UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 2020
or
☐ Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number: 333-165972
BOXSCORE BRANDS, INC.
(Exact name of Registrant as specified in its charter)
Delaware |
|
22-3956444 |
(State
or Other Jurisdiction of
Incorporation or Organization) |
|
(IRS
Employer
Identification No.) |
3275
S. Jones Blvd, Suite 104, Las Vegas, NV |
|
89146 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(800) 998-7962
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act
Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act.
Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements
for the past 90 days. Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted
electronically every Interactive Date File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12
months (or for such shorter period that the registrant was required
to submit such files) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,“and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large
accelerated filer ☐ |
Accelerated
filer ☐ |
Non-accelerated
filer ☐ |
Smaller
reporting company ☒ |
|
Emerging
growth company ☐ |
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant has filed a report on
and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit
report ☐
Indicate by check mark whether the registrant is a shell company
(as defined by Rule 12b-2 of the Act).
Yes ☐ No ☒
The aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant’s most recently completed second fiscal quarter was
$127,545 based upon the price of the registrant’s common stock on
June 30, 2020.
The number of shares outstanding of the registrant’s common stock,
$0.001 par value per share, was 226,604,039 shares as of September
24, 2021.
Documents Incorporated by Reference: None
BOXSCORE BRANDS, INC.
Table of Contents
PART I
Forward Looking Information
This annual report contains statements about future events and
expectations that are characterized as “forward-looking
statements.” Forward-looking statements are based upon management’s
beliefs, assumptions, and expectations. Forward-looking statements
involve risks and uncertainties that may cause our actual results,
performance, and financial condition to be materially different
from the expectations of future results, performance, and financial
condition we express or imply in such forward-looking statements.
You are cautioned not to put undue reliance on forward-looking
statements. Except as required by federal securities laws, we
disclaim any intent or obligation to update any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
ITEM 1 - BUSINESS
Overview
BoxScore Brands, Inc. (formerly U-Vend Inc.) (the “Company”)
formerly developed, marketed and distributed various self-serve
electronic kiosks and mall/airport co-branded islands throughout
North America. Due to the nationwide shutdown related to the
COVID-19 pandemic, the Company spent a portion of 2020
restructuring and retiring certain corporate debt and obligations.
The Company focused on implementing a new operational
direction. After a thorough evaluation process, the Company
found that there is a substantial long-term demand for specific
commodities relating to battery and new energy technologies. This
presents a timely and unique opportunity based on rising demand
characteristics. By capitalizing on market trends and current
sustainable energy government mandates and environmental, social,
and corporate governance (ESG) initiatives, we will focus on
bringing a vertically-integrated solution to market.
Asset Sale
On March 18, 2019, the Company approved an asset sale of the assets
related to the legacy MiniMelts brand for $350,000 in cash, which
was approved by a majority of its shareholders. These MiniMelts
assets generated 100% of the revenue reported during the year ended
December 31, 2019. Part of the proceeds from the sale was used to
retire certain lease obligations as well as for general operating
purposes.
Employees
As of September 24, 2021, the Company had one full-time employee
and a part time employee.
Websites
The Company maintains one active website, www.boxscore.com, which
serves as its corporate website and contains information about the
Company and its business.
Corporate Information and Incorporation
BoxScore Brands, Inc. was incorporated in March 2007 as a Delaware
corporation and we refer to the company as “we”, “us”, the
“Company”, “BoxScore Brands” or “BoxScore” in this annual report.
In February 2018, we filed an amendment to our certificate of
incorporation to change our corporate name from U-Vend Inc. to
BoxScore Brands, Inc. to better reflect the nature of our current
business operations. We are headquartered in Las Vegas, NV. Our
corporate office is located at 3275 South Jones Blvd, Suite 104,
Las Vegas, NV 98146 and our telephone number is (800) 998-7962. Our
corporate website address is www.boxscore.com. Information
contained on our websites is not a part of this annual report.
Available Information
Under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), the Company files annual, quarterly and current
reports with the SEC. You may read and copy any document we file
with the SEC at the SEC’s public reference room at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for further information about the public reference room. The SEC
maintains a website at http://www.sec.gov that contains reports and
other information regarding issuers that file electronically with
the SEC. The Company files electronically with the SEC. The SEC
makes available, free of charge, through the SEC Internet website,
the Company’s filings on Forms 10-K, 10-Q and 8-K, and amendments
to those reports, as soon as they are filed with the SEC.
ITEM 1A - RISK
FACTORS
An investment in our securities is subject to numerous risks,
including the Risk Factors described below. Our business, operating
results or financial condition could be materially adversely
affected by any of the following risks. The risks described below
are not the only ones we face. Additional risks we are not
presently aware of or that we currently believe are immaterial may
also materially affect our business. In such case, we may not be
able to proceed with our planned operations and your investment may
be lost entirely. The trading price of our common stock could
decline due to any of these risks. In assessing these risks, you
should also refer to the other information contained or
incorporated by reference in this Form 10-K, including our
consolidated financial statements. An investment in our securities
should only be acquired by persons who can afford to lose their
entire investment without adversely affecting their standard of
living or financial security.
We have a limited operating history and may not be able to
achieve financial or operational success.
We were founded in March 2007, initiated our first operating
business in October 2009, exited from our first operating business
in March 2013, and acquired another operating business in January
2014, which we modified, sold certain operating assets and retained
others. Our current focus in the renewable energy sector will rely
heavily on our management teams market knowledge. We management
does have operating history with respect to this new corporate
direction we have to identify, acquire and operate a new line of
business. As a result, we may not be able to achieve sustained
financial or operational success, given the risks, uncertainties,
expenses, delays and difficulties associated with an early-stage
business in an evolving market.
Our growth strategy includes acquisitions that entail
significant execution, integration and operational risks.
We are pursuing a growth strategy based in part on acquisitions,
with the objective of creating a combined company that we believe
can achieve increased cost savings and operating efficiencies
through economies of scale especially in the integration of
administrative services. We will seek to make additional
acquisitions in the future to increase our revenue.
This growth strategy involves significant risks. There is
significant competition for acquisition targets in our markets.
Consequently, we may not be able to identify suitable acquisitions
or may have difficulty finding attractive businesses for
acquisition at reasonable prices. If we are unable to identify
future acquisition opportunities, reach agreement with such third
parties or obtain the financing necessary to make such
acquisitions, we could lose market share to competitors who are
able to make such acquisitions.
If we are unable to
develop and market new offerings or fail to predict or respond to
emerging trends, our revenue and any profitability will
suffer.
Our future success will
depend on our management team’s implementation of their new
business plan and the success of the initial key renewal energy
projects. The volatility of natural resources may also affect the
viability of projects.
We depend on key management, product management, technical
and marketing personnel for continued success.
Our success and future growth depend, to a significant degree, on
the skills and continued services of our management team, including
Andrew Boutsikakis, our President and Chief Executive Officer, and
Pat Avery, our Chief Operating Officer. Our ongoing success also
depends on our ability to identify, hire and retain skilled and
qualified technical and marketing personnel in a highly competitive
employment market. As we develop and acquire new products and
services, we will need to hire additional employees. Our inability
to attract and retain well-qualified managerial, technical and
sales and marketing personnel may have a negative effect on our
business, operating results and financial condition.
We may be required to seek additional funding, and such funding
may not be available on acceptable terms or at all.
We may seek additional funding, however due to a number of factors
beyond our expectations or control, including a shortfall in
revenue, increased expenses, a need for working capital for growth,
increased investment in capital equipment or the acquisition of
businesses, services or technologies. The required funding may not
be available on acceptable terms, or at all. If we are unable to
obtain sufficient funding, our business would be harmed. Even if we
were able to find outside funding sources, we might be required to
issue securities in a transaction that could be highly dilutive to
our investors or we may be required to issue securities with
greater rights than the securities we have outstanding today. We
may also be required to take other actions that could lessen the
value of our common stock, including borrowing money on terms that
are not favorable to us. If we are unable to generate or raise
capital that is sufficient to fund our operations, we may be
required to curtail operations, reduce our services, defer or
cancel expansion or acquisition plans or cease operations in
certain jurisdictions or completely.
The termination, non-renewal or renegotiation on materially
adverse terms of our contracts or relationships with one or more of
our significant host locations, product suppliers and partners
could seriously harm our business, financial condition and results
of operations.
The success of our business depends in large part on our ability to
maintain contractual relationships with our host locations in
profitable locations. Our typical host location agreement ranges
from one to three years and automatically renews until we or the
host retailer gives notice of termination. Certain contract
provisions with our host locations vary, including product and
service offerings, the commission fees we are committed to pay each
host location, and the ability to cancel the contract upon notice
after a certain period of time. We strive to provide direct and
indirect benefits to our host locations that are superior to, or
competitive with, other providers or systems or alternative uses of
the floor space that our kiosks occupy. If we are unable to provide
our host retailers with adequate benefits, we may be unable to
maintain or renew our contractual relationships on acceptable
terms, causing our business, financial condition and results of
operations to suffer.
If we cannot execute on our renewable energy strategy.
Our strategy is based upon leveraging our core competencies in the
renewable energy space and relationships with certain land
surveyors and mineral distributors and refiners. To be competitive,
we need to locate, develop, or otherwise provide, sought after
minerals and service offerings that are accepted by the market and
establish third-party relationships necessary to develop and
commercialize such product and service offerings. We are exploring
new businesses to enter, and new products and services to offer,
however, the complexities and structures of these new businesses
could create conflicting priorities, constrain limited resources,
and negatively impact our core businesses. We may use our financial
resources and managements’ time and focus to invest in other
companies’ offerings in the renewable energy sector, or we may seek
to grow businesses organically. We may enter into joint
ventures through which we may expand our offerings.
Litigation, arbitration, mediation, regulatory actions,
investigations or other legal proceedings could result in material
rulings, decisions, settlements, fines, penalties or publicity that
could adversely affect our business, financial condition and
results of operations.
Our industry has in the past been, and may in the future continue
to be, party to class actions, regulatory actions, investigations,
arbitration, mediation and other legal proceedings. The outcome of
such proceedings is often difficult to assess or quantify.
Plaintiffs, regulatory bodies or other parties may seek very large
or indeterminate amounts of money from us or substantial
restrictions on our business activities, and the results, including
the magnitude, of lawsuits, actions, settlements, decisions and
investigations may remain unknown for substantial periods of time.
The cost to defend, settle or otherwise finalize lawsuits,
regulatory actions, investigations, arbitrations, mediations or
other legal proceedings may be significant and such proceedings may
divert management’s time. In addition, there may be adverse
publicity associated with any such developments that could decrease
consumer acceptance of our products and services. As a result,
litigation, arbitration, mediation, regulatory actions or
investigations involving us may adversely affect our business,
financial condition and results of operations.
We are subject to substantial federal, state, local and foreign
laws and government regulation specific to our business.
Our business is subject to federal, state, local and foreign laws
and government regulation, including those relating to copyright
law, federal and state laws around rare earths and the renewable
energy sector, The application of existing laws and regulations,
changes in laws or enactment of new laws and regulations, that
apply, or may in the future apply, to our current or future
products or services, changes in governmental authorities’
interpretation of the application of various government regulations
to our business, or the failure or inability to gain and retain
required permits and approvals could materially and adversely
affect our business.
In addition, many jurisdictions require us to obtain certain
licenses in connection with the operations of our businesses. There
can be no assurance that we will be granted all necessary licenses
or permits in the future, that current licenses or permits will be
renewed or that regulators will not revoke current licenses or
permits. Given the unique nature of our business and new products
and services we may develop or acquire in the future, the
application of various laws and regulations to our business is
uncertain. Further, as governmental and regulatory scrutiny and
action with regard to many aspects of our business increase, we
expect that our costs of complying with the applicable legal
requirements may increase, perhaps substantially.
Failure to comply with these laws and regulations could result in,
among other things, revocation of required licenses or permits,
loss of approved status, termination of contracts, administrative
enforcement actions and fines, class action lawsuits, cease and
desist orders and civil and criminal liability. The occurrence of
one or more of these events, as well as the increased cost of
compliance, could materially adversely affect our business,
financial condition and results of operations.
If we cannot manage our growth effectively, we could experience
a material adverse effect on our business, financial condition and
results of operations.
As we begin to scale our business we may make errors in predicting
and reacting to relevant business trends, which could have a
material adverse effect on our business, financial condition and
results of operations-
This growth may place significant demands on our operational,
financial and administrative infrastructure and our management. As
our operations grow in size, scope and complexity, we anticipate
the need to integrate, as appropriate, and improve and upgrade our
systems and infrastructure, both those relating to providing
attractive and efficient consumer products and services and those
relating to our administration and internal systems, processes and
controls. This integration and expansion of our administration,
processes, systems and infrastructure may require us to commit and
will continue to cause us to commit, substantial financial,
operational and technical resources to managing our business.
Managing our growth will require significant expenditures and
allocation of valuable management and operational resources. If we
fail to achieve the necessary level of efficiency in our
organization, including otherwise effectively growing our business
lines, our business, operating results and financial condition
could be harmed.
We may not have the ability to pay interest on our Notes, to
repurchase the convertible notes upon a fundamental change or to
settle conversions of the Notes, as may be required.
If a fundamental change occurs under the indenture governing our
Notes, holders of the Notes may require us to repurchase, for cash,
all or a portion of their Notes. In addition, upon satisfaction of
certain conversion conditions (including conditions outside of our
control, such as market price or trading price) and proper
conversion of the Notes by a holder, we will be required to make
cash payments. Depending on the amount and timing of the payment
requirements, we may not have been able to meet all of the
obligations relating to Note conversions, which could have had a
material adverse effect.
Further, if we fail to pay interest on, carry out the fundamental
change repurchase obligations relating to, or make payments
(including cash) upon conversion of, the Notes, we will be in
default under the indenture governing the Notes. A default under
the indenture or the fundamental change itself could also lead to a
default under agreements governing our existing and future
indebtedness. If the repayment of indebtedness were to be
accelerated, including after any applicable notice or grace
periods, we may not, among other things, have sufficient funds to
repay indebtedness or pay interest on, carry out our repurchase
obligations relating to, or make cash payments upon conversion of,
the Notes.
Conversion of our convertible notes into common stock will
result in additional dilution to our stockholders.
Upon satisfaction of certain conversion conditions (including
conditions outside of our control, such as market price or trading
price) and proper conversion of the Notes by a holder, we may be
required to deliver shares of our common stock to a converting
holder. If additional shares of our common stock are issued due to
conversion of some or all of the outstanding Notes, the ownership
interests of existing stockholders will be diluted. Further, any
sales in the public market of any shares of common stock issued
upon conversion or hedging or arbitrage trading activity that
develops due to the potential conversion of the Notes could
adversely affect prevailing market prices of our common stock.
Competitive pressures could seriously harm our business,
financial condition and results of operations.
The nature and extent of consolidations and bankruptcies, which
often occur during or as a result of economic downturns, in markets
where we install our kiosks, particularly the supermarket and other
retailing industries, could adversely affect our operations,
including our competitive position, as the number of installations
and potential retail users of our kiosks could be significantly
reduced. See the risk factor below entitled, “Events outside of our
control, including the current economic environment, has negatively
affected, and could continue to negatively affect, consumers’ use
of our products and services.”
Our business can be adversely affected by severe weather,
natural disasters and other events beyond our control, such as
earthquakes, fires, power failures, telecommunication loss and
terrorist attacks.
A catastrophic event that
results in the destruction or disruption of any of our critical
business or information technology systems could harm our ability
to conduct normal business operations and our operating results.
While we have taken steps to protect the security of critical
business processes and systems and have established certain back-up
systems and disaster recovery procedures, any disruptions, whether
due to inadequate back-up or disaster recovery planning, failures
of information technology systems, interruptions in the
communications network, or other factors, could seriously harm our
business, financial condition and results of operations.
In addition, our operational and financial performance is a direct
reflection of consumer use of and the ability to operate and
service our kiosks used in our business. Severe weather, natural
disasters and other events beyond our control can, for extended
periods of time, significantly reduce consumer use of our products
and services as well as interrupt the ability of our employees and
third-party providers to operate and service our kiosks.
Our failure to meet consumer expectations with respect to
pricing our products and services may adversely affect our business
and results of operations.
Demand for our products and services may be sensitive to pricing
changes. We evaluate and update our pricing strategies from time to
time and changes we institute may have a significant impact on,
among other things, our revenue and net income (loss).
Risks Related to our Securities
Since our common stock is thinly traded it is more susceptible
to extreme rises or declines in price, and you may not be able to
sell your shares at or above the price paid.
