NOTE
1 – NATURE OF OPERATIONS
Company
Background
Altitude
International Holdings, Inc. (f/k/a Altitude International, Inc., the “Company,” “we,” “us,”
“our,” or “Altitude-NY”), was incorporated in the State of New York on July 13, 1994 as “Titan Computer
Services, Inc.”
On
June 27, 2017, the Company successfully closed a Share Exchange transaction (the “Share Exchange”) with the shareholders
of Altitude International, Inc. (“Altitude”), a Wisconsin corporation. Altitude was incorporated on May 18, 2017 under
the laws of the state of Wisconsin and has been operating as a wholly owned subsidiary of Altitude-NY since the Share Exchange.
Altitude operates through Northern, Central, and South America sales to execute the current business plan of athletic training
industry, specifically altitude training. Our objective is to be recognized as one of the upper tier specialty altitude training
equipment providers in the Americas.
On
February 13, 2018, the majority of the shareholders of the Company approved the amendment to the Articles of Incorporation to
change the Company’s name from “Titan Computer Services, Inc.” to “Altitude International, Inc.”
The purpose of the name change was to help further our brand identity and will reflect the major focus of our business operations,
the manufacturing and distribution of products in the athletic training industry, specifically altitude training.
On
February 14, 2020, the majority of shareholders of the Company and the Board of Directors authorized a change in the Company’s
name to “Altitude International Holdings, Inc.” to reflect more diversified operations going forward. The Articles
of Amendment finalizing this name change have not yet been filed by the Company.
On
April 24, 2020, the Company formed a wholly owned subsidiary in Wisconsin called “Altitude Sports Management Corp.,”
an entity that will providing fully integrated wealth, health, and career management services to its clients.
On
August 21, 2020, the Company filed with the State of New York to change the name from Altitude International, Inc. to Altitude
International Holdings, Inc.
Nature
of Operations
The
product designs to be licensed from Sporting Edge UK, Ltd (“Sporting Edge UK”) are proven and cover a wide range of
room sizes. The only requirement is to change from metric to imperial sizes where necessary.
There
are three unique elements to the Altitude product:
|
●
|
Sophisticated
Touch Screen control systems capable of integrating the control of simulated altitude, temperature and humidity.
|
|
|
|
|
●
|
A
unique design of Air Separation Unit with only a single active part that provides for ultra-reliable operation and a design
life of greater than fifteen years.
|
|
|
|
|
●
|
Proven
training protocols that allow the desired training benefits to be achieved.
|
Recapitalization
of Altitude
On
June 27, 2017, the Company entered into a share exchange transaction with Altitude which resulted in a change of control of the
Company. Pursuant to the terms of the Share Exchange, the Company agreed to issue 6,102,000 shares of its common stock to all
the individual shareholders of Altitude on a pro rata basis (one to one share exchange). In exchange for this stock issuance,
the Company received 100% of the outstanding shares of Altitude. Following this Share Exchange, Altitude became a wholly owned
subsidiary of Titan. There was a cancellation of 14,700,000 shares of common stock of the Company that was held by the Company’s
former majority stockholder as part of the share exchange agreement, which all had a net effect of a decrease of 8,598,000 shares
in the Company’s outstanding shares. The business, assets and liabilities of the Company changed as a result of this reverse
acquisition to Altitude’s business plan.
This
share exchange transaction resulted in those shareholders obtaining a majority voting interest in –the Company and control
of the Board of Directors of the Company. Generally accepted accounting principles require that the Company whose shareholders
retain the majority interest and control in a combined business be treated as the acquirer for accounting purposes, resulting
in a reverse acquisition with Altitude as the accounting acquirer and the Company as the acquired party. Accordingly, the share
exchange transaction has been accounted for as a recapitalization of Altitude, whereby is deemed to be the continuing, surviving
entity for accounting purposes but through reorganization, has deemed to have adopted the capital structure of Altitude - NY.
The equity section of the accompanying condensed consolidated financial statements has been restated to reflect the recapitalization
of the Company due to the reverse acquisition.
Accordingly,
all references to common shares of Altitude’s common stock have been restated to reflect the equivalent number of the Company’s
common shares. In other words, the 6,102,000 Altitude shares outstanding at the time of the share exchange are restated to 21,228,659
common shares (prior to the 500,000 common share capital raise mentioned below that was conducted after the share exchange agreement),
as of June 27, 2017. Each share of Altitude is accordingly restated at a multiple of approximately 3.48 shares of the Company
for the weighted average shares outstanding for the loss per share calculations in the accompanying condensed consolidated statement
of operations.
