Directors have subsequently determined not to allowproceed with the user quicker accessacquisition as contemplated under the LOI.

On September 4, 2019 the Company entered into a listing agreement for the sale of the Smoke on the Water site location for an offering price of $850,000, with expected 6% sales commission.

Further, in connection with the shift in the Company’s strategy away from rental activities focused in cannabis industry, the Company sold WCS on September 30, 2019 by way of a membership interest purchase agreement (the “Purchase Agreement”) with the Zallen Trust.  Under the terms of the Purchase Agreement, the Company sold all of the Company’s membership interests in WCS for an aggregate purchase price of $782,450. The Zallen Trust paid the purchase price by transferring to marketthe Company 8,693,888 shares of the Company’s Common Stock, valued at $0.09 per share. The Purchase Agreement also provided that Mr. Zallen transfer to the Company an additional 400,000 shares of Common Stock to settle $36,000 in back rent owed at the time of the sale. The Company retired all of the shares received as a result of the transaction.  In connection with the sale of WCS, the Company and professional-managed facilities.

Market and competition

SaaS removes the organizations need to install and run applications on their own computers or in their own data centers.  This eliminates the expense of hardware acquisition, provisioning and maintenance as well as software licensing, installation and support. Other benefits of commercial property.

The global SaaS market is estimated to grow to $117 billion by the end of 2022, with real estate agencies, agents, commercial brokersa compound annual growth rate of roughly 21 percent. [https://www.marketresearchfuture.com/reports/software-as-a-service-market-2003]

North America is dominating the SaaS industry due to various factors including, but not limited to the presence of global players, its rich entertainment industry, and consulting groups that are involvedits high adoption of on-demand software.  Currently the major players operating in the cannabis industry.  We will target specificSaaS industry include the following: Salesforce; Linkedin; Concur Technologies, Workaday, Inc.; IBM Corporation, Oracle Corporation, Netsuite Inc., Medidata Solutions; Service Now, Inc., Microsoft Inc., Google, Inc. and Zuora.[https://www.marketresearchfuture.com/reports/software-as-a-service-market-2003]

Intellectual property

Bombshell entered into two Intellectual Property Assignment Agreements with related parties under which we acquired 100% ownership of certain created, developed and/or programmed patentable and/or copyrightable technology, software applications, code, technical information, data, and trade shows, conferences and seminars associated with cannabis growers.  Assecrets which are integral to our capital for marketing is very limitedsuite of SaaS solutions. Presently we are reviewing the costoperate these solutions as trade secrets.

The Company has not yet filed any patents or copyright applications in respect of advertising on the radio or in print or running ads on certain cannabis industry online websites.

Our subsidiary, Bombshell currently have twohas four employees, eachone of whom is an officerofficer. Grow Capital has 5 employees, all of which are officers and/or directors of the company.Company.  Further we have a key consultant that is also a major shareholder of the Company providing services part time. Our employees are not represented by unions and we consider our relationship with our employees to be good.

Our office is located at 722 W. Dutton Rd, Eagle Point, Oregon 97524a business center known as Green Valley Corporate Center South at2485 Village View Drive, Suite 180, Henderson, NV 89074 and our telephone number is in the building702-830-7919, email: info@growcapital.com.  We have two corporate websites:www.growcapitalinc.com andwww.bombshelltechnologies.com.  

Available information

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports that we own.  We currently pay no rent.  We believe this facility will be adequate for our needs forfile with the next twelve months.

As a smaller reporting companies.

None

(1)The Company entered into a sublease agreement to lease approximately 1,338 square feet of office space at a business center known as Green Valley Corporate Center South located in Henderson, Nevada (the “Henderson Property”), effective October 19, 2018, for use as the Company’s new headquarters. The lease has a term of 123 months, an abatement of the first four months of rent during which time the Company would complete certain required leasehold improvements and escalating base monthly rent per square foot ranging between $2.00 to $3.00 per square foot. The Company commenced occupation of the premises in February 2019. Appreciation, LLC, a related party entity, holds the master lease from which the Company derives its sublease for its headquarters.   