Since our common stock is thinly traded, its trading price is
likely to be highly volatile and could be subject to extreme
fluctuations in response to various factors, many of which are
beyond our control, including:
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trading volume of our shares; |
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number of securities analysts,
market-makers and brokers following our common stock; |
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changes in, or failure to achieve,
financial estimates by securities analysts; |
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new products or services introduced
or announced by us or our competitors; |
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actual or anticipated variations in
quarterly operating results; |
|
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conditions or trends in our
business industries; |
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announcements by us of significant
contracts, acquisitions, strategic partnerships, joint ventures or
capital commitments; |
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additions or departures of key
personnel; |
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sales of our common stock; and |
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general stock market price and
volume fluctuations of publicly-traded, and particularly microcap,
companies. |
The stock markets often experience significant price and volume
changes that are not related to the operating performance of
individual companies, and because our common stock is thinly traded
it is particularly susceptible to such changes. These broad market
changes may cause the market price of our common stock to decline
regardless of how well we perform as a company. In addition,
securities class action litigation has often been initiated
following periods of volatility in the market price of a company’s
securities. A securities class action suit against us could result
in substantial legal fees, potential liabilities and the diversion
of management’s attention and resources from our business.
Moreover, our shares are currently quoted on the OTC Pink and,
further, are subject to the penny stock regulations. Price
fluctuations in such shares are particularly volatile and subject
to manipulation by market-makers, short-sellers and option
traders.
Our common stock may be considered “penny stock”, further
reducing its liquidity.
Our common stock may be considered “penny stock”, which will
further reduce the liquidity of our common stock. Our common stock
is likely to fall under the definition of “penny stock,” trading in
the common stock is limited because broker-dealers are required to
provide their customers with disclosure documents prior to allowing
them to participate in transactions involving the common stock.
These disclosure requirements are burdensome to broker-dealers and
may discourage them from allowing their customers to participate in
transactions involving our common stock, thereby further reducing
the liquidity of our common stock.
“Penny stocks” are equity securities with a market price below
$5.00 per share other than a security that is registered on a
national exchange, included for quotation on the NASDAQ system or
whose issuer has net tangible assets of more than $2,000,000 and
has been in continuous operation for greater than three years.
Issuers who have been in operation for less than three years must
have net tangible assets of at least $5,000,000.
Rules promulgated by the Securities and Exchange Commission under
Section 15(g) of the Exchange Act require broker-dealers engaging
in transactions in penny stocks, to first provide to their
customers a series of disclosures and documents including:
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A standardized risk disclosure
document identifying the risks inherent in investment in penny
stocks; |
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All compensation received by the
broker-dealer in connection with the transaction; and |
|
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Current quotation prices and other
relevant market data; and Monthly account statements reflecting the
fair market value of the securities. |
These rules also require that a broker-dealer obtain financial and
other information from a customer, determine that transactions in
penny stocks are suitable for such customer and deliver a written
statement to such customer setting forth the basis for this
determination.
Investors should not anticipate receiving cash dividends on our
common stock, thereby depriving investors of yield on their
investment.
We have never declared or paid any cash dividends or distributions
on our common stock and intend to retain future earnings, if any,
to support our operations and to finance expansion. Therefore, we
do not anticipate paying any cash dividends on the common stock in
the foreseeable future. Such failure to pay a dividend will deprive
investors of any yield on their investment in our common stock.
Our indemnification of officers and directors and limitations on
their liability could limit our recourse against them.
Our Certificate of Incorporation and Bylaws contain broad
indemnification and liability limiting provisions regarding our
officers, directors and employees, including the limitation of
liability for certain violations of fiduciary duties. Stockholders
therefore will have only limited recourse against these
individuals.
If we fail to implement and maintain proper and effective
internal controls and disclosure controls and procedures, our
ability to produce accurate and timely financial statements and
public reports could be impaired, which could adversely affect our
operating results, our ability to operate our business and
investors’ views of us.
Section 404 of the Sarbanes-Oxley Act of 2002 requires the Company
to evaluate the effectiveness of its internal control over
financial reporting as of the end of each year, and to include a
management report assessing the effectiveness of the Company’s
internal control over financial reporting in each Annual Report on
Form 10-K.
We have identified our disclosure controls and procedures were not
effective and that material weaknesses exists in our internal
control over financial reporting. The material weaknesses consist
of an insufficient complement of qualified accounting personnel and
controls associated with segregation of duties and ineffective
controls associated with identifying and accounting for complex and
non-routine transactions in accordance with U.S. generally accepted
accounting principles. Due to the material weaknesses in internal
control over financial reporting and disclosure controls and
procedures, there may be errors in the Company’s consolidated
financial statements and in the accompanying footnote disclosures
that could require restatements. Investors may lose confidence in
our reported financial information and disclosure, which could
negatively impact our stock price.
We do not expect that our internal control over financial reporting
will prevent all errors and all fraud. A control system, no matter
how well designed and operated, can provide only reasonable, not
absolute, assurance that the control system’s objectives will be
met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls
must be considered relative to their costs. Controls can be
circumvented by the individual acts of some persons, by collusion
of two or more people, or by management override of the controls.
Over time, controls may become inadequate because changes in
conditions or deterioration in the degree of compliance with
policies or procedures may occur. Because of the inherent
limitations in a cost-effective control system, misstatements due
to error or fraud may occur and not be detected.
We have additional common stock and preferred stock available
for issuance, which, if issued, could adversely affect the rights
of the holders of our common stock.
Our Certificate of Incorporation authorizes the issuance of up to
600,000,000 shares of our common stock and up to 10,000,000 shares
of preferred stock. The common stock and the preferred stock can be
issued by the Board of Directors, without stockholder approval. As
of September 24, 2021, there were 226,604,039 shares of our common
stock outstanding. Further, as of September 24, 2021, there were
convertible notes outstanding that can be converted into
approximately 113 million shares of our common stock.
ITEM 1B - UNRESOLVED
STAFF COMMENTS
None.
ITEM 2 - PROPERTIES
The Company’s mailing address is 3275 S. Jones Blvd, Suite 104, Las
Vegas, NV 89146.
ITEM 3 - LEGAL
PROCEEDINGS
There are no material legal proceedings to which the Company or any
of its subsidiaries is a party or of which any of their property is
the subject.
ITEM 4 - MINE SAFETY
DISCLOSURES
Not applicable
PART II
ITEM 5 - MARKET FOR
REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
The Company’s common stock has been quoted on a tier of the OTC
Markets Group, currently on the OTC Pink and previously on the OTC
QB, where it is quoted under the symbol “BOXS”. The Company’s
shares were quoted under the symbol UVND until February 28, 2018
when it applied for and was granted a change of symbol from “UVND”.
The Company has 600,000,000 shares of common stock authorized.
The last reported sales price of BoxScore’s common stock on the OTC
Pink on September 24, 2021 was $0.1.
Issued and Outstanding Shares
The Company’s certificate of incorporation authorizes 600,000,000
shares of common stock, par value $0.001, and 10,000,000 shares of
preferred stock, par value $0.001. As of September 24, 2021, the
Company had 226,604,039 shares of common stock, and no shares of
preferred stock, issued and outstanding.
Stockholders
As of September 24, 2021, the Company had approximately 980 record
holders of its common stock. This number does not include the
number of persons whose shares are in nominee or in “street name”
accounts through brokers.
Dividend Policy
The Company did not pay dividends during the years ended December
31, 2020 and 2019. BoxScore has never declared or paid any cash
dividends or distributions on our common stock and intend to retain
future earnings, if any, to support our operations and to finance
expansion. Therefore, it does not anticipate paying any cash
dividends on the common stock in the foreseeable future.
Stock Transfer Agent and Warrant Agent
The Company’s stock transfer agent is Corporate Stock Transfer
Inc., 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado
80209. BoxScore acts as its own warrant agent for its outstanding
warrants.
Recent Issuances of Unregistered Securities
None.
Shares Repurchased by the Registrant
The Company did not purchase or repurchase any of its securities in
the years ended December 31, 2020 and 2019.
Securities Authorized for Issuance under Equity Compensation
Plans
On July 22, 2011, the Board of Directors of the Company approved
the Company’s 2011 Equity Incentive Plan (the “Plan”) and on July
26, 2011, stockholders holding a majority of shares of the Company
approved, by written consent, the Plan and the issuance under the
Plan of 5,000,000 shares. On November 16, 2017, the Board of
Directors approved an increase of 10,000,000 shares to be made
available for issuance under the Plan. Accordingly, the total
number of shares of common stock available for issuance under the
Plan is 15,000,000 shares. Awards may be granted to employees,
officers, directors, consultants, agents, advisors and independent
contractors of the Company and its related companies. Such options
may be designated at the time of grant as either incentive stock
options or nonqualified stock options. Stock based compensation
includes expense charges related to all stock-based awards. Such
awards include options, warrants and stock grants. Generally, the
Company issues stock options that vest over three years and expire
in 5 to 10 years.
The Company records share based payments under the provisions of
FASB ASC 718. Stock based compensation expense is recognized over
the requisite service period based on the grant date fair value of
the awards. The fair value of each option grant is estimated on the
date of grant using the Black-Scholes option-pricing model on
certain assumptions. The Company estimated the expected volatility
based on data used by peer group of public companies. The expected
term was estimated using the simplified method. The risk-free
interest rate assumption was determined using the equivalent U.S.
Treasury bonds yield over the expected term. The Company has never
paid any cash dividends and does not anticipate paying any cash
dividends in the foreseeable future. Therefore, the Company assumed
an expected dividend yield of zero.
The following table sets forth information as of December 31, 2020
regarding equity compensation plans under which the equity
securities are authorized for issuance.
Equity Plan Compensation Information
Plan Category |
|
Number of
securities
to be
issued upon
exercise of
outstanding
options, warrants
and rights |
|
|
Weighted average
exercise
price of
outstanding
options, warrants
and rights |
|
|
Number of
securities
remaining
available for
future issuance
under equity
compensation
Plans |
|
Equity
compensation plans approved by securities
holders (1) |
|
|
2,500 |
|
|
$ |
60 |
|
|
|
14,997,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
2,500 |
|
|
|
|
|
|
|
14,997,500 |
|
(1) |
Pursuant
to the 2011 Equity Incentive Plan, as amended. |
ITEM 6 - SELECTED
FINANCIAL DATA
This item is not applicable to us as a smaller reporting
company.
ITEM
7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements contained herein constitute “forward-looking
statements”. Except for the historical information contained
herein, this report contains forward-looking statements (identified
by the words “estimate,” “project,” “anticipate,” “plan,” “expect,”
“intend,” “believe,” “hope,” “strategy” and similar expressions),
which are based on our current expectations and speak only as of
the date made. These forward-looking statements are subject to
various risks, uncertainties and factors that could cause actual
results to differ materially from the results anticipated in the
forward-looking statements, including, without limitation, those
discussed under Part I, Item 1A “Risk Factors” in this Annual
Report, and those described herein that could cause actual results
to differ materially from the results anticipated in the
forward-looking statements, and the following:
|
● |
Our
limited operating history with our business model; |
|
|
|
|
● |
The
low cash balance and limited financing currently available to us.
We may in the near future have a number of obligations that we will
be unable to meet without generating additional income or raising
additional capital; |
|
|
|
|
● |
Further
cost reductions or curtailment in future operations due to our low
cash balance and negative cash flow; |
|
|
|
|
● |
Our
ability to effect a financing transaction to fund our operations
which could adversely affect the value of our stock; |
|
|
|
|
● |
Our
limited cash resources may not be sufficient to fund continuing
losses from operations; |
|
|
|
|
● |
The
failure of our products and services to achieve market acceptance;
and |
|
|
|
|
● |
The
inability to compete in our market, especially against established
industry competitors with greater market presence and financial
resources. |
The following discussion and analysis provides information that our
management believes is relevant to an assessment and understanding
of our results of operations and financial condition, and should be
read in conjunction with the consolidated financial statements and
footnotes that appear elsewhere in this report.
Overview
BoxScore Brands, Inc. (formerly U-Vend Inc.) (the “Company”)
formerly developed, marketed and distributed various self-serve
electronic kiosks and mall/airport co-branded islands throughout
North America. Due to the nationwide shutdown related to the
COVID-19 pandemic, the Company spent a portion of 2020
restructuring and retiring certain corporate debt and obligations.
The Company focused on implementing a new operational direction.
After a thorough evaluation process, the Company found that there
is a substantial long-term demand for specific commodities relating
to battery and new energy technologies. This presents a timely and
unique opportunity based on rising demand characteristics. By
capitalizing on market trends and current sustainable energy
government mandates and environmental, social, and corporate
governance (ESG) initiatives, we will focus on bringing a
vertically-integrated solution to market.
Results of Operations
For the Year Ended December 31, 2020 Compared to Year Ended
December 31, 2019
Revenue
For the year ended December 31, 2020, the Company had no revenue,
compared to revenues of $80,233 during the year ended December 31,
2019. The decrease in
revenue was due to asset sale (see note 1), resulting in no sales
activity during the year ended December 31, 2020.
Cost of Goods Sold
For the year ended December 31, 2020, the Company had no cost of
goods sold compared to cost of goods sold $88,965 during the year
ended December 31, 2019. The Company’s gross margin during the year
ended December 31, 2019 was (11)%, The decrease in 2020 was because
all inventory was liquidated during the quarter ended March 31,
2019 prior to the sale of the MiniMelts assets (see Note 1).
Selling Expenses
For the year ended December 31, 2020, the Company had no selling
expenses, compared to $143,323 during the year ended December 31,
2019. During the year ended December 31, 2019, the Company expensed
$115,000 for sponsorship and media commitment fees in connection
with the Major League Baseball Properties, Inc. During the year
ended December 31, 2020, the Company had no sales and there were no
fees recorded under the agreement with MLB as it expired on
December 31, 2019.
General and Administrative Expenses
General and administrative expenses for the year ended December 31,
2020 were $245,813, a decrease of $575,309 or 70%, compared to
$821,122 for the year ended December 31, 2019. The decrease in
general and administrative expenses was mainly due to decrease in in stock compensation
expenses and professional fees as a result of our reduction in
operations as we contemplated our business
restructuring.
Gain on Settlement of Liability
During the year ended December 31, 2019, the Company recorded a
gain on settlement of liabilities of $156,709. During the year
ended December 31, 2020, the Company recorded a gain on settlement
of liabilities of $11,000.
Loss on Asset Impairment
During the year ended December 31, 2019, the Company recorded asset
impairment charges of $192,705. No such impairments were noted
during the year ended December 31, 2020.
Gain on Fair Value of Derivative Liabilities
During the year ended December 31, 2019, the Company recognized a
gain on the change in fair value of derivative liabilities in the
amount $34,986, as compared to a loss on the change in fair value
of derivative liabilities of $3,069,702 during the year ended
December 31, 2020.
Amortization of Debt Discount and Deferred Financing
Costs
Amortization of debt discount and deferred financing costs for the
year ended December 31, 2019 were $171,513, compared to $4,432 for
the year ended December 31, 2020. The majority of the debt discount
was fully amortized at December 31, 2019, leaving only a minimal
amount remaining to be amortized during 2020. At December 31, 2020,
there was $0 in unamortized debt discount.
Interest Expense
Interest expense for the year ended December 31, 2019 was $622,797,
as compared to $611,294 during the year ended December 31,
2020.
Gain on Sale of Asset
During the years ended December 31, 2020 and 2019, the Company sold
certain equipment and recorded $12,074 and $27,465, respectively,
in loss on sale of assets.
Net Loss
As a result of the foregoing, the net loss for the year ended
December 31, 2019 was $1,896,150 as compared to $3,932,313 for the
year ended December 31, 2020.
Liquidity and Capital Resources
The accompanying consolidated financial statements have been
prepared on a going concern basis. The Company had net loss of
$3,932,313 during the year ended December 31, 2020, has accumulated
losses totaling $18,130,455, and has a working capital deficit of
$8,117,241 at December 31, 2020. These factors, among others,
indicate that the Company may be unable to continue as a going
concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
The Company will need to raise additional financing in order to
fund their operations for the next 12 months, and to allow the
Company to continue the development of its business plans and
satisfy its obligations on a timely basis. Should additional
financing not be available, the Company will have to negotiate with
its lenders to extend the repayment dates of its indebtedness.
There can be no assurance that the Company will be able to
successfully restructure its debt obligations in the event it fails
to obtain additional financing.
Operating Activities
During the year ended December 31, 2020, the Company used $40,394
of cash in operating activities primarily as a result of the
Company’s net loss of $3,932,313, offset by change in fair value of
derivative liabilities of $3,069,702, loss on sale of asset of
$12,074, share-based compensation of $5,772, $4,432 in amortization
and accretion of debt discount, gain on settlement of liabilities
of $11,000, and net changes in operating assets and liabilities of
$810,939.
During the year ended December 31, 2019, the Company used $751,637
of cash in operating activities primarily as a result of the
Company’s net loss of $1,896,150, offset by gain on change in fair
value of derivative liabilities of $34,986, loss on sale of asset
of $27,465, loss on asset impairment of $192,705, share-based
compensation of $285,379, $100,188 in depreciation expense,
$171,513 in amortization and accretion of debt discount, loss on
default of convertible notes of $42,625, gain of settlement of debt
$156,709 and net changes in operating assets and liabilities of
$516,333.
