This discussion summarizes the significant factors affecting the results of operations and financial condition of the Company during the fiscal years ended June 30, 2020 and 2019 and should be read in conjunction with our consolidated financial statements and accompanying notes thereto included elsewhere herein. Certain information contained in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are "forward-looking statements." Statements that are not historical in nature and which may be identified by the use of words like "expects," "assumes," "projects," "anticipates," "estimates," "we believe," "could be" and other words of similar meaning, are forward-looking statements. These statements are based on management's expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Our actual results may differ materially from the results discussed in this section because of various factors, including those set forth elsewhere herein. See "Forward-Looking Statements" included in this report.





Financial Statements

The audited consolidated financial statements form a part of this Report include results for our fiscal years ended June 30, 2020 and 2019. The consolidated financial statements include the accounts of Grow Capital, Inc., and its wholly-owned subsidiaries, Resort at Lake Selmac, Inc. and Bombshell Technologies, Inc. as of June 30, 2020. All significant intercompany accounting transactions have been eliminated as a result of consolidation.

Following is management's discussion and analysis of those financial statements. This discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in Report on Form 10-K for the fiscal years ended June 30, 2020 and 2019.





RESULTS OF OPERATIONS

Results of Operations from Continuing Operations

The Company shifted its focus to the FinTech sector during the current fiscal year and acquired an operating, revenue generating subsidiary, Bombshell Technologies, Inc. Further, the Company divested WCS effective September 30, 2019. While the Resort at Lake Selmac site location was classified as "held for sale" in the first two quarters of fiscal 2020, management determined to continue to operate the property until further notice, and its operations have been returned to continuing operations in the these fiscal year end financials.

During the fiscal year ended, 2020, the Resort at Lake Selmac generated reduced revenues as compared to fiscal 2019, as we took several months to re-brand the site as a resort destination location and attend to minor repairs and site upgrades during January and February 2020. Subsequently in March 2020 the Resort remained closed as a result of local state orders preventing its re-opening due to COVID 19. The resort was able to reopen as of July 2020. Financial results for the fiscal year ended June 30, 2020 are "combined" with respect to the operations of Bombshell Technologies, Inc. under the requirements of ASC 850-50-45, which results impact the statements of profit and loss and statements of cash flows to include operations of Bombshell Technologies Inc. as though it had been acquired on inception.

Fiscal Year ended June 30, 2020 compared to Fiscal Year ended June 30, 2019





Revenue and costs of revenue

During the fiscal year ended June 30, 2020 we generated gross revenues of $2,368,504, of which $2,051,355 was derived from related party customers, compared to $1,065,213 in the comparative fiscal year ended June 30, 2019, of which $787,919 was derived from related party customers. Costs of sales in the fiscal year ended June 30, 2020 totaled $1,267,704 of which $186,354 were costs of related party services, compared to $561,793 for the fiscal year ended June 30, 2019 of which $294,613 were costs of related party services. Gross profit for the comparative fiscal years ended June 30, 2020 and 2019, respectively totaled $1,100,800 and $503,420, respectively. We do not yet have sufficient revenues to meet our ongoing operational overhead. Reported revenues in the comparative periods were generated by our wholly owned subsidiary in the FinTech sector, Bombshell which did not form and begin operations until November 2018, and the Resort at Lake Selmac site location which provides RV and campsite services. During the fiscal year ended June 30, 2020 and 2019, operations of the Resort at Lake Selmac contributed gross profit of


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$87,578 and $145,170, while operations of Bombshell contributed gross profit of $1,013,222 and $353,231, respectively.





