ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SIMLATUS
CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
Table
of Contents
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Simlatus Corp. and subsidiaries
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of Simlatus Corp. and subsidiaries (the Company) as of December 31,
2020 and 2019, and the related consolidated statements of operations, stockholders deficit, and cash flows for each of
the years in the two-year period ended December 31, 2020, and the related notes (collectively referred to as the consolidated
financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the
years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United
States of America.
Basis
for Opinion
These
consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an
opinion on the Companys consolidated 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 PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free of material 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. As part of our audits, we are required to obtain an understanding of internal control over financial reporting,
but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the consolidated 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 regarding the amounts and disclosures in the consolidated financial statements. 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 audits provide a reasonable basis for our opinion.
Going
Concern
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 2 to the consolidated financial statements, the Company suffered a net loss from operations and has a net
capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Managements plans
regarding those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Critical
Audit Matters
The
critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements
that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
Derivative
Liabilities
As
discussed in Note 7, the Company borrows funds through the use of convertible notes payable that contain a conversion price that
fluctuates with the stock price. Due to the fluctuation of the conversion price, the embedded conversion feature requires bifurcation
from the host contract and is recorded as a liability subject to market adjustments as of each reporting period. Significant judgment
is exercised by the Company in determining derivative liability values for these convertible note agreements, including the use
of a specialist engaged by management.
We
evaluated managements conclusions regarding their derivative liability and reviewed support for the significant inputs
used in the valuation model, as well as assessing the model for reasonableness.
Convertible
Preferred Stock
As
discussed in Note 9, the Company has issued and outstanding certain Preferred Shares that contain a fixed value and convertible
into common stock at the closing market price on the date of conversion. Auditing managements evaluation of the convertible
preferred shares involves significant judgements and estimates in determining the proper classification of the preferred shares
that include both debt and equity qualities. To evaluate the appropriateness and accuracy of the classification of the convertible
preferred shares, we evaluated managements assessment of the debt and equity like characteristics.
We
evaluated managements appropriateness and accuracy of the classification of the convertible preferred shares and evaluated
managements assessment of the debt and equity like characteristics.
/s/
M&K CPAS, PLLC
|
|
We
have served as the Companys auditor since 2018.
|
|
Houston,
Texas
|
|
March
31, 2021
|
SIMLATUS
CORP.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
134,855
|
|
|
$
|
25,495
|
|
Accounts receivable
|
|
|
5,563
|
|
|
|
7,741
|
|
Inventory, net
|
|
|
4,133
|
|
|
|
425
|
|
Prepaid expenses
|
|
|
—
|
|
|
|
7,268
|
|
Other current assets
|
|
|
10,000
|
|
|
|
—
|
|
Total current assets
|
|
|
154,551
|
|
|
|
40,929
|
|
|
|
|
|
|
|
|
|
|
Financing lease assets – related party
|
|
|
31,178
|
|
|
|
—
|
|
Security deposit
|
|
|
5,162
|
|
|
|
5,162
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
190,891
|
|
|
$
|
46,091
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS DEFICIT
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
522,418
|
|
|
$
|
401,121
|
|
Accounts payable - related party
|
|
|
—
|
|
|
|
31,269
|
|
Accrued wages
|
|
|
321,530
|
|
|
|
1,184,455
|
|
Accrued expenses
|
|
|
29,416
|
|
|
|
38,617
|
|
Accrued interest
|
|
|
148,233
|
|
|
|
374,439
|
|
Convertible notes payable in default
|
|
|
203,167
|
|
|
|
96,647
|
|
Convertible notes payable, net of discount
|
|
|
29,771
|
|
|
|
609,888
|
|
Current financing lease liabilities – related party
|
|
|
3,988
|
|
|
|
—
|
|
Deferred revenue
|
|
|
—
|
|
|
|
629
|
|
Derivative liabilities
|
|
|
7,996,994
|
|
|
|
3,168,799
|
|
Loans payable
|
|
|
87,420
|
|
|
|
16,500
|
|
Related party liabilities
|
|
|
245,323
|
|
|
|
91,130
|
|
Total Current liabilities
|
|
|
9,588,260
|
|
|
|
6,013,494
|
|
|
|
|
|
|
|
|
|
|
Non-current financing lease liabilities – related party
|
|
|
27,190
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
9,615,450
|
|
|
|
6,013,494
|
|
|
|
|
|
|
|
|
|
|
Series A convertible preferred stock: 10,000,000 shares authorized, par value $0.001
|
|
|
11,162,005
|
|
|
|
10,713,594
|
|
6,235,757 shares issued and outstanding at December 31, 2020
|
|
|
|
|
|
|
|
|
5,985,248 shares issued and outstanding at December 31, 2019
|
|
|
|
|
|
|
|
|
Series C convertible preferred stock, 45,750 shares authorized, par value $0.0001
|
|
|
355,830
|
|
|
|
355,830
|
|
35,583 shares issued and outstanding at December 31, 2020
|
|
|
|
|
|
|
|
|
35,583 shares issued and outstanding at December, 2019
|
|
|
|
|
|
|
|
|
Convertible preferred stock payable
|
|
|
754,249
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Stockholders deficit:
|
|
|
|
|
|
|
|
|
Series B preferred stock: 10,000,000 shares authorized, par value $0.001
|
|
|
1
|
|
|
|
1
|
|
500 shares issued and outstanding at December 31, 2020
|
|
|
|
|
|
|
|
|
500 shares issued and outstanding at December 31, 2019
|
|
|
|
|
|
|
|
|
Common stock, $0.00001 par value 10,000,000,000 authorized
|
|
|
48,967
|
|
|
|
45
|
|
4,896,736,884 shares issued and outstanding at December 31, 2020 (1)
|
|
|
|
|
|
|
|
|
4,524,351 shares issued and outstanding at December 31, 2019 (1)
|
|
|
|
|
|
|
|
|
Additional paid in capital
|
|
|
(6,107,768
|
)
|
|
|
(12,857,352
|
)
|
Accumulated deficit
|
|
|
(15,637,843
|
)
|
|
|
(4,179,521
|
)
|
Total stockholders deficit
|
|
|
(21,696,643
|
)
|
|
|
(17,036,827
|
)
|
Total liabilities and stockholders deficit
|
|
$
|
190,891
|
|
|
$
|
46,091
|
|
|
(1)
|
All
common share amounts and per share amounts in the financial statements reflect the one-for-one thousand reverse stock split that
was made effective on December 18, 2019. See Note 12.
|
The
accompanying notes are an integral part of these financial statements
SIMLATUS
CORP.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Years ended
|
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Sales
|
|
$
|
342,283
|
|
|
$
|
477,357
|
|
Cost of materials
|
|
|
7,821
|
|
|
|
5,957
|
|
Gross profit
|
|
|
334,462
|
|
|
|
471,400
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
G&A expenses
|
|
|
433,998
|
|
|
|
3,785,517
|
|
Professional fees
|
|
|
77,287
|
|
|
|
34,754
|
|
Salaries and wages
|
|
|
585,931
|
|
|
|
610,768
|
|
Total operating expenses
|
|
|
1,097,216
|
|
|
|
4,431,039
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(762,754
|
)
|
|
|
(3,959,639
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Debt forgiveness
|
|
|
118,548
|
|
|
|
—
|
|
Gain on settlement of debt
|
|
|
—
|
|
|
|
783,208
|
|
Loss on conversion of debt
|
|
|
(72,051
|
)
|
|
|
(86,718
|
)
|
Loss on conversion of debt of preferred shares
|
|
|
(191,349
|
)
|
|
|
(174,273
|
)
|
Derivative expense
|
|
|
(9,404,359
|
)
|
|
|
(5,942,525
|
)
|
Interest expense
|
|
|
(1,146,357
|
)
|
|
|
(1,432,469
|
)
|
Total other income (expense)
|
|
|
(10,695,568
|
)
|
|
|
(6,852,777
|
)
|
|
|
|
|
|
|
|
|
|
Net loss before income taxes
|
|
|
(11,458,322
|
)
|
|
|
(10,812,416
|
)
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
Net profit (loss)
|
|
$
|
(11,458,322
|
)
|
|
$
|
(10,812,416
|
)
|
|
|
|
|
|
|
|
|
|
Per share information
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding, basic (1)
|
|
|
1,422,458,791
|
|
|
|
793,784
|
|
Net income (loss) per common share, basic
|
|
$
|
(0.008
|
)
|
|
$
|
(13.62
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding, diluted (1)
|
|
|
1,422,458,791
|
|
|
|
793,784
|
|
Net income (loss) per common share, diluted
|
|
$
|
(0.008
|
)
|
|
$
|
(13.62
|
)
|
|
(1)
|
All
common share amounts and per share amounts in the financial statements reflect the one-for-one thousand reverse stock split that
was made effective on December 18, 2019. See Note 12.
|
The
accompanying notes are an integral part of these financial statements
SIMLATUS
CORP.
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS DEFICIT
|
FOR
THE YEARS ENDED DECEMBER 31, 2020 AND 2019
|
|
|
Convertible Preferred Stock
|
|
|
Preferred Stock
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
Series A
|
|
|
Series C
|
|
|
Shares
|
|
|
Series B
|
|
|
Common Stock (1)
|
|
|
Paid-In
|
|
|
Earnings
|
|
|
Shareholders
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Payable
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
(Deficit)
|
|
|
Equity (Deficit)
|
|
Balances for December 31, 2018
|
|
|
5,064,929
|
|
|
$
|
9,066,223
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
500
|
|
|
$
|
1
|
|
|
|
108,078
|
|
|
$
|
1
|
|
|
$
|
(24,198,066
|
)
|
|
$
|
6,634,730
|
|
|
$
|
(17,563,334
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of debt to common stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,119,224
|
|
|
|
21
|
|
|
|
969,497
|
|
|
|
—
|
|
|
|
969,518
|
|
Cashless warrant exercise
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
118,280
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Warrant shares exchanged for convertible preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
45,750
|
|
|
|
457,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,372,501
|
|
|
|
—
|
|
|
|
1,372,501
|
|
Convertible preferred stock issued for services
|
|
|
1,675,978
|
|
|
|
3,000,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Convertible preferred stock converted to common stock
|
|
|
(712,360
|
)
|
|
|
(1,275,124
|
)
|
|
|
(10,167
|
)
|
|
|
(101,670
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,178,345
|
|
|
|
23
|
|
|
|
1,551,045
|
|
|
|
—
|
|
|
|
1,551,068
|
|
Convertible preferred stock repurchased and retired
|
|
|
(43,299
|
)
|
|
|
(77,505
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Contributed capital
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
362,261
|
|
|
|
—
|
|
|
|
362,261
|
|
Imputed interest
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14,670
|
|
|
|
—
|
|
|
|
14,670
|
|
Lease standard adoption
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,835
|
)
|
|
|
(1,835
|
)
|
Derivative settlements
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,053,082
|
|
|
|
—
|
|
|
|
7,053,082
|
|
Common stock issued for derivative settlements
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
424
|
|
|
|
—
|
|
|
|
24,953
|
|
|
|
—
|
|
|
|
24,953
|
|
Debt settlement by related party
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,295
|
)
|
|
|
—
|
|
|
|
(7,295
|
)
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,812,416
|
)
|
|
|
(10,812,416
|
)
|
Balances for December 31, 2019
|
|
|
5,985,248
|
|
|
$
|
10,713,594
|
|
|
|
35,583
|
|
|
$
|
355,830
|
|
|
$
|
—
|
|
|
|
500
|
|
|
$
|
1
|
|
|
|
4,524,351
|
|
|
$
|
45
|
|
|
$
|
(12,857,352
|
)
|
|
$
|
(4,179,521
|
)
|
|
$
|
(17,036,827
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued due to reverse stock split rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,476
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Conversion of debt to common stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,674,337,087
|
|
|
|
36,744
|
|
|
|
1,040,971
|
|
|
|
—
|
|
|
|
1,077,715
|
|
Convertible preferred stock converted to common stock
|
|
|
(283,510
|
)
|
|
|
(507,483
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,217,871,970
|
|
|
|
12,178
|
|
|
|
686,652
|
|
|
|
—
|
|
|
|
698,830
|
|
Convertible preferred stock issued to settle note payable
|
|
|
118,466
|
|
|
|
212,055
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Convertible preferred stock issued to settle accrued liabilities
|
|
|
415,553
|
|
|
|
743,839
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Related party debt settled to additional paid in capital
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
31,269
|
|
|
|
—
|
|
|
|
31,269
|
|
Convertible preferred shares to be issued to settle debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
754,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
Imputed interest
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14,136
|
|
|
|
—
|
|
|
|
14,136
|
|
Derivative settlements
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,976,556
|
|
|
|
—
|
|
|
|
4,976,556
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(11,458,322
|
)
|
|
|
(11,458,322
|
)
|
Balances for December 31, 2020
|
|
|
6,235,757
|
|
|
$
|
11,162,005
|
|
|
|
35,583
|
|
|
$
|
355,830
|
|
|
$
|
754,249
|
|
|
|
500
|
|
|
$
|
1
|
|
|
|
4,896,736,884
|
|
|
$
|
48,967
|
|
|
$
|
(6,107,768
|
)
|
|
$
|
(15,637,843
|
)
|
|
$
|
(21,696,643
|
)
|
|
(1)
|
All
common share amounts and per share amounts in the financial statements reflect the one-for-one thousand reverse stock split that
was made effective on December 18, 2019. See Note 12.