Investing Activities
During the year ended December 31, 2020, investing activities
provided $18,000 in cash in proceeds from sale of property and
equipment.
During the year ended December 31, 2019, investing activities
provided $350,000 in cash in proceeds from sale of property and
equipment. The Company does not anticipate any investing purchasing
activities in the near future.
Financing Activities
During the year ended December 31, 2020, financing activities
provided $45,980, resulting from $76,500 in proceeds from
convertible notes, $15,000 repayments of promissory notes and
$15,520 in repayments of capital lease obligations.
During the year ended December 31, 2019, financing activities
provided $338,559, resulting from $270,000 in proceeds from
promissory notes and $619,303 in proceeds from convertible notes.
The Company used $296,508 in repayments of promissory notes,
$64,300 in repayment of convertible notes, and $189,936 in
repayments of capital lease obligations.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that
have, or are reasonably likely to have, an effect on its financial
condition, financial statements, revenues or expenses.
Inflation
Although the Company’s operations are influenced by general
economic conditions, it does not believe that inflation had a
material effect on its results of operations during the last two
years as it is generally able to pass the increase in material and
labor costs to its customers or absorb them as it improves the
efficiency of its operations.
Critical Accounting Policies
The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the
United States requires management to make judgments, assumptions
and estimates that affect the amounts reported in our consolidated
financial statements and accompanying notes. The consolidated
financial statements as of December 31, 2020 describe the
significant accounting policies and methods used in the preparation
of the consolidated financial statements. Actual results could
differ from those estimates and be based on events different from
those assumptions. Future events and their effects cannot be
predicted with certainty; estimating therefore, requires the
exercise of judgment. Thus, accounting estimates change as new
events occur, as more experience is acquired or as additional
information is obtained. The following critical accounting policies
are impacted significantly by judgments, assumptions and estimates
used in the preparation of our consolidated financial
statements:
Fair Value of Financial Instruments
For certain of the Company’s financial instruments, including cash
and equivalents, restricted cash, accounts receivable, accounts
payable, accrued liabilities and short-term debt, the carrying
amounts approximate their fair values due to their short
maturities. ASC Topic 820, “Fair Value Measurements and
Disclosures,” requires disclosure of the fair value of financial
instruments held by the Company. ASC Topic 825, “Financial
Instruments,” defines fair value, and establishes a three-level
valuation hierarchy for disclosures of fair value measurement that
enhances disclosure requirements for fair value measures. The three
levels of valuation hierarchy are defined as follows:
|
● |
Level
1: Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or
liabilities. The Company considers active markets as those in which
transactions for the assets or liabilities occur in sufficient
frequency and volume to provide pricing information on an ongoing
basis |
|
● |
Level
2: Quoted prices in markets that are not active, or inputs which
are observable, either directly or indirectly, for substantially
the full term of the asset or liability. This category includes
those derivative instruments that the Company values using
observable market data. Substantially all of these inputs are
observable in the marketplace throughout the term of the derivative
instruments, can be derived from observable data, or supported by
observable levels at which transactions are executed in the
marketplace. |
|
● |
Level
3: Measured based on prices or valuation models that require inputs
that are both significant to the fair value measurement and less
observable from objective sources (i.e. supported by little or no
market activity). Level 3 instruments include derivative warrant
instruments. The Company does not have sufficient corroborating
evidence to support classifying these assets and liabilities as
Level 1 or Level 2. |
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if
such instruments are derivatives or contain features that qualify
as embedded derivatives. Certain warrants issued by the Company
contain terms that result in the warrants being classified as
derivative liabilities for accounting purposes. For derivative
financial instruments that are accounted for as liabilities, the
derivative instrument is initially recorded at its fair market
value and then is revalued at each reporting date, with changes in
fair value reported in the consolidated statement of operations.
The Company does not use derivative instruments to hedge exposures
to cash flow, market or foreign currency risks.
ITEM 7A - QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8 - FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Index
to Consolidated Financial Statements
BOXSCORE
BRANDS, INC.
December
31, 2020 and 2019

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of
BoxScore Brands, Inc. (Formerly U-Vend, Inc. and Subsidiaries)
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of
BoxScore Brands, Inc. (the Company) (Formerly U-Vend Inc, Inc. and
Subsidiaries) as of December 31, 2019 and 2018, the related
consolidated statements of operations, changes in stockholders'
deficit and cash flows for the years then ended, and the related
notes to the consolidated financial statements (collectively, the
financial statements). In our opinion, the financial statements
present fairly, in all material respects, the financial position of
the Company as of December 31, 2019 and 2018, and the results of
its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the
United States of America.
Substantial Doubt About the Company’s Ability to Continue as a
Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 3 to the consolidated financial statements, the Company’s has
suffered recurring losses from operations since inception and, as
of December 31, 2019, has negative working capital and a
stockholders’ deficit. This raises substantial doubt about the
Company's ability to continue as a going concern. Management's
plans in regard to these matters also are described in Note 3. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s 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 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 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 Company's 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 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 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.
/s/ Freed Maxick CPAs, P.C.
We have served as the Company's auditor since 2009.
Buffalo, New York
May 12, 2021
Report of Independent
Registered Public Accounting Firm
To the Board of Directors and Stockholders
BoxScore Brands, Inc.
Las Vegas, NV
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of
BoxScore Brands, Inc. (the Company) as of December 31, 2020, and
the related consolidated statements of operations, changes in
stockholders’ deficit, and cash flows for the year then ended, and
the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the
Company as of December 31, 2020, and the results of its operations
and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of
America.
Going Concern Considerations
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has
suffered recurring losses since inception and has not achieved
profitable operations, which raise substantial doubt about its
ability to continue as a going concern. Management’s plans in
regard to these matters are described in Note 3. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audit. 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 audit 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 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 audit, 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 Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of
material misstatement of the 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 financial
statements. Our audit 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 audit provides a reasonable basis
for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising
from the current period audit of the financial statements that was
communicated or required to be communicated to the audit committee
and that: (1) relates to accounts or disclosures that are material
to the 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
financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or
disclosures to which it relates.
Going Concern – Disclosure
The financial statements of the Company are prepared on a going
concern basis, which assumes that the Company will continue in
operation for the foreseeable future and, accordingly, will be able
to realize its assets and discharge its liabilities in the normal
course of operations. As noted in “Going Concern Considerations”
above, the Company has a history of recurring net losses, a
significant accumulated deficit and currently has net working
capital deficit. At December 31, 2020, the Company had an
accumulated deficit of $18,130,455. The Company has contractual
obligations, such as commitments for repayments of accounts
payable, accrued liabilities, notes payable, convertible notes
payable, and amounts due under capital lease (collectively
“obligations”). Currently, management’s forecasts and related
assumptions illustrate their ability to meet the obligations
through management of expenditures, implementation of a new
operational direction, obtaining additional debt financing, and
issuance of capital stock for additional funding to meet its
operating needs. Should there be constraints on the ability to
implement its new business operations or access financing through
stock issuances, the Company will continue to manage cash outflows
and meet the obligations through debt financing.
We identified management’s assessment of the Company’s ability to
continue as a going concern as a critical audit matter. Management
made judgments to conclude that it is probable that the Company’s
plans will be effectively implemented and will provide the
necessary cash flows to fund the Company’s obligations as they
become due. Specifically, the judgments with the highest degree of
impact and subjectivity in determining it is probable that the
Company’s plans will be effectively implemented include its ability
to manage expenditures, its ability to access funding from the
capital market, its ability to obtain debt financing, and the
successful implementation of its new operational direction.
Auditing the judgments made by management required a high degree of
auditor judgment and an increased extent of audit effort.
Addressing the matter involved performing procedures and evaluating
audit evidence in connection with forming our overall opinion on
the financial statements. These procedures included the following,
among others: (i) evaluating the probability that the Company will
be able to access funding from the capital market; (ii) evaluating
the probability that the Company will be able to manage
expenditures (iii) evaluating the probability that the Company will
be able to obtain debt financing, and (iv) evaluating the planned
implementation of its new business operational direction.
/s/ Pinnacle Accountancy Group of Utah
We have served as the Company’s auditor since 2021.
Pinnacle Accountancy Group of Utah
(a dba of Heaton & Company, PLLC)
Farmington, Utah
September 27, 2021
BOXSCORE BRANDS,
INC.
Consolidated Balance Sheets
|
|
December 31, |
|
|
December 31, |
|
Assets |
|
2020 |
|
|
2019 |
|
Current assets |
|
|
|
|
|
|
Cash |
|
$ |
23,586 |
|
|
|
- |
|
Accounts
receivable |
|
|
- |
|
|
|
1,530 |
|
Prepaid expenses and other assets |
|
|
9,789 |
|
|
|
7,789 |
|
Total current
assets |
|
|
33,375 |
|
|
|
9,319 |
|
Noncurrent assets |
|
|
|
|
|
|
|
|
Property and equipment (net) |
|
|
61,600 |
|
|
|
91,673 |
|
Total assets |
|
$ |
94,975 |
|
|
$ |
100,992 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Deficit |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
314,533 |
|
|
$ |
278,188 |
|
Accrued
expenses |
|
|
390,398 |
|
|
|
399,551 |
|
Accrued
interest |
|
|
1,720,766 |
|
|
|
1,205,325 |
|
Other amounts
due to related parties |
|
|
- |
|
|
|
67,022 |
|
Senior
convertible notes, net of discount |
|
|
402,704 |
|
|
|
443,804 |
|
Promissory
notes payable |
|
|
406,081 |
|
|
|
520,537 |
|
Convertible
notes payable, net of discount |
|
|
4,769,400 |
|
|
|
3,867,316 |
|
Current capital
lease obligation |
|
|
146,734 |
|
|
|
104,379 |
|
Total current
liabilities |
|
|
8,150,616 |
|
|
|
6,886,122 |
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities: |
|
|
|
|
|
|
|
|
Promissory
notes payable |
|
|
118,250 |
|
|
|
- |
|
Convertible
notes payable, net of discount |
|
|
481,350 |
|
|
|
1,089,699 |
|
Capital lease
obligation |
|
|
34,890 |
|
|
|
76,471 |
|
Derivative
liabilities |
|
|
3,083,255 |
|
|
|
13,553 |
|
Total noncurrent
liabilities |
|
|
3,717,745 |
|
|
|
1,179,723 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
11,868,361 |
|
|
|
8,065,845 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit |
|
|
|
|
|
|
|
|
Common stock, $.001 par value, 600,000,000 shares authorized,
75,828,064 and 37,717,755 shares issued and outstanding,
respectively |
|
|
75,828 |
|
|
|
37,716 |
|
Additional paid
in capital |
|
|
6,281,241 |
|
|
|
6,195,573 |
|
Accumulated deficit |
|
|
(18,130,455 |
) |
|
|
(14,198,142 |
) |
Total stockholders’ deficit |
|
|
(11,773,386 |
) |
|
|
(7,964,853 |
) |
Total
liabilities and stockholders’ deficit |
|
$ |
94,975 |
|
|
$ |
100,992 |
|
The accompanying notes are an integral part of these consolidated
financial statements.
BOXSCORE BRANDS,
INC.
Consolidated Statements of
Operations
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
- |
|
|
$ |
80,233 |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
- |
|
|
|
88,965 |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
- |
|
|
|
(8,732 |
) |
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
Selling |
|
|
- |
|
|
|
143,323 |
|
General and
administrative |
|
|
245,811 |
|
|
|
821,122 |
|
Asset
impairment |
|
|
- |
|
|
|
192,705 |
|
Depreciation |
|
|
- |
|
|
|
100,188 |
|
Total operating expenses |
|
|
245,811 |
|
|
|
1,257,338 |
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
|
(245,811 |
) |
|
|
(1,266,070 |
) |
|
|
|
|
|
|
|
|
|
Other Expenses
(Income) |
|
|
|
|
|
|
|
|
(Gain) loss on
change in fair value of derivative liabilities |
|
|
3,069,702 |
|
|
|
(34,986 |
) |
Gain on
settlement of liabilities |
|
|
(11,000 |
) |
|
|
(156,709 |
) |
Loss on sale of
assets |
|
|
12,074 |
|
|
|
27,465 |
|
Amortization
and accretion of debt discount and deferred financing costs |
|
|
4,432 |
|
|
|
171,513 |
|
Interest expense |
|
|
611,294 |
|
|
|
622,797 |
|
Total other expenses (income) |
|
|
3,686,502 |
|
|
|
630,080 |
|
|
|
|
|
|
|
|
|
|
Income (loss)
from operations before income taxes |
|
|
(3,932,313 |
) |
|
|
(1,896,150 |
) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net
Loss |
|
$ |
(3,932,313 |
) |
|
$ |
(1,896,150 |
) |
|
|
|
|
|
|
|
|
|
Net
loss per share – basic and diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
Weighted
average common shares – basic and diluted |
|
|
41,943,712 |
|
|
|
36,369,365 |
|
The accompanying notes are an integral part of these consolidated
financial statements.
BOXSCORE BRANDS,
INC.
Consolidated Statements of
Changes in Stockholders’ Deficit
|
|
Common stock |
|
|
Additional Paid in |
|
|
Accumulated |
|
|
Total
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
Balance as of December 31, 2018 |
|
|
32,176,659 |
|
|
$ |
32,177 |
|
|
$ |
5,692,058 |
|
|
$ |
(12,301,992 |
) |
|
$ |
(6,577,757 |
) |
Shares issued for services |
|
|
3,441,096 |
|
|
|
3,439 |
|
|
|
281,940 |
|
|
|
- |
|
|
|
285,379 |
|
Shares issued for note conversion |
|
|
2,100,000 |
|
|
|
2,100 |
|
|
|
102,900 |
|
|
|
- |
|
|
|
105,000 |
|
Reclassification of warrant liability to equity related to adoption
of ASU 2017-11 |
|
|
- |
|
|
|
- |
|
|
|
118,675 |
|
|
|
- |
|
|
|
118,675 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,896,150 |
) |
|
|
(1,896,150 |
) |
Balance as of
December 31, 2019 |
|
|
37,717,755 |
|
|
$ |
37,716 |
|
|
$ |
6,195,573 |
|
|
$ |
(14,198,142 |
) |
|
$ |
(7,964,853 |
) |
Shares issued for note conversion |
|
|
38,110,309 |
|
|
|
38,112 |
|
|
|
79,896 |
|
|
|
- |
|
|
|
118,008 |
|
Fair value of warrants |
|
|
- |
|
|
|
- |
|
|
|
5,772 |
|
|
|
- |
|
|
|
5,772 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,932,313 |
) |
|
|
(3,932,313 |
) |
Balance as of
December 31, 2020 |
|
|
75,828,064 |
|
|
$ |
75,828 |
|
|
$ |
6,281,241 |
|
|
$ |
(18,130,455 |
) |
|
$ |
(11,773,386 |
) |
The accompanying notes are an integral part of these consolidated
financial statements.
BOXSCORE BRANDS,
INC.
Consolidated Statements of
Cash Flows
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Cash Flows from
Operating Activities |
|
|
|
|
|
|
Net
loss |
|
$ |
(3,932,313 |
) |
|
$ |
(1,896,150 |
) |
Adjustments to
reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Stock based
compensation |
|
|
5,772 |
|
|
|
285,379 |
|
Depreciation |
|
|
- |
|
|
|
100,188 |
|
Amortization and
accretion of debt discount and deferred financing costs |
|
|
4,432 |
|
|
|
171,513 |
|
Gain on
settlement of liabilities |
|
|
(11,000 |
) |
|
|
(156,709 |
) |
Loss on default
of convertible notes |
|
|
- |
|
|
|
42,625 |
|
(Gain) loss on
change in fair value of derivative liabilities |
|
|
3,069,702 |
|
|
|
(34,986 |
) |
Loss on sale of
asset |
|
|
12,074 |
|
|
|
27,465 |
|
Loss on asset
impairment |
|
|
- |
|
|
|
192,705 |
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
1,530 |
|
|
|
24,122 |
|
Inventory |
|
|
- |
|
|
|
59,135 |
|
Prepaid expenses
and other assets |
|
|
(2,000 |
) |
|
|
23,221 |
|
Accounts payable
and accrued expenses |
|
|
283,432 |
|
|
|
(144,897 |
) |
Accrued
interest |
|
|
594,999 |
|
|
|
455,600 |
|
NHL and MLB
sponsorship liability |
|
|
- |
|
|
|
115,000 |
|
Amount due to
officers |
|
|
(67,022 |
) |
|
|
(15,848 |
) |
Net cash used
in operating activities |
|
|
(40,394 |
) |
|
|
(751,637 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities |
|
|
|
|
|
|
|
|
Proceeds from sale of property and equipment |
|
|
18,000 |
|
|
|
350,000 |
|
Net cash provided by investing activities |
|
|
18,000 |
|
|
|
350,000 |
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from
promissory notes |
|
|
- |
|
|
|
270,000 |
|
Proceeds from
convertible notes |
|
|
76,500 |
|
|
|
619,303 |
|
Repayments of
capital lease obligations |
|
|
(15,520 |
) |
|
|
(189,936 |
) |
Repayment of
convertible note |
|
|
- |
|
|
|
(64,300 |
) |
Repayments of
promissory notes |
|
|
(15,000 |
) |
|
|
(296,508 |
) |
Net cash
provided by financing activities |
|
|
45,980 |
|
|
|
338,559 |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
|
23,586 |
|
|
|
(63,078 |
) |
|
|
|
|
|
|
|
|
|
Cash, beginning of period |
|
|
- |
|
|
|
63,078 |
|
|
|
|
|
|
|
|
|
|
Cash, end of
period |
|
$ |
23,586 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
- |
|
|
$ |
- |
|
Income taxes
paid |
|
$ |
- |
|
|
$ |
- |
|
Supplemental disclosures of non-cash
investing and financing activity: |
|
|
|
|
|
|
|
|
Accounts payable and accrued payable exchanged for convertible
note |
|
$ |
228,947 |
|
|
$ |
178,572 |
|
Note
payable converted to equity |
|
$ |
118,008 |
|
|
$ |
105,000 |
|
Promissory note converted into convertible notes |
|
$ |
- |
|
|
$ |
248,485 |
|
Accrued interest exchanged into convertible notes |
|
$ |
- |
|
|
$ |
73,339 |
|
The accompanying notes are an integral part of these consolidated
financial statements.