Operating expenses



Our operating expenses for the fiscal years ended June 30, 2020 and 2019 were as
follows:



                                                    Fiscal Years Ended
                                                          June 30
                                                   2020            2019
Revenue                                       $     317,149   $     277,294
Revenue, related parties                          2,051,355         787,919
Total revenues                                    2,368,504       1,065,213

Cost of sales, nonrelated parties                 1,081,350         267,180
Cost of sale, related parties                       186,354         294,613
Total cost of sales                               1,267,704         561,793

Gross profit                                      1,100,800         503,420

Operating expenses
General and administrative                        2,499,094       1,828,643

General and administrative, related parties 223,957 82,470 Professional fees

                                 1,233,071         749,998
Depreciation, amortization and impairment            14,624         121,345
Total operating expenses                          3,970,746       2,782,456

Loss from operations                            (2,869,946)     (2,279,036)

Fiscal Years ended June 30, 2020 and 2019

Our general and administrative expenses consist of stock-based compensation, rent, telephone, internet services, banking charges, salaries, consulting fees and miscellaneous office costs.

The Company experienced a substantial increase to operating expenses from $2,782,456 during the fiscal year ended June 30, 2019 compared to $3,970,746

during the current fiscal year ended June 30, 2020. The increase in operating expenses is predominantly attributable to an increase in professional fees and stock-based compensation. During fiscal 2020 and 2019, the Company issued common stock to certain board members, employees and consultants for services rendered at rates below market, the total combined value of which was $2,058,341 for the fiscal year ended June 30, 2020 compared to $1,484,059 during the fiscal year ended June 30, 2019, which amounts are included as part of general and administrative expenses on our statements of operations. Professional fees also increased substantially period over period from $749,998 (2019) to $1,233,071 (2020) as the Company undertook various corporate actions and acquisitions in the period. General and administrative fees incurred from related parties also increased period over period from $82,470 in the fiscal year ended June 30, 2019 to $223,957 in the fiscal year ended June 30, 2020 as the Company increased its continuing operation to include operations of Bombshell. Depreciation, amortization and impairment decreased from $121,345 (2019) to $14,624 (2020), as the Company divested certain of its owned properties in fiscal 2020.

We expect operating expenses to increase in future periods as we continue to expand our holdings seeking additional areas of operation to further enhance our existing revenue base.


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Other Expenses

Other income/expenses recorded in the fiscal ended June 30, 2020 reflect other income of $6,304 in the current fiscal year as a result of interest income related to a short term loan provided by the Company to a third party, with no similar transaction in the comparative fiscal year ended June 30, 2019. Interest expenses with respect to a note payable on the Resort at Lake Selmac totaled $35,963 and $47,265 respectively in the fiscal years ended June 30, 2020 and 2019.

Net losses from continuing operations in the fiscal years ended June 30, 2020 totaled $2,899,605 and $2,326,301, respectively.





Discontinued operations

The Company sold its' wholly owned subsidiary WCS effective September 30, 2019. The effect of the sale and operations prior to the sale are included in discontinued operations. During the fiscal years ended June 30, 2020 and June 30, 2019, the Company reported income discontinued operations of $552,852 as compared to a loss from discontinued operations of $2,395. The income from discounted operations reported in fiscal 2020 relates primarily to the forgiveness of certain payroll liabilities and salaries by former management concurrent with the divestiture of approximately $428,000.

Net losses from continuing and discontinued operations for the fiscal years ended June 30, 2020 and 2019 totaled $2,346,753 and $2,328,696, respectively.

Liquidity and Financial Condition

Liquidity and Capital Resources





                                                   At                At
                                        June 30, 2020     June 30, 2019

                Current Assets            $   774,537       $ 2,950,256
                Current Liabilities         1,044,113         1,183,995
                Working Capital           $ (269,576)       $ 1,766,261

As of June 30, 2020, the Company had total current assets of $774,537 and a working capital deficit of $269,576, compared to total current assets of $2,950,256 (including stock based compensation recorded as prepaid expenses of $1,380,459) and working capital of $1,766,261 as of June 30, 2019. The decrease in our working capital was primarily a result of the disposition of assets held for sale, the reduction in prepaid expenses, collection of a subscription receivable and a reduction in cash, offset by an increase in related party receivables and promissory note receivables.