|
The
accompanying notes are an integral part of these financial statements
SIMLATUS
CORP.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Years ended
|
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net profit (loss)
|
|
$
|
(11,458,322
|
)
|
|
$
|
(10,812,416
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Amortization of convertible debt discount
|
|
|
705,157
|
|
|
|
1,006,485
|
|
Stock based compensation
|
|
|
—
|
|
|
|
3,000,000
|
|
Imputed interest
|
|
|
14,136
|
|
|
|
14,670
|
|
Debt forgiveness
|
|
|
(118,548
|
)
|
|
|
—
|
|
Gain on debt settlement
|
|
|
—
|
|
|
|
(783,208
|
)
|
Loss on conversion of debt
|
|
|
72,051
|
|
|
|
86,718
|
|
Loss on conversion of preferred shares to common stock
|
|
|
191,349
|
|
|
|
174,273
|
|
Change in fair value of derivative liability
|
|
|
9,404,359
|
|
|
|
5,942,525
|
|
Penalties on notes payable
|
|
|
197,939
|
|
|
|
—
|
|
Decrease (increase) in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
2,178
|
|
|
|
21,609
|
|
Inventory
|
|
|
(3,708
|
)
|
|
|
(425
|
)
|
Other current assets
|
|
|
(10,000
|
)
|
|
|
—
|
|
Prepaid expenses
|
|
|
7,268
|
|
|
|
(7,268
|
)
|
Right-of-use asset
|
|
|
—
|
|
|
|
(1,835
|
)
|
Accrued interest
|
|
|
(71,942
|
)
|
|
|
362,904
|
|
Accounts payable
|
|
|
168,166
|
|
|
|
266,897
|
|
Accrued expenses
|
|
|
625,962
|
|
|
|
122,951
|
|
Advances from related parties
|
|
|
122,924
|
|
|
|
(67,995
|
)
|
Deferred revenue
|
|
|
(629
|
)
|
|
|
629
|
|
Net cash (used in) provided by operating activities
|
|
|
(151,660
|
)
|
|
|
(673,486
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Cash paid for fixed assets
|
|
|
—
|
|
|
|
—
|
|
Net cash provided by investing activities
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from convertible debt
|
|
|
190,100
|
|
|
|
1,032,504
|
|
Proceeds from loans payable
|
|
|
72,920
|
|
|
|
—
|
|
Repurchase of preferred series A shares - related party
|
|
|
—
|
|
|
|
(77,505
|
)
|
Payments on convertible debt
|
|
|
—
|
|
|
|
(212,500
|
)
|
Payments on promissory notes
|
|
|
(2,000
|
)
|
|
|
(49,500
|
)
|
Net cash (used in) provided for financing activities
|
|
|
261,020
|
|
|
|
692,999
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
109,360
|
|
|
|
19,513
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period
|
|
|
25,495
|
|
|
|
5,982
|
|
Cash, end of period
|
|
$
|
134,855
|
|
|
$
|
25,495
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Schedule of non-cash investing & financing activities:
|
|
|
|
|
|
|
|
|
Stock issued for debt conversion
|
|
$
|
1,005,664
|
|
|
$
|
882,778
|
|
Settlement of debt by related party
|
|
$
|
507,481
|
|
|
$
|
—
|
|
Discount from derivative
|
|
$
|
400,393
|
|
|
$
|
1,245,813
|
|
Preferred stock converted to common stock
|
|
$
|
698,830
|
|
|
$
|
1,376,794
|
|
Conversion of debt in to preferred shares
|
|
$
|
212,055
|
|
|
$
|
—
|
|
Conversion of accrued liabilities into preferred shares
|
|
$
|
743,839
|
|
|
$
|
—
|
|
Conversion of accrued liabilities into preferred shares payable
|
|
$
|
754,249
|
|
|
$
|
—
|
|
Contributed capital
|
|
$
|
—
|
|
|
$
|
362,261
|
|
Debt exchanged for payment of accounts payable
|
|
$
|
15,600
|
|
|
$
|
—
|
|
Lease adoption recognition
|
|
$
|
31,178
|
|
|
$
|
77,700
|
|
Common stock issued for derivative settlements
|
|
$
|
—
|
|
|
$
|
24,953
|
|
Derivative warrants settled with preferred C shares
|
|
$
|
—
|
|
|
$
|
1,830,001
|
|
Derivative settlements
|
|
$
|
4,976,556
|
|
|
$
|
7,053,082
|
|
The
accompanying notes are an integral part of these financial statements
SIMLATUS
CORP.
|
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
December
31, 2020
|
|
1.
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
and Description of Business
Satel
Group merged with Simlatus Corporation (SIML or Company) on November 13, 2018 and is the premier provider
of DirecTV to high-rise apartments, condominiums and large commercial office buildings in the San Francisco metropolitan area
and is now expanding both their DirecTV and Internet services across the Bay Area. Simlatus continues to manufacture its own proprietary
systems for major broadcast studios, such as Warner Bros., Fox News, CBS, and DirecTV. Its video technology supports the major
system used for underwater oil exploration in the world. For the years ended December 31, 2020 and 2019, the Company had one major
customer who represented approximately 55% and 53% of total revenue, respectively.
Simlatus
Corporation was initially incorporated in the State of Nevada under the name Sunberta Resources Inc. on November 15, 2006, as
a mining and exploration of mineral claims business. On November 18, 2009, the Company changed its name to Grid Petroleum Corp.
and continued with the mining and exploration of mineral claims in Alberta, Canada, Vancouver Island, British Columbia, England,
and the United States.
On
March 9, 2016, Grid Petroleum Corp. entered into an Asset Purchase Agreement (the Asset Purchase Agreement) with
RJM and Associates, LLC, a California limited liability company (RJM) whereby RJM‟s owners became the directors
of the Company and were to be issued $6,250,000 worth of the Companys stock; $5,000,000 of Restricted Common Stock 90 days
from the date of this agreement and $1,250,000 of Preferred Series-A Shares of the Companys Preferred Stock. On the same
date the entire management team of RJM became the entire management team of Grid Petroleum Corp.
The
Companys transaction with RJM has been treated as a reverse recapitalization of the Company, with the Company (the legal
acquirer of RJM) considered the accounting acquiree, and RJM, whose management took control of the Company (the legal acquiree
of the Company) considered the accounting acquirer. The Company did not recognize goodwill or any intangible assets in connection
with the transaction. All costs related to the transaction are being charged to operations as incurred. The $6,250,000 worth of
shares of Company stock, to be issued in conjunction with the transaction, was presented as a liability until such time that the
shares were issued, and the liability reduced. The historical financial statements include the operations of the accounting acquirer
for all periods presented.
On
March 25, 2016, the Company approved a name change to Simlatus Corporation, stock symbol SIML, which was executed on April 4,
2016. The new name change better describes the Companys new business and revenues from selling commercial broadcast equipment
on a global basis. Simlatus Corporation develops, manufactures, markets, and owns proprietary advanced broadcast equipment and
software. These systems have been sold worldwide over the past 20 years to some of the most recognized, major broadcast companies
in the Television Industry.
Satel
Group Inc., a Nevada Corporation, merged with Simlatus Corporation on November 13, 2018. Satel Group, Inc., (the Company
or Satel) was incorporated in the State of Nevada on August 15, 2016. The Company was originally formed as Satel,
LLC on February 26, 2003 as a California limited liability company. Satel, LLC converted to a California Corporation, Satel, Inc.,
by Articles of Incorporation with a Statement of Conversion signed by Richard Hylen as managing member of Satel LLC, dated December
20, 2013, and filed with the California Secretary of State on December 23, 2013. On September 25, 2016 Satel Group, Inc. purchased
all of the assets of Satel, Inc., and therefore this Company was organized and continues to operate with the same management while
engaged in providing their existing High Speed Internet and DirecTV™ services to upscale, high-rise commercial buildings
including large office complexes, apartments, and condominiums in the City of San Francisco and throughout the Bay Area.
Financial
Statement Presentation
The
audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in
the United States of America (U.S. GAAP).
Reclassification
Certain
prior period amounts have been reclassified to conform to current period presentation.
Fiscal
Year End
The
Company has selected December 31 as its fiscal year end.
Use
of Estimates
The
preparation of the Companys financial statements in conformity with generally accepted accounting principles of 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.
Management
makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when
the financial statements are prepared. Actual results could differ from those estimates.
Cash
Equivalents
The
Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.
Leases
In
February 2016, the FASB issued ASU 2016-02, Leases Topic 842, which amends the guidance in former ASC Topic
840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by
lessees of right-of-use (ROU) assets and lease liabilities on the balance sheet for all leases longer than 12 months.
Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount,
timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating,
with classification affecting the pattern and classification of expense recognition in the income statement.
Revenue
Recognition and Related Allowances
The
Companys main revenue stream is from selling DirecTV services to corporate and residential customers. During the year ended
December 31, 2020, 55% of the Companys revenue was from commissions, 19% was from corporate service subscribers, 13% was
from residential service subscribers, and 6% was from installations and equipment. In addition, the Companys sales for
audio/video systems represented 7% of revenues.
On
January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which
supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic
605). Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The impact of adopting the
new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on
January 1, 2018.
Under
Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount
that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We
determine revenue recognition through the following steps:
|
●
|
identification
of the contract, or contracts, with a customer;
|
|
●
|
identification
of the performance obligations in the contract;
|
|
●
|
determination
of the transaction price;
|
|
●
|
allocation
of the transaction price to the performance obligations in the contract; and
|
|
●
|
recognition
of revenue when, or as, we satisfy a performance obligation.
|
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are
provided based on historical experience and managements evaluation of outstanding accounts receivable. Management evaluates
past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts
at December 31, 2020 and December 31, 2019 is $0.
Accounts
Payable and Accrued Expenses
Accounts
payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company
prior to the end of the fiscal year that are unpaid and arise when the Company becomes obliged to make future payments in respect
of the purchase of these goods and services.
Loss
Per Share
Basic
loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding
during the period after giving retroactive effect to the reverse stock split affected on December 18, 2019 (see Note 10).
Inventories
Inventories
are stated at the lower of cost, computed using the first-in, first-out method and net realizable value. Any adjustments to reduce
the cost of inventories to their net realizable value are recognized in earnings in the current period.
Fair
Value of Financial Instruments
Fair
value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly
transaction between market participants at the measurement date and in the principal or most advantageous market for that asset
or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset
or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration
of non-performance risk including our own credit risk.
In
addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value
hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which
inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three
levels and which is determined by the lowest level input that is significant to the fair value measurement in its entirety.
These
levels are:
Level
1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
Level
2 - inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments
in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the
market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level
3 - inputs are generally unobservable and typically reflect managements estimates of assumptions that market participants
would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include
option pricing models, discounted cash flow models, and similar techniques.
The
following table represents the Companys financial instruments that are measured at fair value on a recurring basis as of
December 31, 2020 and December 31, 2019 for each fair value hierarchy level:
December 31, 2020
|
|
Derivative Liabilities
|
|
|
Total
|
|
Level I
|
|
$
|
—
|
|
|
$
|
—
|
|
Level II
|
|
$
|
—
|
|
|
$
|
—
|
|
Level III
|
|
$
|
7,996,994
|
|
|
$
|
7,996,994
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
Derivative Liabilities
|
|
|
Total
|
|
Level I
|
|
$
|
—
|
|
|
$
|
—
|
|
Level II
|
|
$
|
—
|
|
|
$
|
—
|
|
Level III
|
|
$
|
3,168,799
|
|
|
$
|
3,168,799
|
|
In
managements opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value
as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current
market. Unless otherwise noted, it is managements opinion that the Company is not exposed to significant interest, exchange
or credit risks arising from these financial instruments. As of December 31, 2020 and December 31, 2019, the balances reported
for cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities, approximate the fair value because
of their short maturities.
Income
Taxes
The
Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts
of existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized
in operations in the year of change. A valuation allowance is recorded when it is more likely-than-not that a deferred
tax asset will not be realized.
As
of the date of this filing, the Company is not current in filing their tax returns. The last return filed by the Company was December
31, 2017, and the Company has not accrued any potential penalties or interest from that period forward. The Company will need
to file returns for the year ending December 31, 2019 and 2018, which are still open for examination.
Recent
Accounting Pronouncements
In
June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments. The guidance requires companies to measure credit losses utilizing a methodology that reflects
expected credit losses and requires the consideration of a broader range of reasonable and supportable information to inform credit
loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within
those fiscal years. The Company is evaluating the impact of the new standard.
2.
GOING CONCERN
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of December 31,
2020, the Company has a shareholders deficit of $21,696,643 since its inception, working capital deficit of $9,433,709,
negative cash flows from operations, and has limited business operations, which raises substantial doubt about the Companys
ability to continue as going concern. The ability of the Company to meet its commitments as they become payable is dependent on
the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There is no assurance
the Company will be successful in achieving these goals.
The
Company does not have sufficient cash to fund its desired research and development objectives for its augmented/virtual reality
product development for the next 12 months. The Company has arranged financing and intends to utilize the cash received to fund
the research and development project. This financing may be insufficient to fund expenditures or other cash requirements required
to complete the product design for the augmented/virtual reality markets. There can be no assurance the Company will be successful
in completing any new product development. The Company plans to seek additional financing if necessary, in private or public equity
offering(s) to secure future funding for operations. There can be no assurance the Company will be successful in raising additional
funding. If the Company is not able to secure additional funding, the implementation of the Companys business plan will
be impaired. There can be no assurance that such additional financing will be available to the Company on acceptable terms or
at all.
These
financial statements do not give effect to adjustments to the amounts and classification to assets and liabilities that would
be necessary should the Company be unable to continue as a going concern.
3.
ACCRUED EXPENSES
As
of December 31, 2020 and December 31, 2019, accrued expenses were comprised of the following:
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Accrued expenses
|
|
|
|
|
|
|
|
|
Credit cards
|
|
$
|
407
|
|
|
$
|
8,282
|
|
Customer deposits
|
|
|
18,307
|
|
|
|
18,307
|
|
Employee liabilities
|
|
|
7,612
|
|
|
|
7,612
|
|
Sales tax payable
|
|
|
90
|
|
|
|
1,416
|
|
Short-term loans
|
|
|
3,000
|
|
|
|
3,000
|
|
Total accrued expenses
|
|
$
|
29,416
|
|
|
$
|
38,617
|
|
|
|
|
|
|
|
|
|
|
Accrued interest
|
|
|
|
|
|
|
|
|
Interest on notes payable
|
|
$
|
44,855
|
|
|
$
|
111,326
|
|
Interest on short-term loans
|
|
|
5,826
|
|
|
|
—
|
|
Interest on accrued wages
|
|
|
97,552
|
|
|
|
263,113
|
|
Total accrued interest
|
|
$
|
148,233
|
|
|
$
|
374,439
|
|
|
|
|
|
|
|
|
|
|
Accrued wages
|
|
$
|
321,530
|
|
|
$
|
1,184,455
|
|
4.