BOXSCORE BRANDS,
INC.
Notes
to Consolidated Financial Statements
For the years ended December 31, 2020 and 2019
Note 1 – Nature of the Business
BoxScore
Brands, Inc. (formerly U-Vend Inc.) (the “Company”) formerly
developed, marketed and distributed various self-serve electronic
kiosks and mall/airport co-branded islands throughout North
America. Due to the nationwide shutdown related to the COVID-19
pandemic, the Company spent a portion of 2020 restructuring and
retiring certain corporate debt and obligations. The Company
focused on implementing a new operational direction. After a
thorough evaluation process, the Company found that there is a
substantial long-term demand for specific commodities relating to
battery and new energy technologies. This presents a timely and
unique opportunity based on rising demand characteristics. By
capitalizing on market trends and current sustainable energy
government mandates and environmental, social, and corporate
governance (ESG) initiatives, we will focus on bringing a
vertically-integrated solution to market.
Asset
Sale
On
March 18, 2019, the Company approved an asset sale of the assets
related to the legacy MiniMelts brand for $350,000 in cash, which
was approved by a majority of its stockholders. These MiniMelts
assets generated 100% of the revenue reported during the year ended
December 31, 2019. During the year ended December 31, 2018,
MiniMelts sales accounted for approximately $1,100,000, or 85%, of
the revenue reported during that period. Part of the proceeds from
the sale was used to retire certain lease obligations as well as
for general operating purposes.
Note 2 – Summary of Significant Accounting
Policies
Basis
of Presentation and Principles of Consolidation
The
accompanying consolidated financial statements have been prepared
in accordance with U.S. generally accepted accounting principles
(GAAP). The Company’s fiscal year ends is December 31.
The
accompanying consolidated financial statements include the accounts
of BoxScore Brands, Inc. and the operations of its wholly-owned
subsidiaries U-Vend America, Inc., U-Vend Canada, Inc. and U-Vend
USA LLC. All intercompany balances and transactions have been
eliminated in consolidation.
Use
of Estimates
The
preparation of consolidated financial statements in conformity with
GAAP requires management to make estimates and assumptions that
affect amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates and be based on events different from those assumptions.
Future events and their effects cannot be predicted with certainty;
estimating, therefore, requires the exercise of judgment. Thus,
accounting estimates change as new events occur, as more experience
is acquired, or as additional information is obtained.
Property
and Equipment
Property
and equipment are stated at cost less depreciation. Depreciation is
provided using the straight-line method over the estimated useful
life of the assets. Equipment has estimated useful lives between
three and seven years. Expenditures for repairs and maintenance are
charged to expense as incurred.
Impairment
of Long-lived Assets
Long-lived
assets, such as property and equipment and intangible assets
subject to amortization are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an
asset group may not be recoverable. Recoverability of assets to be
held and used is measured by comparing the carrying amount to the
estimated future undiscounted cash flows expected to be generated
by the asset group. If it is determined that an asset group is not
recoverable, an impairment charge is recognized for the amount by
which the carrying amount of the asset group exceeds its fair
value.
Earnings
(Loss) Per Share
The
Company presents basic and diluted earnings per share in accordance
with ASC 260, “Earnings Per Share.” Basic earnings per share
reflect the actual weighted average of shares issued and
outstanding during the period. Diluted earnings per share are
computed including the number of additional shares that would have
been outstanding if dilutive potential shares had been issued. In a
loss period, the calculation for basic and diluted earnings per
share is considered to be the same, as the impact of potential
common shares is anti-dilutive.
As of
December 31, 2020 and 2019, respectively, there were approximately
166 million and 160 million shares, respectively, potentially
issuable under convertible debt agreements, options, and warrants
that could dilute basic earnings per share in the future that were
excluded from the calculation of diluted earnings per share because
their inclusion would have been anti-dilutive to the Company’s
losses during the periods presented.
Derivative
Financial Instruments
The
Company evaluates its financial instruments to determine if such
instruments are derivatives or contain features that qualify as
embedded derivatives. Certain warrants issued by the Company
contain terms that result in the warrants being classified as
derivative liabilities for accounting purposes. For derivative
financial instruments that are accounted for as liabilities, the
derivative instrument is initially recorded at its fair market
value and then is revalued at each reporting date, with changes in
fair value reported in the consolidated statement of operations.
The Company does not use derivative instruments to hedge exposures
to cash flow, market or foreign currency risks.
Fair
Value of Financial Instruments
For
certain of the Company’s financial instruments, including cash,
accounts receivable, accounts payable, accrued liabilities and
short-term debt, the carrying amounts approximate their fair values
due to their short maturities. ASC Topic 820, “Fair Value
Measurements and Disclosures,” requires disclosure of the fair
value of financial instruments held by the Company. ASC Topic 825,
“Financial Instruments,” defines fair value, and establishes a
three-level valuation hierarchy for disclosures of fair value
measurement that enhances disclosure requirements for fair value
measures. The three levels of valuation hierarchy are defined as
follows:
|
● |
Level
1: Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or
liabilities. The Company considers active markets as those in which
transactions for the assets or liabilities occur in sufficient
frequency and volume to provide pricing information on an ongoing
basis |
|
● |
Level
2: Quoted prices in markets that are not active, or inputs which
are observable, either directly or indirectly, for substantially
the full term of the asset or liability. This category includes
those derivative instruments that the Company values using
observable market data. Substantially all of these inputs are
observable in the marketplace throughout the term of the derivative
instruments, can be derived from observable data, or supported by
observable levels at which transactions are executed in the
marketplace. |
|
● |
Level
3: Measured based on prices or valuation models that require inputs
that are both significant to the fair value measurement and less
observable from objective sources (i.e. supported by little or no
market activity). Level 3 instruments include derivative warrant
instruments. The Company does not have sufficient corroborating
evidence to support classifying these assets and liabilities as
Level 1 or Level 2. |
Certain
of the Company’s debt and equity instruments include embedded
derivatives that require bifurcation from the host contract under
the provisions of ASC 815-40, “Derivatives and Hedging.” Certain
warrants were issued between June 2013 and December 2014 were
derivative liabilities outside the exception of applying ASU
2017-11, “Accounting for Certain Financial Instruments with Down
Round Features.” When determining whether certain financial
instruments should be classified as liabilities or equity
instruments, a down round feature no longer precludes equity
classification when assessing whether the instrument is indexed to
an entity’s own stock. On January 1, 2019, the Company adopted ASU
2017-11 on its consolidated financial statements and reclassified
$118,675 as equity from derivative liabilities. The estimated fair
value of the derivative warrant instruments was calculated using a
Black Scholes valuation model.
The
following table sets forth by level within the fair value hierarchy
our financial assets and liabilities that were accounted for at
fair value on a recurring basis as December 31, 2020 and
2019:
|
|
Carrying |
|
|
Fair
Value Measurement at |
|
|
|
Value |
|
|
December 31, 2020 |
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities,
debt and equity instruments |
|
$ |
3,083,255 |
|
|
|
— |
|
|
|
— |
|
|
$ |
3,083,255 |
|
|
|
Carrying |
|
|
Fair
Value Measurement at |
|
|
|
Value |
|
|
December 31, 2019 |
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities,
debt and equity instruments |
|
$ |
13,553 |
|
|
|
— |
|
|
|
— |
|
|
$ |
13,553 |
|
Stock-Based
Compensation
The
Company accounts for stock-based compensation in accordance with
ASC 718, “Compensation – Stock Compensation,” that requires all
stock-based awards granted to employees, directors, and
non-employees to be measured at grant date fair value of the equity
instrument issued, and recognized as expense. Stock-based
compensation expense is recognized on a straight-line basis over
the requisite service period of the award, which is generally
equivalent to the vesting period. The fair value of each stock
option granted is estimated using the Black-Scholes option pricing
model. The measurement date for the non-forfeitable awards to
nonemployees that vest immediately is the date the award is
issued.
Gain
on Settlement of Liabilities
During
the year ended December 31, 2020 creditors forgave aggregate amount
of $11,000 associated with accrued expenses. During the year ended
December 31, 2019 creditors forgave aggregate amount of $156,709,
of which approximately $64,000 were associated accrued expenses,
$45,000 related to conversion of approximately $105,000 of accounts
payable to a $60,000 convertible note, and $47,000 was connected to
forgiveness of accounts payable.
Other
Amounts due to Related Parties
Amounts
due from related parties represent past amounts owed for
compensation and operating expenses paid by the related party on
behalf of the Company. During the year ended December 31, 2019, the
Company reclassified approximately $185,000 from due to related
parties to accrued expenses, as a result of the individual no
longer being an officer of the Company during 2019, and paid net
$63,370 to related parties, resulting in a balance of $67,022 owed
at December 31, 2019. During the year ended December 31, 2020, this
amount was reclassed to accrued expenses.
Revenue
Recognition
Revenue
is recognized at the time each vending transaction occurs, the
payment method is approved, and the product is disbursed from the
machine. Wholesale revenue, including revenue earned under
contracts with major sports organizations, are recognized at the
time the products are delivered to the customer based on the
agreement with the customer. We recognize revenue under ASC 606,
Revenue from Contracts with Customers (“ASC 606”), the core
principle of which is that an entity should recognize revenue to
depict the transfer of control for promised goods or services to
customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or
services. In applying the revenue recognition principles, an entity
is required to identify the contract(s) with a customer, identify
the performance obligations, determine the transaction price,
allocate the transaction price to the performance obligations and
recognize revenue as the performance obligations are satisfied
(i.e., either over time or at a point in time). ASC 606 further
requires that companies disclose sufficient information to enable
readers of financial statements to understand the nature, amount,
timing and uncertainty of revenue and cash flows arising from
contracts with customers.
Income
Taxes
Income
taxes are accounted for under the liability method in accordance
with ASC 740, “Income Taxes.” Under the liability method, future
tax liabilities and assets are recognized for the estimated future
tax consequences attributable to differences between the amounts
reported in the financial statements and their respective tax
bases. Future tax assets and liabilities are measured using enacted
or substantially enacted income tax rates expected to apply when
the asset is realized, or the liability settled.
Deferred
taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and
operating loss and tax credit carryforwards and deferred tax
liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax basis. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more-likely-than-not that some portion or all the
deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax law and
rates on the date of enactment.
Recent
Accounting Pronouncements
In
July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic
260), Distinguishing Liabilities from Equity (Topic 480) and
Derivatives and Hedging (Topic 815): I. Accounting for Certain
Financial Instruments with Down Round Features; II. Replacement of
the Indefinite Deferral for Mandatorily Redeemable Financial
Instruments of Certain Nonpublic Entities and Certain Mandatorily
Redeemable Noncontrolling Interests with a Scope Exception, (ASU
2017-11).” Part I of this update addresses the complexity of
accounting for certain financial instruments with down round
features. Down round features are features of certain equity-linked
instruments (or embedded features) that result in the strike price
being reduced on the basis of the pricing of future equity
offerings. Current accounting guidance creates cost and complexity
for entities that issue financial instruments (such as warrants and
convertible instruments) with down round features that require fair
value measurement of the entire instrument or conversion option.
Part II of this update addresses the difficulty of
navigating Topic 480, Distinguishing Liabilities from
Equity, because of the existence of extensive pending
content in the FASB Accounting Standards Codification. This pending
content is the result of the indefinite deferral of accounting
requirements about mandatorily redeemable financial instruments of
certain nonpublic entities and certain mandatorily redeemable
non-controlling interests. The amendments in Part II of this update
do not have an accounting effect. This ASU is effective for fiscal
years, and interim periods within those years, beginning after
December 15, 2019. The Company adopted ASU 2017-11 on its
consolidated financial statements. Upon adoption the Company
derecognized 39,512,502 number of warrants based on review of
contracts that determined the derivative treatment was specific to
a feature in the instrument that reduced the strike price if the
Company issued additional shares for an amount less than the strike
price. As a result of this analysis the Company recorded a
cumulative effect adjustment of $118,675 on January 1,
2019.
The
Company has examined all other recent accounting pronouncements and
determined that they will not have a material impact on its
financial position, results of operations, or cash
flows.
Note
3 – Going Concern
The
accompanying consolidated financial statements have been prepared
on a going concern basis. The Company reported net loss of
$3,932,313 for the year ended December 31, 2020 and has incurred
accumulated losses totaling $18,130,455 through December 31, 2020.
In addition, the Company has incurred negative cash flows from
operating activities since its inception. The Company has relied on
the proceeds from loans and private sales of its stock, in addition
to its revenues, to finance its operations. These factors, among
others, indicate that the Company may be unable to continue as a
going concern. The consolidated financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.
With
the onset of the Covid 19 pandemic, the reduction of foot traffic
and closure of retail locations, management has been proactively
looking at new business models and opportunities to stabilize
revenues and continue to grow the company. Until the Company can
generate significant cash from operations, its ability to continue
as a going concern is dependent upon obtaining additional
financing. The Company hopes to raise additional financing,
potentially through the sale of debt or equity instruments, or a
combination, to fund its operations for the next 12 months and
allow the Company to continue the development of its business plans
and satisfy its obligations on a timely basis. Should additional
financing not be available, the Company will have to negotiate with
its lenders to extend the repayment dates of its indebtedness.
There can be no assurance that the Company will be able to
successfully restructure its debt obligations in the event it fails
to obtain additional financing. These conditions have raised
substantial doubt as to the Company’s ability to continue as a
going concern for one year from the issuance of the financial
statements, which has not been alleviated.
Note
4 – Property and Equipment
Property
and equipment consist of the following as of December 31, 2020 and
2019:
|
|
December 31,
2020 |
|
|
December 31,
2019 |
|
Freezers
and other equipment |
|
$ |
61,600 |
|
|
$ |
91,673 |
|
Delivery
vans |
|
|
- |
|
|
|
- |
|
Less:
accumulated depreciation |
|
|
- |
|
|
|
- |
|
Total |
|
$ |
61,600 |
|
|
$ |
91,673 |
|
Depreciation
expense amounted to $0 and $100,188 for the years ended December
31, 2020 and 2019, respectively. We impaired our fixed assets by $0
and $192,705 during the years ended December 31, 2020 and 2019,
respectively, related to the certain freezers and other equipment
based the expected recoverability of the assets not currently in
use.
During
the years ended December 31, 2020 and 2019, the Company recorded
losses on sale of assets of $12,074 and $27,465, respectively,
related to sale of the certain freezers and other
equipment.
Note
5 – Debt
Senior Convertible Notes
During
the year ended December 31, 2018, a Senior Convertible Note in the
aggregate principal amount of $310,000 and a maturity date of
December 31, 2018 payable to Cobrador Multi-Strategy Partners, LP
(“Cobrador 1”), was extended until December 31, 2019. During the
year ended December 31, 2020, principal and accrued interest in the
amount of $55,788 were converted into 14,760,086 shares of common
stock. The carrying value as of December 31, 2020 and 2019 was
$268,900 and $310,000, respectively.
On
June 30, 2016, the Company issued a Senior Convertible Note in the
face amount of $108,804 to Cobrador (“Cobrador 2”) in settlement of
previously accrued interest, additional interest, fees and
penalties. The additional interest, fees and penalties was $72,734
and this amount was charged to operations as debt discount
amortization during the year ended December 31, 2016. The Senior
Convertible Note was extended during the year ended December 31,
2018 and was due on December 31, 2019. It is convertible into
shares of common stock at a conversion price $0.05 per share and
bears interest at 7% per annum. The Company determined that
Cobrador 2 had a beneficial conversion feature based on the
difference between the conversion price and the market price on the
date of issuance and allocated $87,043 as debt discount
representing the beneficial conversion feature which was fully
amortized at December 31, 2017. The carrying value as of December
31, 2020 and 2019 was $108,804.