During the fiscal ended June 30, 2020, cash used in operating activities totaled $633,482, primarily as a result of a net loss from continuing operations of $2,899,605 and a gain from discontinued operations of $552,852. The net loss from continuing operations was offset by stock-based compensation of $2,164,782, depreciation, amortization and impairment expenses of $14,624, changes in allowance for bad debt of $35,350 and amortization of right to use assets of $3,976. Further during the fiscal year ended June 30, 2020 we increased our accounts receivable by $60,565, our related party accounts receivable decreased by $25,199, our related party accounts payable increased by $21,551, and accounts payable increased by $70,984, while reducing our accrued expenses.

Unearned revenue also decreased in the current period. In the fiscal year ended June 30, 2019, cash used in operating activities totaled $485,378 with a net loss from continuing operations of $2,326,301, and a loss from discontinued operations of $2,395, offset by stock-based compensation of $1,484,059, non-cash interest of $6,612, and depreciation, amortization and impairment expenses of $121,345. During the fiscal year ended June 30, 2019 we increased our accounts receivable by $44,579, our prepaid expenses by $54,567, and increased our accrued expenses by $122,468. Our related party accounts receivable increased by $270,805, while our accounts payable increased by $306,432 and our related party accounts payable increased by $118,912. Unearned revenue also increased in the fiscal year ended June 30, 2019 by $16,570, and deferred income tax assets increased by $31,800.


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Net cash provided by investing activities in the fiscal year ended June 30, 2019 was $9,983, as compared to net cash used of $27,681 in the fiscal year ended June 30, 2020. Increase to cash due from related party in the fiscal year ended June 30, 2020 totaled $16,854 as compared to $23,415 in the prior comparative fiscal year ended June 30, 2019. During the most recent fiscal year ended June 30, 2020 the Company loaned a third party $100,000 on a one-year promissory note and received cash from the acquisition of Bombshell of $43,975, with no similar transactions in the prior fiscal year ended June 30, 2019. The loan receivable was offset in fiscal 2020 by repayments from the borrower of $11,490. Results for the fiscal year ended June 30, 2019 also include the purchase of equipment of $13,232 and the acquisition of intangible assets of $200 with no similar transactions in the fiscal year ended June 30, 2020.

Net cash provided by financing activities was $1,822,705 in the fiscal year ended June 30, 2019 as compared to $429,754 in fiscal 2020. During the current fiscal year ended June 30, 2020, the Company closed private placements for total proceeds of $355,000, compared to total proceeds of $1,765,000 during the comparable fiscal year ended June 30, 2019. Cash from financing activities in the fiscal year ended June 30, 2020 was offset by a repayment to a related party of $66,195 in the current year, as compared to proceeds from a related party of $66,195 in the prior comparative fiscal year ended June 30, 2019. The Company reduced its promissory note on the Resort at Lake Selmac property by $9,051 and $8,490 respectively during the fiscal years ended June 30, 2020 and 2019. During fiscal 2020 the Company recorded a subscription receivable, with no similar transactions in fiscal 2019.

Net cash used by discontinued activities totaled $833,796 in the fiscal year ended June 30,2019, as compared to cash used by discontinued activities of $5,260 in the fiscal year ended June 30, 2020.





Going Concern

During the fiscal year ended June 30, 2020 and June 30, 2019, the Company reported a net loss of $2,346,753 and $2,328,696, respectively. Working capital deficit totaled approximately $269,576 with approximately $246,761 of cash on hand. Cash used in operations was in excess of this amount for the year ended June 30, 2020. The Company believes that as of June 30, 2020 its existing capital resources are not adequate to enable it to fully execute its business plan. While the Company successfully acquired a second operating business subsequent to fiscal year end, including additional operations complementary to its recently acquired subsidiary, Bombshell Technologies, management believes we will require additional capital resources to fully implement our business plan, which includes the acquisition of additional operations. While the Company`s subsidiary provided approximately $1,100,000 in gross profit to offset operational overhead in the period, revenues are presently not sufficient to meet the Company's ongoing expenditures. The Company is actively working to increase the customer base and gross profit in Bombshell Technologies in order to achieve net profitability by the close of fiscal 2021. The addition of another operating entity subsequent to June 30, 2020, is expected to contribute additional gross profits to offset operational overheads. The additional growth plans include the acquisition of several new customers, an increase to the users currently subscribed to our software, as well as increased sales of customization services to new and existing customers. The Company intends to rely on sales of our unregistered common stock, loans and advances from related parties to meet operational shortfalls until such time as we achieve profitable operations. If the Company fails to generate positive cash flow or obtain additional financing, when required and on acceptable terms, the Company may have to modify, delay, or abandon some or all of its business and expansion plans, and potentially cease operations altogether. Consequently, the aforementioned items raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.