CONVERTIBLE NOTES PAYABLE
As
of December 31, 2020 and December 31, 2019, notes payable were comprised of the following:
|
|
Original
|
|
Due
|
|
Interest
|
|
Conversion
|
|
December 31,
|
|
|
December 31,
|
|
|
|
Note Date
|
|
Date
|
|
Rate
|
|
Rate
|
|
2020
|
|
|
2019
|
|
Armada Investment #2
|
|
5/30/2019
|
|
2/29/2020
|
|
18%
|
|
Variable
|
|
$
|
—
|
|
|
$
|
27,500
|
|
Armada Investment #3
|
|
7/22/2019
|
|
7/22/2020
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
37,950
|
|
Armada Investment #4
|
|
12/6/2019
|
|
12/6/2020
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
18,150
|
|
BHP Capital NY #3
|
|
3/26/2019
|
|
3/26/2020
|
|
24%
|
|
Variable
|
|
|
—
|
|
|
|
28,600
|
|
BHP Capital NY #4
|
|
4/9/2019
|
|
1/9/2020
|
|
18%
|
|
Variable
|
|
|
—
|
|
|
|
46,000
|
|
BHP Capital NY #6*
|
|
5/30/2019
|
|
2/29/2020
|
|
18%
|
|
Variable
|
|
|
27,500
|
|
|
|
27,500
|
|
BHP Capital NY #7*
|
|
7/22/2019
|
|
7/22/2020
|
|
8%
|
|
Variable
|
|
|
37,950
|
|
|
|
37,950
|
|
BHP Capital NY #8*
|
|
8/7/2019
|
|
8/7/2020
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
33,000
|
|
BHP Capital NY #9
|
|
12/20/2019
|
|
12/20/2020
|
|
12%
|
|
Variable
|
|
|
11,075
|
|
|
|
19,000
|
|
Blackbridge Capital #2*
|
|
5/3/2016
|
|
5/3/2017
|
|
5%
|
|
Variable
|
|
|
—
|
|
|
|
80,400
|
|
Coventry #3
|
|
5/31/2019
|
|
5/31/2020
|
|
24%
|
|
Variable
|
|
|
—
|
|
|
|
38,691
|
|
Emunah Funding #4*
|
|
10/20/2018
|
|
7/20/2019
|
|
24%
|
|
Variable
|
|
|
2,990
|
|
|
|
2,990
|
|
Emunah Funding #8*
|
|
1/31/2019
|
|
1/31/2020
|
|
24%
|
|
Variable
|
|
|
33,652
|
|
|
|
33,652
|
|
Fourth Man #2
|
|
10/26/2018
|
|
7/20/2019
|
|
24%
|
|
Variable
|
|
|
—
|
|
|
|
8,257
|
|
Fourth Man #4
|
|
4/23/2019
|
|
4/23/2020
|
|
10%
|
|
Variable
|
|
|
—
|
|
|
|
16,865
|
|
Fourth Man #5
|
|
7/22/2019
|
|
7/22/2020
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
37,950
|
|
Fourth Man #6
|
|
8/12/2019
|
|
8/12/2020
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
17,600
|
|
Fourth Man #7
|
|
10/9/2019
|
|
10/8/2020
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
27,500
|
|
Fourth Man #8
|
|
12/10/2019
|
|
9/10/2020
|
|
12%
|
|
Variable
|
|
|
—
|
|
|
|
16,500
|
|
Fourth Man #9
|
|
8/3/2020
|
|
8/3/2021
|
|
8%
|
|
Variable
|
|
|
27,500
|
|
|
|
|
|
Fourth Man #10
|
|
12/15/2020
|
|
12/15/2021
|
|
8%
|
|
Variable
|
|
|
33,000
|
|
|
|
—
|
|
James Powell
|
|
9/7/2015
|
|
Demand
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
150,875
|
|
Jefferson St Capital #2*
|
|
3/5/2019
|
|
10/18/2019
|
|
0%
|
|
Variable
|
|
|
5,000
|
|
|
|
5,000
|
|
Jefferson St Capital #3
|
|
4/9/2019
|
|
1/9/2020
|
|
8%
|
|
Variable
|
|
|
—
|
|
|
|
44,400
|
|
Jefferson St Capital #5
|
|
5/30/2019
|
|
2/29/2020
|
|
18%
|
|
Variable
|
|
|
—
|
|
|
|
27,500
|
|
Jefferson St Capital #6*
|
|
6/21/2019
|
|
3/21/2020
|
|
18%
|
|
Variable
|
|
|
27,500
|
|
|
|
27,500
|
|
Jefferson St Capital #7*
|
|
8/20/2019
|
|
5/20/2020
|
|
18%
|
|
Variable
|
|
|
38,500
|
|
|
|
38,500
|
|
Jefferson St Capital #8*
|
|
12/20/2019
|
|
12/20/2020
|
|
12%
|
|
Variable
|
|
|
19,000
|
|
|
|
19,000
|
|
Optempus Invest #1
|
|
9/4/2019
|
|
4/4/2020
|
|
6%
|
|
Variable
|
|
|
—
|
|
|
|
25,000
|
|
Optempus Invest #2
|
|
9/13/2019
|
|
4/13/2020
|
|
6%
|
|
Variable
|
|
|
—
|
|
|
|
20,000
|
|
Optempus Invest #3
|
|
10/15/2019
|
|
6/15/2020
|
|
6%
|
|
Variable
|
|
|
—
|
|
|
|
25,000
|
|
Optempus Invest #4
|
|
11/2/2020
|
|
11/2/2021
|
|
10%
|
|
Variable
|
|
|
20,000
|
|
|
|
—
|
|
Optempus Invest #5
|
|
11/5/2020
|
|
11/5/2021
|
|
10%
|
|
Variable
|
|
|
20,000
|
|
|
|
—
|
|
Optempus Invest #6
|
|
12/31/2020
|
|
12/31/2021
|
|
6%
|
|
Variable
|
|
|
20,000
|
|
|
|
—
|
|
Power Up Lending #1*
|
|
3/14/2019
|
|
3/14/2020
|
|
22%
|
|
Variable
|
|
|
—
|
|
|
|
6,500
|
|
Power Up Lending #2
|
|
5/13/2019
|
|
5/13/2020
|
|
10%
|
|
Variable
|
|
|
—
|
|
|
|
103,000
|
|
Power Up Lending #3
|
|
6/20/2019
|
|
6/20/2020
|
|
10%
|
|
Variable
|
|
|
—
|
|
|
|
53,000
|
|
Power Up Lending #4
|
|
5/18/2020
|
|
5/18/2021
|
|
10%
|
|
Variable
|
|
|
—
|
|
|
|
—
|
|
Power Up Lending #5
|
|
6/15/2020
|
|
6/15/2021
|
|
10%
|
|
Variable
|
|
|
13,100
|
|
|
|
—
|
|
Power Up Lending #6
|
|
6/24/2020
|
|
6/24/2021
|
|
10%
|
|
Variable
|
|
|
33,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
369,767
|
|
|
|
1,101,330
|
|
Less debt discount
|
|
|
|
|
(136,829
|
)
|
|
|
(394,795
|
)
|
Notes payable, net of discount
|
|
|
|
$
|
232,938
|
|
|
$
|
706,535
|
|
|
*
|
As
of December 31, 2020, the balance of notes payable that are in default is $203,167.
|
Armada
Investment Fund LLC
On
May 30, 2019, the Company issued a convertible note to Armada Investment Fund LLC for $27,500, which includes $16,667 paid Auctus
Fund pursuant to a settlement agreement, $5,000 to settle outstanding accounts payable, transaction fee interest of $3,000, and
cash consideration of $2,833. The note bears interest of 8% (increases to 18% per annum upon an event of default), matures on
February 29, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$27,500 due to this conversion feature, and $27,500 has been amortized to the statement of operations. During the year ended December
31, 2020, the Company issued 75,300,469 common shares upon the conversion of principal in the amount of $27,500, accrued interest
of $2,415, and conversion fees of $1,500. As of September 30, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
July 22, 2019, the Company received funding pursuant to a convertible note issued to Armada Investment Fund LLC for $37,950, of
which $33,500 was received in cash and $4,450 was recorded as transaction fees. The note bears interest of 8% (increases to 24%
per annum upon an event of default), matures on July 22, 2020, and is convertible into common stock at 65% of the lowest trading
price of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt
discount from the derivative equal to $37,950 due to this conversion feature, and $37,950 has been amortized to the statement
of operations. During the year ended December 31, 2020, the Company issued 55,597,416 common shares upon the conversion of principal
in the amount of $37,500, accrued interest of $2,719, and conversion fees of $3,600. As of December 31, 2020, the note has been
fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 6, 2019, the Company received funding pursuant to a convertible note issued to Armada Investment Fund LLC for $18,150,
which includes $15,000 to settle outstanding accounts payable and $3,150 in transaction fees. The note bears interest of 8% (increases
to 24% per annum upon an event of default), matures on December 6, 2020, and is convertible into common stock at 65% of the lowest
trading price of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded
a debt discount from the derivative equal to $18,150 due to this conversion feature, which has been amortized to the statement
of operations. During the year ended December 31, 2020, the Company issued 56,783,986 common shares upon the conversion of principal
in the amount of $18,150, accrued interest of $842, and conversion fees of $2,400. As of December 31, 2020, the note has been
fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
BHP
Capital NY, Inc.
On
March 26, 2019, the Company received funding pursuant to convertible note issued to BHP Capital NY for $28,600, of which $25,000
was received in cash and $3,600 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on March 26, 2019, and is convertible into common stock at 58% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $28,600 due to this conversion feature, which has been amortized to the statement of operations.
During the year ended December 31, 2020, the Company issued 87,276,122 common shares upon the conversion of principal in the amount
of $28,600, accrued interest of $2,897 and conversion fees of $1,500. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
April 9, 2019, the Company issued a convertible note to BHP Capital NY, Inc. for $55,000, which includes transaction fee interest
of $6,500, and cash consideration of $48,500. The note bears interest of 8% (increases to 18% per annum upon an event of default),
matures on January 9, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period
ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal
to $55,000 due to this conversion feature, and $55,000 has been amortized to the statement of operations. During the year ended
December 31, 2019, the Company issued 76,100 common shares upon the conversion of principal in the amount of $9,000, accrued interest
of $1,915, and conversion fees of $500. During the year ended December 31, 2020, the Company issued 197,220,250 common shares
upon the conversion of principal in the amount of $46,000, accrued interest of $2,651, and conversion fees of $1,500. As of December
31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 30, 2019, the Company issued a convertible note to BHP Capital NY for $27,500, which includes $16,667 paid Auctus Fund pursuant
to a settlement agreement, $5,000 to settle outstanding accounts payable, transaction fee interest of $3,000, and cash consideration
of $2,833. The note bears interest of 8% (increases to 18% per annum upon an event of default), matures on February 29, 2020,
and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period ending on the latest complete
day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to $27,500 due to this conversion
feature, which has been amortized to the statement of operations. As of December 31, 2020, the note had a principal balance of
$27,500 and accrued interest of $5,806. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
July 22, 2019, the Company received funding pursuant to a convertible note issued to BHP Capital NY for $37,950, of which $33,500
was received in cash and $4,450 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on July 22, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $37,950 due to this conversion feature, which has been amortized to the statement of operations.
As of December 31, 2020, the note had a principal balance of $37,950 and accrued interest of $7,087.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
August 7, 2019, the Company received funding pursuant to a convertible note issued to BHP Capital NY for $33,000 of which $29,000
was received in cash and $4,000 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on August 7, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $33,000 due to this conversion feature, which has been amortized to the statement of operations.
During the year ended December 31, 2020, the Company issued 569,243,419 common shares upon the conversion of principal in the
amount of $33,000, interest of $3,667 and conversion fees of $4,000. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 20, 2019, the Company received funding pursuant to a convertible note issued to BHP Capital NY for $19,000 of which $15,000
was received in cash and $4,000 was recorded as transaction fees. The note bears interest of 12% (increases to 22% per annum upon
an event of default), matures on December 20, 2020, and is convertible into the lower of 1) 55% of the lowest trading price of
the 20 trading day period ending on the latest complete day prior to the date of the note, and 2) 55% of the lowest trading price
of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $19,000 due to this conversion feature, which has been amortized to the statement of operations.
During the year ended December 31, 2020, the Company issued 196,361,455 common shares upon the conversion of principal in the
amount of $7,925, interest of $2,375 and conversion fees of $500. As of December 31, 2020, the note had a principal balance of
$11,075 and accrued interest of $29.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Blackbridge
Capital
On
May 3, 2016, the Company accepted and agreed to a Debt Purchase Agreement, whereby Blackbridge Capital acquired $100,000 of principal
of a Direct Capital Group, Inc. convertible note in exchange for $100,000. The note bears interest at 5% per annum, matured on
May 3, 2017, and is convertible into common stock at 50% of the lowest market price of the 20 trading days prior to the date of
conversion. The Company recorded a debt discount from the derivative equal to $100,000 due to this conversion feature, which has
been amortized to the statement of operations. The note has converted $19,600 of principal into 267 shares of common stock. On
December 2, 2020, a Debt Settlement Agreement was executed, whereby the Company, Blackbridge Capital and Direct Capital agreed
to retire the Debt Purchase Agreement and $80,400 in principal and $17,770 in accrued interest was recorded as debt forgiveness
on the statement of operations.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Coventry
Enterprises, LLC
On
May 31, 2019, the Company issued a convertible note to Coventry Enterprises for $50,000, of which $47,500 was received in cash
and $2,500 was recorded as transaction fees. The note bears interest at 10% (increases to 24% per annum upon an event of default),
matures on May 31, 2020, and is convertible into common stock at 61% multiplied by the lowest trading price during the 20-day
trading period including the conversion date. During the three month period ended March 31, 2020, the Company recorded a default
penalty of $38,691. The Company recorded a debt discount from the derivative equal to $101,925 due to this conversion feature,
which has been amortized to the statement of operations. During the year ended December 31, 2019, the Company issued 425,000 common
shares upon the conversion of principal in the amount of $11,309 and accrued interest of $2,818. During the year ended December
31, 2020, the Company issued 129,270,950 common shares upon the conversion of principal in the amount of $77,382, accrued interest
of $8,809, and conversion fees of $3,105. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
February 4, 2020, the Company issued a convertible note to Coventry Enterprises for $40,000, of which $37,500 was received in
cash and $2,500 was recorded as transaction fees. The note bears interest at 10% (increases to 24% per annum upon an event of
default), matures on February 4, 2021, and is convertible into common stock at 60% multiplied by the lowest trading price during
the 20-day trading period prior to the conversion date. The Company recorded a debt discount from the derivative equal to $40,000
due to this conversion feature, which been amortized to the statement of operations. During the year ended December 31, 2020,
the Company issued 554,094,166 common shares upon the conversion of principal in the amount of $40,000, accrued interest of $2,366,
and conversion fees of $1,380. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Emunah
Funding LLC
On
October 20, 2017, the Company issued a convertible note to Emunah Funding LLC for $33,840, which includes $26,741 to settle outstanding
accounts payable, transaction costs of $4,065, OID interest of $2,840, and cash consideration of $194. On November 6, 2017, the
Company issued an Allonge to the convertible debt in the amount of $9,720. The Company received $7,960 in cash and recorded transaction
fees of $1,000 and OID interest of $760. On November 30, 2017, the Company issued an Allonge to the convertible debt in the amount
of $6,480. The Company received $5,000 in cash and recorded transaction fees of $1,000 and OID interest of $480. On January 11,
2018, the Company issued an Allonge to the convertible debt in the amount of $5,400. The Company received $5,000 in cash and recorded
OID interest of $480. The note bears interest of 8% (increases to 24% per annum upon an event of default), matured on July 20,
2018, and is convertible into common stock at 57.5% of the lowest trading price of the 20 trading day period ending on the latest
complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to $55,440 due to
this conversion feature, which has been amortized to the statement of operations. On October 26, 2018, the principal amount of
$40,000 was reassigned to Fourth Man, LLC. Pursuant to the default terms of the note, the Company entered a late filing penalty
of $1,000. Prior to the period ended December 31, 2020, the note has converted $13,450 of principal and $4,918 of interest into
7,145 shares of common stock. As of December 31, 2020, the note had a principal balance of $2,990 and accrued interest of $1,079.
This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
January 31, 2019, the Company received funding pursuant to convertible note issued to Emunah Funding LLC for $33,000, which includes
$5,000 to settle outstanding accounts payable, $4,500 in transaction fees and cash consideration of $23,500. The note bears interest
of 8% (increases to 24% per annum upon an event of default), matures on January 31, 2020, and is convertible into common stock
at 50% of the lowest trading price of the 20 trading day period ending on the latest complete day prior to the date of conversion.
