NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature
of Operations and Organization
Indoor
Harvest Corp (the “Company,”) is a Texas corporation formed on November 23, 2011. Our principal executive office is located
at 7401 W. Slaughter Lane #5078, Austin, Texas 78739. On August 3, 2017, we formed Alamo Acquisition, LLC, a wholly owned Texas limited
liability company (“Alamo Acquisition Sub”). On August 4, 2017, we consummated a business acquisition (the “Alamo Acquisition”)
pursuant to which Alamo Acquisition Sub acquired all of the outstanding member interests of Alamo CBD, LLC. (“Alamo CBD”),
a Texas limited Liability Company. Upon closing of the Alamo Acquisition, the member interests of Alamo CBD were exchanged for 7,584,008
shares of Indoor Harvest’s common stock, the parent company of Alamo Acquisition Sub, and Alamo CBD continued as our surviving
wholly-owned subsidiary, and Alamo Acquisition Sub ceased to exist. Pursuant to ASC 805 “Business Combinations,” the
Company determined the Alamo Acquisition was an asset purchase.
From
inception until August 4, 2017, the Company pursued full service, state of the art design-build, engineering, procurement and construction
services to the indoor and vertical farming industry. The Company pursued providing production platforms, mechanical systems and complete
custom designed build outs for both Controlled Environment Agriculture (“CEA”) and Building Integrated Agriculture (“BIA”),
for two unique industries, produce and cannabis. In mid-2016, the Company began efforts to separate its produce and cannabis related
operations due to ongoing feedback from both clients and potential institutional investors. It was determined that the Company’s
involvement in the cannabis industry was creating conflicts for clients and potential institutional investors wishing to work with the
Company from the produce industry due to the public perception and political issues surrounding the cannabis industry. By late-2016,
the Company had decided to cease its products and services to the vertical farming industry and to focus on utilizing the Company’s
developed technology and methods for the cannabis industry. On August 4, 2017, the Company ceased actively supporting business development
of vertical farms for produce production.
On
August 14, 2019, the Company established a wholly owned subsidiary, IHC Consulting, Inc. (“IHC”), in the State of New York
of the United States of America. IHC Consulting may provide consulting and other services to the Company and others on a contracted basis.
The
current strategy is to position the Company as an integrated consolidation platform offering for cannabis industry companies focused
on hemp, other hemp-related products, CBD, with the potential to be part of a bigger opportunity while sharing intellectual capital,
technology, expanded business networks, along with access to new capital markets and liquidity for investors.
The
Company’s operational expenditures will be focused on plans to create shareholder value through an M&A and strategic partnership
strategy, while managing the necessary costs related to being a fully reporting company with the SEC.
COVID-19
A
novel strain of coronavirus (COVID-19) was first identified in December 2019, and subsequently declared a global pandemic by the World
Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and
in markets served. The Company has instituted some and may take additional temporary precautionary measures intended to help ensure the
well-being of its managers and minimize business disruption. The Company considered the impact of COVID-19 on the assumptions and estimates
used and determined that there were no material adverse impacts on the Company’s results of operations and financial position at
March 31, 2020 other than material delays in pursuing its plans. The full extent of the future impacts of COVID-19 on the Company’s
operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the
Company, including the timing and ability of the Company to develop its business plan.
Basis
of Presentation
The
accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally
accepted in the United States of America (“GAAP”).
It
is management’s opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made
which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of
the results to be expected for the year.
Reclassification
Certain
amounts from prior periods have been reclassified to conform to the current period presentation.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP 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. Actual results could differ from those estimates.
Significant
estimates include, but are not limited to, the estimate of percentage of completion on construction contracts in progress at each reporting
period which we rely on as a primary basis of revenue recognition, estimated useful lives of equipment for purposes of depreciation and
the valuation of common shares issued for services, equipment and the liquidation of liabilities.
Principles
of Consolidation
The
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant inter-company
accounts and transactions have been eliminated in consolidation.
