Level Brands, Inc. ("Level Brands", "we", "us", our, "Parent Company or the Company) is a North Carolina corporation formed on March 17, 2015 as Level Beauty Group, Inc. In November 2016 we changed the name of the Company to Level Brands, Inc. We operate from our offices located in Charlotte, North Carolina. Our fiscal year end is established as September 30. The accompanying unaudited interim condensed consolidated financial statements of Level Brands have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the rules of the Securities and Exchange Commission (SEC) and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Companys Annual Report filed with the SEC on Form 10-K for the year ended September 30, 2018. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of consolidated financial position and the consolidated results of operations for the interim periods presented have been reflected herein. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal year 2018 as reported in the Form 10-K have been omitted. In March 2015, the Company formed Beauty and Pin-Ups, LLC ("BPU"), a North Carolina limited liability company, and contributed $250,000 in exchange for our member interest. As of September 30, 2018, we own 100% interest in BPU. BPU manufactures, markets and sells an array of beauty and personal care products, including hair care and hair treatments, as well as beauty tools. The Company's products historically have been sold to the professional salon market, principally through distributors to professional salons in the North America and has expanded its focus to retailers, online segments and licensing opportunities. IM1, LLC. (IM1) was formed in California in September 2016. IM1 Holdings, LLC, a California limited liability company, (IM1 Holdings) was the initial member of IM1. In January 2017, we acquired all of the Class A voting membership interests in IM1 from IM1 Holdings in exchange for 583,000 shares of our common stock, which represents 51% of the interest in IM1. IM1 Holdings continues to own the Class B non-voting membership interest of IM1. IM1  Ireland Men One is a brand inspired by Kathy Ireland that focuses on providing millennial-inspired lifestyle products under the IM1 brand. IM1 has entered into an exclusive wholesale license agreement with kathy ireland Worldwide in connection with the use of the intellectual property related to this brand. Encore Endeavor 1, LLC (EE1) was formed in California in March 2016. EE1 Holdings, LLC, a California limited liability company, (EE1 Holdings") was the initial member of EE1. In January 2017, we acquired all of the Class A voting membership interests in EE1 from EE1 Holdings in exchange for 283,000 shares of our common stock, which represents 51% of the interest in EE1. EE1 Holdings continues to own the Class B non-voting membership interests of EE1. EE1 is a brand management company and producer and marketer of multiple entertainment distribution platforms under the EE1 brand. Level H&amp;W, LLC (Level H&amp;W) was formed in North Carolina in October 2017 and began operations in fiscal 2018; we own 100% interest in Level H&amp;W. The Company signed an agreement with kathy ireland Worldwide to retain exclusive rights to the intellectual property and other rights in connection with kathy ireland Health &amp; Wellness and its associated trademarks and tradenames. Level H&amp;W focuses on establishing licensing arrangements under the kathy ireland Health &amp; Wellness brand. The agreement initially was a seven year agreement with a three year option to extend by the Company. The Company agreed to pay $840,000 over the license term of seven years, of which $480,000 was paid by January 1, 2018, and $120,000 was to be paid on January 1 of subsequent years until paid in full. The Company will pay kathy ireland Worldwide 33 1/3% of net proceeds we receive under any sublicense agreements we may enter into for this intellectual property as royalties, with credit being applied for any payments made toward the $840,000. In January 2018, the Company, amended its wholesale license agreement with kathy Ireland Worldwide. The amendment accounted for the Company exercising its option on a three year extension and amending the payment terms related to this extension as follows: to pay $400,000 within 5 days of executing the amendment (which was paid on January 31, 2018), and to pay the final amounts due under the Agreement, $320,000 on the latter of January 1, 2019 or 30 days after the receipt by the Company of $5,000,000 in net proceeds from sublicense agreements signed under the health and wellness trademarks. In addition, royalty payments to kathy ireland Worldwide for the additional three year extension are set at 35% of net proceeds. The Company capitalized the cost into intangibles and is amortizing them over the term of the licensing agreement. In December 2018, Level Brands agreed to and paid the balance owed as final payment at a reduced price of $300,000. On November 17, 2017, the Company completed an initial public offering (the IPO) of 2,000,000 shares of its common stock for aggregate gross proceeds of $12.0 million. The Company received approximately $10.9 million in net proceeds after deducting expenses and commissions. On October 2, 2018, the Company completed a secondary public offering of 1,971,428 shares of its common stock for aggregate gross proceeds of $6,899,998. The Company received approximately $6.3 million in net proceeds after deducting underwriting discounts and commissions and other offering expenses payable by us. On December 20, 2018 the Company, and its newly organized wholly-owned subsidiaries AcqCo, LLC and cbdMD, completed a two-step merger (the Mergers) with Cure Based Development, LLC, a Nevada limited liability company ( Cure Based Development ). Upon completion of the Mergers, cbdMD survived and operates the prior business of Cure Based Development. As consideration for the Mergers, the Company has a contractual obligation, after approval by our shareholders, to issue 15,250,000 shares of our common stock to the members of Cure Based Development, of which 8,750,000 of the shares will vest over a five year period and are subject to a voting proxy agreement. cbdMD LLC produces and distributes various high-grade, premium cannibidiol oil (CBD) products under the cbdMD brand. CBD is a natural substance produced from the hemp plant and the products manufactured by cbdMD are non pyschoactive as they do not contain tetrahydrocannibinol (THC).