The Company recorded a debt discount from the derivative equal to $33,000 due to this conversion feature, and $33,000 has been
amortized to the statement of operations. Pursuant to the default terms of the note, the Company entered late filing penalties
of $50,652. During the year ended December 31, 2020, the Company made cash payments of $50,000. As of December 31, 2020, the note
had a principal balance of $33,652 and accrued interest of $10,842.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Fourth
Man LLC
On
October 26, 2018, the Company accepted and agreed to a Debt Purchase Agreement, whereby Fourth Man LLC acquired $40,000 of debt
from an Emunah Funding LLC convertible note in exchange for $40,000. The note bears interest of 24%, matures on July 20, 2019,
and is convertible into common stock at 50% of the lowest trading price of the 20 trading day period ending on the latest complete
day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to $16,591 due to this conversion
feature, which has been amortized to the statement of operations. During the year ended December 31, 2019, the Company issued
22,299 common shares upon the conversion of principal in the amount of $31,743. During the year ended December 31, 2020, the Company
issued 69,046,532 common shares upon the conversion of principal in the amount of $8,257 and accrued interest of $2,100. As of
December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
April 23, 2019, the Company issued a convertible note to Fourth Man LLC for $26,400, which includes $24,000 to settle outstanding
accounts payable, and transaction fee interest of $2,400. The note bears interest of 10%, matures on April 23, 2020, and is convertible
into common stock at 60% of the lowest trading price of the 20 trading day period ending on the latest complete day prior to the
date of conversion. The Company recorded a debt discount from the derivative equal to $26,400 due to this conversion feature,
which has been amortized to the statement of operations. During the year ended December 31, 2019, the Company issued 165,531 common
shares upon the conversion of principal in the amount of $9,535. During the year ended December 31, 2020, the Company issued 65,759,708
common shares upon the conversion of principal in the amount of $16,865 and accrued interest of $2,862. As of December 31, 2020,
the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
July 22, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $37,950, of which $33,500
was received in cash and $4,450 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on July 22, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $37,950 due to this conversion feature, which has been amortized to the statement of operations.
During the year ended December 31, 2020, the Company issued 89,447,039 common shares upon the conversion of principal in the amount
of $37,950, accrued interest of $2,837 and conversion fees of $3,600. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
August 12, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $17,600, of which $15,000
was received in cash and $2,600 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on August 12, 2020, and is convertible into common stock at 65% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $17,600 due to this conversion feature, which has been amortized to the statement of operations.
During the year ended December 31, 2020, the Company issued 47,812,803 common shares upon the conversion of principal in the amount
of $17,600, accrued interest of $1,281, and conversion fees of $1,200. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
October 9, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $27,500, of which $25,000
was received in cash and $2,500 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on October 19, 2020, and is convertible into common stock at 60% of the lowest trading price of
the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $27,500 due to this conversion feature, which has been amortized to the statement of operations.
During the year ended December 31, 2020, the Company issued 30,896,663 common shares upon the conversion of principal in the amount
of $27,500, accrued interest of $1,477, and conversion fees of $2,400. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 10, 2019, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $16,500 of which $15,000
was received in cash and $1,500 was recorded as transaction fees. The note bears interest of 12% (increases to 24% per annum upon
an event of default), matures on September 10, 2020, and is convertible into the lower of 1) 50% of the lowest trading price of
the 20 trading day period ending on the latest complete day prior to the date of the note, and 2) 50% of the lowest trading price
of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $16,500 due to this conversion feature, which has been amortized to the statement of operations.
During the year ended December 31, 2020, the Company issued 15,008,658 common shares upon the conversion of principal in the amount
of $16,500, accrued interest of $1,010 and conversion fees of $500. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
August 3, 2020, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $27,500 of which $25,000
was received in cash and $2,500 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on August 3, 2021, and is convertible into common stock at 60% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $27,500 due to this conversion feature, and $11,301 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at December 31, 2020 of $16,199. As of December 31, 2020, the note
had a principal balance of $27,500 and accrued interest of $904.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 15, 2020, the Company received funding pursuant to a convertible note issued to Fourth Man LLC for $33,000 of which $27,600
was received in cash and $5,400 was recorded as transaction fees. The note bears interest of 8% (increases to 24% per annum upon
an event of default), matures on August 3, 2021, and is convertible into common stock at 60% of the lowest trading price of the
20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount
from the derivative equal to $33,000 due to this conversion feature, and $1,447 has been amortized to the statement of operations.
The debt discount and transaction fee interest had a balance at December 31, 2020 of $31,553. As of December 31, 2020, the note
had a principal balance of $33,000 and accrued interest of $116.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
GPL
Ventures LLC
On
April 29, 2020, the Company accepted and agreed to an Assignment Agreement, whereby GPL Ventures acquired $25,000 of principal
and $958 in accrued interest from one note with Optempus Investments, LLC. The note bears interest at 10%, matured on April 4,
2020, and is convertible into 55% of the lowest trading price of the 20 trading day period ending on the latest complete day prior
to the date of conversion. During the year ended December 31, 2020, the Company issued 21,631,275 common shares upon the conversion
of principal in the amount of $25,958. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 20, 2020, the Company accepted and agreed to an Assignment Agreement, whereby GPL Ventures acquired $45,000 of principal,
$2,664 in debt discounts, and $2,290 in accrued interest from two notes with Optempus Investments, LLC. The note bears interest
at 10%, matures on June 15, 2020, and is convertible into 55% of the lowest trading price of the 20 trading day period ending
on the latest complete day prior to the date of conversion. During the year ended December 31, 2020, the Company issued 174,297,500
common shares upon the conversion of principal in the amount of $47,290, and the debt discount of $2,664 has been amortized to
the statement of operations. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
James
Powell
On
September 7, 2015, the Company issued a convertible note with the Companys former President, James Powell for non-cash
consideration for accrued fees of $150,875. The note bears interest at 8%, is due on demand, and is convertible into convertible
into common stock at 50% of the lowest trading price for the 15 days prior to the date of conversion. On November 27, 2020, 118,466
shares of Series A preferred stock were issued to settle the principal amount of $150,875 and interest of $61,180 in accordance
with conversion terms. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Jefferson
Street Capital LLC
On
March 5, 2019, the Company accepted and agreed to a Debt Purchase Agreement, whereby Jefferson Street Capital LLC acquired $30,000
of debt from an Emunah Funding LLC convertible note in exchange for $29,000, and the Company recorded a gain on settlement of
debt of $1,000. The note bears no interest, matures on October 18, 2019, and is convertible into common stock at 57.5% of the
lowest trading price of the 20 trading days ending on the latest complete day prior to the date of conversion. The Company recorded
a debt discount from the derivative equal to $29,000 due to this conversion feature, which has been amortized to the statement
of operations. During the year ended December 31, 2019, the Company issued 10,691 common shares upon the conversion of principal
in the amount of $24,000 and $1,000 in conversion fees. As of December 31, 2020, the note had a principal balance of $5,000. This
note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
April 9, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $55,000, which includes transaction fee
interest of $6,500, and cash consideration of $48,500. The note bears interest of 8% (increases to 18% per annum upon an event
of default), matures on January 9, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $55,000 due to this conversion feature, which has been amortized to the statement of operations. During the year ended
December 31, 2019, the Company issued 74,000 common shares upon the conversion of principal in the amount of $10,600 and $500
in conversion fees. During the year ended December 31, 2020, the Company issued 33,860,373 common shares upon the conversion of
principal in the amount of $44,400, accrued interest of $2,200 and conversion fees of $1,500. As of December 31, 2020, the note
has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 30, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $27,500, which includes $16,667 paid Auctus
Fund pursuant to a settlement agreement, $5,000 to settle outstanding accounts payable, transaction fee interest of $3,000, and
cash consideration of $2.833. The note bears interest of 8% (increases to 18% per annum upon an event of default), matures on
February 29, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$27,500 due to this conversion feature, which has been amortized to the statement of operations. During the year ended December
31, 2020, the Company issued 56,783,115 common shares upon the conversion of principal in the amount of $27,500, accrued interest
of $2,377 and conversion fees of $2,250. As of December 31, 2020, the note had been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
June 21, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $27,500, which includes transaction fee
interest of $4,000, and cash consideration of $23,500. The note bears interest of 8% (increases to 18% per annum upon an event
of default), matures on March 21, 2020, and is convertible into common stock at 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $27,500 due to this conversion feature, which has been amortized to the statement of operations. As of December 31, 2020,
the note had a principal balance of $27,500 and accrued interest of $5,533. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
August 20, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $38,500, of which $32,000 was received
in cash and $6,500 was recorded as transaction fees. The note bears interest at 10% (increases to 18% per annum upon an event
of default), matures on May 20, 2020, and is convertible into the lower of 1) 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of the note, and 2) 65% of the lowest trading price of the 15 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $38,500 due to this conversion feature, which has been amortized to the statement of operations. As of December 31, 2020,
the note had a principal balance of $38,500 and accrued interest of $6,600. This note is currently in default.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 20, 2019, the Company issued a convertible note to Jefferson Street Capital LLC for $19,000, of which $15,000 was received
in cash and $4,000 was recorded as transaction fees. The note bears interest of 12% (increases to 22% per annum upon an event
of default), matures on December 20, 2020, and is convertible into the lower of 1) 55% of the lowest trading price of the 20 trading
day period ending on the latest complete day prior to the date of the note, and 2) 55% of the lowest trading price of the 20 trading
day period ending on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative
equal to $19,000 due to this conversion feature, which has been amortized to the statement of operations. As of December 31, 2020,
the note had a principal balance of $19,000 and accrued interest of $2,329.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Optempus
Investments, LLC
On
September 4, 2019, the Company received $25,000 cash from the issuance of a convertible promissory note with Optempus Investments,
LLC in the amount of $25,000. The note bears interest at 6% (increases to 24% per annum upon an event of default), matures on
April 4, 2020, and is convertible into the lower of 1) 70% of the lowest trading price of the 30 trading day period ending on
the latest complete day prior to the date of the note, and 2) 70% of the lowest trading price of the 30 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$25,000 due to this conversion feature, which has been amortized to the statement of operations. On April 29, 2020, the principal
amount of $25,000, and interest of $958 was reassigned to GPL Ventures LLC. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
September 13, 2019, the Company received $20,000 cash from the issuance of a convertible promissory note with Optempus Investments,
LLC in the amount of $20,000. The note bears interest at 6% (increases to 24% per annum upon an event of default), matures on
April 13, 2020, and is convertible into the lower of 1) 70% of the lowest trading price of the 30 trading day period ending on
the latest complete day prior to the date of the note, and 2) 70% of the lowest trading price of the 30 trading day period ending
on the latest complete day prior to the date of conversion. The Company recorded a debt discount from the derivative equal to
$20,000 due to this conversion feature, which has been amortized to the statement of operations. On May 20, 2020, the principal
amount of $20,000, and interest of $1,395 was reassigned to GPL Ventures LLC. As of December 31, 2020, the note has been fully
satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
October 15, 2019, the Company received $25,000 cash from the issuance of a convertible promissory note with Optempus Investments,
LLC in the amount of $25,000. The note bears interest at 6%, matures on June 15, 2020, and is convertible into 70% of the lowest
trading price of the 20 trading day period ending on the latest complete day prior to the date of conversion. The Company recorded
a debt discount from the derivative equal to $25,000 due to this conversion feature, and $22,336 has been amortized to the statement
of operations. On May 20, 2020, the principal amount of $25,000, debt discount of $2,664 and interest of $896 was reassigned to
GPL Ventures LLC. As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
November 2, 2020, the Company issued a convertible note to Optempus Investments, LLC. for $20,000, of which $10,000 was received
in cash and $10,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on November 2, 2021, convertible into 60% multiplied by the average of the two lowest trading prices during
the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the derivative
equal to $20,000 due to this conversion feature, and $3,233 has been amortized to the statement of operations. The debt discount
and transaction fee interest had a balance at December 31, 2020 of $16,767. As of December 31, 2020, the note had a principal
balance of $20,000 and accrued interest of $323.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
November 5, 2020, the Company issued a convertible note to Optempus Investments, LLC. for $20,000, of which $10,000 was received
in cash and $10,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on November 5, 2021, convertible into 60% multiplied by the average of the two lowest trading prices during
the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the derivative
equal to $20,000 due to this conversion feature, and $3,068 has been amortized to the statement of operations. The debt discount
and transaction fee interest had a balance at December 31, 2020 of $16,932. As of December 31, 2020, the note had a principal
balance of $20,000 and accrued interest of $307.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
December 31, 2020, the Company issued a convertible note to Optempus Investments, LLC. for $20,000. The Company received a cash
payment of $10,000 on January 8, 2021, and $10,000 was recorded as transaction fees. The note bears interest at 10% (increases
to 22% per annum upon an event of default), matures on December 31, 2021, convertible into 60% multiplied by the average of the
two lowest trading prices during the 20 day trading period on the trading day prior to the conversion date. The Company recorded
a debt discount from the derivative equal to $20,000 due to this conversion feature. The debt discount and transaction fee interest
had a balance at December 31, 2020 of $20,000. As of December 31, 2020, the note had a principal balance of $20,000 and the $10,000
cash payment was recorded to other current assets on the balance sheet.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Power
Up Lending Group Ltd.
On
March 14, 2019, the Company issued a convertible note to Power Up Lending Group Ltd. for $73,000, of which $70,000 was received
in cash and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on March 14, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices
during the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the
derivative equal to $73,000 due to this conversion feature, which has been amortized to the statement of operations. Pursuant
to the default terms of the note, the Company entered a late filing penalty of $36,500. During the year ended December 31, 2019,
the Company issued 445,833 common shares upon the conversion of principal in the amount of $103,000. During the year ended December
31, 2020, Power Up forgave the remaining debt and the principal amount of $6,500 was reclassed to the statement of operations.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 13, 2019, the Company issued a convertible note to Power Up Lending Group Ltd. for $103,000, of which $100,000 was received
in cash and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on May 13, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices during
the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the derivative
equal to $103,000 due to this conversion feature, and $65,290 has been amortized to the statement of operations. During the year
ended December 31, 2020, the Company entered a default penalty of $103,000. On March 5, the principal amount of $206,000, debt
discount and transaction fee interest of $37,710 and interest of $14,115 was reassigned to Redstart Holdings Corp. As of December
31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
June 20, 2019, the Company issued a convertible note to Power Up Lending Group Ltd. for $53,000, of which $50,000 was received
in cash and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on June 20, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices
during the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the
derivative equal to $53,000 due to this conversion feature, and $28,092 has been amortized to the statement of operations. During
the year ended December 31, 2020, the Company entered a default penalty of $53,000. On March 5, 2020, the principal amount of
$106,000, debt discount and transaction fee interest of $24,908 and interest of $6,769 was reassigned to Redstart Holdings Corp.