(2)Up until its divesture in September 2019, we owned a building at 722 W. Dutton Road, Eagle Point, OR  97524 representing our first operating location for former subsidiary, WCS Enterprises.  The building is 15,000 square feet and zoned to meet the requirements for specific purpose industrial use and is divided into four 1,500 square feet condo style grow rooms which, is being leased to four tenants and one 7,500 square feet grow facility leased, for whichfacility.  Until relocation to our new corporate headquarters in Henderson, NV we occupied one 1,500 sq. ft. unit to use as an office space.  

(3) In April 2016, the rent has yet begun, to one tenant that isCompany purchased a related party.

(4)In March 2017, the Company acquired a RV and campground park in Selma, Oregon.  The property is being paid atlocated just 20 miles of Grants Pass, Oregon and 2.5 miles east of the amountRedwood Highway in Selma, Oregon and is known as the Lake Selmac Resort.  The Resort facilities include fishing, swimming, boating, and in addition to RV parking, has tent camping & cabin locations established for accommodation.  On September 4, 2019 the Company listed the property for an offering price of $1,335.65 on the first of each month until October 1, 2017, or the date on which site work for construction begins, whichever occurs first, at which time the full principal balance and any accrued interest will be due and payable. 

The Company is not the subject of any pending legal proceedings and, to the knowledge of management, no proceedings are presently contemplated.

Our shares of common stock are quoted by the OTC Markets Group Inc. of the Financial Industry Regulatory Authority, Inc. ("FINRA") under the symbol "GRWC".  Set forth below are the high and low closing bid prices for our common stock for each quarter of 2013 through 2015.the last two fiscal years ended June 30, 2019 and 2018.  These bid prices were obtained from OTC MarketsGroupMarkets Group Inc. All prices listed herein reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.

The number of record holders of the Company's common stock as of the date of this ReportOctober 14, 2019 is approximately 184211, not including an indeterminate number who may hold shares in "street name."

The Company has not declared any cash dividends with respect to its common stock and does not intend to declare dividends in the foreseeable future. There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our common stock.

Equity Incentive Stock Option Plan. During the year endedPlan

In December 31, 20102015, the Company increasedadopted the number2015 Equity Incentive Plan (“Incentive Plan”) with a term of 10 years.  The Incentive Plan allows for the issuance up to a maximum of 2 million shares of common stock, options exercisable into common stock of the Company or stock purchase rights exercisable into shares of common stock of the Company.  The plan is administered by the board of directors unless a separate delegation to an administrator is

made by the board of directors.   Options granted under the plan carry a maximum term of 10 years, except to a grantee who is also a 10% beneficial owner at the time of grant, in which case the maximum term is 5 years.  In addition, exercise prices of options available forgranted must be within a certain percentage of the closing price on date of grant depending on the level of beneficial ownership of common stock of the Company by the grantee.  All vesting conditions are set by the board or administrator.  In December 2015, the Company filed a registration statement on Form S-8 covering all shares issued or issuable under the 2001 Incentive Plan.

Stock OptionPlan

In December 2015, the Company adopted the 2015 Stock Plan by 550,000 options.  Under(“Stock Plan”).   As a condition of adoption of the 2001 Non-QualifiedStock Plan, the Company may grant optionsentered into a registration statement on Form S-8 and covered the shares issued under the plan, which registration statement was filed in December 2015.  The Stock Plan allows for the issuance up to 2,850,000a maximum of 2 million shares of common stock.  The maximum termstock of the options was five years, and they vested at various times accordingCompany.  The plan is administered by the board of directors unless a separate delegation to an administrator is made by the board of directors.  The Stock Plan shall continue in effect until such time as is terminated by the Board or all shares are issued pursuant to the Option Agreements. Under the 2001 Incentive Stock Option Plan, the Company may grant options for up to 2,000,000 shares of common stock.  The maximum term of the options is five years and they vested at various times according to the Option Agreements.  