During
December 2017, the Company issued a Senior Convertible Note in the
amount of $25,000 to Cobrador. The note bears interest at 7%, was
due in December 2019, and is convertible into common shares at a
conversion price of $0.05 per share. In addition, in conjunction
with this note, the Company issued 500,000 warrants to purchase
common shares at $0.05 with a contractual term of 5 years. The
estimated value of the warrants was determined to be $1,421 and was
recorded as interest expense during 2017 and a warrant liability
due to the down round provision in the note agreement. The carrying
value as of December 31, 2020 and 2019 was $25,000.
As of
the date of release of these financial statements, all senior
convertible notes were in default with an interest rate increased
to 15%.
Promissory Notes Payable
During
2014, the Company issued an unsecured promissory note to a former
employee of U-Vend Canada. The original amount of this note was
$10,512 has a term of 3 years and accrues interest at 17% per
annum. The total principal outstanding on this promissory note as
of December 31, 2020 and 2019 was $6,235.
Starting
of 2015, the Company entered into a series of promissory notes from
the same lender. All of the notes bear interest at a rate of 19%
per annum and are payable together with interest over a period of
six (6) months from the date of borrowing. As of December 31, 2015,
we had note balance of $11,083. In 2016, the Company borrowed
$76,500 and repaid $63,497. The balance outstanding on these notes
was $24,116 at December 31, 2016. In 2017, the Company borrowed
$36,400 and repaid $44,449. The balance outstanding on these notes
was $16,067 at December 31, 2017. In 2018, the Company borrowed
$143,908 and repaid $125,931. The balance outstanding on these
notes was $34,044 at December 31, 2018. During the year ended
December 31, 2019, the Company borrowed additional $38,325 and
recorded additional original discount in the amount of $3,325
associated with the new borrowing. During the year ended December
31, 2019, the Company repaid $46,584 in principal and fully
amortized $3,325 of debt discount. As of December 31, 2020 and
2019, the balance outstanding on these notes was
$25,784.
During
the year ended December 31, 2016, the Company issued two unsecured
promissory notes and borrowed an aggregate amount of $80,000. The
promissory notes bear interest at 10% per annum, with a provision
for an increase in the interest rate upon an event of default by 2%
over original interest rate and were due at various due dates in
May and September 2017. The due dates of both notes were extended
to December 31, 2019. As of December 31, 2020 and 2019, the balance
outstanding on these notes was $80,000.
In
December 2017, the Company issued promissory notes in the aggregate
principal balance of $28,000 to Cobrador. The notes accrue interest
at 7% and have a two-year term. As of December 31, 2020 and 2019,
the balance outstanding on these notes was $28,000.
On
July 18, 2018, the Company issued a promissory note in the
principal amount of $187,500 with net proceeds of $147,000. The
Company agreed to pay $1,143 per business day for 164 days. The
Company recorded $40,500 to debt discount. During 2018, the Company
repaid $128,050 in principal and amortized $40,500 of debt discount
resulting in an unamortized debt discount of $0 and carrying value
of $59,450 at December 31, 2018. During the year ended December 31,
2019, this note was paid off.
On
April 13, 2018, the Company issued a promissory note in the
principal amount of $115,000. This note bears interest at the rate
of 7% per annum, due on December 31, 2019. In 2018, the Company
borrowed an additional $25,000 and repaid $60,000. The balance
outstanding on this note as of December 31, 2020 and 2019, was
$80,000.
In
October 2014, January 2015 and October 2015, the Company entered
into three (3) separate 24-month equipment financing agreements
(the “Agreements”) with Perkins Industries, LLC (“Perkins”) for
equipment in the aggregate amount of $387,750 with an annual
interest rate of 15%. The assets financed consisted of self-service
electronic kiosks placed in service in the Company’s Southern
California region. The Company is obligated to make monthly
interest only payments in accordance with the Agreements. The
Agreements include a put/call option at the end of year one and the
end of year two. Neither of these options were exercised. During
2017, $100,000 was paid down on the notes. The carrying value as of
December 31, 2018 was $287,750. Maturities of these notes were
extended to December 31, 2019. During the year ended December 31,
2019, $39,266 was paid down on the notes. On April 1, 2019, total
principal and accrued interest in the amount of $321,824 were
restructured into two converted notes below. The carrying value as
of December 31, 2020 and 2019 was $0.
Pursuant
to the Agreements, Perkins received a warrant to purchase an
aggregate of 310,200 shares at an exercise price of $0.35 per share
with a contractual term of three (3) years. The warrant was
recorded as a debt discount and a warrant liability in the
aggregate amount of $3,708 due to the down round provision,
pursuant to which the exercise price of the warrants was revised to
$0.26 at December 31, 2016.
In
October 2016, the Company and Perkins agreed to extend the
termination date of two of the Agreements to October 17, 2017 and
January 5, 2018. In consideration of this extension, the Company
issued an additional 200,000 warrants with an exercise price of
$0.05 per share and a five-year contractual term.
During
the year ended December 31, 2018 the Agreements were purchased by a
third party and the due dates were extended to December 31,
2019.
On
November 19, 2018, the Company issued a promissory note in the
principal amount of $124,000 with net proceeds of $112,840. This
note matured 64 weeks later. The Company recorded $11,160 to debt
discount. During the year ended December 31, 2018, the Company
repaid $9,784 in principal and amortized $872 of debt discount
resulting in an unamortized debt discount of $10,288 and carrying
value of $103,928 at December 31, 2018. During the year ended
December 31, 2019, the Company repaid $48,154 in principal and
amortized $9,744 of debt discount resulting in an unamortized debt
discount of $544 and carrying value of $65,518 at December 31,
2019. During the year ended December 31, 2020, the Company repaid
$15,000 in principal and fully amortized $544 of debt discount. As
of December 31, 2020 and 2019, the balance outstanding on this note
was $51,062 and $65,518, respectively.
On
December 12, 2018, the Company issued a promissory note in the
principal amount of $112,425 with net proceeds of $64,500. The
Company agreed to pay $937 per business day for 120 days. The
Company recorded $47,925 to debt discount. During the year ended
December 31, 2018, the Company repaid $9,370 in principal and
amortized $3,744 of debt discount resulting in an unamortized debt
discount of $44,181 and carrying value of $58,874 at December 31,
2018. During the year ended December 31, 2019, the Company repaid
$103,055 in principal and fully amortized $44,181 of remaining debt
discount resulting in carrying value of $0 at December 31,
2019.
During
the year ended December 31, 2019, the Company issued two promissory
notes in the aggregate principal amount of $135,000, bearing
interest of 7% and maturing on August 8, 2019. As of December 31,
2020 and 2019, the balance outstanding on these notes was
$135,000.
As of
the date of release of these financial statements, promissory notes
were in default with an interest rate increased by 2% over the
original interest rate.
On
March 5, 2019, the Company issued a non-equity linked promissory
note for $100,000 to an investor with an annual 10% rate of
interest and a one (1) year maturity. This investor also received a
warrant for 500,000 shares at a strike price of $0.07 per share
with a five (5) year maturity. The fair value of warrant was not
material. As of December 31, 2019, the outstanding balance was
$100,000. On December 23, 2020, total principal and accrued
interest in the amount of $118,250 were converted into a new
promissory note in the principal amount of $118,250 with an annual
10% rate of interest and mature on January 15, 2022. As of December
31, 2020, the outstanding balance was $118,250.
Convertible Notes Payable
2014
Stock Purchase Agreement
In
2014 and 2015 the Company entered into the 2014 Securities Purchase
Agreement (the “2014 SPA”) pursuant to which it issued eight (8)
convertible notes in the aggregate face amount of $146,000 due at
various dates between August 2015 and March 2016. The principal on
these notes is due at the holder’s option in cash or common shares
at a conversion rate of $0.30 per share. In connection with these
borrowings the Company granted a total of 360,002 warrants with an
exercise price of $0.35 per share and a 5 year contractual term.
The warrants issued have a down round provision and as a result are
classified as a liability in the accompanying consolidated balance
sheets. Pursuant to the down round provision, the exercise price of
the warrants was reduced to $0.22 at December 31, 2016. During 2017
the Company repaid one of the notes in the amount of $50,000. On
May 1, 2018, the Company granted 1,000,000 warrants with an
exercise price of $0.15 per share and a 5 year contractual term,
valued at $2,841, which was recorded as debt discount. As of
December 31, 2020 and 2019, outstanding balance of these notes was
$121,000. As of the date of release of these financial statements,
these notes were in default with an interest rate increased to
15%.
The
Company and Cobrador held three of the convertible notes in the
aggregate face amount of $45,000 and agreed to extend the repayment
date to November 17, 2020. The Company agreed to a revised
conversion price of $0.05 per share and a revised warrant exercise
price of $0.07 per share. The change in the value of warrants was
not material and was charged to operations during the year ended
December 31, 2017. As of December 31, 2020 and 2019, outstanding
balance of these notes was $45,000.
2015
Stock Purchase Agreement
During
the year ended December 31, 2015, the Company issued eleven
subordinated convertible notes bearing interest at 9.5% per annum
with an aggregate principal balance of $441,000 pursuant to the
2015 Stock Purchase Agreement (the “2015 SPA”). The notes were due
in December 2017 and are payable at the noteholder’s option in cash
or common shares at a conversion rate of $0.30 per share. The
conversion rate was later revised to $0.05 due to down round
provisions contained in the 2015 SPA, and the due date was extended
to November 17, 2020. In connection with these borrowings, the
Company issued a warrant to purchase 735,002 shares of the
Company’s common stock at an exercise price of $0.40 per share and
a 5 year contractual term. The exercise price was later revised to
$0.22 per share pursuant to the down round provisions in the 2015
SPA. The Company allocated $8,113 of proceeds received to debt
discount based on the computed fair value of the convertible notes
and warrants issued. During the year ended December 31, 2016, the
noteholder converted one note in the face amount of $35,000 into
700,000 shares of common stock. As of December 31, 2020 and 2019,
the 2015 SPA had a balance of $406,000. The debt discount was fully
amortized as of December 31, 2016.
2016
Stock Purchase Agreement
On
June 30, 2016, the Company entered into the 2016 Stock Purchase
Agreement (the “2016 SPA”) pursuant to which it issued five
convertible notes in the aggregate principal amount of $761,597.
The 2016 SPA notes were due in November 2020 and bear interest at
9.5% per annum. The notes are convertible into shares of common
stock at a conversion price of $0.17 per share. With these notes,
the Company satisfied its obligations for: previously issued
promissory notes of $549,000, accrued interest of $38,615, lease
principal installments of $47,466, previously accrued registration
rights penalties of $22,156, due to a former officer of $81,250,
and additional interest, expenses, fine and penalties of $23,110.
The Company charged additional interest, expenses, fines and
penalties $23,110 to operations as amortization of debt discount
and deferred financing costs during the year ended December 31,
2016.
In
connection with the 2016 SPA, the Company granted a total of
2,239,900 warrants with an exercise price of $0.30 per share which
was later revised to $0.05 per share due to down round provisions,
with a 5 year contractual life. The Company allocated $19,242 to
debt discount based on the computed fair value of the convertible
notes and warrants issued and classified the debt discount is as a
warrant liability due to the down round provision in the
warrants.
On
July 11, 2019, $85,000 in principal was converted into 1,700,000
shares of common stock.
As of
December 31, 2020 and 2019, the 2016 SPA had a carrying value of
$676,597. As of the date of release of these financial statements,
these notes were in default with an interest rate increased to
18%.
Other
2016 Financings
During
the year ended December 31, 2016, the Company issued four
convertible notes (the “Cobrador 2016 Notes”) in the aggregate
principal amount of $115,000. The Cobrador 2016 Notes have a 2 year
term, bear interest at 9.5% per annum, and are convertible into
shares of common stock at a conversion price of $0.17 per share.
The conversion price was subsequently revised to $0.05 per the down
round provisions and the maturity date was extended to September
26, 2021. In connection with the Cobrador 2016 Notes, the Company
granted a total of 338,235 warrants with an exercise price of $0.30
per share which was subsequently revised to $0.05 per share due to
down round provisions with a 5 year contractual term. The Company
allocated $1,994 to debt discount based on the computed fair value
of the convertible notes and warrants issued and classified the
debt discount as a warrant liability due to the down round
provision in the warrants. During the year ended December 31, 2019,
$20,000 was converted into 400,000 shares. As of December 31, 2020
and 2019, the Cobrador 2016 Notes had a carrying value of
$95,000.
During
the fourth quarter of 2016, the Company issued three additional
convertible notes in the aggregate principal amount of $250,000.
The notes have a 2 year term, bear interest at 9.5% per annum and
are convertible into shares of common stock at a conversion price
of $0.05 per share. In connection with these borrowings, the
Company granted warrants to purchase 5,000,000 shares of common
stock with an exercise price of $0.07 per share. The Company
allocated $27,585 to debt discount based on the computed fair value
of the convertible notes and warrants issued, and the debt discount
is classified as a warrant liability due to the down round
provision in the warrants. As of December 31, 2020 and 2019, the
carrying value of the notes was $250,000. As of the date of release
of these financial statements, these notes were in default with an
interest rate increased to 18%.
2017
Financings
During
the year ended December 31, 2017, the Company entered into 19
separate convertible notes agreements (the “2017 Convertible
Notes)” in the aggregate principal amount of $923,882. The 2017
Convertible Notes each have a 2 year term, bear interest at 9.5%,
and are convertible into shares of common stock at a conversion
price of $0.05 per share. In connection with the 2017 Convertible
Notes, the Company issued a total of 16,537,926 warrants with an
exercise price of $0.07 per share with a 5 year term. The Company
allocated $59,403 to a debt discount based on the computed fair
value of the convertible notes and warrants issued and classified
the debt discount as a warrant liability due to the down round
provision in the warrants. During the year ended December 31, 2018,
the Company amortized $31,940 of debt discount resulting in
unamortized debt discount of $13,278 and carrying value of $910,608
at December 31, 2018. During the year ended December 31, 2019, the
Company fully amortized remaining $13,278 of debt discount. As of
December 31, 2020 and 2019, the carrying value of the notes was
$924,282. As of the date of release of these financial statements,
these notes were in default with an interest rate increased to
18%.
2018
Financings
During
the year ended December 31, 2018, the Company entered into
seventeen separate convertible notes agreements (the “2018
Convertible Notes)” in the aggregate principal amount of $537,500.
The 2018 Convertible Notes each have a 2 year term, bear interest
at 9.5% if paid in cash, 15% if paid in common stock, and are
convertible into shares of common stock at a conversion price of
$0.05 per share. These notes are accruing interest at the cash rate
of 9.5%. In connection with the 2018 Convertible Notes, the Company
issued a total of 10,750,000 warrants with an exercise price of
$0.07 per share with a 5 year term. The Company allocated $33,384
to a debt discount based on the computed fair value of the
convertible notes and warrants issued and classified the debt
discount as a warrant liability due to the down round provision in
the warrants. During the year ended December 31, 2018, the Company
amortized $12,803 of debt discount resulting in an unamortized debt
discount of $20,581 and carrying value of $516,919 at December 31,
2018. During the year ended December 31, 2019, the Company
amortized $16,692 of debt discount resulting in an unamortized debt
discount of $3,889 and carrying value of $533,611 as of December
31, 2019. During the year ended December 31, 2020, the Company
fully amortized $3,889 of debt discount resulting in carrying value
of $537,500 as of December 31, 2020. As of the date of release of
these financial statements, convertible notes were in default with
an interest rate increased to 18%.
On
November 20, 2018, two officers converted $436,500 accrued
compensation into two convertible note agreements in the principal
amount of $436,500 in exchange. The notes have a 2 year term, bear
interest at 9.5% if paid in cash, 15% if paid in common stock, and
are convertible into shares of common stock at a conversion price
of $0.05 per share. The note is accruing interest at the 9.5% cash
rate. As of December 31, 2020 and 2019, the carrying value of the
notes was $436,500. As of the date of release of these financial
statements, convertible notes were in default with an interest rate
increased to 18%.