Loss
per Share
Basic
earnings (loss) per share amounts are calculated based on the weighted average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is based on the weighted average numbers of shares of common stock outstanding for the periods,
including dilutive effects of stock options, warrants granted and convertible preferred stock. Dilutive options and warrants that are
issued during a period or that expire or are canceled during a period are reflected in the computations for the time they were outstanding
during the periods being reported. Since Indoor Harvest has incurred losses for all periods, the impact of the common stock equivalents
would be anti- dilutive and therefore are not included in the calculation.
For
the three months ended March 31, 2020 and 2019, respectively, the following common stock equivalents were excluded from the computation
of diluted net loss per share as the result of the computation was anti-dilutive.
|
|
|
Three months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
(Shares)
|
|
|
(Shares)
|
|
|
Series A Preferred Stock
|
|
|
2,884,615,385
|
|
|
|
27,402,265
|
|
|
Convertible notes
|
|
|
4,157,725,282
|
|
|
|
44,125,424
|
|
|
Total
|
|
|
7,042,340,667
|
|
|
|
71,527,689
|
|
Derivative
Liability
The
Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative
instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and
requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting
for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types
of relationships designated are based on the exposures hedged. At March 31, 2020 and December 31, 2019, the Company did not have any
derivative instruments that were designated as hedges.
Revenue
Recognition
Revenues
are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration
that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to
determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
|
|
●
|
identify the contract with
a customer;
|
|
|
●
|
identify the performance
obligations in the contract;
|
|
|
●
|
determine the transaction
price;
|
|
|
●
|
allocate the transaction
price to performance obligations in the contract; and
|
|
|
●
|
recognize revenue as the
performance obligation is satisfied.
|
Revenue
from construction contracts are reported under the percentage of completion method for financial statement purposes. The estimated revenue
for each contract reflected in the financial statements represent that percentage of estimated total revenue that costs incurred to date
bear to estimated total costs, based on the Company’s current estimates. With respect to contracts that extend over one or more
accounting periods, revisions in costs and revenue estimates during the work are reflected in the period the revisions become known.
When current estimates of total contract costs indicate a loss, provision is made for the entire estimated loss.
The
asset, “costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenues recognized in excess
of amounts billed. The liability, “Estimated earnings on uncompleted contracts,” represents billings in excess of revenues
recognized.
Billing
practices for these projects are governed by the contract terms of each project based upon actual costs incurred, achievement of milestones,
or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized under the percentage of completion method of accounting.
Except for claims and change orders that are in the process of being negotiated with customers, unbilled work is usually billed during
normal billing processes following achievement of the contractual requirements.
Fair
Value of Financial Instruments
As
defined in ASC 820” Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes
market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and
the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally
unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value
hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The
following table summarizes fair value measurements by level at March 31, 2020 and December 31, 2019, measured at fair value on a recurring
basis:
|
March 31, 2020
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,551,708
|
|
|
$
|
4,551,708
|
|
|
December 31, 2019
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,029,748
|
|
|
$
|
3,029,748
|
|
Recently
Issued Accounting Pronouncements
In
August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options”
and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting
models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation
models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition
of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued
with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal
years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier
than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing
the impact of the adoption of this standard on its consolidated financial statements.