The 2015 Equity Incentive Plan is designed to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants and to promote the success of the Company's business.  Options granted under the Plan may be Incentive Stock Options or Non-Qualified Stock Options, as determined by the Administrator at the time of grant.  Stock purchase rights may also be granted under the Plan.  The maximum aggregate number of shares which may be issued upon exercise of such Options or Stock Purchase Rights is two million (2,000,000) shares of Common Stock.  The term of the option is five (5) years from the grant date of such shorter term as may be provided in the Option Agreement.  The Plan become effective upon initial Board adoption and continues until terminated but in no case longer than ten (10) years.  The Company had granted an option for the purchase of two million shares to datein April 2016, of which 1,500,000 have been exercised.

Except as set forth below, there were no sales of equity securities during the fiscal year ended June 30, 2015,period covered by this Report that were not registered under the Securities Act and were not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by the Company. 

On July 1, 2019 the Company issued an aggregate of 245,170 common shares to a total of 15 persons.  The securities were exempt from registration under Section 5450,918 shares of the Act pursuantfully vested unregistered Common Stock to section 4(2)its directors as part of the Act since there was no public offering of the securities.

On July 31, 2019 the Company issued 3,100,000277,778 shares of pre-split common stockunregistered Common Stock in respect to private placements for Boardtotal gross proceeds of Director Services.

On October 1, 2019 the Company issued 900,000 shares of common stock to extinguish debt in the amount of $71,469 and 1,000,000 shares of common stock for consulting services.

Not required for smaller reporting companies.

Statements made in this Form 10-K which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of Grow Condos.Capital.   Such forward-looking statements include those that are preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions nationally and/or in the communities in which we conduct business; legislation or regulatory requirements, including environmental requirements; conditions of the securities markets; competition; our ability to raise capital; changes in accounting principles, policies or guidelines; financial or political instability; acts of war or terrorism; and other economic, competitive, governmental, regulatory and technical factors affecting our operations, products, services and prices.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward- looking statements speak only as of the date they are made. Grow CondosCapital does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

The consolidated financial statements which are a part of this Report are as of June 30, 2016,2019 and for the period from July 1, 2015 through June 30, 2016 (the "Relevant Period").2018. The consolidated financial statements are thoseinclude the accounts of Grow Capital, Inc., and its wholly-owned subsidiaries, WCS forEnterprises, LLC and Smoke on the resultsWater, Inc. as of operations becauseJune 30, 2019. All significant intercompany accounting transactions have been eliminated as a result of the reverse acquisition.  consolidation.

Following is management's discussion and analysis of those financial statements.

The consolidated financial statements demonstrate a loss from operationsCompany believes that its existing capital resources may not be adequate to satisfy its cash requirements for the Relevant Period of $1,496,455; and non-cash expense of $28,228 in depreciation expense.

Results of Operations

Revenues

During the fiscal years ended June 30, 2019 and 2018, respectively we have recorded net revenues of $Nil and $Nil respectively from ongoing operations.  While the Company had cash on handcontinued to operate the Lake Selmac Resort held by subsidiary SOTW and the condominium rental operation held by subsidiary WCS, these operations have been offered for sale, and as a result all operations, including all earned revenue are included as part of approximately $43,600.  This is sufficient to sustaindiscontinued operations in the day to dayfinancial statements included herein for the fiscal years ended June 30, 2019 and 2018.

Operating Expenses

Our consolidated expenses from ongoing operations offor the fiscal years ended June 30, 2019 and 2018 were as follows:

Our general and administrative expenses include rent, telephone, internet services, banking charges, salaries, consulting fees and miscellaneous office costs.

During the comparative fiscal years ended June 30, 2019 and 2018, the Company for approximately 90 days.  It is not likely that operating revenues willrecorded an increase in stock-based compensation expense from $1,134,315 (2018) to $1,484,059 during the near future to a sufficient extent to covercurrent fiscal year.  The increase was primarily the operating expensesresult of the Company.   Therefore it will be necessary to obtain additional capital from the sale of equity or debt securities.

Total operating expenses during fiscal 2019 totaled $2,234,480 as compared to $1,510,030 in fiscal 2018.

We expect operating expenses to increase in future periods as we continue to expand our operations and our revenue base, and if we continue to issue shares to settle salaries, consulting fees and expenses.

Other Expenses

Other expenses recorded in fiscal 2019 and 2018 totaled $11,183 and $919,156 respectively.  The substantial decrease to other expenses in fiscal 2019 is directly related to amortization of the Companydebt discount and in its ability to grow its business and to raise capital as needed until such time as the business operations of the Company become self-sustaining.