During the
year ended December 31, 2018, the Company entered into three
convertible note agreements in the aggregate principal amount of
$240,500 with a net proceed of $214,000. These notes had a 1-year
term, and bear interest at 8%-12%. The notes are convertible into
common stock at 60% to 61% multiplied by the lowest one to two
trading price(s) during fifteen to twenty-five trading day period
prior to the Conversion Date. The embedded conversion features were
valued at $59,027, which were recorded as debt discount. In
addition, the Company also recorded $26,500 as original debt
discount. These notes were in default due to failure to comply with
the reporting requirements of the Exchange Act, as the result, the
Company recorded additional $120,250 penalty in principal as of
December 31, 2018. During the year ended December 31, 2018, the
Company amortized $21,382 of debt discount resulting in unamortized
debt discount of $64,145 and carrying value of $296,605 at December
31, 2018. During the year ended December 31, 2019, the Company
repaid $64,300 in principal and amortized $21,381 of debt discount,
recorded $42,764 in accretion of debt discount, resulting in
unamortized debt discount of $0 and carrying value of $296,450 at
December 31, 2019. During the year ended December 31, 2020, total
principal and accrued interest in the amount of $37,712 were
converted into 9,924,132 shares of common stock, resulting in
carrying value of $281,250 as of December 31, 2020.
2019
Financings
On
March 18, 2019, the Company issued a convertible promissory note
for $85,250 with net proceed of $75,000 to an investor with an 8.0%
rate of interest and a one (1) year maturity. The Company had the
option to pre-pay the note (principal and accrued interest) in cash
within the 1st 90 days from issuance at a 25% premium, and 40%
premium 91-180 days from the issuance date. Subsequent to 181 days,
the Company shall have no right of prepayment and the holder may
convert at a 40% discount to the prevailing market price. The note
matured on December 11, 2019. The note is convertible into shares
of common stock at the lesser of 1) lowest trading price of
twenty-five days prior to March 18, 2019 or 2) 60% of lowest
trading price of twenty-five days prior to the Conversion Day. In
addition, the Company also recorded $10,250 as original debt
discount. These notes were in default due to failure to comply with
the reporting requirements of the Exchange Act, as the result, the
Company recorded additional $42,625 penalty in principal as of
December 31, 2019. During the year ended December 31, 2019,
the Company fully amortized $23,384 of debt discount. During the
year ended December 31, 2020, accrued interest in the amount of
$24,508 was converted into 13,426,091 shares of common stock. As of
December 31, 2020 and 2019, the carrying value of the note was
$127,875. As of the date of release of these financial statements,
convertible note was in default with an interest rate increased to
24%.
On
March 14, 2019, the Company converted accounts payable of
approximately $105,000 payables into a convertible note agreement
in the principal amount of $60,000, remaining balance of the amount
owed was released and recorded as a settlement of liability. The
note has a 2 year term, bears interest at 9.5% if paid in cash, 15%
if paid in common stock, and is convertible into shares of common
stock at a conversion price of $0.05 per share. The note is
accruing interest at the cash rate of 9.5%. The outstanding
principal balance was $60,000 as of December 31, 2020 and
2019.
On
April 1, 2019, The Company converted an aggregate amount of
principal and accrued interest of Perkins promissory note in the
amount of $321,824 and accounts payable of $10,000 into two
convertible notes. Both Notes have a 2 year term, bear interest at
9.5% if paid in cash, 15% if paid in common stock, and are
convertible into shares of common stock at a conversion price of
$0.05 per share. The outstanding principal balance was $331,824 as
of December 31, 2020 and 2019.
On
April 15, 2019, the Company converted an accrued payable of
$108,572, which was used to purchase vending machine, into a
convertible note. The note has a 2 year term, bear interest at 9.5%
if paid in cash, 15% if paid in common stock, and are convertible
into shares of common stock at a conversion price of $0.07 per
share. The outstanding principal balance was $108,572 as of
December 31, 2020 and 2019. The note is accruing interest at the
9.5% cash rate.
On
May 30, 2019, the Company issued a series of convertible notes
under a $250,000 revolving Senior Secured credit facility to an
investor, for working capital purposes. The notes carry an interest
rate of 9.5% and a two-year term. The notes are convertible into
common stock at $0.07 per share and are redeemable after one-year
at the Company’s option. The notes also contain a 4.99% limitation
of ownership on conversion. The investor had consented to higher
draws on the facility in excess of the limit per the initial
agreement. On April 15, 2020, the Company issued a convertible note
in the amount of $206,231. The note has a 2 year term, bears
interest of 9.5% if paid in cash, 15% if paid in common stock, and
is convertible into shares of common stock at a conversion price of
$0.05 per share. On December 24, 2020, the Company issued a
convertible promissory note in the amount of $147,000. The note has
a 2 year term, bears interest of 9.5% if paid in cash, 15% if paid
in common stock, and is convertible into shares of common stock at
a conversion price of $0.03 per share and is redeemable at the
principal amount plus accrued unpaid interest after one year, at
the Company’s option. The note is accruing interest at the 9.5%
cash rate. During the year ended December 31, , 2020, $176,928 was
drawn under the agreement, including $75,500 in cash proceeds and
$1000,428 in repayment of accrued liabilities. As of December 31,
2020 and 2019, $603,231 and $426,303 was drawn under these
agreements, respectively.
During
the year ended December 31, 2019, the Company entered into several
convertible note agreements in the amount of $68,000. The Notes
have a 2 year term, bear interest at 9.5% if paid in cash, 15% if
paid in common stock, and are convertible into shares of common
stock at a conversion price of $0.07 per share. The outstanding
principal balance was of $68,000 as of December 31, 2020 and 2019.
The Notes are accruing interest at the 9.5% cash rate.
During
the year ended December 31, 2019, the Company entered into a
convertible notes agreement in the amount of $50,000. The Note has
a 6 month term, bears interest at 9.5% if paid in cash, 15% if paid
in common stock, and is convertible into shares of common stock at
a conversion price of $0.01 per share. In connection with the Note,
the Company issued 10,000,000 warrants with an exercise price of
$0.02 per share with a 5 year term. The outstanding balance was of
$50,000 as of December 31, 2020 and 2019.
2020
Financings
On
January 1, 2020, the Company issued a convertible note in the
amount of $8,500 for conversion of accrued liabilities. The Note
has a 2 year term, bears interest of 9.5% if paid in cash, 15% if
paid in common stock, and is convertible into shares of common
stock at a conversion price of $0.05 per share. The outstanding
principal balance was $8,500 as of December 31, 2020.
On
March 1, 2020, the Company issued a convertible note in the amount
of $17,899 for conversion of accrued liabilities. The Note has a 2
year term, bears interest of 9.5% if paid in cash, 15% if paid in
common stock, and is convertible into shares of common stock at a
conversion price of $0.05 per share. The outstanding principal
balance was $17,899 as of December 31, 2020.
On
November 1, 2020, the Company issued a convertible note in the
amount of $46,719 for conversion of accrued liabilities. The Note
has a 2 year term, bears interest of 9.5% if paid in cash, 15% if
paid in common stock, and is convertible into shares of common
stock at a conversion price of $0.05 per share. The outstanding
principal balance was $46,719 as of December 31, 2020.
The
2020 Financings are accruing interest at their cash repayment rate
of 9.5%.
Scheduled
maturities of debt remaining as of December 31, 2020 for each
respective fiscal year end are as follows:
2020 |
|
$ |
4,664,789 |
|
2021 |
|
|
913,396 |
|
2022 |
|
|
599,
600 |
|
|
|
|
6,177,785 |
|
Less:
unamortized debt discount |
|
|
- |
|
|
|
$ |
6,177,785 |
|
The
following table reconciles, for the years ended December 31, 2020
and 2019, the beginning and ending balances for financial
instruments related to the embedded conversion features that are
recognized at fair value in the consolidated financial
statements:
|
|
December 31,
2020 |
|
|
December 31,
2019 |
|
Balance of embedded
derivative at the beginning of the year |
|
$ |
13,553 |
|
|
$ |
28,357 |
|
Additions related to embedded
conversion features of convertible debt issued |
|
|
- |
|
|
|
9,502 |
|
Derivative liabilities reduction due
to notes default |
|
|
- |
|
|
|
(112,408 |
) |
Change in fair
value of conversion features |
|
|
3,069,702 |
|
|
|
88,102 |
|
Balance of
embedded derivatives at the end of the year |
|
$ |
3,083,255 |
|
|
|
13,553 |
|
Note
6 – Capital Lease Obligations
The
Company acquired capital assets under capital lease obligations.
Pursuant to the agreement with the lessor, the Company makes
quarterly lease payments and will make a guaranteed residual
payment at the end of the lease as summarized below. At the end of
the lease, the Company will own the equipment.
In
August 2016, the Company and the lessor agreed to extend the term
of the lease until December 31, 2020. As a consideration of the
extension, the Company issued warrants to acquire 150,000 shares of
common stock. The warrants have an exercise price of $0.30 per
share, a term of three years, and were recorded as a debt discount
and warrant liability due to the down round provision and as such
are marked to market each reporting period. On January 1, 2019, the
Company adopted ASU 2017-11 on its consolidated financial
statements and reclassified $118,675 as equity from derivative
liabilities.
During
the year ended December 31, 2018 the Company entered into various
capital lease agreements. The leases expire at various points
through the year ended December 31, 2023.
The
following schedule provides minimum future rental payments required
as of December 31, 2020, under the current portion of capital
leases.
2021 |
|
$ |
157,503 |
|
2022 |
|
|
30,584 |
|
2023 |
|
|
10,252 |
|
Total minimum lease payments |
|
|
198,339 |
|
Less: Amount
represented interest |
|
|
(16,715 |
) |
Present value of
minimum lease payments and guaranteed residual value |
|
$ |
181,624 |
|
Note
7 – Capital Stock
Preferred
Stock
The
Company has authorization for “blank check” preferred stock, which
could be issued with voting, liquidation, dividend and other rights
superior to common stock. As of December 31, 2020 and 2019, there
are 10,000,000 shares of preferred stock authorized, par value
$0.001, and no shares issued or outstanding.
Common
Stock
The
Company has authorized 600,000,000 shares of common stock with a
par value of $.001.
During
the year ended December 31, 2020, the Company issued 38,110,309
shares of its common stock, in conversion of $118,008 of
convertible notes.
During
the year ended December 31, 2019, the Company issued 5,541,096
shares of its common stock, including 3,441,096 shares of common
stock with a fair value of $285,379 for services rendered, and
2,100,000 shares in conversion of $105,000 of convertible
notes.
Note
8 – Stock Options and Warrants
Warrants
At
December 31, 2020 the Company had the following warrant securities
outstanding:
|
|
Warrants |
|
|
Exercise
Price |
|
|
Expiration |
2016 Warrants - 2016 SPA
convertible debt |
|
|
2,239,990 |
|
|
$ |
0.05 |
|
|
June 2021 |
2016 Warrants for services |
|
|
850,000 |
|
|
$ |
0.05 |
|
|
June 2021 |
2016 Warrants - Convertible notes |
|
|
338,236 |
|
|
$ |
0.05 |
|
|
August - September 2021 |
2016 Warrants for services |
|
|
200,000 |
|
|
$ |
0.07 |
|
|
October 2020 |
2016 Warrants issued with Convertible
Notes |
|
|
5,000,000 |
|
|
$ |
0.07 |
|
|
November -December 2021 |
2017 Warrants – 2017 financing |
|
|
15,109,354 |
|
|
$ |
0.07 |
|
|
December 2022 |
2018 Warrants – 2019 financing |
|
|
9,991,905 |
|
|
$ |
0.07 |
|
|
January - November 2023 |
2018 Warrants for services |
|
|
2,250,000 |
|
|
$ |
0.07 |
|
|
October - December 2023 |
2019 Warrants – 2020 financing |
|
|
10,500,000 |
|
|
$ |
0.07 |
|
|
March 2024 |
2019 Warrants for services |
|
|
3,500,000 |
|
|
$ |
0.07 |
|
|
March 2024 |
2020 Warrants
for services |
|
|
3,000,000 |
|
|
$ |
0.05 |
|
|
February
2025 |
Total |
|
|
52,979,485 |
|
|
|
|
|
|
|
During
the year ended December 31, 2020, the Company issued warrants
exercisable into 3,000,000 shares of common stock to its officer.
The fair value of warrants was determined to be $5,772, and was
estimated using the Black-Scholes-Merton option-pricing model with
the following assumptions: expected volatility of 339%, risk-free
interest rate 1.35%, expected dividend yield of 0%.
A
summary of all warrants activity for the years ended December 31,
2020 and 2019 is as follows:
|
|
Number of
Warrants |
|
|
Weighted
Average
Exercise
Price |
|
|
Weighted
Average
Remaining
Contractual
Term |
|
Balance outstanding at December 31, 2018 |
|
|
62,566,102 |
|
|
$ |
0.06 |
|
|
|
2.53 |
|
Granted |
|
|
14,000,000 |
|
|
$ |
0.02 |
|
|
|
1.21 |
|
Exercised |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Forfeited |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Cancelled |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Expired |
|
|
(25,289,698 |
) |
|
$ |
0.06 |
|
|
|
- |
|
Balance outstanding at December 31, 2019 |
|
|
51,276,404 |
|
|
$ |
0.06 |
|
|
|
2.24 |
|
Exercisable at December 31, 2019 |
|
|
51,276,404 |
|
|
$ |
0.06 |
|
|
|
2.24 |
|
|
|
Number of Warrants |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Contractual Term |
|
Balance outstanding at
December 31, 2019 |
|
|
51,276,404 |
|
|
$ |
0.06 |
|
|
|
2.24 |
|
Granted |
|
|
3,000,000 |
|
|
$ |
0.05 |
|
|
|
4.84 |
|
Exercised |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Forfeited |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Cancelled |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Expired |
|
|
(1,296,919 |
) |
|
$ |
0.12 |
|
|
|
- |
|
Balance outstanding at December 31,
2020 |
|
|
52,979,485 |
|
|
$ |
0.06 |
|
|
|
2.34 |
|
Exercisable at December 31,
2019 |
|
|
52,979,485 |
|
|
$ |
0.06 |
|
|
|
2.34 |
|
The
following table provides a summary of changes in the down-round
warrant liabilities measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) for the years ended
December 31, 2020 and 2019.
|
|
December 31,
2020 |
|
|
December 31,
2019 |
|
Balance of embedded
down-round derivative at the beginning of the year |
|
$ |
- |
|
|
$ |
129,355 |
|
Fair value of warrants issued and
recorded as liabilities |
|
|
- |
|
|
|
- |
|
Reclassification of warrant lability
to equity related to adoption of ASU 2017-11 |
|
|
- |
|
|
|
(118,675 |
) |
Gain on fair
value adjustment |
|
|
- |
|
|
|
(10, 680) |
|
Balance of
embedded down-round derivatives at the end of the year |
|
$ |
- |
|
|
$ |
- |
|
Equity
Incentive Plan
On
July 22, 2011, the Board of Directors of the Company approved the
Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26,
2011, stockholders holding a majority of shares of the Company
approved, by written consent, the Plan and the issuance under the
Plan of 5,000,000 shares. On November 16, 2017, the Board of
Directors approved an increase of 10,000,000 shares to be made
available for issuance under the Plan. Accordingly, the total
number of shares of common stock available for issuance under the
Plan is 15,000,000 shares. Awards may be granted to employees,
officers, directors, consultants, agents, advisors and independent
contractors of the Company and its related companies. Such options
may be designated at the time of grant as either incentive stock
options or nonqualified stock options. Stock-based compensation
includes expense charges related to all stock-based awards. Such
awards include options, warrants and stock grants. Generally, the
Company issues stock options that vest over three years and expire
in 5 to 10 years.
A
summary of all stock option activity for the years ended December
31, 2020 and 2019 is as follows:
|
|
Number of
Options |
|
|
Weighted
Average
Exercise
Price |
|
|
Weighted
Average
Remaining
Contractual
Term |
|
Balance outstanding at
December 31, 2018 |
|
|
3,155,100 |
|
|
$ |
0.25 |
|
|
|
2.5 |
|
Granted |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Exercised |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Cancelled or expired |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Balance
outstanding at December 31, 2019 |
|
|
3,155,100 |
|
|
$ |
0.25 |
|
|
|
1.5 |
|
Exercisable at December 31,
2019 |
|
|
3,155,100 |
|
|
$ |
0.25 |
|
|
|
1.5 |
|
|
|
Number of
Options |
|
|
Weighted
Average
Exercise
Price |
|
|
Weighted
Average
Remaining
Contractual
Term |
|
Balance outstanding at
December 31, 2019 |
|
|
3,155,100 |
|
|
$ |
0.25 |
|
|
|
1.5 |
|
Granted |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Exercised |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Cancelled or expired |
|
|
(3,152,600 |
) |
|
|
- |
|
|
|
- |
|
Balance
outstanding at December 31, 2020 |
|
|
2,500 |
|
|
$ |
60 |
|
|
|
0.5 |
|
Exercisable at December 31,
2020 |
|
|
2,500 |
|
|
$ |
60 |
|
|
|
0.5 |
|
Note
9 – Commitments and Contingencies
Major
League Baseball Properties, Inc. License Agreement
In
March 2016, the Company entered into a license agreement beginning
April 1, 2016 through December 31, 2019 with Major League Baseball
Properties, Inc. (“MLB” “Licensor”) for the non-exclusive right to
certain proprietary intangible property of the Licensor to be used
in connection with the manufacturing, distribution, promotion and
advertisement of the Company’s products sold within the U.S., the
District of Columbia and U.S. territories. Under the license
agreement, the Company was scheduled to pay the following
guaranteed payments; $150,000 during 2016, $275,000 during 2017,
$100,000 during 2018, and $115,000 during 2019. The Company was
obligated to pay the licensor a royalty based on the product sold
or advertising sold. The royalty paid was to offset all or a
portion of the guaranteed payments. The agreement was subject to
customary default and termination clauses. The Company paid $0
during the years ended December 31, 2019 and 2020, and has accrued
$115,000 at December 31, 2020 and 2019.