As of December 31, 2020, the note has been fully satisfied.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
May 18, 2020, the Company issued a convertible note to Power Up Lending Group Ltd. for $16,000, of which $15,600 was paid to settle
accounts payable, and $400 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an
event of default), matures on May 18, 2021, and is convertible into 61% multiplied by the average of the two lowest trading prices
during the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the
derivative equal to $16,000 due to this conversion feature, which has been amortized to the statement of operations. During the
year ended December 31, 2020, the Company issued 278,333,333 common shares upon the conversion of principal in the amount of $16,000
and accrued interest of $700. As of December 31, 2020, the note has an accrued interest balance of $100.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
June 15, 2020, the Company issued a convertible note to Power Up Lending Group Ltd. for $43,000, of which $40,000 was received
in cash, and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on June 15, 2021, and is convertible into 61% multiplied by the average of the two lowest trading prices
during the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the
derivative equal to $43,000 due to this conversion feature, and $23,444 has been amortized to the statement of operations. The
debt discount and transaction fee interest had a balance at December 31, 2020 of $19,556. During the year ended December 31, 2020,
the Company issued 498,333,333 common shares upon the conversion of principal in the amount of $29,900. As of December 31, 2020,
the note had a principal balance of $13,100 and accrued interest of $2,150.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
On
June 24, 2020, the Company issued a convertible note to Power Up Lending Group Ltd. for $33,000, of which $30,000 was received
in cash, and $3,000 was recorded as transaction fees. The note bears interest at 10% (increases to 22% per annum upon an event
of default), matures on June 24, 2021, and is convertible into 61% multiplied by the average of the two lowest trading prices
during the 20 day trading period on the trading day prior to the conversion date. The Company recorded a debt discount from the
derivative equal to $33,000 due to this conversion feature, and $17,178 has been amortized to the statement of operations. The
debt discount and transaction fee interest had a balance at December 31, 2020 of $15,822. As of December 31, 2020, the note had
a principal balance of $33,000 and accrued interest of $1,650.
The
Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were indeterminate
due to the lack on conversion price floor and, as such, does constitute a derivative liability as the Company has insufficient
authorized shares.
Redstart
Holdings Corp.
On
March 5, 2020, the Company accepted and agreed to an Assignment Agreement, whereby Redstart Holdings Corp. acquired $156,000 of
principal, $156,000 in penalties, $62,618 in debt discount and financing costs, and $20,884 in accrued interest from two notes
with Power Up Lending Group Ltd. The note bears interest at 10% (increases to 22% per annum upon an event of default), matures
on June 20, 2020, and is convertible into 61% multiplied by the average of the two lowest trading prices during the 20 day trading
period on the trading day prior to the conversion date. The Company recorded an additional debt discount from the derivative equal
to the amount of $156,000 due to this conversion feature, which has been amortized to the statement of operations. During the
nine months ended December 31, 2020, the Company issued 371,978,522 common shares upon the conversion of principal in the amount
of $312,000 and accrued interest of $15,654. The remaining interest of $13,878 has been forgiven by the note holder and was reclassed
to the statement of operations.
Convertible
Note Conversions
During
the year ended December 31, 2020, the Company issued the following shares of common stock upon the conversions of portions of
the Convertible Notes:
|
|
Principal
|
|
|
Interest
|
|
|
Total
|
|
|
Conversion
|
|
|
Shares
|
|
|
|
Date
|
|
Conversion
|
|
|
Conversion
|
|
|
Conversion
|
|
|
Price
|
|
|
Issued
|
|
|
Issued to
|
4/16/2020
|
|
|
1,600
|
|
|
|
—
|
|
|
$
|
1,600
|
|
|
|
0.0073
|
|
|
|
219,178
|
|
|
Redstart Holdings
|
4/22/2020
|
|
|
1,600
|
|
|
|
—
|
|
|
|
1,600
|
|
|
|
0.0073
|
|
|
|
219,178
|
|
|
Redstart Holdings
|
4/28/2020
|
|
|
1,500
|
|
|
|
—
|
|
|
|
1,500
|
|
|
|
0.0059
|
|
|
|
254,237
|
|
|
Redstart Holdings
|
5/1/2020
|
|
|
1,100
|
|
|
|
—
|
|
|
|
1,100
|
|
|
|
0.0044
|
|
|
|
250,000
|
|
|
Redstart Holdings
|
5/5/2020
|
|
|
12,500
|
|
|
|
—
|
|
|
|
12,500
|
|
|
|
0.0032
|
|
|
|
3,955,696
|
|
|
GPL Ventures
|
5/6/2020
|
|
|
12,000
|
|
|
|
—
|
|
|
|
12,000
|
|
|
|
0.0044
|
|
|
|
2,727,272
|
|
|
Redstart Holdings
|
5/14/2020
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.0000
|
|
|
|
6,460,971
|
|
|
GPL Ventures
|
5/19/2020
|
|
|
13,458
|
|
|
|
—
|
|
|
|
13,458
|
|
|
|
0.0012
|
|
|
|
11,214,608
|
|
|
GPL Ventures
|
5/20/2020
|
|
|
12,744
|
|
|
|
7,386
|
|
|
|
20,130
|
|
|
|
0.0018
|
|
|
|
11,000,000
|
|
|
Coventry
|
6/3/2020
|
|
|
22,600
|
|
|
|
—
|
|
|
|
22,600
|
|
|
|
0.0021
|
|
|
|
10,761,905
|
|
|
Redstart Holdings
|
6/5/2020
|
|
|
34,650
|
|
|
|
—
|
|
|
|
34,650
|
|
|
|
0.0017
|
|
|
|
21,000,000
|
|
|
GPL Ventures
|
6/5/2020
|
|
|
18,000
|
|
|
|
—
|
|
|
|
18,000
|
|
|
|
0.0021
|
|
|
|
8,624,708
|
|
|
Jefferson St Cap
|
6/5/2020
|
|
|
21,500
|
|
|
|
—
|
|
|
|
21,500
|
|
|
|
0.0020
|
|
|
|
10,750,000
|
|
|
Redstart Holdings
|
6/8/2020
|
|
|
19,192
|
|
|
|
938
|
|
|
|
20,130
|
|
|
|
0.0018
|
|
|
|
11,000,000
|
|
|
Coventry
|
6/8/2020
|
|
|
22,800
|
|
|
|
—
|
|
|
|
22,800
|
|
|
|
0.0018
|
|
|
|
13,333,333
|
|
|
Fourth Man
|
6/8/2020
|
|
|
21,500
|
|
|
|
—
|
|
|
|
21,500
|
|
|
|
0.0020
|
|
|
|
10,750,000
|
|
|
Redstart Holdings
|
6/9/2020
|
|
|
21,500
|
|
|
|
—
|
|
|
|
21,500
|
|
|
|
0.0020
|
|
|
|
10,750,000
|
|
|
Redstart Holdings
|
6/9/2020
|
|
|
21,500
|
|
|
|
—
|
|
|
|
21,500
|
|
|
|
0.0020
|
|
|
|
10,750,000
|
|
|
Redstart Holdings
|
6/10/2020
|
|
|
16,500
|
|
|
|
1,010
|
|
|
|
17,510
|
|
|
|
0.0012
|
|
|
|
15,008,658
|
|
|
Fourth Man
|
6/11/2020
|
|
|
14,500
|
|
|
|
—
|
|
|
|
14,500
|
|
|
|
0.0019
|
|
|
|
7,957,559
|
|
|
Jefferson St Cap
|
6/11/2020
|
|
|
18,300
|
|
|
|
—
|
|
|
|
18,300
|
|
|
|
0.0017
|
|
|
|
10,764,706
|
|
|
Redstart Holdings
|
6/12/2020
|
|
|
18,950
|
|
|
|
2,687
|
|
|
|
21,637
|
|
|
|
0.0012
|
|
|
|
19,518,506
|
|
|
Armada
|
6/12/2020
|
|
|
8,800
|
|
|
|
—
|
|
|
|
8,800
|
|
|
|
0.0009
|
|
|
|
10,000,000
|
|
|
GPL Ventures
|
6/12/2020
|
|
|
14,000
|
|
|
|
—
|
|
|
|
14,000
|
|
|
|
0.0013
|
|
|
|
10,769,231
|
|
|
Redstart Holdings
|
6/15/2020
|
|
|
11,800
|
|
|
|
—
|
|
|
|
11,800
|
|
|
|
0.0011
|
|
|
|
10,727,273
|
|
|
Redstart Holdings
|
6/16/2020
|
|
|
13,575
|
|
|
|
—
|
|
|
|
13,575
|
|
|
|
0.0006
|
|
|
|
23,452,381
|
|
|
Fourth Man
|
6/16/2020
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.0000
|
|
|
|
42,000,000
|
|
|
GPL Ventures
|
6/16/2020
|
|
|
11,900
|
|
|
|
2,200
|
|
|
|
14,100
|
|
|
|
0.0008
|
|
|
|
17,278,106
|
|
|
Jefferson St Cap
|
6/16/2020
|
|
|
10,700
|
|
|
|
—
|
|
|
|
10,700
|
|
|
|
0.0010
|
|
|
|
10,700,000
|
|
|
Redstart Holdings
|
6/17/2020
|
|
|
10,000
|
|
|
|
21
|
|
|
|
10,021
|
|
|
|
0.0007
|
|
|
|
16,440,765
|
|
|
Armada
|
6/17/2020
|
|
|
15,740
|
|
|
|
273
|
|
|
|
16,013
|
|
|
|
0.0006
|
|
|
|
25,000,000
|
|
|
Coventry
|
6/17/2020
|
|
|
9,100
|
|
|
|
—
|
|
|
|
9,100
|
|
|
|
0.0009
|
|
|
|
10,705,882
|
|
|
Redstart Holdings
|
6/17/2020
|
|
|
9,100
|
|
|
|
—
|
|
|
|
9,100
|
|
|
|
0.0009
|
|
|
|
10,705,882
|
|
|
Redstart Holdings
|
6/19/2020
|
|
|
13,950
|
|
|
|
—
|
|
|
|
13,950
|
|
|
|
0.0005
|
|
|
|
31,562,500
|
|
|
Fourth Man
|
6/19/2020
|
|
|
6,600
|
|
|
|
5,150
|
|
|
|
11,750
|
|
|
|
0.0007
|
|
|
|
17,537,313
|
|
|
Redstart Holdings
|
6/22/2020
|
|
|
12,250
|
|
|
|
—
|
|
|
|
12,250
|
|
|
|
0.0007
|
|
|
|
20,000,000
|
|
|
Jefferson St Cap
|
6/22/2020
|
|
|
12,200
|
|
|
|
—
|
|
|
|
12,200
|
|
|
|
0.0006
|
|
|
|
20,000,000
|
|
|
Redstart Holdings
|
6/23/2020
|
|
|
9,000
|
|
|
|
12
|
|
|
|
9,012
|
|
|
|
0.0005
|
|
|
|
19,638,145
|
|
|
Armada
|
6/24/2020
|
|
|
7,500
|
|
|
|
—
|
|
|
|
7,500
|
|
|
|
0.0004
|
|
|
|
19,704,433
|
|
|
BHP Capital
|
6/24/2020
|
|
|
14,806
|
|
|
|
139
|
|
|
|
14,945
|
|
|
|
0.0004
|
|
|
|
35,000,000
|
|
|
Coventry
|
6/24/2020
|
|
|
10,425
|
|
|
|
2,837
|
|
|
|
13,262
|
|
|
|
0.0004
|
|
|
|
34,432,158
|
|
|
Fourth Man
|
6/24/2020
|
|
|
10,400
|
|
|
|
—
|
|
|
|
10,400
|
|
|
|
0.0005
|
|
|
|
20,000,000
|
|
|
Redstart Holdings
|
6/25/2020
|
|
|
10,400
|
|
|
|
—
|
|
|
|
10,400
|
|
|
|
0.0005
|
|
|
|
20,000,000
|
|
|
Redstart Holdings
|
6/26/2020
|
|
|
4,700
|
|
|
|
1,477
|
|
|
|
6,177
|
|
|
|
0.0004
|
|
|
|
17,563,330
|
|
|
Fourth Man
|
6/26/2020
|
|
|
10,400
|
|
|
|
—
|
|
|
|
10,400
|
|
|
|
0.0005
|
|
|
|
20,000,000
|
|
|
Redstart Holdings
|
6/29/2020
|
|
|
9,000
|
|
|
|
819
|
|
|
|
9,819
|
|
|
|
0.0005
|
|
|
|
24,218,648
|
|
|
Armada
|
6/29/2020
|
|
|
18,100
|
|
|
|
—
|
|
|
|
18,100
|
|
|
|
0.0004
|
|
|
|
45,812,808
|
|
|
BHP Capital
|
6/29/2020
|
|
|
10,345
|
|
|
|
50
|
|
|
|
10,395
|
|
|
|
0.0004
|
|
|
|
30,000,000
|
|
|
Coventry
|
6/29/2020
|
|
|
11,250
|
|
|
|
—
|
|
|
|
11,250
|
|
|
|
0.0005
|
|
|
|
23,076,923
|
|
|
Jefferson St Cap
|
6/29/2020
|
|
|
10,400
|
|
|
|
—
|
|
|
|
10,400
|
|
|
|
0.0005
|
|
|
|
20,000,000
|
|
|
Redstart Holdings
|
6/30/2020
|
|
|
15,700
|
|
|
|
—
|
|
|
|
15,700
|
|
|
|
0.0005
|
|
|
|
30,192,308
|
|
|
Redstart Holdings
|
7/1/2020
|
|
|
23,100
|
|
|
|
—
|
|
|
|
23,100
|
|
|
|
0.0005
|
|
|
|
50,217,391
|
|
|
Redstart Holdings
|
7/1/2020
|
|
|
13,000
|
|
|
|
2,396
|
|
|
|
15,396
|
|
|
|
0.0005
|
|
|
|
35,484,737
|
|
|
Armada
|
7/1/2020
|
|
|
3,000
|
|
|
|
2,897
|
|
|
|
5,897
|
|
|
|
0.0003
|
|
|
|
21,758,881
|
|
|
BHP Capital
|
7/2/2020
|
|
|
17,600
|
|
|
|
1,281
|
|
|
|
18,881
|
|
|
|
0.0004
|
|
|
|
47,812,803
|
|
|
Fourth Man
|
7/2/2020
|
|
|
13,400
|
|
|
|
9,700
|
|
|
|
23,100
|
|
|
|
0.0005
|
|
|
|
50,217,391
|
|
|
Redstart Holdings
|
7/6/2020
|
|
|
4,000
|
|
|
|
2,377
|
|
|
|
6,377
|
|
|
|
0.0005
|
|
|
|
13,706,192
|
|
|
Jefferson St Cap
|
7/7/2020
|
|
|
—
|
|
|
|
804
|
|
|
|
804
|
|
|
|
0.0004
|
|
|
|
2,009,375
|
|
|
Redstart Holdings
|
7/7/2020
|
|
|
14,500
|
|
|
|
19
|
|
|
|
14,519
|
|
|
|
0.0004
|
|
|
|
39,815,732
|
|
|
Armada
|
7/7/2020
|
|
|
4,553
|
|
|
|
24
|
|
|
|
4,578
|
|
|
|
0.0003
|
|
|
|
17,270,950
|
|
|
Coventry
|
7/8/2020
|
|
|
22,500
|
|
|
|
2,601
|
|
|
|
25,101
|
|
|
|
0.0004
|
|
|
|
71,324,065
|
|
|
BHP Capital
|
7/9/2020
|
|
|
16,865
|
|
|
|
2,862
|
|
|
|
19,728
|
|
|
|
0.0003
|
|
|
|
65,759,708
|
|
|
Fourth Man
|
7/10/2020
|
|
|
9,150
|
|
|
|
22
|
|
|
|
9,172
|
|
|
|
0.0003
|
|
|
|
32,565,338
|
|
|
Armada
|
7/16/2020
|
|
|
17,000
|
|
|
|
41
|
|
|
|
17,041
|
|
|
|
0.0002
|
|
|
|
89,954,923
|
|
|
BHP Capital
|
7/16/2020
|
|
|
8,257
|
|
|
|
2,100
|
|
|
|
10,357
|
|
|
|
0.0002
|
|
|
|
69,046,532
|
|
|
Fourth Man
|
7/22/2020
|
|
|
6,500
|
|
|
|
9
|
|
|
|
6,509
|
|
|
|
0.0002
|
|
|
|
35,941,262
|
|
|
BHP Capital
|
8/4/2020
|
|
|
19,000
|
|
|
|
2,000
|
|
|
|
21,000
|
|
|
|
0.0001
|
|
|
|
175,000,000
|
|
|
Coventry
|
8/11/2020
|
|
|
10,000
|
|
|
|
—
|
|
|
|
10,000
|
|
|
|
0.0001
|
|
|
|
112,820,513
|
|
|
BHP Capital
|
8/25/2020
|
|
|
7,678
|
|
|
|
123
|
|
|
|
7,800
|
|
|
|
0.0001
|
|
|
|
130,000,000
|
|
|
Coventry
|
10/26/2020
|
|
|
7,151
|
|
|
|
229
|
|
|
|
7,380
|
|
|
|
0.00006
|
|
|
|
134,500,000
|
|
|
Coventry
|
11/3/2020
|
|
|
6,172
|
|
|
|
14
|
|
|
|
6,186
|
|
|
|
0.00006
|
|
|
|
114,594,166
|
|
|
Coventry
|
11/27/2020
|
|
|
5,000
|
|
|
|
3,593
|
|
|
|
8,593
|
|
|
|
0.00007
|
|
|
|
147,793,846
|
|
|
BHP Capital
|
12/2/2020
|
|
|
8,900
|
|
|
|
—
|
|
|
|
8,900
|
|
|
|
0.00006
|
|
|
|
148,333,333
|
|
|
Power Up
|
12/4/2020
|
|
|
7,100
|
|
|
|
700
|
|
|
|
7,800
|
|
|
|
0.00006
|
|
|
|
130,000,000
|
|
|
Power Up
|
12/7/2020
|
|
|
3,840
|
|
|
|
211
|
|
|
|
4,052
|
|
|
|
0.00004
|
|
|
|
101,297,500
|
|
|
GPL Ventures
|
12/8/2020
|
|
|
8,500
|
|
|
|
—
|
|
|
|
8,500
|
|
|
|
0.00007
|
|
|
|
146,153,846
|
|
|
BHP Capital
|
12/17/2020
|
|
|
9,500
|
|
|
|
61
|
|
|
|
9,561
|
|
|
|
0.00007
|
|
|
|
162,475,214
|
|
|
BHP Capital
|
12/22/2020
|
|
|
10,200
|
|
|
|
—
|
|
|
|
10,200
|
|
|
|
0.00006
|
|
|
|
170,000,000
|
|
|
Power Up
|
12/24/2020
|
|
|
10,400
|
|
|
|
—
|
|
|
|
10,400
|
|
|
|
0.00006
|
|
|
|
173,333,333
|
|
|
Power Up
|
12/29/2020
|
|
|
7,925
|
|
|
|
2,375
|
|
|
|
10,300
|
|
|
|
0.00006
|
|
|
|
196,361,455
|
|
|
BHP Capital
|
12/30/2020
|
|
|
9,300
|
|
|
|
—
|
|
|
|
9,300
|
|
|
|
0.00006
|
|
|
|
155,000,000
|
|
|
Power Up
|
Total conversions
|
|
|
944,227
|
|
|
|
61,437
|
|
|
|
1,005,664
|
|
|
|
|
|
|
|
3,674,337,087
|
|
|
|
Loss on conversion
|
|
|
—
|
|
|
|
—
|
|
|
|
41,116
|
|
|
|
|
|
|
|
|
|
|
|
Conversion fees
|
|
|
—
|
|
|
|
—
|
|
|
|
30,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
944,227
|
|
|
$
|
61,437
|
|
|
$
|
1,077,715
|
|
|
|
|
|
|
|
3,674,337,087
|
|
|
|
5.