NOTE
2 - GOING CONCERN
The
accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern,
which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company had minimal
cash as of March 31, 2020, incurred losses from its operations and did not generate cash from its operation for past two years and the
three months ended March 31, 2020. These factors, among others, raise substantial doubt about the Company’s ability to continue
as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The
Company’s continued existence is dependent upon management’s ability to develop profitable operations, continued contributions
from the Company’s executive officers to finance its operations and the ability to obtain additional funding sources to explore
potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company’s
products and business
NOTE
3 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Accounts payable
|
|
$
|
181,583
|
|
|
$
|
130,584
|
|
|
Credit card
|
|
|
14,720
|
|
|
|
16,595
|
|
|
Accrued expenses
|
|
|
15,714
|
|
|
|
15,714
|
|
|
Accrued former management fee
|
|
|
4,000
|
|
|
|
9,000
|
|
|
Accrued interest
|
|
|
250,960
|
|
|
|
227,817
|
|
|
|
|
$
|
466,977
|
|
|
$
|
399,710
|
|
NOTE
4 - CONVERTIBLE NOTES PAYABLE
Convertible
notes payable on March 31, 2020 and December 31, 2019 are as follows:
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Note 2
|
|
|
50,000
|
|
|
|
50,000
|
|
|
Note 3
|
|
|
213,279
|
|
|
|
226,956
|
|
|
Note 4
|
|
|
522,885
|
|
|
|
522,884
|
|
|
Note 5
|
|
|
57,500
|
|
|
|
65,000
|
|
|
Note 6
|
|
|
48,000
|
|
|
|
48,000
|
|
|
Note 7
|
|
|
38,000
|
|
|
|
38,000
|
|
|
Total convertible notes payable
|
|
|
929,664
|
|
|
|
950,840
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Unamortized debt discount
|
|
|
(35,315
|
)
|
|
|
(53,012
|
)
|
|
Total convertible notes
|
|
|
894,349
|
|
|
|
897,828
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: current portion of convertible notes
|
|
|
894,349
|
|
|
|
897,828
|
|
|
Long-term convertible notes
|
|
$
|
-
|
|
|
$
|
-
|
|
During
the three months ended March 31, 2020 and 2019, the Company recorded interest expense (income) of $($41,165) and $9249, and amortization
of discount of $17,697 and $14,418, respectively. As of March 31, 2020 and December 31, 2019, the Company had accrued interest of $250,960
and $227,817, respectively.
Conversion
During
the three months ended March 31, 2020, the Company converted notes with principal amounts and accrued interest of $21,177 into 70,264,956
shares of common stock. The corresponding derivative liability at the date of conversion of $38,999 was settled through additional paid
in capital.
Note
2
On
October 12, 2017, the Company issued a fixed convertible promissory note to Tangiers for the principal sum of $50,000 as a commitment
fee for the Investment Agreement. The promissory note (“Note 2”) maturity date is May 12, 2018. The principal amount due
under Note 2 can be converted by Tangiers any time, into shares of the Company’s common stock at a conversion price of $0.1666
per share. The promissory note is in a “Maturity Default,” which is defined in Note 2 as the event in which Note 2 is not
retired prior to its maturity date, Tangiers’ conversion rights under Note 2 would be adjusted such that the conversion price would
be the lower of (i) $0.1666 or (ii) b) 65% of the average of the two lowest trading prices of the Company’s common stock during
the 10 consecutive trading days prior to the date on which Tangiers elects to convert all or part of the note. The default interest rate
is 20%.
Note
3
On
January 16, 2018, the Company issued and sold an 8% Fixed Convertible Promissory Note (“Note 3”) to Tangiers (the “Buyer”),
in the aggregate principal amount of up to $550,000, which includes a 10% original issue discount. Note 3 is convertible into shares
of the Company’s common stock at a conversion price of $0.30 per share. However, if Note 3 is not paid back on or before the maturity
date, defined in Note 3 as a “Maturity Default”, the conversion price of Note 3 shall then be adjusted to be equal to the
lower of: (i) $0.30 or (ii) 65% multiplied by the lowest trading price of the Company’s common stock in the fifteen (15) consecutive
trading day period immediately preceding the trading day that the Company receives a notice of conversion of Note 3.
On
February 13, 2018, April 17, 2018, June 13, 2018, and July 27, 2018, the Company executed Amendments #1, #2, #3, and #4 to the Tangiers
Note 3 for draws of $132,000, $132,000, $101,750 and $101,750, respectively. All other terms and conditions of the Tangiers Note 3 remain
effective.
Note
4
On
September 14, 2018, the Company issued and sold an 8% Fixed Convertible Promissory Note (“Note 4”) to Tangiers (the “Buyer”),
in the aggregate principal amount of up to $550,000, which includes a 10% original issue discount. Note 4 is convertible into shares
of the Company’s common stock at a conversion price of $0.08 per share. However, if Note 4 is not paid back on or before the maturity
date, defined in Note 4 as a “Maturity Default”, the conversion price of Note 4 shall then be adjusted to be equal to the
lower of: (i) $0.08 or (ii) 65% of the lowest trading price of the Company’s common stock during the 15 consecutive trading days
prior to the date on which Buyer elects to convert all or part of the Note 4.