The
book value of the net assets that for accounting purposes, were deemed to have been acquired by Altitude from the Company, as
of the date of acquisition (June 27, 2017) were $0, after the waiver of all debts from officers and third parties.
A
condition to the closing of the Share Exchange Agreement was raising $100,000 in the Company. On June 27, 2017, the Company issued
500,000 shares of its common stock to an accredited investor pursuant to a Subscription Agreement for $100,000, or $0.20 per share
which was kept at escrow account. During the recapitalization, the Company incurred legal fees of $12,500 which was paid through
the attorney’s escrow account and recorded as transaction costs which were netted against the $100,000 proceeds.
Altitude
International, Inc.
Altitude
International, Inc. (“Altitude”) was incorporated on May 18, 2017 under the laws of the state of Wisconsin with 100,000,000
authorized common stock with $0.001 par value. On May 18, 2017, 6,102,000 shares of common stock at $0.001 (par) were issued as
founder shares, valued at a total of $6,102 to 15 individuals. These shares were issued for future potential services from these
various individuals and as of the date of this issuance, no value was placed on these future potential services and were therefore
recorded at par value as stock-based compensation to the founders.
On
June 27, 2017, after the closing of certain Stock Purchase Agreements, in private sale transaction and the Share Exchange Agreement,
a change of control of the Company occurred and the new operational focus of the Company commenced. See Notes 6 and 8.
Altitude
will operate through Northern, Central, and South America sales to execute the current business plan of athletic training industry,
specifically altitude training. Our objective is to be recognized as one of the upper tier specialty altitude training equipment
providers.
Changes
in Management and the Board of Directors
On
January 25, 2019, Robert Kanuth (“Kanuth”) was appointed as the Company’s new CEO and David Vincent resigned
as CEO and was appointed as the Company’s Chief Technology Officer.
On
June 27, 2019, Greg Anthony and Peter Sandore were elected to serve on the Board of Directors.
On
August 20, 2019, Dave Vincent resigned as a director and CTO of the Company.
On
September 19, 2019, Greg Anthony was appointed as President of the Company.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States
of America and has a year-end of December 31.
Management
further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system
of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is
designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions
are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition,
results of operations and cash flows of the Company for the respective periods being presented.
The
unaudited condensed financial statements of the Company for the nine month periods ended September 30, 2020 and 2019 have been
prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information
and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. Accordingly, they do not include all the information
and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion
of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for
interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information
as of December 31, 2019 was derived from the audited financial statements included in the Company’s financial statements
as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the Securities
and Exchange Commission (the “SEC”) on March 30, 2020. These financial statements should be read in conjunction with
that report.
Going
Concern and Liquidity
We
have incurred recurring losses since inception and expect to continue to incur losses as a result of legal and professional fees
and our corporate general and administrative expenses. At September 30, 2020, we had $1,659 in cash. Our net losses incurred for
the nine months ended September 30, 2020 were $268,563 and working capital deficit was $212,242 at September 30, 2020.
As a result, there is substantial doubt about our ability to continue as a going concern. In the event that we are unable to generate
sufficient cash from our operating activities or raise additional funds, we may be required to delay, reduce or severely curtail
our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business,
operating results, financial condition and long-term prospects. The Company expects to seek to obtain additional funding through
increased revenues and future financings. There can be no assurance as to the availability or terms upon which such financing
and capital might be available.
Principles
of Consolidation
The
consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Altitude. All significant
intercompany balances and transactions have been eliminated in the consolidation. The consolidated financial statements included
herein, presented in accordance with United States generally accepted accounting principles (“GAAP”) and stated in
United States dollars, have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange
Commission.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure
of contingent 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.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
Intangible
Assets
Costs
incurred to file patent applications and acquired intangibles are capitalized when the Company believes that there is a high likelihood
that the patent will be issued and there will be future economic benefit associated with the patent. These costs will be amortized
on a straight-line basis over a 20 year life from the date of patent filing. All costs associated with abandoned patent applications
are expensed. In addition, the Company will review the carrying value of patents for indicators of impairment on a periodic basis
and if it determines that the carrying value is impaired, it values the patent at fair value. As of September 30, 2020, carrying
value of patent was $10,293.
In
accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assets and amortizable
intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may
not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be
recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment
share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair
value to the carrying value. The amortization of the trademark was not significant for the period ended September 30, 2020.