LEASES
The
Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying
the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently,
financial information will not be updated, and the disclosures required under the new standard will not be provided for dates
and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether
any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and
(3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient
which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard
did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment
to opening equity.
The
interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental
borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease
payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize
its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019 adoption date.
Operating
Leases
Operating
lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments
over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes
lease incentives and initial direct costs incurred, if any. Our lease terms may include options to extend or terminate the lease
when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of month-to-month and less
than 1 year, one of which includes an option to extend the lease term for a year.
The
Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease
expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as
right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.
The
new standard also provides practical expedients and certain exemptions for an entitys ongoing accounting. We have elected
the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term
is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities.
Those leases are expensed on a straight-line basis over the term of the lease. As of December 31, 2020, the Company did not have
any operating leases.
Financing
Leases
On
December 22, 2020, the Company entered into a vehicle lease in the amount of $19,314. The lease has a term of 6 years, from February
5, 2021 January 5, 2027, with a monthly payment of $268.
On
December 22, 2020, the Company entered into a vehicle lease in the amount of $18,689. The lease has a term of 6 years, from February
5, 2021 January 5, 2027, with a monthly payment of $260.
The
Company evaluated the leases in accordance with ASC 842 and determined that its leases meet the definition of a finance
lease.
Financing
lease assets and liabilities related to our operating leases are as follows:
|
|
December 31, 2020
|
|
Financing lease assets
|
|
$
|
31,178
|
|
Current financing lease liabilities
|
|
|
3,988
|
|
Non-current financing lease liabilities
|
|
|
27,190
|
|
Supplemental
cash flow information and non-cash activity related to our operating leases are as follows:
|
|
Year ended
|
|
|
|
December 31, 2020
|
|
Operating cash flow information:
|
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
—
|
|
Non-cash activity:
|
|
|
|
|
Financing lease assets obtained in exchange for lease obligations
|
|
$
|
31,178
|
|
The
following is a schedule, by years, of future minimum lease payments required under the finance leases:
Years Ending
|
|
|
|
December 31,
|
|
Finance Leases
|
|
2021
|
|
$
|
5,806
|
|
2022
|
|
|
6,334
|
|
2023
|
|
|
6,334
|
|
2024
|
|
|
6,334
|
|
2025
|
|
|
6,334
|
|
Thereafter
|
|
|
6,862
|
|
Total
|
|
|
38,003
|
|
Less imputed Interest
|
|
|
6,825
|
|
Total liability
|
|
$
|
31,178
|
|
Other
information related to leases is as follows:
Lease Type
|
|
Weighted Average Remaining
Term
|
|
Weighted Average Interest Rate
|
Finance Leases
|
|
6 years
|
|
7%
|
6.
LOANS PAYABLE
On
October 1, 2017, Direct Capital Group, Inc. agreed to cancel two convertible notes in the principal amounts of $25,000 and $36,000,
and $6,304 in accrued interest, in exchange for a Promissory Note in the amount of $61,000. The note bears no interest and is
due on or before October 1, 2020. During the year ended December 31, 2020, the Company recorded payments of $2,000.
As
of December 31, 2020 and December 31, 2019, the principal balance owed to Direct Capital Group was $14,500 and $16,500, respectively.
On
May 3, 2020, the Company, was granted a loan (the Loan) from Bank of America. in the amount of $72,920, pursuant
to the Paycheck Protection Program (the PPP) under Division A, Title I of the CARES Act, which was enacted March
27, 2020.
The
Loan, which was in the form of a Note dated May 3, 2020 issued by the Borrower, matures on May 3, 2022, and bears interest at
a rate of 1% per annum, payable monthly commencing on November 3, 2020. The Note may be prepaid by the Borrower at any time prior
to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group
health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations. The Company intends to use the
entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are
used for qualifying expenses as described in the CARES Act.
During
the year ended December 31, 2020, the Company recorded accrued interest of $5,826 on the PPP loan.
7.
DERIVATIVE LIABILITIES
During
the year ended December 31, 2020, the Company valued the embedded conversion feature of the convertible notes, warrants, certain
accounts payable and certain related party liabilities. The fair value was calculated at December 31, 2020 based on the lattice
model.
The
following table represents the Companys derivative liability activity for the embedded conversion features for the year
ended December 31, 2020:
|
|
Notes
|
|
|
Warrants
|
|
|
Stock Payable
|
|
|
Total
|
|
Balance, beginning of period
|
|
$
|
1,631,390
|
|
|
$
|
3,804
|
|
|
$
|
1,533,605
|
|
|
$
|
3,168,799
|
|
Initial recognition of derivative liability
|
|
|
35,173,887
|
|
|
|
—
|
|
|
|
—
|
|
|
|
35,173,887
|
|
Derivative settlements
|
|
|
(4,976,556
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,976,556
|
)
|
Loss (gain) on derivative liability valuation
|
|
|
(27,895,246
|
)
|
|
|
23,539
|
|
|
|
2,502,571
|
|
|
|
(25,369,136
|
)
|
Balance, end of period
|
|
$
|
3,933,475
|
|
|
$
|
27,343
|
|
|
$
|
4,036,176
|
|
|
$
|
7,996,994
|
|
Convertible
Notes
The
fair value at the commitment date for the convertible notes and the revaluation dates for the Companys derivative liabilities
were based upon the following management assumptions as of December 31, 2020:
|
|
Valuation date
|
Expected dividends
|
|
0%
|
Expected volatility
|
|
249.88%-775.47%
|
Expected term
|
|
.09 - 1 year
|
Risk free interest
|
|
.07%-.13%
|
Warrants
On
January 2, 2019, the Company executed a Common Stock Purchase Warrant for 1,821,875 shares (1,821 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.016 per share and expire on December
31, 2023.
On
January 31, 2019, the Company executed a Common Stock Purchase Warrant for 2,200,000 shares (2,200 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.016 per share and expire on January
30, 2024.
On
March 26, 2019, the Company executed a Common Stock Purchase Warrant for 1,643,678 shares (1,643 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.017 per share and expire on March 25,
2024.
On
March 26, 2019, the Company executed a Common Stock Purchase Warrant for 1,643,678 shares (1,643 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.017 per share and expire on March 25,
2024.
On
April 9, 2019, the Company executed a Common Stock Purchase Warrant for 550,000 shares (550 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.10 per share and expire on April 8, 2024.
On
April 9, 2019, the Company executed a Common Stock Purchase Warrant for 550,000 shares (550 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.10 per share and expire on April 8, 2024.
On
April 23, 2019, the Company executed a Common Stock Purchase Warrant for 105,000 shares (105 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.25 per share and expire on April 22, 2024.
On
May 30, 2019, the Company executed a Common Stock Purchase Warrant for 625,000 shares (625 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.040 per share and expire on May 29, 2024.
On
May 30, 2019, the Company executed a Common Stock Purchase Warrant for 625,000 shares (625 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.040 per share and expire on May 29, 2024.
On
May 30, 2019, the Company executed a Common Stock Purchase Warrant for 625,000 shares (625 post-split). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.040 per share and expire on May 29, 2024.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Fourth Man Fund, LLC. Both parties agreed
to exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated July 3, 2018, July 17, 2018, October 3, 2018, and August 22, 2018, representing 89,540 shares of common stock, exchanged
for 10,167 shares of Preferred Series C stock at $10 per share. The exchange extinguished $734,381 worth of derivative liabilities.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Emunah Funding, LLC. Both parties agreed to
exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated October 20, 2017, November 6, 2017, November 30, 2017, January 11, 2018, May 15, 2018, and October 31, 2018, representing
129,952 shares of common stock, exchanged for 35,583 shares of Preferred Series C stock at $10 per share. The exchange extinguished
$1,095,620 worth of derivative liabilities.
On
June 21, 2019, the Company executed a Common Stock Purchase Warrant for 1,000,000 shares (1,000 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.025 per share and expire on June 20,
2024.
On
July 22, 2019, the Company executed a Common Stock Purchase Warrant for 1,679,204 shares (1,679 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.023 per share and expire on July 22,
2024.
On
July 22, 2019, the Company executed a Common Stock Purchase Warrant for 1,679,204 shares (1,679 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.023 per share and expire on July 22,
2024.
On
July 22, 2019, the Company executed a Common Stock Purchase Warrant for 1,679,204 shares (1,679 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.023 per share and expire on July 22,
2024.
On
August 7, 2019, the Company executed a Common Stock Purchase Warrant for 2,200,000 shares (2,200 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.015 per share and expire on August
7, 2024.
On
August 12, 2019, the Company executed a Common Stock Purchase Warrant for 1,173,333 shares (1,173 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.015 per share and expire on August
7, 2024.
On
August 20, 2019, the Company executed a Common Stock Purchase Warrant for 3,500,000 shares (3,500 post-split). The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.01 per share and expire on August 7,
2024.
On
October 9, 2019, the Company executed a Common Stock Purchase Warrant for 17,187,500 shares (17,188 post-split). The purchase
price of one share of Common Stock under this Warrant shall be equal to the Exercise Price of $0.0016 per share and expire on
October 9, 2024.
During
the year ended December 31, 2019, warrant holders exercised the warrants and the Company issued 118,280 shares of common stock
through a cashless exercise of the warrants in accordance with the conversion terms.
The
Company evaluated all outstanding warrants to determine whether these instruments may be tainted. All warrants outstanding were
considered tainted. The Company valued the embedded derivatives within the warrants based on the independent report of the valuation
specialist.
The
fair value at the valuation dates were based upon the following management assumptions:
|
|
Valuation date
|
Expected dividends
|
|
0%
|
Expected volatility
|
|
491.11%-519.32%
|
Expected term
|
|
3.01 – 3.77 years
|
Risk free interest
|
|
0.17%
|
Stock
Payable
The
payables to be issued in stock are at 100% of the lowest closing market price with a 15 day look back. The fair value at the valuation
dates were based upon the following management assumptions:
|
|
Valuation date
|
Expected dividends
|
|
0%
|
Expected volatility
|
|
758.23%
|
Expected term
|
|
1 year
|
Risk free interest
|
|
0.10%
|
8.
RELATED PARTY TRANSACTIONS
The
Company is periodically advanced noninterest bearing operating funds from related parties. The advances are due on demand and
unsecured. During the year ended December 31, 2020, the Company made payments of $28,377 to amounts due to related parties, and
$182,570 was advanced to the Company by related parties. As of December 31, 2020 and December 31, 2019, the Company owed related
parties $245,323 and $91,130, respectively. During the year ended December 31, 2020, the Company recorded imputed interest of
$14,136 to the statement of operations with a corresponding increase to additional paid in capital. During the year ended December
31, 2020, the companys former president forgave accounts payable of $31,269, which was recorded to additional paid in capital.
As of December 31, 2020 and December 31, 2019, the Company recorded accounts payable due to related parties of $0 and $31,269,
respectively.
On
December 22, 2020, the President, Richard Hylen, and the Company entered into two vehicle leases in the amount of $19,314 and
$18,689, respectively. The leases have a term of 6 years, from February 5, 2021 January 5, 2027, with monthly payments of $268
and $260, respectively.
9.