On
December 14, 2018, April 2, 2019, and June 7, 2019, the Company executed Amendments #1, #2 and #3 to the Tangiers Note 4 for draws
of $171,050, $110,000 and $71,834, respectively. All other terms and conditions of the Tangiers Note 4 remain effective.
Note
5
On
September 23, 2019, the Company issued and sold an 10% Fixed Convertible Promissory Note (“Note 5”) to Power Up Lending Group
Ltd. (“Power Up”), in the principal amount of $65,000, which includes a $3,000 original issue discount. Note 5 is convertible
into shares of the Company’s common stock one hundred eighty (180) days from September 23, 2019. Note 5 is convertible at a conversion
price of 61% of the average of the two (2) lowest trading prices of the Company’s common stock during the twenty (20) consecutive
trading days prior to the date of on which Power Up elects to convert all or part of the Note 5.
Note
6
On
October 22, 2019, the Company issued and sold an 10% Fixed Convertible Promissory Note (“Note 6”) to Power Up Lending Group
Ltd. (“Power Up”), in the principal amount of $48,000, which includes a $3,000 original issue discount. Note 6 is convertible
into shares of the Company’s common stock one hundred eighty (180) days from October 22, 2019. Note 6 is convertible at a conversion
price of 61% of the average of the two (2) lowest trading prices of the Company’s common stock during the twenty (20) consecutive
trading days prior to the date of on which Power Up elects to convert all or part of the Note 6.
Note
7
On
December 19, 2019, the Company issued and sold an 10% Fixed Convertible Promissory Note (“Note 7”) to Power Up Lending Group
Ltd. (“Power Up”), in the principal amount of $38,000, which includes a $3,000 original issue discount. Note 7 is convertible
into shares of the Company’s common stock one hundred eighty (180) days from December 22, 2019. Note 7 is convertible at a conversion
price of 61% of the average of the two (2) lowest trading prices of the Company’s common stock during the twenty (20) consecutive
trading days prior to the date of on which Power Up elects to convert all or part of the Note 7.
NOTE
5 - DERIVATIVE LIABILITIES
The
Company identified the conversion features embedded within its convertible debts as financial derivatives. The Company has determined
that the embedded conversion option should be accounted for at fair value.
At
March 31, 2020, the estimated fair values of the liabilities measured on a recurring basis are as follows:
|
|
|
|
Three months ended
|
|
|
|
|
|
March 31, 2020
|
|
|
Expected term
|
|
|
0.06
- 0.50
|
|
|
Expected average volatility
|
|
|
304% - 317
|
%
|
|
Expected dividend yield
|
|
|
-
|
|
|
Risk-free interest rate
|
|
|
0.07% - 0.15
|
%
|
The
following schedule shows the change in fair value of the derivative liabilities at March 31, 2020:
|
Fair Value Measurements Using Significant Observable Inputs (Level 3)
|
|
Balance - December 31, 2019
|
|
$
|
3,029,748
|
|
|
Addition of new derivatives recognized as loss on derivatives
|
|
|
-
|
|
|
Settled on issuance of common stock
|
|
|
(38,999
|
)
|
|
Loss on change in fair value of the derivative
|
|
|
1,560,959
|
|
|
Balance - March 31, 2020
|
|
|
4,551,708
|
|
The
aggregate loss on derivatives during the three months ended March 31, 2020 and 2019 was $1,560,959 and $223,655, respectively.
NOTE
6 - RELATED PARTY TRANSACTIONS
Convertible
Promissory Note
On
September 28, 2020, the Company entered into a Convertible Promissory Note with Electrum Partners, LLC, (the “Electrum Partners”)
for $10,000 with a maturity of 90 days. The proceeds were used for general corporate purposes. Electrum Partners, LLC is an entity under
common control with the Company, in that the Chief Executive Officer of the Company is also the managing member of said other entity.