Recent
Accounting Pronouncements
Recently
Issued Accounting Standards: Management does not believe that any recently issued, but not yet effective, accounting standards
if currently adopted would have a material effect on the accompanying financial statements.
NOTE
3 – INTANGIBLE ASSETS - TRADEMARK
The
Company has intangible assets related to a trademark. The amortization of the intangible asset is over a twenty-year period. As
of September 30, 2020, and December 31, 2019, the Company had intangible assets, net of accumulated amortization, of $10,293 and
$10,753, respectively. The intangible assets are as follows:
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Trademark
|
|
$
|
12,284
|
|
|
$
|
12,284
|
|
Total intangible assets
|
|
|
12,284
|
|
|
|
12,284
|
|
Less: Accumulated amortization
|
|
|
1,991
|
|
|
|
1,531
|
|
Intangible assets, net
|
|
$
|
10,293
|
|
|
$
|
10,753
|
|
Amortization
expense of the trademark for the nine months ended September 30, 2020 and 2019 were $460 and $459, respectively.
NOTE
4 – NOTES PAYABLE
Note payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2020
|
|
|
December 31, 2019
|
|
|
|
|
|
|
Accrued
|
|
|
|
|
|
|
|
|
Accrued
|
|
|
|
|
|
|
Principal
|
|
|
Interest
|
|
|
Total
|
|
|
Principal
|
|
|
Interest
|
|
|
Total
|
|
David Vincent
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
20,000
|
|
|
$
|
3,595
|
|
|
$
|
23,595
|
|
David Vincent
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
40,000
|
|
|
|
6,707
|
|
|
|
46,707
|
|
Joseph B. Frost
|
|
|
40,000
|
|
|
|
20,707
|
|
|
|
60,707
|
|
|
|
40,000
|
|
|
|
4,252
|
|
|
|
44,252
|
|
Joseph B. Frost
|
|
|
500
|
|
|
|
76
|
|
|
|
576
|
|
|
|
500
|
|
|
|
6
|
|
|
|
506
|
|
Joseph B. Frost
|
|
|
10,000
|
|
|
|
4,349
|
|
|
|
14,349
|
|
|
|
10,000
|
|
|
|
833
|
|
|
|
10,833
|
|
Joseph B. Frost
|
|
|
13,000
|
|
|
|
5,576
|
|
|
|
18,576
|
|
|
|
13,000
|
|
|
|
1,012
|
|
|
|
14,012
|
|
David Vincent
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
|
|
|
48
|
|
|
|
5,048
|
|
David Vincent
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,000
|
|
|
|
26
|
|
|
|
15,026
|
|
Robert Kanuth
|
|
|
1,500
|
|
|
|
27
|
|
|
|
1,527
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Robert Kanuth
|
|
|
4,200
|
|
|
|
71
|
|
|
|
4,271
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
69,200
|
|
|
$
|
30,806
|
|
|
$
|
100,006
|
|
|
$
|
143,500
|
|
|
$
|
16,479
|
|
|
$
|
159,979
|
|
On
March 2, 2018, Frost, a director, loaned the Company $40,000 in the form of a promissory note. The note bears interest of 20%
and has the term of one year, at which time all principal and interest will be paid in a balloon payment. As of September 30,
2020, this note is in default and the accrued interest was $20,707, and the principal balance was $40,000.
On
July 30, 2018, Frost, a director, loaned the Company $10,000 in the form of a promissory note. The note bears interest of 20%
and has the term of one year, at which time all principal and interest will be paid in a balloon payment. As of September 30,
2020, the accrued interest was $4,349, the principal balance was $10,000, and the note is in default.
On
August 10, 2018, Frost, a director, loaned the Company $13,000 in the form of a promissory note. The note bears interest of 20%
and has the term of six months, at which time all principal and interest will be paid in a balloon payment. As of September 30,
2020, this note is in default and the accrued interest was $5,576, the principal balance was $13,000, and the note is in default.
On
November 5, 2018, Frost, a director, loaned the Company $500 in the form of a promissory note. The note bears interest of 8% and
has the term of six months, at which time all principal and interest will be paid in a balloon payment. As of September 30, 2020,
the accrued interest was $76, and the principal balance was $500.
On
January 24, 2019, Kanuth, an officer and director, loaned the Company $11,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On July
15, 2019, the principal of $11,000 and accrued interest of $319 was converted into common stock of the Company. On April 7, 2020,
the accrued interest balance was converted into common stock of the Company (see Note 7).