Discontinued operations

During fiscal 2019 certain of the Company’s subsidiary operations were allocated as held for sale. Results reported in respect to these discontinued operations provided for a loss from discontinued operations of $159,434 and $53,453 for the years ended June 30, 2019 and 2018, respectively.  The increase in the loss from discontinued operations in the year ended June 30, 2019 as compared to June 30, 2018 was primarily the result of increased cost of revenues, general and administrative expenses and a $112,000 impairment recorded based on the expected sale price less costs of sale of the Smoke on the Water property, offset by reduced interest expense in the current period compared to the prior year.

Net losses in the fiscal years ended June 30, 2019 and 2018 totaled $2,405,097 and $2,482,639, respectively.

Liquidity and Capital Resources

As of June 30, 2019, the Company had total current assets of $2,082,080 including $1,431,796 in prepaid expenses of which $1,380,459 relates to salaries and consulting fees prepaid by the issue of stock, and working capital of $898,603, compared to total current assets of $385,378 and a working capital deficit of $1,448,177 as of June 30, 2013. The decrease in our working capital deficit was due to a decrease in liabilities held from sale over the comparative periods from $1,555,240 in fiscal 2018 to $472,241 in the current fiscal year ended June 30, 2019, and an increase to non-cash prepaid expenses in the current fiscal year, as identified above.  

During the fiscal year ended June 30, 2019, cash used by operating activities totaled $415,864, primarily as a result of a net loss from operations of $2,405,097, offset by a loss from discontinued operations of $159,434 and certain non-cash adjustments including non-cash interest of $6,612, a loss from the sale of land and depreciation, amortization and impairment expenses of $765, as well as stock-based compensation expenses of $1,484,059.  In fiscal 2018 cash used by operating activities totaled $400,344, primarily as a result of a net loss from operations of $2,482,639, offset by a loss from discontinued operations of $236,036, and certain non-cash adjustments including non-cash interest of $930,715, depreciation, amortization and impairment expenses of $268 and stock-based compensation expenses of $1,134,315. 

Net cash provided by investing activities was $18,003 in fiscal 2019 as compared to net cash used in investing activities of $40,268 in fiscal 2018. Results for fiscal 2019 include $5,412 expended on equipment, offset by amounts due to a related party of $23,415, as compared to $40,268 receivable from a related party in fiscal 2018.

Net cash provided by financing activities was $1,765,000 in fiscal 2019 as compared to $277,000 in fiscal 2018. During fiscal 2018 the Company received proceeds from private placements of $232,000 and proceeds from related party advances of $45,000, compared to proceeds from private placements totaling $1,765,000 in fiscal 2019.

Net cash flows used in discontinued operations  were $897,600 in fiscal 2019 as compared to net cash provided by discontinued activities of $147,436 in fiscal 2018.

During fiscal 2019 the Company reported a net increase in cash of $469,539 as compared to a decrease in cash of $16,176 in fiscal 2018.

Going Concern

During the fiscal year ended June 30, 2019 and 2018, the Company reported a net loss of $2,405,097 and $2,482,639, respectively, combined with a working capital deficit of approximately $481,000 (after removing prepaid stock-based compensation) with approximately $483,000 of cash on hand. The Company believes that as of June 30, 2019 its existing capital resources are not adequate to enable it to fully execute its business plan.  While the

Company acquired an industry thatoperating business is illegal under federal law,the FinTech sector subsequent to fiscal year end, which is generating net income as at June 30, 2019, we havedo not believe the additional cash flows are yet sufficient to achieve profitable operations, we have a significant accumulated deficit and are dependent onmeet all of our ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable profitable operations.anticipated operational overhead for fiscal 2020.    These factorsconditions raise substantial doubt aboutas to the Company's ability to continue as a going concern.  Management'sDuring fiscal 2019 the Company raised gross proceeds from private placements of our common shares of $1,765,000which were allocated to working capital and to retire certain debt obligations. These funds were raised for use in the execution of the Company’s shift away from the cannabis industry and towards its new business plan focused on acquisitions in the FinTech sector and other related sectors.  As part of this plan, the Company has sold WCS as of September 30, 2019 and Smoke on the Water is currently being offered for sale (See Note 3).  If the Company fails to sell Smoke on the Water, generate positive cash flow or obtain additional financing, when required, the Company may have to modify, delay, or abandon some or all of its business and expansion plans, in regard to these matters are described in Note 1 in theand potentially cease operations altogether. The accompanying consolidated financial statements.