NOTE
7 - SHAREHOLDERS’ EQUITY
On May 11, 2020, the Company completed an increase
in the authorized shares of the Company’s stock to a total number of 10,015,000,000, allocated as follows among these classes and
series of stock:
|
|
●
|
Common Stock Class, par value $0.001 per share - 10,000,000,000 shares authorized.
|
|
|
●
|
Preferred Stock Class, Series A, par value $0.01 per share - 15,000,000 shares authorized.
|
Convertible
Series A Preferred Stock
As
of March 31, 2020 and December 31, 2019, there were 750,000 and 750,000 shares of Series A Convertible Preferred Stock issued
and outstanding.
Common
Stock
During
the three months ended March 31, 2020, the Company issued 72,285,962 shares of common stock as follows;
|
|
●
|
2,021,006 shares to consultant valued at $72,920 for
consulting services
|
|
|
●
|
70,264,956 shares for conversion of debt of $21,177
|
Common
Stock Warrants and option
As
of March 31, 2020, no warrants or options were outstanding.
NOTE
8 - SUBSEQUENT EVENTS
Effective
May 11, 2020, the Company (Registrant) mutually and amicably completed a change of officers, as to the principal accounting officer and
principal executive officer, the person serving in the capacity of interim CEO and interim CFO. Mr. Cook, serving as both up to such
time, departed, and no longer serves in any officer or Director capacity. The Board of Directors appointed Leslie Bocskor to act as a
principal executive officer serving in the capacity of CEO with non-material arrangements to apply moving forward, including compensation
of $2,500 monthly, potential stock, and other considerations, indemnifications, and reimbursement of expenses.
On
September 28, 2020, the Company entered into a Convertible Promissory Note with Electrum Partners, LLC, (the “Electrum Partners”)
for $10,000 USD with a maturity of 90 days. The proceeds will be used for general corporate purposes. Electrum Partners, LLC is
an entity under common control with the Company, in that the Chief Executive Officer of the Company is also the managing member of said
other entity.
About
March 2021, a third party advanced $25,000 to assist the Company in operating expenses and the Company is in the process of
confirming arrangements for the repayment of said amount; it is anticipated it will be a promissory note due from the Company in
cash or stock.
The Registrant had a
dispute with Power Up Lending Group, Ltd., the holder of certain promissory notes dated October 22, 2019, and December 19,
2019, issued by the Registrant, including allegations or claims of default and suit, and related. As part of the company recovery
efforts after COVID-19, with amicable cooperation from “Power Up”, in third quarter of 2021 the Registrant reached a full
payoff resolution for $80,000 to successfully settle all issues.
On
August 4, 2021, the Company formalized its employment and compensation arrangement with Mr. Leslie Bocskor. Mr. Bocskor was
initially engaged as CEO on May 11, 2020 at a monthly rate of $2,500 pending the establishment of a comprehensive employment and compensation
agreement. To date, Mr. Bocskor has not received any consideration for his efforts, and over this time continued to bring necessary
resources to the company in the form of executive and administrative support, and more as needed. These resources included several
critical functions provided by individuals and entities who worked to support the CEO and the Company over the prior year
to stabilize and sustain the Company and lay the foundation for future success.
The
Board has recognized the substantive efforts of Messrs.Leslie Bocskor, Benjamin Rote, and Dennis Forchic to
sustain and support the Company over the past year without compensation while laying the foundation for the future. The Board has
voted to formalize employment agreements with Messrs. Bocskor and Rote, and an advisory agreement with Mr. Forchic. Stock option
agreements reflecting past contributions and incentives for the future have been issued to all three parties. Stock options plans were
offered with an exercise price of $0.01 and consideration of 150 million options to Mr. Bocskor, 100 million options to Mr. Rote, and
150 million options to Mr. Forchic vesting immediately. On the 1 year anniversary of their respective agreements, additional stock options
priced at $0.015 will vest with consideration of 150 million options to Mr. Bocskor, 100 million options to Mr. Rote, and 150 million
options to Mr. Forchic.
Additionally,
the Board, consisting of Directors Rick Gutshall and Lang Coleman, having not received any consideration over the past 2 years, will
receive stock options of 5 million options each at a price of $0.01. The company’s legal counsel will be receiving 10 million
options, under the same terms as the Board, in recognition of their valuable work and support.