Covid-19 Pandemic

The recent COVID-19 pandemic could have an adverse impact on our ongoing operations. To date the Company's primary operating segment, Bombshell, has not experienced a decline in sales as a result of the impact of COVID 19. The Company's operations in the FinTech sector are carried out with a limited amount of person to person contact and we do not expect an impact on these operations as a result of COVID 19, however, the full effect of the COVID-19 outbreak continues to evolve as of the date of this report, is highly uncertain and subject to change. Operations of the Company's Resort at Lake Selmac property were delayed until July 2020 when the government permitted the resort to reopen.

Management does not expect the delay in opening the resort for the 2020-2021 season to substantially impact profitable operations for this business in the long term. Management is actively monitoring the

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situation but given the daily evolution of the COVID-19 outbreak, the Company is not able to estimate the effects of the COVID-19 outbreak on its operations or financial condition in the next 12 months. While significant uncertainty remains, the Company does not believe the COVID-19 outbreak will have a negative impact on its ability to raise additional financing, conclude the acquisition of targeted business operations or reach profitable operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements; however, we have identified below certain policies that have substantial impact on our financial reporting:

Accounts Receivable and Allowance for Doubtful Accounts

The Company determines the allowance for doubtful accounts by considering a number of factors, including the length of time the accounts receivable are beyond the contractual payment terms, previous loss history, and the customer's current ability to pay its obligation. When the Company becomes aware of a specific customer's inability to meet its financial obligations to the Company, the Company records a charge to the allowance to reduce the customer's related accounts. At June 30, 2020, the allowance for doubtful accounts totaled approximately $35,350.





Leases

In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02 - Topic 842 Leases. ASU 2016-02 requires that most leases be recognized on the financial statements, specifically the recognition of right-to-use assets and related lease liabilities, and enhanced disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The standard requires using the modified retrospective transition method and apply ASU 2016-02 either at (i) latter of the earliest comparative period presented in the financial statements or commencement date of the lease, or (ii) the beginning of the period of adoption. The Company has elected to apply the standard at the beginning period of adoption, July 1, 2019 which resulted in no cumulative adjustment to retained earnings. On July 30, 2018, the FASB issued ASU 2018-11 to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02 (codified as ASC 842). Specifically, under the amendments in ASU 2018-11: (i) Entities may elect not to recast the comparative periods presented when transitioning to ASC 842 (Issue 1), and (ii) Lessors may elect not to separate lease and nonlease components when certain conditions are met (Issue 2).

The Company has elected to apply the short-term scope exception for leases with terms of 12 months or less at the inception of the lease and will continue to recognize rent expense on a straight-line basis. As a result of the adoption, on July 1, 2019, the Company recognized a lease liability of approximately $291,753, which represented the present value of the remaining minimum lease payments using an estimated incremental borrowing rate of 6.75%. As of July 1, 2019, the Company recognized a right-to-use asset of approximately $289,089 million. Lease expense did not change materially as a result of the adoption of ASU 2016-02.





Share-based compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. Unregistered stock awards are measured based on the fair market values of the underlying stock on the dates of grant. For service type awards, share-based compensation expense is recognized

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on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. For awards that vest or begin vesting upon achievement of a performance condition, the Company estimates the likelihood of satisfaction of the performance condition and recognizes compensation expense when achievement of the performance condition is deemed probable using an accelerated attribution model.