On
February 4, 2019, Kanuth, an officer and director, loaned the Company $13,197 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On July
15, 2019, the principal of $13,197 was converted into common stock of the Company. On April 7, 2020, the accrued interest balance
was converted into common stock of the Company (see Note 7).
On
February 4, 2019, Kanuth, an officer and director, loaned the Company $5,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On July
15, 2019, the principal of $5,000 was converted into common stock of the Company. On April 7, 2020, the accrued interest balance
was converted into common stock of the Company (see Note 7).
On
April 30, 2019, Kanuth, an officer and director, loaned the Company $6,514 in the form of a promissory note. The note bears interest
of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020,
the balance was converted into common stock of the Company (see Note 7).
On
May 23, 2019, Kanuth, an officer and director, loaned the Company $6,544 in the form of a promissory note. The note bears interest
of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020,
the balance was converted into common stock of the Company (see Note 7).
On
August 13, 2019, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
September 5, 2019, Kanuth, an officer and director, loaned the Company $20,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
September 16, 2019, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
October 16, 2019, Kanuth, an officer and director, loaned the Company $30,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
October 31, 2019, Kanuth, an officer and director, loaned the Company $8,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
November 8, 2019, Kanuth, an officer and director, loaned the Company $70,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 8).
On
November 25, 2019, Kanuth, an officer and director, loaned the Company $9,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
December 17, 2019, Kanuth, an officer and director, loaned the Company $20,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
January 3, 2020, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
February 8, 2020, Kanuth, an officer and director, loaned the Company $4,860 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
February 26, 2020, Kanuth, an officer and director, loaned the Company $10,000 in the form of a promissory note. The note bears
interest of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April
7, 2020, the balance was converted into common stock of the Company (see Note 7).
On
March 18, 2020, Kanuth, an officer and director, loaned the Company $30,000 in the form of a promissory note. The note bears interest
of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. n April 7, 2020,
the balance was converted into common stock of the Company (see Note 7).
On
March 31, 2020, Kanuth, an officer and director, loaned the Company $3,129 in the form of a promissory note. The note bears interest
of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. On April 7, 2020,
the balance was converted into common stock of the Company (see Note 7).
On
April 9, 2020, Kanuth, an officer and director, loaned the Company $1,500 in the form of a promissory note. The note bears interest
of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. As of September
30, 2020, the principal balance was $1,500 and the accrued interest was $27.
On
April 15, 2020, Kanuth, an officer and director, loaned the Company $4,200 in the form of a promissory note. The note bears interest
of 8% and has the term of one year, at which time all principal and interest will be paid in a balloon payment. As of September
30, 2020, the principal balance was $4,200 and the accrued interest was $71.
On
May 5, 2020, the Company received $20,800 in the form of a loan through the CARES Act Paycheck Protection Program. The balance
at September 30, 2020 was $20,800.
NOTE
5 – COMMITMENTS AND CONTINGENCIES
The
Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims,
or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity,
financial condition and cash flows. As of November 9, 2020, the Company did not have any legal actions pending against
it.
On
June 27, 2017, Altitude entered a license agreement with Sporting Edge UK (see Note 1), Sporting Edge UK is the sole and exclusive
owner of and has the right to license to licensee the ability to manufacture and sell rights to the full range of membrane-based
systems for the production of reduced oxygen environments and associated services as well as the use of patents and trademarks
held by Sporting Edge UK or Vincent.
On
January 24, 2019, Altitude and Sporting Edge UK entered into a Revised Licensing Agreement that grants a license to Altitude to
use Sporting Edge UK’s proprietary technology related to properly engineered, membrane-based designs for simulated altitude
training equipment. The annual license fee under the revised agreement is $1.00 per year. The product line ranges from personal
at home use machines to fully integrated environmental rooms and chambers. Altitude has the licensing rights to use all technology
to manufacture the products and to sell them (directly or through distributors) in the following territories:
|
●
|
The
Continent of North America, Central America, The Continent of South America.
|
|
|
|
|
●
|
Other
territories as may be agreed from time to time, on a temporary or permanent basis.
|
All
amounts due under the 2017 license agreement were waived, as were all royalty fees.
NOTE
6 – RELATED PARTY TRANSACTIONS
As
of December 31, 2019, and September 30, 2020, the balance due to our former CEO, David Vincent, was recorded under stockholder’s
advance of $36,211 and $36,211, respectively, which is a verbal agreement, non-interest bearing, unsecured and payable on demand.