As of
December 31, 2020, the agreement with MLB has expired. The Company
will not be continuing the relationship.
Note 10 -
Income Taxes
Loss
from operations before provision (benefit) for income taxes is
summarized in the following table:
|
|
Years
ended
December 31,
|
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Domestic |
|
$ |
(3,954,316 |
) |
|
$ |
(1,878,591 |
) |
Foreign |
|
|
(- |
) |
|
|
(17,559 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(3,954,316 |
) |
|
$ |
(1,896,150 |
) |
|
|
Years
ended
December 31,
|
|
|
|
2020 |
|
|
2019 |
|
Current |
|
|
|
|
|
|
Federal |
|
$ |
- |
|
|
$ |
- |
|
State |
|
|
- |
|
|
|
- |
|
Foreign |
|
|
- |
|
|
|
- |
|
Total Current |
|
|
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Deferred |
|
|
|
|
|
|
|
|
Federal |
|
|
(770,342 |
) |
|
|
(253,561 |
) |
State |
|
|
(207,471 |
) |
|
|
(49,921 |
) |
Foreign |
|
|
- |
|
|
|
- |
|
Total Deferred |
|
|
(977,813 |
) |
|
|
(303,481 |
) |
Less increase in
allowance |
|
|
977,813 |
|
|
|
303,481 |
|
Net Deferred |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total income tax provision
(benefit) |
|
$ |
- |
|
|
$ |
- |
|
The
significant components of the deferred tax assets and liabilities
are summarized below:
|
|
Years
ended
December
31,
|
|
|
|
2020 |
|
|
2019 |
|
Deferred tax assets (liabilities): |
|
|
|
|
|
|
Net operating loss
carryforwards |
|
$ |
3,023,143 |
|
|
$ |
2,862,056 |
|
Depreciable and amortizable
assets |
|
|
(20,520 |
) |
|
|
(28,808 |
) |
Stock based compensation |
|
|
50,297 |
|
|
|
49,555 |
|
Beneficial conversion feature |
|
|
838,752 |
|
|
|
30,223 |
|
Loss reserve |
|
|
457 |
|
|
|
251 |
|
Accrued compensation |
|
|
35,146 |
|
|
|
35,707 |
|
Other |
|
|
29,908 |
|
|
|
30,386 |
|
Total |
|
|
3,957,183 |
|
|
|
2,979,370 |
|
Less valuation
allowance |
|
|
(3,957,183 |
) |
|
|
(2,979,370 |
) |
Net
deferred tax assets (liabilities) |
|
$ |
- |
|
|
$ |
- |
|
At
December 31, 2020, the Company has available net operating loss
carryforwards for federal and state income tax purposes of
approximately $11.9 million and $12.3 million, respectively. Of the
federal net operating loss carryforward, $8.6 million, if not
utilized earlier, expires through 2037 and $3.3 million will
carryforward indefinitely. The state net operating loss
carryforwards expire through 2040, if not utilized earlier. Due to
the uncertainty as to the Company’s ability to generate sufficient
taxable income in the future and utilize the net operating loss
carryforwards before they expire, the Company has recorded a
valuation allowance to fully offset the net operating loss
carryforwards, as well as the total net deferred tax
assets.
Internal
Revenue Code Section 382 (“Section 382”) imposes limitations on the
availability of a company’s net operating losses and other
corporate tax attributes as certain significant ownership changes
occur. As a result of the historical equity instrument issuances by
the Company, a Section 382 ownership change may have occurred and a
study will be required to determine the date of the ownership
change, if any. The amount of the Company’s net operating losses
and other tax attributes incurred prior to any ownership change may
be limited based on the Company’s value. A full valuation allowance
has been established for the Company’s deferred tax assets,
including net operating losses and any other corporate tax
attributes.
During
the years ended December 31, 2020 and 2019, the Company had no
unrecognized uncertain tax positions. The Company’s policy is to
recognize interest accrued and penalties related to unrecognized
uncertain tax positions in tax expense.
The
Company files income tax returns in the U.S. federal jurisdiction,
as well as the states of California, Florida, Illinois and New
York. The tax years 2017-2020 generally remain open to examination
by the U.S. federal and state taxing authorities. In addition, the
2016 tax year is still open to examination by the state of
California.
A
reconciliation of the income tax provision using the statutory U.S.
income tax rate compared with the actual income tax provision
reported on the consolidated statements of operations is summarized
in the following table:
|
|
Years
ended
December
31,
|
|
|
|
2020 |
|
|
2019 |
|
Statutory United States
federal rate |
|
|
21.00 |
% |
|
|
21.00 |
% |
State income tax, net of federal
benefit |
|
|
4.14 |
|
|
|
2.08 |
|
Change in valuation allowance |
|
|
(24.72 |
) |
|
|
(16.03 |
) |
Stock based compensation |
|
|
- |
|
|
|
(9.93 |
) |
Permanent differences |
|
|
(0.42 |
) |
|
|
2.88 |
|
Tax rate differential between
jurisdictions |
|
|
- |
|
|
|
|
|
Other |
|
|
- |
|
|
|
|
|
Foreign net
operating loss adjustment |
|
|
- |
|
|
|
- |
|
Effective tax rate benefit (provision) |
|
|
- |
% |
|
|
- |
% |
Note
11 – Subsequent Events
The
Company has evaluated events occurring subsequent to December 31,
2020 through the date these financial statements were issued and
determined the following significant events require
disclosure:
Subsequent
to December 31, 2020, the Company issued multiple convertible
promissory notes in the aggregate principal amount of $515,000 to
unaffiliated investors. The notes bear interest at the rate of 9.5%
per annum and are due and payable in two years. The notes are
convertible into shares of the Company’s common stock at $0.05 per
share and are redeemable at the principal amount plus accrued
unpaid interest after one year, at the Company’s option.
Subsequent
to December 31, 2020, the Company issued a convertible note for
deferred compensation in the principal amount of $94,600. The notes
bear interest at the rate of 9.5% per annum and is due and payable
in two years. The note is convertible into shares of the Company’s
common stock at $0.05 per share and is redeemable at the principal
amount plus accrued unpaid interest after one year, at the
Company’s option.
Subsequent
to December 31, 2020, the Company issued 150,775,975 of its common
stock in conversion of $568,589 of convertible notes.
Subsequent
to December 31, 2020, the Company hired Patrick Avery as the
Company’s Chief Operating Officer with a salary of
$84,000.
ITEM 9 - CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A - CONTROLS AND
PROCEDURES
Management’s
Annual Report on Internal Control over Financial
Reporting
Our
management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over
financial reporting is a process designed by, or under the
supervision of, the chief executive officer and our chief financial
officer and effected by our board of directors, management and
other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles.
The
Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in its
Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and
forms, and that such information is accumulated and communicated to
the Company’s management, including the Company’s chief executive
officer also acting as chief financial officer, as appropriate, to
allow timely decisions regarding required disclosure. Management
recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of
achieving their objectives and management necessarily applies its
judgment in evaluating the cost-benefit relationship of possible
controls and procedures. Our evaluation of internal control over
financial reporting includes using the 2013 COSO framework, an
integrated framework for the evaluation of internal controls issued
by the Committee of Sponsoring Organizations of the Treadway
Commission, to identify the risks and control objectives related to
the evaluation of our control environment.
Our
chief executive officer, after evaluating the effectiveness of the
Company’s “disclosure controls and procedures” (as defined in the
Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or
15d-15(e)) as of the end of the period covered by this annual
report, has concluded that our disclosure controls and procedures
were not effective and that material weaknesses exist in our
internal control over financial reporting based on the evaluation
of these controls and procedures as required by paragraph (b) of
Exchange Act Rules 13a-15 or 15d-15.
A
material weakness is a deficiency, or a combination of
deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be prevented
or detected on a timely basis. Management has identified the
following material weakness as of December 31, 2020: insufficient
personnel resources within the accounting function to segregate the
duties over financial transaction processing and reporting. Because
of this material weakness, management concluded that the Company’s
internal control over financial reporting was not effective as of
December 31, 2020.
To
remediate our internal control weakness, management intends to
implement the following measures:
|
● |
Add
sufficient accounting personnel or outside consultants to properly
segregate duties and to effect a timely, accurate preparation of
the financial statements. |
|
● |
Upon
the hiring of additional accounting personnel or outside
consultants, develop and maintain adequate written accounting
policies and procedures. |
To
address the material weaknesses, we performed additional analyses
and other post-closing procedures and retained the services of a
consultant to ensure that our consolidated financial statements
were prepared in accordance with accounting principles generally
accepted in the United States of America (U.S. GAAP).
Notwithstanding these material weaknesses, management believes that
the financial statements included in this Annual Report on Form
10-K fairly present, in all material respects, our financial
condition, result of operations and cash flows for the periods
presented.
This
annual report does not include an attestation report of the
Company’s registered public accounting firm regarding internal
control over financial reporting. Management’s report was not
subject to attestation requirements by the Company’s registered
public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to
provide only management’s report in this annual report.
Changes
in Internal Control Over Financial Reporting
There
was no change in the Company’s internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) during the year ended December 31, 2020 that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting.
Inherent
Limitations on Effectiveness of Controls
The
design of any system of control is based upon certain assumptions
about the likelihood of future events. There can be no assurance
that any design will succeed in achieving its stated objectives
under all future events, no matter how remote, or that the degree
of compliance with the policies or procedures may not deteriorate.
Because of its inherent limitations, disclosure controls and
procedures may not prevent or detect all misstatements.
Accordingly, even effective disclosure controls and procedures can
provide only reasonable assurance of achieving their control
objectives. In addition, the design of disclosure controls and
procedures must reflect the fact that there are resource
constraints and that management is required to apply its judgment
in evaluating the benefits of possible controls and procedures
relative to their costs. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or
that the degree of compliance with policies and procedures may
deteriorate.
ITEM 9B - OTHER
INFORMATION
None.
PART
III
ITEM 10 - DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
and Executive Officers
Name |
|
Age |
|
|
Position |
|
Director/Officer
Since |
Andrew
Boutsikakis |
|
|
45 |
|
|
Chief
Executive Officer, President and Director |
|
February
2020 |
John
Edward (Jay) Hentschel |
|
|
52 |
|
|
Director |
|
June
2017 |
Patrick
White |
|
|
65 |
|
|
Director |
|
October
2009 |
Jared
Levinthal |
|
|
48 |
|
|
Director |
|
December
2018 |
Patrick
Avery |
|
|
66 |
|
|
Chief
Operating Officer |
|
July
2021 |
The
principal occupations for at least the past five years of each of
our directors and executive officers are as follows:
Andrew
Boutsikakis was appointed to be Chief Executive Officer,
President and member of the Board of Directors of the company on
February 2, 2020. Mr.
Boutsikakis has over 15 years of sales experience in financial
services, communications, and business development. In 2014, Mr.
Boutsikakis formed AB Consulting Group (“AB Consulting”) to focus
his efforts in the emerging medical marijuana industry in Nevada
and Arizona. AB Consulting provided corporate consulting services
primarily in sales, licensing, and mergers & acquisition
to the legal cannabis industry. Previously, Andrew was the sales
director at Markets Media and director of business development at
Cohere Communication.
John
Edward (Jay) Hentschel was the Executive Vice President of
Dean and Deluca, Inc. where he has worked from October 2016 to
January 2018. From May 1991 until September 2016, Mr. Hentschel was
a Partner with Accenture, a NYSE-listed global professional
services company where he served as managing director of the Retail
Industry practice advising large retailers. Currently Mr. Hentschel
is not employed. Mr. Hentschel also volunteers on the Retail
Advisory Committee for the New York City Investment Fund, has
authored numerous articles, and holds an MBA with distinction from
Columbia University’s Graduate School of Business.
Patrick
White has been CEO and President of VerifyMe, Inc. since
August 2017. Mr.White was Chief Executive Officer and a member of
the Board of Directors of Document Security Systems, Inc. (“DSS”)
from August 2002 to December 2012, serving as its Chairman of the
Board of Directors from August 2002 until January 2008. Mr. White
then served as a Business Consultant to DSS from 2012 to 2015. DSS
is an NYSE American listed company. Mr. White received his
Bachelor’s of Science (Accounting) and Masters of Business
Administration degrees from Rochester Institute of Technology. We
believe Mr. White is qualified to serve on our board of directors
based on his extensive corporate management experience, including
serving as the chief executive officer of a publicly-held company,
and his experience with the organizational challenges involved with
becoming and operating as a publicly-held company.
Jared
Levinthal has served as a Director of the Company since
December 2018. Mr. Levinthal is a Partner with Lightfoot Franklin
& White, PLLC in Houston, Texas. Mr. Levinthal is a graduate,
with Honors, Order of the Coif, from the University of Texas School
of Law. Mr. Levinthal is a graduate of Tulane University with a BA,
and is a member of the Texas Bar.
Patrick
Avery has over 30 years of experience working in the industries
of fertilizer, mining, specialty chemicals, petroleum, and
construction/project management. For the first 15 years of his
career, Mr. Avery worked for ARCO and Santa Fe Pacific Pipelines in
refining and transportation. In the fertilizer industry, he worked
for 11 years with JR Simplot, one of the largest privately held
food and agribusiness companies in the USA, where he held senior
positions across all key business units such as mining,
manufacturing, supply chain, wholesale sales and energy management,
managing over 1500 employees, three mines(two phosphate and one
silica), and five major manufacturing facilities, and several
warehouse/distribution locations, making dozens of products from
chemical fertilizers, industrial products, and water treatment. Mr.
Avery was also President of Intrepid Potash (NYSE:IPI), where he
led all aspects of mining, manufacturing, logistics and sales. He
has led several junior fertilizer companies through all key phases
of growth and is currently a Board Member at Fertoz an AUS
phosphate company with major assets in North America. More
recently, Mr. Avery is the Principal and Owner of LDR Solution LLC,
a consulting firm for major mining, chemical, fertilizer, project
management and private equity companies.
Term
of Office
Directors
are elected to hold office until the next annual meeting of
stockholders and until their successors are elected and qualified.
Annual meetings of the stockholders, for the selection of directors
to succeed those whose terms expire, are held at such time each
year as designated by the Board of Directors. Officers of the
Company are elected by the Board of Directors, which is required to
consider that subject at its first meeting after every annual
meeting of shareholders. Each officer holds office until his
successor is elected and qualified or until his earlier resignation
or removal.
Committees
of the Board of Directors
We do
not have any committees of the Board of Directors. We consider a
majority of our Board members (consisting of Messrs. Hentschel,
Levinthal and White) to be independent directors under NYSE
American rules.
Corporate
Governance
We do
not have an audit committee, compensation committee or nominating
committee. As we grow and evolve as a SEC registrant, our corporate
governance structure is expected to be enhanced.
ITEM 11 - EXECUTIVE
COMPENSATION
As of
the date of release of these financial statements, the Company has
employment agreement with Mr. Boutsikakis. Mr. Flanagan, Mr.
Humphrey. Mr. Carroll, and Mr. Graber resigned December 27, 2019,
October 4, 2019, February 28, 2019, and November 30, 2018,
respectively. We do not have key person life insurance on the lives
of any of our executive officers.
The
following table discloses compensation received by our Chief
Executive Officer, Chief Operating Officer and President, BoxScore
Brands, Inc., also referred to herein as our “named executive
officers,” for the years ended December 31, 20192020 and
2019.
The
following table sets forth information regarding all cash and
non-cash compensation earned by or paid to all of the executive
officers of the Company who served during the fiscal years ended
December 31, 2020 and 2019 for services in all capacities to the
Company.
Name
and Principal Position |
|
Year |
|
|
Salary
($) |
|
|
Bonus
($) |
|
|
Stock
Awards
($) |
|
|
Warrant
Awards
($) |
|
|
All
Other Compensation
($) |
|
|
Total
($) |
|
Andrew
Boutsikakis (1) |
|
|
2020 |
|
|
|
48,400 |
|
|
|
- |
|
|
|
- |
|
|
|
5,772 |
|
|
|
- |
|
|
|
54,172 |
|
Chief
Executive Officer |
|
|
2019 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Michael
Flanagan (2) |
|
|
2020 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Former
Chief Executive Officer |
|
|
2019 |
|
|
|
90,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
90,000 |
|
Tyler
J. Humphrey (3) |
|
|
2020 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Interim
Chief Financial Officer |
|
|
2019 |
|
|
|
46,500 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
46,500 |
|
Michael
T. Carroll (4) |
|
|
2020 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Former
Chief Executive Officer |
|
|
2019 |
|
|
|
8,667 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8,667 |
|
1) |
Mr.