CONVERTIBLE PREFERRED STOCK
Series
A Convertible Preferred Stock
On
January 25, 2011, the Company filed an amendment to its Nevada Certificate of Designation to create Series A Convertible Preferred
Stock, with a par value of $0.001 and 10,000,000 shares authorized.
On
January 3, 2017, the Company filed an Amendment to Certificate of Designation with the Nevada Secretary of State defining the
rights and preferences of the Series A Convertible Preferred shares. Series A Convertible Preferred stock shall be convertible
into common shares at the rate of the closing market price on the day of the conversion notice equal to the dollar amount of the
value of the Series A Convertible Preferred shares, and holders shall have no voting rights on corporate matters, unless and until
they convert their Series A Convertible Preferred shares into Common shares, at which time they will have the same voting rights
as all Common Shareholders have; their consent shall not be required for taking any corporate action.
On
October 26, 2018, the Company issued 488,827 Series A Convertible Preferred shares at $1.79 per share to Donna Murtaugh, to settle
liabilities of $875,000 owed to her pursuant to the Asset Purchase Agreement dated March 9, 2016.
As
of November 13, 2018, 3,489,510 shares of Series A Convertible Preferred stock were transferred into the Company in connection
with the reverse merger.
On
November 13, 2018, the Company granted 1,086,592 Series A Convertible Preferred shares at $1.79 per share to Richard Hylen, valued
at $1,945,000, pursuant the Merger Agreement.
On
January 9, 2019, the Company entered into an Asset Purchase Agreement Proscere Bioscience Inc., a Florida Corporation. Pursuant
to the Asset Purchase Agreement, Proscere Bioscience assigned and transferred all of its right, title, and interest to its fixed
assets and know how to Simlatus Corporation. These assets and know how pursuant to the 5 year
Exclusive Distribution & License Agreement dated January 9, 2019 are valued at $3,000,000. As consideration for the assets
and know how Simlatus Corporation issued 1,675,978 shares of Convertible Preferred Series A stock at a price of
$1.79 per share. At that time, Proscere Bioscience became a wholly subsidiary of Simlatus Corporation.
On
March 19, 2019, Richard Hylen entered into a Debt Settlement Agreement with Xillient, LLC to settle $362,261 in outstanding debt
owed to Xillient, LLC for $200,000. Mr. Hylen
transferred 111,732 of his Convertible Preferred Series A that are valued at $1.79 per share. The liability amount of $362,261
was reclassed to additional paid in capital due to the contributed capital by a related party.
On
April 10, 2019, the Board of Directors repurchased and returned to treasury 25,140 Convertible Preferred Series A Shares in the
name of Optempus Investments, LLC. The company authorized and paid the payment of $45,000 to Optempus Investments, LLC for the
repurchase of 25,140 Convertible Preferred Series A at $1.79 per share. This transaction is pursuant with the Asset Purchase Agreement
of Proscere Bioscience and the IP of the Cold-Water CBD/HEMP Extraction Systems. The Convertible Preferred Series A Stock is convertible
to common stock at market price the day of conversion.
On
June 3, 2019, the Board of Directors repurchased and returned to treasury 18,159 Convertible Preferred Series A Shares in the
name of Optempus Investments, LLC. The company authorized and paid the payment of $32,505 to Optempus Investments, LLC for the
repurchase of 18,159 Convertible Preferred Series A at $1.79 per share. This transaction is pursuant with the Asset Purchase Agreement
of Proscere Bioscience and the IP of the Cold-Water CBD/HEMP Extraction Systems. The Convertible Preferred Series A Stock is convertible
to common stock at market price the day of conversion.
On
June 21, 2019, 43,299 Convertible Preferred Series A shares held in treasury were retired.
During
the year ended December 31, 2019, 712,360 shares of Convertible Series A Preferred stock were converted to 2,150,330 common shares
in accordance with the conversion terms.
On
November 27, 2020, the Company and a note holder agreed to convert the principal and interest balance of $212,054 to 118,466 shares
of Convertible Series A Preferred stock.
On
December 28, 2020, the Company converted wages and accrued interest owed to Richard Hylen and Mike Schatz to Convertible Series
A Preferred stock. The Company issued 97,732 shares at $1.79 per share in exchange of principal and interest of $174,930 owed
to Richard Hylen. The Company issued 317,821 shares at $1.79 per share in exchange of principal and interest of $568,899 owed
to Mike Schatz.
During
the year ended December 31, 2020, 283,510 shares of Convertible Series A Preferred stock were converted to 1,217,871,970 common
shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $191,349, which was recorded
to the statement of operations.
The
Series A Convertible Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional
obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation
is based on a fixed monetary amount known at inception. Each share of the Convertible Series A Preferred Stock has a fixed value
of $1.79 per share, has no voting rights, and is convertible into common stock at closing market price on the date of conversion.
The Company has recorded $11,162,005, which represents 6,235,757 Series A Preferred Stock at $1.79 per share, issued and outstanding
as of December 31, 2020, outside of permanent equity and liabilities.
Series
C Convertible Preferred Stock
On
June 13, 2019, the Companys Board of Directors authorized the creation of 45,750 shares of Series C Convertible Preferred
Stock with a par value of $0.0001, and on June 13, 2019, a Certificate of Designation was filed with the Nevada Secretary of State.
The Convertible Preferred Series C shall have no voting rights as to corporate matters unless, and until, they are converted into
common shares, at which time, they will have the same voting rights as all common stock shareholders. Convertible Preferred Series
C shares cannot be sold, assigned, hypothecated, or otherwise disposed of, without first obtaining the consent of the majority
Convertible Preferred Series C shareholders. Convertible Preferred Series C shares shall have a value of $10.00 USD per share
and shall convert into common shares at the rate of the closing market price on the day of conversion notice equal to the dollar
amount of the value of the Convertible Preferred Series C share. At no time may the shareholder convert their shares into more
than 4.99% of the issued and outstanding.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Fourth Man Fund, LLC. Both parties agreed
to exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated July 3, 2018, July 17, 2018, October 3, 2018, and August 22, 2018, representing 89,540 shares of common stock, exchanged
for 10,167 shares of Convertible Preferred Series C stock at $10 per share. The exchange extinguished $734,381 worth of derivative
liabilities.
On
June 13, 2019, the Company entered into a Securities Exchange Agreement with Emunah Funding, LLC. Both parties agreed to
exchange the Warrants pursuant under the terms of a Securities Exchange Agreement, in its entirety. The Agreement is for warrants
dated October 20, 2017, November 6, 2017, November 30, 2017, January 11, 2018, May 15, 2018, and October 31, 2018, representing
129,952 shares of common stock, exchanged for 35,583 shares of Convertible Preferred Series C stock at $10 per share. The exchange
extinguished $1,095,620 worth of derivative liabilities.
During
the year ended December 31, 2019, 10,167 shares of Convertible Series C preferred stock were converted to 28,015 common shares
in accordance with the conversion terms.
The
Convertible Series C Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional
obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation
is based on a fixed monetary amount known at inception. The Company has recorded $355,830 which represents 35,583 Series C Convertible
Preferred Stock at $10 per share, issued and outstanding as of December 31, 2020, outside of permanent equity and liabilities.
As
of December 31, 2020, 10,000,000 Series A Convertible Preferred shares and 45,750 Series C Convertible Preferred shares were authorized,
of which 6,235,757 Series A Convertible Preferred shares were issued and outstanding and 35,583 Series C Convertible Preferred
shares were issued and outstanding.
Preferred
Stock Payable
On
December 28, 2020, the Company received resignation letters from Baron Tennelle, Dusty Vereker, and Robert Stillwaugh. The Company
agreed to issue Preferred Series A shares to settle unpaid wages and interest owed to those individuals.
The
Company agreed to issue 52,931 Preferred Series A shares to Baron Tennelle in exchange for accrued wages of $90,000 and interest
of $4,745. The Company agreed to issue 50,615 Preferred Series A shares to Dusty Vereker in exchange for accrued wages of $86,250
and interest of $4,350. The Company agreed to issue 317,821 Preferred Series A shares to Robert Stillwaugh in exchange for accrued
wages of $427,708 and interest of $141,190.
The
shares were issued subsequent to December 31, 2020, which have been disclosed in subsequent events (Note 14).
10.
PREFERRED STOCK
On
January 25, 2011, the Company filed an amendment to its Nevada Certificate of Designation to create Series B Preferred Stock,
with a par value of $0.001 and 10,000,000 shares authorized.
On
July 1, 2015, the Companys Board of Directors authorized the creation of shares of Series B Voting Preferred Stock and
on July 27, 2015 a Certificate of Designation was filed with the Nevada Secretary of State. The holder of the shares of the Series
B Voting Preferred Stock has the right to vote those shares of the Series B Voting Preferred Stock regarding any matter or action
that is required to be submitted to the shareholders of the Company for approval. The vote of each share of the Series B Voting
Preferred Stock is equal to and counted as 4 times the votes of all of the shares of the Companys (i) common stock, and
(ii) other voting preferred stock issued and outstanding on the date of each and every vote or consent of the shareholders of
the Company regarding each and every matter submitted to the shareholders of the Company for approval.
On
November 9, 2018, Mike Schatz returned 250 Preferred Series B Control Shares, valued at par value, pursuant to his new employee
agreement dated November 1, 2018.
On
November 9, 2018, Robert Stillwaugh returned 250 Preferred Series B Control Shares, valued at par value, pursuant to his new employee
agreement dated November 1, 2018.
On
November 9, 2018, newly appointed President, Richard Hylen was issued 500 Preferred Series B Control Shares, pursuant to his employee
agreement dated November 1, 2018.
As
of December 31, 2020, 10,000,000 Series B Preferred shares were authorized, of which 500 shares were issued and outstanding.
11.
COMMON STOCK
On
June 15, 2016, the Company approved the authorization of a 1 for 1,000 reverse stock split of the Companys outstanding
shares of common stock, which was effective on July 22, 2016. The financial statements have been retroactively adjusted to take
this into account for all periods presented.
As
of November 13, 2018, 2,918 shares of common stock were transferred into the Company in connection with the reverse merger.
On
November 13, 2018, the Company issued 102,368 shares of restricted common stock to Richard Hylen as collateral, pursuant to the
Asset Purchase Agreement dated November 13, 2018. The shares are valued at $4,298,450 based on the market price of the Companys
common stock on the date of the agreement.
During
the year ended December 31, 2018, the holders of convertible notes converted a total of $10,448 of principal and interest
into 2,792 shares of common stock. The issuance extinguished $115,941 worth of derivative liabilities which was recorded to additional
paid in capital.
On
April 16, 2019, the Company issued 424 common shares at to Hanson & Associates to settle outstanding stock payable liabilities
pursuant to a Consulting Agreement dated April 1, 2017. The stock was valued at $24,953 on the date of issuance, which extinguished
$24,953 in derivative liabilities.
On
June 13, 2019, the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase the number of authorized
common shares from 900,000,000 to 975,000,000 with a par value of $0.00001.
On
July 23, 2019, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys voting
securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number of authorized
Common Shares from 975,000,000 to 1,500,000,000 shares at par value $0.00001 per share.
On
September 16, 2019, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys
voting securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number
of authorized Common Shares from 1,500,000,000 to 5,000,000,000 shares at par value $0.00001 per share.
On
October 17, 2019, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys
voting securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number
of authorized Common Shares from 5,000,000,000 to 10,000,000,000 shares at par value $0.00001 per share.
On
December 18, 2019, the Company approved the authorization of a 1 for 1,000 reverse stock split of the Companys outstanding
shares of common stock. The financial statements have been retroactively adjusted to take this into account for all periods presented.
During
the year ended December 31, 2019, 712,360 shares of Series A preferred stock were converted to 2,161,158 common shares in accordance
with the conversion terms.
During
the year ended December 31, 2019, 10,167 shares of Series C preferred stock were converted to 28,015 common shares in accordance
with the conversion terms.
During
the year ended December 31, 2019, warrant holders exercised the warrants and the Company issued 118,280 shares of common stock
through a cashless exercise of the warrants in accordance with the conversion terms.
During
the year ended December 31, 2019, the holders of convertible notes converted a total of $866,299 of principal and interest,
and $16,500 in note fees, into 2,119,224 shares of common stock in accordance with the conversion terms. The issuances resulted
in a loss on conversion of $86,719 and settled $1,784,469 worth of derivative liabilities which was recorded to additional paid
in capital.
On
March 27, 2020, 3,476 shares of common stock were issued due to rounding in conjunction with the reverse stock split.
On
June 5, 2020, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys voting
securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to decrease the number of authorized
Common Shares from 10,000,000,000 to 2,000,000,000 shares at par value $0.00001 per share.
On
June 11, 2020, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys voting
securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number of authorized
Common Shares from 2,000,000,000 to 5,000,000,000 shares at par value $0.00001 per share.
On
August 14, 2020, the Company Board of Directors and the Majority Stockholders owning a majority of the Companys
voting securities, approved a resolution authorizing the Company to amend the Articles of Incorporation to increase the number
of authorized Common Shares from 5,000,000,000 to 10,000,000,000 shares at par value $0.00001 per share.
During
the year ended December 31, 2020, 283,510 shares of Convertible Series A Preferred stock were converted to 1,217,871,970 common
shares, valued at $507,483, in accordance with the conversion terms. The issuances resulted in a loss on conversion of $191,349,
which was recorded to the statement of operations.
During
the year ended December 31, 2020, the holders of convertible notes converted a total of $1,005,664 of principal and interest,
and $30,935 in note fees, into 3,674,337,087 shares of common stock in accordance with the conversion terms. The issuances resulted
in a loss on conversion of $41,116 and settled $4,976,556 worth of derivative liabilities which was recorded to additional paid
in capital.
As
of December 31, 2020, 10,000,000,000 common shares, par value $0.00001, were authorized, of which 4,896,738,884 shares were issued
and outstanding.
12.
INCOME TAXES
Deferred
income taxes are determined using the liability method for the temporary differences between the financial reporting basis and
income tax basis of the Companys assets and liabilities. Deferred income taxes are measured based on the tax rates expected
to be in effect when the temporary differences are included in the Companys tax return. Deferred tax assets and liabilities
are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts
of assets and liabilities and their respective tax bases.
The
deferred tax asset and the valuation allowance consist of the following at December 31, 2020:
|
|
December 31,
|
|
|
|
2020
|
|
Net operating loss
|
|
$
|
2,972,563
|
|
Statutory rate
|
|
|
21
|
%
|
Expected tax recovery
|
|
|
624,238
|
|
Change in valuation allowance
|
|
|
(624,238
|
)
|
Income tax provision
|
|
$
|
—
|
|
|
|
|
|
|
Components of deferred tax asset:
|
|
|
|
|
Non-capital tax loss carry-forwards
|
|
|
624,238
|
|
Less: valuation allowance
|
|
|
(624,238
|
)
|
Net deferred tax asset
|
|
$
|
—
|
|
As
of the date of this filing, the Company is not current in filing their tax returns. The last return filed by the Company was December
31, 2017, and the Company has not accrued any potential penalties or interest from that period forward. The Company will
need to file returns for the year ending December 31, 2018, 2019 and 2020 which are still open for examination.