We had no off-balance sheet arrangements of any kind for the period ended June 30, 2016.

Not required for smaller reporting companies.

To the Board of Directors and
Stockholders

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetsheets of Grow Condos,Capital, Inc. and subsidiary (f/k/a Fanatic Fans Inc. and Calibrus, Inc.)(the Company) as of June 30, 20162019 and 2015,2018, and the related consolidated statements of operations, changes in stockholders'stockholders’ equity (deficit), and cash flows for each of the years then ended.  in the two year period ended June 30, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two year period ended June 30, 2019, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph on Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. Management’s plans in regards to this uncertainty are included Note 1 to the financial statements.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on thesethe Company’s consolidated financial statements based on our audit.

We conducted our auditaudits 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 statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.

F-1

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

F-2

GROW CAPITAL, INC.

AND SUBSIDIARIES

(Formerly Grow Condos, Inc.)

Consolidated Statements of Operations

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

F-3

GROW CAPITAL, INC.

AND SUBSIDIARIES

(Formerly Grow Condos, Inc.)

Consolidated Statements of Changes in Stockholders Equity (Deficit)

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

F-4

GROW CAPITAL, INC.

AND SUBSIDIARIES

(Formerly Grow Condos, Inc.)

Consolidated Statements of Cash Flows

F-5

F-6

GROW CAPITAL, INC.

AND SUBSIDIARIES

(formerly Grow Condos, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization and Description of Business

Grow Capital, Inc. (the "Company," “we,” or “us”) (f/k/a Grown Condos, Inc.) was incorporated on October 22, 1999, in the State of Nevada.  

Our former wholly owned subsidiary, WCS Enterprises, Inc. (“WCS”) is an Oregon limited liability company which was formed on September 9, 2013 with operations beginning in October 2013.  WCS is a real estate purchaser, developer and manager of specific use industrial properties providing "Condo" style turn-key aeroponics grow facilities to above present fairly,support cannabis farmers. WCS owns, leases, sells and manages multi- tenant properties so as to reduce the risk of ownership and reduce costs to tenants and owners.  WCS currently owns a condominium property in all material respects,Eagle Point, Oregon (the “Eagle Point Property”). On September 30, 2019, we sold WCS to the Wayne A. Zallen Trust u/a/d/ 10/24/2014 (the “Zallen Trust”), of which Wayne Zallen, our former CEO and Chairman, is the trustee and a beneficiary. See Note 3 for further information.

Our wholly owned subsidiary, Smoke on the Water, Inc. was incorporated on October 21, 2016, in the State of Nevada. Smoke on the Water is focused on operating properties in the RV and campground rental industry and currently owns the Lake Selmac Resort located at 2700 Lakeshore Drive, Selma, Oregon (the “Lake Selmac Property”).

Our wholly owned subsidiary Bombshell Technologies, Inc. (“Bombshell”), was formed as Bombshell Technologies, LLC on November 5, 2018 and converted into a corporation on June 24, 2019.  We acquired Bombshell on July 23, 2019 (See Note 11).  Bombshell is a full-service design and software development company focused on developing and selling software to financial services firms and advisors and is the first acquisition as part of our strategic shift into the financial positiontechnology (“FinTech”) sector and related sectors.

On June 22, 2018, the Board of Directors of the Company approved an amendment to our articles of incorporation to increase our authorized capital to 180,000,000 shares, consisting of 175,000,000 shares of common stock (“Common Stock”), par value $0.001, and 5,000,000 shares of preferred stock (“Preferred Stock”), par value $0.001 (the “Recapitalization”) and to change the name of the Company to “Grow Capital, Inc.” The Company filed articles of amendment with the State of Nevada to effect the aforementioned changes on July 10, 2018 and August 28, 2018, respectively. The Company received approval from the Financial Industry Regulatory Authority ("FINRA") for the above noted corporate actions on August 8, 2019.