The Company capitalizes the cost of issuance grants that cover a period of employment or consulting agreement under contract or performance obligation related to future performance and amortizes the compensation related to these contracts ratably over the period of employment or at percentage of completion or other appropriate method for future performance grants. There were no issuance grants outstanding with a performance term longer than one year at June 30, 2020 and June 30, 2019. Prepaid expenses for the fiscal year ended June 30, 2020 and fiscal year ended June 30, 2019 include unamortized costs of issuance grants under employment and consulting contracts totaling $0 and $1,380,459, respectively.

Revenue Recognition under ASC 606

The Company has adopted accounting standard, ASC 606 "Revenue from Contracts with Customers" and all related amendments to the new accounting standard to contracts.

Revenues from contracts with customers are recognized when control of promised goods and services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The Company recognizes revenue using the five-step model as prescribed by ASC 606:

1) Identification of the contract, or contracts, with a customer; 2) Identification of the performance obligations in the contract; 3) Determination of the transaction price; 4) Allocation of the transaction price to the performance obligations in the


   contract; and
5) Recognition of revenue when or as, the Company satisfies a performance
   obligation.

When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount to reserve for uncollectible amounts at the end of each reporting period based on the aging of the contract balance, current and historical customer trends, and communications with its customers. These reserves are recorded against the related accounts receivable.

The transaction price is the consideration that the Company expects to receive from its customers in exchange for its products or services. In determining the allocation of the transaction price, the Company identifies performance obligations in contracts with customers, which may include subscriptions to software and services, support, professional services and customization. In the case of the Company's software contracts and support services prices are predetermined based on the specific terms of the contract either in flat fee customization/license fee charges or as hourly support and/or software customization charges. Charges relative to license fees are amortized over the term of the license. Charges relative to customization of the software are charged over the term of the scope of work on a percentage of completion basis. Charges relative to support and ongoing services and professional fees are charged when incurred and control has been transferred or the work has been completed.

License fees and customization of software

License and implementation fees are charged as flat fees which are amortized over the term of the contract. For contracts with elements related to customized software solutions and certain build-outs or software systems that require significant modification or customization, the Company will recognize revenue using the percentage-of-completion method. In using the percentage-of-completion method, revenues are generally recorded based on completion of milestones under a scope of work or based on total estimated cost of work and percentage completion as at the balance sheet date.


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Software Revenue

The Company generates software revenue monthly on a single fee per subscribed user basis. The Company recognizes software revenue monthly on a per user for each user that is able to deploy software and provided all revenue recognition criteria have been met. If the revenue recognition criteria has not been met, the revenue is deferred or not recognized.

Customization, support and maintenance

Revenue from the Company's customization of software to meet a particular client's needs is recognized on a percentage of completion basis over the term of the customization work and until control of the goods or services is transferred to the customer or such date the customer agrees the scope of work has been completed and the intended functionality of the software is complete and able to perform the desired service. Support and maintenance revenue is generated from recurring monthly support and is invoiced monthly based on hourly fees at predetermined rates based on each customer contract.

The Customer is credited a certain number of services hours monthly based on the numbers of users actively subscribed to the software which amounts offset any monthly user fees.

Support and maintenance services include e-mail and telephone support, unspecified rights to software fixes and product updates and upgrades and enhancements available on a when-and-if available basis.

Professional services and other

Professional services and other revenue is generated through services including onsite training, product implementation and other similar services. Professional services are generally flat fee services based on a number of hours or scope of work for each specific service. Depending on the services to be provided, revenue from professional services and other is generally recognized at the time of delivery when the services have been completed and control has been transferred.





Unearned Revenue

Unearned revenue represents billings or payments received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of license fees being amortized over the term of the customer contract and customization services which have not yet been concluded and are being deferred using the percentage-of-completion method.

Campground space rentals and concession sales

Revenues from our campsite operations from the sales of concession items, equipment rentals or campsite locations are recoded on the cash basis due to the nature of collection of campsite fees and concession items, which occur daily as the site is rented and sundry items are purchased.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows. Refer to Note 2 - Summary of Significant Accounting Policies in the Audited yearend financial statements included herein.

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