13.
COMMITMENTS AND CONTINGENCIES
On
March 29, 2019, the Company and its subsidiary, Proscere Bioscience Inc., entered into an Exclusive Distribution Agreement with
Brand House Ventures Inc. allowing the rights to sell the CBD Cold Water Extraction Systems within all of the United States. Mike
Mulder is the President of Brand House Ventures Inc., and the company was
formed in 2010 as a sole proprietorship, and in 2014 was formed as a California S-Corporation. Today Brand House is a Holding
Company for the distribution of a variety of products and technologies.
On
March 29, 2019, the Company and its subsidiary, Proscere Bioscience Inc., entered into a Distribution Agreement with United Opportunities,
LLC allowing the rights to sell the CBD/HEMP Cold Water Extraction Systems within Canada and Europe. Shawn Illingworth is the
Managing Partner of United Opportunities, LLC, and the company was formed in 2017 in overseeing the purchases of multiple cannabis
farms in the Humboldt, Adelanto, Needles, Nipton, Cal City, and Searchlight areas of California and
Nevada. The company currently cultivates medical grade crops on a grand scale and supply product to all the major manufacturers
and extraction companies in the industry. Future plans are to expand the company and distribute internationally through attaining
cultivation centers in Canada, Europe, and Australia. United Opportunities is currently opening an office and showroom in Las
Vegas, NV which will round out its current operating platforms in New York, Florida, and San Diego, California.
To
date, the Company has established distribution relationships in the United States, Canada, and Europe. The company also
has purchase orders to fulfill in relationship to the above distribution agreement. Any delays in fulfilling the orders have been
caused by manufacturing delays and the COVID-19 delays in working with our suppliers.
On
November 1, 2019, the Company renewed an Employment Agreement with Robert Stillwaugh, which appoints him as President of Simlatus,
a non-director/officer position, with an annual salary of $45,000, which can be accumulated at 6% interest and converted to restricted
common stock at fair market value at the time of conversion. During the year ended December 31, 2020, the Company recorded wages
of $45,000 and interest of $43,697 in connection with this agreement. On December 28, 2020, Mr. Stillwaugh resigned from his position
and the Company agreed to convert unpaid wages and accrued interest totaling $568,899 into 317,821 shares of
Convertible Preferred Series A stock. The shares were issued subsequent to the reporting period and is disclosed in subsequent
events (Note 14).
On
November 1, 2019, the Company renewed an Employment Agreement with Mike Schatz, which appoints him as the Vice President of Simlatus,
a non-director/officer position, with an annual salary of $45,000, which can be accumulated at 6% interest and converted to restricted
common stock at fair market value at the time of conversion. During the year ended December 31, 2020, the Company recorded wages
of $45,000 and interest of $43,697 in connection with this agreement. On December 28, 2020, the Company converted unpaid wages
and accrued interest totaling $568,899 into 317,821 shares of Convertible Preferred Series A stock.
On
November 1, 2019, the Company renewed an Employee Agreement with Richard Hylen which appoints him as Chief Executive Officer,
Chairman of the Board, and President, Secretary, and Treasurer of the Company. Mr. Hylen will receive an annual salary of $120,000,
which can be accumulated at 6% interest and converted to restricted common stock at fair market value at the time of conversion.
During the year ended December 31, 2020, the Company recorded wages of $120,000, interest of $6,924 and payments of $34,768, in
connection with this agreement. On December 28, 2020, the Company converted unpaid wages and accrued interest totaling $174,940
into 97,732 shares of Convertible Preferred Series A stock.
On
January 9, 2020, the Company renewed an Employee Agreement with Baron Tennelle, which appoints him as Director of Simlatus and
President of Proscere Bioscience, Inc., a wholly owned subsidiary of Simlatus. He will receive an annual salary of $45,000 paid
out quarterly in either cash or stock at the current fair market value of the stock at time of conversion. During the year ended
December 31, 2020, the Company recorded wages of $45,000 and interest of $3,725 in connection with this agreement. On December
28, 2020, Mr. Tennelle resigned from his position and the Company agreed to convert unpaid wages and accrued interest totaling
$94,745 into 52,931 shares of Convertible Preferred Series A stock. The shares were issued subsequent to the reporting period
and is disclosed in subsequent events (Note 14).
On
February 19, 2020, the Company renewed an Employee Agreement with Dusty Vereker as a Director of the company, and Vice
President of Proscere Bioscience. Her employment contract allows an annual salary of $45,000 to be paid quarterly in either cash
or stock. Ms. Verekers Director Agreement allows for fees associated with meetings and conferences. During the year ended
December 31, 2020, the Company recorded wages of $45,000 and interest of $3,501 in connection with this agreement. On December
28, 2020, Ms. Vereker resigned from her position and the Company agreed to convert unpaid wages and accrued interest totaling
$90,600 into 50,615 shares of Convertible Preferred Series A stock. The shares were issued subsequent to the reporting period
and is disclosed in subsequent events (Note 14).
14.
SUBSEQUENT EVENTS
Employee
and Director Agreements
On
January 1, 2021, the Company dismissed Richard Hylen as CEO, and appointed Richard Hylen as the Chairman and Secretary of the
company, and the President of Satel Group Inc., a wholly owned subsidiary of the company and pursuant with the Employment Agreement
and Director Agreement dated January 1, 2021. These Agreements will replace all previous agreements. The employee will receive
an annual salary of $200,000 to be paid in equal monthly installments. Amounts unpaid will accrue annual interest of 6% and may
be converted to Convertible Preferred Series A stock of the company in value of $1.79 per share and under the conversion guidelines
of the Certificate of designation for Convertible Preferred Series A stock. Pursuant to the agreement, the company issued 500
Preferred Series B shares. Said shares are control shares and have voting rights only. As Director the undersigned is hereby granted
$25,000 of Convertible Preferred Series A shares of the company at a price of $1.79 per share. On January 20, 2021, the Company
issued 13,966 shares, pursuant with the Certificate of Designation for conversion rights of said shares.
On
January 1, 2021, the Company appointed Jef Lewis as a Director and the Chief Executive Officer, President and Treasurer of the
company and pursuant with the Employment Agreement and Director Agreement dated January 1, 2021. These Agreements will replace
all previous agreements. The employee will receive an annual salary of $200,000 to be paid in equal monthly installments. Amounts
unpaid will accrue annual interest of 6% and may be converted to Convertible Preferred Series A stock of the company in value
of $1.79 per share and under the conversion guidelines of the Certificate of designation for Convertible Preferred Series A stock.
Pursuant to the agreement, the company issued 500 Preferred Series B shares on January 20, 2021. Said shares are control shares
and have voting rights only. As Director the undersigned is hereby granted $25,000 of Convertible Preferred Series A shares of
the company at a price of $1.79 per share. On January 20, 2021, the Company issued 13,966 shares, pursuant with the Certificate
of Designation for conversion rights of said shares.
Jeffrey
Lewis is 47 years old. Founder of BrewBilt Manufacturing LLC, and is the Chairman and CEO of BrewBilt Manufacturing, Inc., a multiple
million dollar craft beer brewery manufacturing facility in Northern California, has over 15 years of experience managing engineering,
design, and fabrication teams that custom design and fabricate integrated stainless steel distillation and brewing systems for
the craft beer beverage industries.
On
January 1, 2021, the Company appointed Samuel Berry as a Director and the Chief Operations Officer of the company and pursuant
with the Employment Agreement and Director Agreement dated January 1, 2021. These Agreements will replace all previous agreements.
The employee will receive an annual salary of $100,000 to be paid in equal monthly installments. Amounts unpaid will accrue annual
interest of 6% and may be converted to Convertible Preferred Series A stock of the company in value of $1.79 per share and under
the conversion guidelines of the Certificate of designation for Convertible Preferred Series A stock. The company will issue to
the employee $50,000 of Preferred Series A shares at a value of $1.79 per share. As Director the undersigned is hereby granted
$25,000 of Preferred Series A shares of the company at a price of $1.79 per share, pursuant with the Certificate of Designation
for conversion rights of said shares. On January 20, 2021, the Company issued 41,898 shares of Convertible Preferred Series A
shares, pursuant to these agreements.
Samuel
Berry is 43 years old and a graduate from Keene State College in New Hampshire with a Bachelor of Science, and a graduate from
Florida International University with his Master of Science. Sam is a Director of BrewBilt Manufacturing Inc. and experienced
with the operations of a public craft beer manufacturing business. With over 15 years of business experience in management, he
will oversee the operations of Simlatus.
On
March 1, 2021, the Company appointed Bennett Buchanan as a Director and of the company and pursuant with the Employment Agreement
and Director Agreement dated March 3, 2021. Pursuant to the Employment Agreement, Mr. Buchanan will be employed on at-will basis
and receive an annual salary of $100,000 payable in monthly installments, with unpaid amounts accruing interest at the rate of
6% per annum. Unpaid salary may be converted by Mr. Buchanan into shares of Convertible Series A Preferred Stock of the Company.
On March 4, 2021, the Company issued 13,966 shares of Convertible Series A Preferred Stock pursuant to the Employment Agreement.
Bennett
Buchanan is 36 years old and the co-founder and brewer for the award-winning Old Bus Tavern brewpub in San Francisco. He has also
honed his skills brewing on a production scale for the Fort Point Beer Company. Bennett holds a Bachelor of Science in Civil Engineering
and a Master of Engineering Management from Cornell University.
Convertible
Notes
On
January 25, 2021, the Company entered in a Convertible Promissory Note with Redstart Holdings Corp in the amount of $63,500. The
note is unsecured, bears interest at 10% per annum, and matures on January 25, 2022.
On
February 8, 2021, the Company entered in a Convertible Promissory Note with Labrys Fund LP in the amount of $140,000. The note
is unsecured, bears interest at 12% per annum, and matures on February 8, 2022.
On
March 5, 2021, the Company entered in a Convertible Promissory Note with Fourth Man, LLC in the amount of $140,000. The note is
unsecured, bears interest at 12% per annum, and matures on March 5, 2022.
On
March 8, 2021, the Company entered in a Convertible Promissory Note with FirstFire Global Opportunities Fund LLC in the amount
of $300,000. The note is unsecured, bears interest at 12% per annum, and matures on March 8, 2022. The Company will also issue
35,000,000 commitment shares pursuant to the Securities Purchase Agreement.
Subsequent
Issuances
On
January 5, 2021, the holder of a convertible note converted a total of $13,000 of principal into 144,444,444 shares of our common
stock.
On
January 5, 2021, 37,989 shares of Preferred Series A stock was converted in to 113,333,850 shares of common stock.
On
January 7, 2021, the holder of a convertible note converted a total of $10,750 of principal and fees into 107,500,000 shares of
our common stock.
On
January 7, 2021, the Company issued 52,931 Preferred Series A shares to Baron Tennelle in exchange for accrued wages of $90,000
and interest of $4,745.
On
January 7, 2021, the Company issued 50,615 Preferred Series A shares to Dusty Vereker in exchange for accrued wages of $86,250
and interest of $4,350.
On
January 7, 2021, the Company issued 317,821 Preferred Series A shares to Robert Stillwaugh in exchange for accrued wages of $427,708
and interest of $141,190.
On
January 7, 2021, 80,450 shares of Preferred Series A stock was converted in to 240,009,167 shares of common stock.
On
January 11, 2021, the holder of a convertible note converted a total of $2,250 of principal and interest into 15,000,000 shares
of our common stock.
On
January 11, 2021, the holder of a convertible note converted a total of $15,000 of principal into 100,000,000 shares of our common
stock.
On
January 11, 2021, 19,550 shares of Preferred Series A stock was converted in to 58,324,167 shares of common stock.
On
January 12, 2021, the holder of a convertible note converted a total of $11,627 of principal, interest, and fees into 105,697,273
shares of our common stock.
On
January 13, 2021, 60,000 shares of Preferred Series A stock was converted in to 268,500,000 shares of common stock.
On
January 14, 2021, the holder of a convertible note converted a total of $19,650 of principal and interest into 109,166,667 shares
of our common stock.
On
January 15, 2021, the holder of a convertible note converted a total of $6,300 of interest into 63,000,000 shares of our common
stock.
On
January 20, 2021, the holder of a convertible note converted a total of $36,200 of principal, interest, and fees into 301,666,667
shares of our common stock.
On
January 22, 2021, the holder of a convertible note converted a total of $3,300 of interest into 33,000,000 shares of our common
stock.
On
January 22, 2021, 40,000 shares of Preferred Series A stock was converted in to 79,555,556 shares of common stock.
On
January 26, 2021, the holder of a convertible note converted a total of $29,088 of principal, interest, and fees into 242,397,433
shares of our common stock.
On
January 28, 2021, 100,000 shares of Preferred Series A stock was converted in to 162,727,273 shares of common stock.
On
February 1, 2021, 100,000 shares of Preferred Series A stock was converted in to 198,888,889 shares of common stock.
On
February 2, 2021, 100,000 shares of Preferred Series A stock was converted in to 179,000,000 shares of common stock.
On
February 8, 2021, the holder of a convertible note converted a total of $7,505 of principal and interest into 50,035,712 shares
of our common stock.
On
February 8, 2021, the holder of a convertible note converted a total of $9,494 of principal, interest, and fees into 52,746,722
shares of our common stock.
On
February 9, 2021, the holder of a convertible note converted a total of $7,569 of principal and interest into 50,457,178 shares
of our common stock.
On
February 10, 2021, 100,000 shares of Preferred Series A stock was converted in to 89,500,000 shares of common stock.
On
February 10, 2021, 100,000 shares of Preferred Series A stock was converted in to 49,722,223 shares of common stock.
On
February 11, 2021, the holder of a convertible note converted a total of $34,313 of principal, interest, and fees into 142,971,542
shares of our common stock.
On
February 16, 2021, the holder of a convertible note converted a total of $20,797 of principal and interest into 103,986,324 shares
of our common stock.
On
February 23, 2021, 100,000 shares of Preferred Series A stock was converted in to 55,937,500 shares of common stock.
On
February 25, 2021, 100,000 shares of Preferred Series A stock was converted in to 137,692,308 shares of common stock.
On
February 26, 2021, 150,000 shares of Preferred Series A stock was converted in to 116,739,131 shares of common stock.
On
March 4, 2021, 200,000 shares of Preferred Series A stock was converted in to 275,384,615 shares of common stock.
On
March 8, 2021, the holder of a convertible note converted a total of $21,602 of principal, interest, and fees into 19,549,294
shares of our common stock.
On
March 8, 2021, 35,000,000 shares of common stock were issued pursuant to a Securities Purchase Agreement.
On
March 9, 2021, 100,000 shares of Preferred Series A stock was converted in to 105,294,118 shares of common stock.
On
March 15, 2021, 200,000 shares of Preferred Series A stock was converted in to 179,000,000 shares of common stock.
On
March 15, 2021, 200,000 shares of Preferred Series A stock was converted in to 358,000,000 shares of common stock.
On
March 17, 2021, 224,720 shares of Preferred Series A stock was converted in to 206,281,435 shares of common stock.
On
March 17, 2021, 35,583 shares of Preferred Series C stock was converted in to 100,000,000 shares of common stock.
The
Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events
to disclose.