On July 23, 2019, and effective July 25, 2019, the Board of Directors of the Company and the holders of our outstanding capital stock having a majority of the voting power, respectively, adopted resolutions to amend and restate our articles of incorporation to increase our authorized capital to 550,000,000 shares, consisting of 500,000,000 shares of Common Stock and 50,000,000 shares of Preferred Stock. The effective date of the aforementioned actions was August 29, 2019.

In connection with its name change, the Company has adopted a business plan focused on shifting the Company’s strategy away from rental activities focused in the cannabis industry and into the FinTech sector and related sectors.  In connection with this strategy, the Company has hired a new Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) and appointed a new chairman of the Company’s board of directors (the “Board”), all of whom have significant experience in the FinTech sector.  The Company intends to acquire FinTech companies, such as Bombshell (see Note 11), with a clear niche and strong leadership and use its experience and understanding of the FinTech sector and access to the public markets to help its acquisitions grow.  The Company is currently in the process of identifying suitable acquisitions and completing those acquisitions.  In connection with the shift in the Company’s strategy away from rental activities focused in the cannabis industry, the Company sold WCS on September 30, 2019, and has determined to divest Smoke on the Water, which it is currently actively marketing .  In connection with these efforts, management of the Company has determined it is appropriate to include the operations of WCS and Smoke on the Water in this report as Assets and Liabilities Held for Sale (See Note 3). As the Company moves away from the cannabis industry and into financial technology and related sectors,Grow

F-7

GROW CAPITAL, INC.

AND SUBSIDIARIES

(formerly Grow Condos, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Capital expects to identify suitable acquisitions, complete those acquisitions, and subsidiary (f/k/grow those companies. Any potential acquisitions or divestitures remain subject to final agreements, due diligence, and typical closing conditions.

Going Concern 

During the fiscal year ended June 30, 2019 and 2018, the Company reported a Fanatic Fans Inc. net loss of $2,405,097 and Calibrus, Inc.)$2,482,639, respectively, combined with a working capital deficit of approximately $481,000 (after removing prepaid stock-based compensation) with approximately $483,000 of cash on hand. The Company believes that as of June 30, 2019 its existing capital resources are not adequate to enable it to fully execute its business plan.  While the Company acquired an operating business is the FinTech sector subsequent to fiscal year end, which is generating net income as at June 30, 2016 and 2015, and2019, we do not believe the results of its operations, changes in stockholders' equity and itsadditional cash flows are yet sufficient to meet all of our anticipated operational overhead for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States ("GAAP"), and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC").

These consolidated financial statements include the accounts of Grow Condos,Capital, Inc., and its wholly-owned subsidiary, WCS.subsidiaries, WCS and Smoke on the Water, as of June 30, 2019. All significant intercompany accounting transactions have been eliminated as a result of consolidation.

The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period.  We believe that it is at least reasonably possible that the effect on the financial statementsestimates of a condition, situation, or set of circumstances that existedamounts realizable upon our properties currently for sale at the date of the financial statements will change in the near term due to one or more future confirming events and the effect of the change would be material to the financial statements. Significant estimates include, but are not limited to, the estimate of the allowance for doubtful accounts, equity compensation, allocation of purchase price for acquired assets, and depreciable lives of long lived assets.

For financial accounting purposes, cash and cash equivalents are considered to be all highly liquid investments with a maturity of three (3) months or less at the time of purchase.

Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition (excluding acquisition related expenses), construction costs, and mortgage interest during the period the facilities are under construction and prior to readiness for occupancy, and any tenant improvements, major improvements and betterments that extend the useful life of the real estate assets and leasing costs. All repairs and maintenance are expensed as incurred.

The Company is required to make subjective assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life of the assets. Real estate assets, other than land, are depreciated on a straight-line basis over the estimated useful life of the asset.

The estimated useful lives of the Company's real estate assets by class are generally as follows:

Advertising costs are expensed as incurred.  Advertising and promotion expense was $205,000$15,974 and $0 for the fiscal yearyears ended June 30, 2016.