On February 9, 2018, the Board of Directors changed the arrangement whereas the advance would begin accruing interest at the rate
of 20%. The Company had accrued expenses to David Vincent, as of December 31, 2018 of $57,948 which were converted into common
stock on January 10, 2019.
Altitude
has an oral agreement with its Chairman of the Board and current CEO, Robert Kanuth, in which it will provide for reimbursement
of private airline travel expenses incurred on behalf of the Company, for his use of an aircraft in which he has an interest in..
The remuneration package for the Chairman is currently under negotiation as are the terms and validity of a purported agreement
between the Chairman and the Company’s CEO regarding shares to be transferred from the CEO to the Chairman upon sales milestones
being reached. The Company and its subsidiaries were not parties to the purported agreement, and their property is not the subject
of the purported agreement.
NOTE
7 – STOCKHOLDERS’ EQUITY
Preferred
Stock
On
February 5, 2015, the Board of Directors of the Company authorized 5,000,000 shares of preferred stock with no par value. Each
share of the preferred stock is entitled to one vote and is convertible into one share of common stock.
As
of September 30, 2020, and December 31, 2019, the Company has no preferred stock issued and outstanding.
Common
Stock
Altitude
was incorporated on May 18, 2017 under the laws of the state of Wisconsin with 100,000,000 authorized common stock with $0.001
par value. The shareholders have one vote per share of common stock.
After
the closing of certain Stock Purchase Agreements, in private sale transaction and the Share Exchange Agreement, the Company’s
common stock had no par value and is registered in New York.
On
January 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work
for January 2020. The common stock of the Company is thinly traded and had a value of $0.0401 per share, therefore the Company
recorded the transaction at $501.
On
February 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work
for February 2020. The common stock of the Company is thinly traded and had a value of $0.07 per share, therefore the Company
recorded the transaction at $875.
On
March 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work
for March 2020. The common stock of the Company is thinly traded and had a value of $0.04 per share, therefore the Company recorded
the transaction at $500.
On
April 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work
for April 2020. The common stock of the Company is thinly traded and had a value of $0.025 per share, therefore the Company recorded
the transaction at $313.
On
April 7, 2020, Kanuth converted $257,916 of notes and accrued interest into 7,390,144 shares of common stock of the Company, at
the current market price of $0.345.
On
May 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work for
May 2020. The common stock of the Company is thinly traded and had a value of $0.051 per share, therefore the Company recorded
the transaction at $638.
On
June 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work
for June 2020. The common stock of the Company is thinly traded and had a value of $0.047 per share, therefore the Company recorded
the transaction at $588.
On
July 1, 2020, the Company was contractually obligated to issue its legal counsel 12,500 shares of common stock for legal work
for July 2020. The common stock of the Company is thinly traded and had a value of $0.03 per share, therefore the Company recorded
the transaction at $375.
On
July 9, 2020, Frost converted $158,932 of debt into 7,946,625 shares of common stock. The conversion was at a discount whereas
the fair market value was $198,666. The Company recognized a loss of $39,734 related to the discount.
As
of September 30, 2020, and December 31, 2019, the Company has 51,500,264 and 36,075,995 shares of no par common stock issued,
issuable, and outstanding.
Stock
Option Plan
On
February 13, 2018, the Company’s shareholders and Board of Directors approved the 2017 Incentive Stock Plan.
On
January 25, 2019, the Company issued 250,000 options to Vincent. The options vest at a rate of 25% every six months after the
grant date and expire upon termination of employment. The exercise price is $0.077. The Black-Scholes calculation valued the options
at $15,809, or $0.06 per share. As of September 30, 2020, $5,912 was amortized. These options expired three months following Vincent’s
resignation because they were not exercised prior to that time.
On
January 25, 2019, the Company issued 250,000 options to Frost. The options vest at a rate of 25% every six months after the grant
date and expire upon termination of employment. The exercise price is $0.077. The Black-Scholes calculation valued the options
at $15,809, or $0.06 per share. As of September 30, 2020, $16,697 was amortized.
NOTE
8 – SUBSEQUENT EVENTS
The
Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and
Exchange Commission. The Company has determined that there are no other such events that warrant disclosure or recognition in
the financial statements, except as stated herein.
The
outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause
slower recovery of the economy. We may experience impact from quarantines, market downturns and changes in customer behavior related
to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners,
service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection,
sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus
impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will
include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses
to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results
of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and
could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow
our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination
of agreements due to deterioration in economic conditions could negatively impact our results of operations.