Boutsikakis was appointed CEO effective February 1, 2020 and was
granted a monthly salary of $12,500. During the year ended December
31, 2020, he earned $137,500 under this arrangement, of which
$48,400 was paid during the year and remaining balance was earned
but unpaid |
|
|
2) |
Terminated
effective December 27, 2019. Mr. Flanagan was appointed CEO
effective April 1, 2019 and was granted a monthly salary of
$10,000. During the year ended December 31, 2019, he earned $90,000
under this arrangement, of which $70,000 was paid during the year
and $20,000 was earned but unpaid. |
|
|
3) |
Resigned
effective October 4, 2019. Mr. Humphrey was appointed CFO effective
March 3, 2019 and was granted an annual salary of $78,000. During
the year ended December 31, 2019, he earned $46,500 under this
arrangement, of which $7,500 was paid during the year and $39,000
was earned but unpaid. |
|
|
4) |
Resigned
effective February 28, 2019. Mr. Carroll was appointed CEO
effective December 3, 2018 and was granted an annual salary of
$52,000. During the year ended December 31, 2019, he earned $8,667
under this arrangement, of which $4,667 was paid during the year
and $4,000 was earned but unpaid. |
Employment Agreement
The Company and Mr. Boutsikakis
entered into an employment agreement, effective February 1, 2020,
for a period of two years. Mr. Boutsikakis in his capacity as Chief Executive
Officer was granted a monthly salary of $12,500, of which
$7,500 are payable in cash and $5,000 are payable in a convertible
note. Mr. Boutsikakis
also received a five-year
warrant to purchase 3,000,000 shares of common stock at $0.05. The
warrant has a two-year, quarterly vesting
schedule.
The Company and Mr. Flanagan entered
into an employment agreement, effective April 1, 2019, for a period
of two years, which may be extended by mutual consent. Mr.
Flanagan in his capacity
as Chief Executive Officer is entitled to 10% of company revenue
with a monthly guarantee of $10,000 as a non-recourse draw against
sales. Mr. Flanagan will also receive a five (5) year warrant to
purchase 3,000,000 shares of common stock at $.07. The warrant will
have a two-year, quarterly vesting schedule. The Employment
Agreement may be terminated prior to such date, however, upon Mr.
Flanagan’s death, disability, by the Company for Cause (as defined
in the Employment Agreement), by Mr. Flanagan for Good Reason (as
defined in the Employment Agreement) and voluntary termination by
Mr. Flanagan other than for Good Reason upon 30 days’ notice. Upon
termination by the Company for any reason other than Cause or by
Mr. Flanagan for Good Reason, Mr. Flanagan will receive any accrued
but unpaid salary through the date of termination and an amount
equal to his salary at the time of termination payable for the
remainder of the then-current term. Upon termination by reason of
Mr. Flanagan’s death or disability, he will receive any accrued but
unpaid salary through the date of termination and an amount equal
to his salary at the time of termination payable for 1 year
beginning 30 days after the date of termination. Upon termination
by the Company for Cause or voluntarily by Mr. Flanagan for other
than Good Reason, he will receive only accrued but unpaid salary
through the date of termination. Mr. Flanagan resigned effective
December 27, 2019. Mr.
Flanagan was terminated effective December 27,
2019.
Directors
Compensation
The
Company’s non-employee directors do not currently receive cash
compensation for their services as directors although they are
provided reimbursement for out-of-pocket expenses incurred in
attending Board meetings. In order to attract and retain qualified
persons to our Board, in July 2011, the Company granted its
non-employee directors stock options through its Equity Incentive
Plan. During 2011, each non-employee director received 2,500 stock
options at an exercise price of $60.00, vesting equally over a
three year period, and with an expiration date of ten years from
date of grant. In 2015, the Company granted each of its
non-employee directors 500,000 stock options at an exercise price
of $0.20, one third of the options vesting immediately and the
balance over a two year period, and with an expiration date of five
years from the date of grant.
Equity
Incentive Plan
On
July 22, 2011, the Board of Directors of the Company approved the
Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26,
2011, stockholders holding a majority of shares of the Company
approved, by written consent, the Plan. The Plan provides for the
grant of options intended to qualify as “incentive stock options”
and “non-statutory stock options” within the meaning of Section 422
of the Internal Revenue Code of 1986, together with the grant of
bonus stock and stock appreciation rights, at the discretion of our
Board of Directors. Incentive stock options are issuable only to
our eligible officers, directors and key employees. Non-statutory
stock options are issuable only to our non-employee directors and
consultants. Upon stockholder approval of the Plan, a total of
5,000,000 shares of common stock or appreciation rights may be
issued under the Plan. The Plan will be administered by our full
Board of Directors. Under the Plan, the Board will determine which
individuals shall receive options, grants or stock appreciation
rights, the time period during which the rights may be exercised,
the number of shares of common stock that may be purchased under
the rights and the option price. As of December 31, 2020, the
Company had 2,500 options outstanding under the Plan to employees,
directors and outside consultants.
On
November 22, 2017, stockholders of the Company holding a majority
of the outstanding shares of the Company’s common stock approved,
by written consent, an increase in the number of shares reserved
under the Plan by 10,000,000 shares. After this increase of
10,000,000 shares, the total number of shares of common stock
reserved under the Plan totals 15,000,000 shares. On November 16,
2017, the Company’s Board of Directors approved the increase of the
10,000,000 shares reserved under the Plan.
Limitation
on Liability and Indemnification of Officers and
Directors
Our
Certificate of Incorporation provides that liability of directors
to us for monetary damages is eliminated to the full extent
provided by Delaware law. Under Delaware law, a director is not
personally liable to us or our stockholders for monetary damages
for breach of fiduciary duty as a director except for liability (i)
for any breach of the director’s duty of loyalty to us or our
stockholders; (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law; (iii)
for authorizing the unlawful payment of a dividend or other
distribution on our capital stock or the unlawful purchases of our
capital stock; (iv) a violation of Delaware law with respect to
conflicts of interest by directors; or (v) for any transaction from
which the director derived any improper personal
benefit.
The
effect of this provision in our Certificate of Incorporation is to
eliminate our rights and our stockholders’ rights (through
stockholders’ derivative suits) to recover monetary damages from a
director for breach of the fiduciary duty of care as a director
(including any breach resulting from negligent or grossly negligent
behavior) except in the situations described in clauses (i) through
(v) above. This provision does not limit or eliminate our rights or
the rights of our security holders to seek non-monetary relief,
such as an injunction or rescission, in the event of a breach of a
director’s duty of care or any liability for violation of the
federal securities laws.
ITEM 12 - SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
As of
September 24, 2021, there were 226,604,039 shares of common stock
outstanding. The following table sets forth certain information
regarding the beneficial ownership of the outstanding common shares
as of September 24, 2021 by (i) each person who owns beneficially
more than 5% of our outstanding common stock; (ii) each of our
executive officers and directors; and (iii) all of our executive
officers and directors as a group. The shares listed include as to
each person any shares that such person has the right to acquire
within 60 days from the date hereof. Except as otherwise indicated,
each such person has sole investment and voting power with respect
to such shares, subject to community property laws where
applicable. The address of our executive officers and directors is
in care of us at 3675 W. Teco Avenue Suite 8, Las Vegas, Nevada
89118.
SECURITY
OWNERSHIP OF MANAGEMENT
Name
of Beneficial Owner |
|
Number of
Shares Beneficially
Owned |
|
|
Percentage
Owned (%) |
|
Andrew
Boutsikakis (1) |
|
|
3,000,000 |
|
|
|
1.31 |
% |
Patrick
White (2) |
|
|
778
,757 |
|
|
|
* |
|
John
Edward (Jay) Hentschel |
|
|
200,000 |
|
|
|
* |
|
Jared
Levinthal |
|
|
300,000 |
|
|
|
* |
|
All
directors and named executive officers as a group (4
individuals) |
|
|
4,278,757 |
|
|
|
1.86 |
% |
* |
Less
than 1% |
|
|
1. |
Includes
3,000,000 shares issuable upon exercise of warrants. |
|
|
2. |
Includes
2,500 shares issuable upon exercise of options. |
ITEM 13 - CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Director
Independence
As
our common stock is currently quoted on the OTC Pink, we are not
subject to the rules of any national securities exchange which
require that a majority of a listed company’s directors and
specified committees of the board of directors meet independence
standards prescribed by such rules. However, we consider a majority
of our Board members (consisting of Messrs. Hentschel, White and
Levinthal) to be independent directors under NYSE American stock
exchange rules.
ITEM 14 – PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Audit
Fees
Audit
fees consist of fees for professional services rendered for audit
and review services of the Company’s consolidated financial
statements included in the Company’s annual financial statements
and review of financial statements included on Form 10-Q, and for
services that are normally provided by the auditor in connection
with statutory and regulatory filings or engagements. The aggregate
fees billed or to be billed for professional services rendered by
our principal accountant, Pinnacle Accountancy Group of Utah (a dba
of the registered firm Heaton & Company, PLLC) (“Pinnacle”) for
audit and review services for the year ended December 31, 2020 were
$25,000. The aggregate fees billed for professional services
rendered by our prior principal accountant, Freed Maxick CPAs, P.C.
(“Freed”), for audit and review services for the year ended
December 31, 2019 were $67,239. For the years ended December 31,
2020 and 2019, the Company was not required to have an audit of its
internal controls over financial reporting.
Audit
Related Fees
The
aggregate fees billed for other audit related services by our
principal accountant, Pinnacle, or our prior principal accountant,
Freed, pertaining to registration statements for the years ended
December 31, 2020 and 2019 were approximately $0.
Tax
Fees
The
aggregate fees billed for professional services rendered by our
principal accountant, Pinnacle, for preparation of tax returns
during the year ended December 31, 2020 were $0. The aggregate fees
billed for professional services rendered by our prior principal
accountant, Freed, for preparation of tax returns during the year
ended December 31, 2019 were $2,200.
All
Other Fees
The
aggregate other fees billed for professional services rendered by
our principal accountant, Pinnacle, or our prior principal
accountant, Freed, during the years ended December 31, 2020 and
2019 were $0.
We do
not have an Audit Committee. Our Board of Directors pre-approves
all auditing services and permissible non-audit services provided
to us by our independent registered public accounting firm. All
fees listed above were pre-approved in accordance with this
policy.
ITEM 15 - EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
(a)
Exhibits
3.1 |
|
Certificate
of Incorporation, dated March 26, 2007 (incorporated by reference
to the Company’s Registration Statement on Form 02S-1 filed on
April 9, 2010). |
3.2 |
|
Certificate
of Amendment of Certificate of Incorporation, dated October 4, 2010
(incorporated by reference to the Company’s Current Report on Form
8-K filed on October 7, 2010). |
3.3 |
|
Certificate of Amendment
of the Certificate Incorporation (incorporated by reference to the
Company’s Current Report on Form 8-K filed on March 1,
2018). |
3.4 |
|
By-laws, as
amended (incorporated by reference to the Company’s Registration
Statement on Form S-1 filed on April 9, 2010). |
10.3 |
|
Form of
Senior Convertible Note issued to Cobrador Multi-Strategy Partners,
LP (incorporated by reference to the Company’s Quarterly Report on
Form 10-Q filed on November 19, 2013). |
10.4 |
|
Form of
Warrant to Purchase Common Stock issued to Cobrador Multi-Strategy
Partners, LP (incorporated by reference to the Company’s Quarterly
Report on Form 10-Q filed on November 19, 2013). |
10.5 |
|
Form of
Vending Machine Equipment Lease with Automated Retail Leasing
Partners (incorporated by reference to the Company’s Quarterly
Report on Form 10-Q filed on November 19, 2013). |
10.6 |
|
Form of
Warrant between Automated Retail Leasing Partners, LP and Internet
Media Services, Inc. (incorporated by reference to the Company’s
Annual Report on Form 10-K filed on April 15,
2014). |
10.7 |
|
Promissory
Note, dated May 30, 2014, issued to Automated Retail Leasing
Partners, LP (incorporated by reference to the Company’s
Registration Statement on Form S-1/A filed on October 1,
2014). |
10.8 |
|
Equipment
Lease Agreement, dated October 21, 2014, between BoxScore Brands,
Inc. and Perkin Industries, LLC (incorporated by reference to the
Company’s Current Report on Form 8-K filed on October 30,
2014). |
10.9 |
|
Warrant to
Purchase Common Stock issued to Perkin Industries, LLC, dated
October 21, 2014 (incorporated by reference to the Company’s
Current Report on Form 8-K filed on October 30,
2014). |
10.10 |
|
Modification
to the Series of Cobrador Stock Purchase Agreement, Senior
Convertible Notes and Series A Warrants between BoxScore Brands,
Inc. and Cobrador Multi-Strategy Partners LP (incorporated by
reference to the Company’s Current Report on Form 8-K filed on
January 8, 2015). |
10.11 |
|
NHL/U-Vend
Corporate Marketing Letter Agreement, dated February 27, 2015
(incorporated by reference to the Company’s Current Report on Form
8-K filed on March 17, 2015). |
10.12 |
|
Form of
Securities Purchase Agreement between the Company and each
investor, dated on or about August 17, 2015 (incorporated by
reference to the Company’s Quarterly Report on Form 10-Q filed on
September 4, 2015). |
10.13 |
|
Form of
Convertible Promissory Note, dated on or about August 17, 2015
(incorporated by reference to the Company’s Quarterly Report on
Form 10-Q filed on September 4, 2015). |
10.14 |
|
Form of
Warrant to Purchase Common Stock, dated on or about August 17, 2015
(incorporated by reference to the Company’s Quarterly Report on
Form 10-Q filed on September 4, 2015). |
10.15 |
|
Securities
Purchase Agreement between the Company and each investor, dated
June 30, 2016 (incorporated by reference to the Company’s Current
Report on Form 8-K filed on July 28, 2016). |
10.16 |
|
Form of
Convertible Promissory Note, dated June 30, 2016 (incorporated by
reference to the Company’s Current Report on Form 8-K filed on July
28, 2016). |
10.17 |
|
Form of
Warrant to Purchase Common Stock, dated June 30, 2016 (incorporated
by reference to the Company’s Current Report on Form 8-K filed on
July 28, 2016). |
10.18 |
|
Debt
Conversion Agreement of Raymond Meyers, dated June 30, 2016
(incorporated by reference to the Company’s Current Report on Form
8-K filed on July 28, 2016). |
10.19 |
|
Debt
Conversion Agreement of Paul Neelin, dated June 30, 2016
(incorporated by reference to the Company’s Current Report on Form
8-K filed on July 28, 2016). |
10.20 |
|
Debt
Conversion Agreement of Mark Chapman, dated June 30, 2016
(incorporated by reference to the Company’s Current Report on Form
8-K filed on July 28, 2016). |
10.21 |
|
Agreement to
Amend Leases, dated as of August 8, 2016, between the Company and
Automated Retail Leasing Partners, LP (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q filed on August 15,
2016). |
10.22 |
|
Warrant to
Purchase Shares of Common Stock issued to Automated Retail Leasing
Partners, LP, dated August 8, 2016 (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q filed on August 15,
2016). |
10.23 |
|
Master
Services Consulting Agreement, dated as of February 1, 2017,
between the Company and Raymond Meyers (incorporated by reference
to the Company’s Current Report on Form 8-K filed on February 6,
2017). |
10.24 |
|
Employment
Agreement, dated as of February 1, 2017, between the Company and
David Graber (incorporated by reference to the Company’s Current
Report on Form 8-K filed on February 6, 2017). |
10.37 |
|
Master
Distribution Agreement, dated as of January 26, 2017, between the
Company and UVend Group of Companies (incorporated by reference to
the Company’s Current Report on Form 8-K filed on February 6,
2017). |
21.1 |
|
Subsidiaries of the
Registrant (filed herewith). |
31.1 |
|
Certification of
Principal Executive Officer and Principal Financial Officer
Pursuant to Rule 13a-14(a) and15d-14(a) (filed
herewith). |
32.1 |
|
Certification of Principal Executive
Officer and Principal Financial Officer Pursuant to 18 U.S.C. 1350
(furnished herewith). (1) |
101.INS* |
|
XBRL Instance
Document |
101.SCH* |
|
XBRL Schema
Document |
101.CAL* |
|
XBRL Calculation
Linkbase Document |
101.DEF* |
|
XBRL Definition Linkbase
Document |
101.LAB* |
|
XBRL Label Definition
Document |
101.PRE* |
|
XBRL Presentation
Linkbase Document |
|
(1) |
In
accordance with SEC Release 33-8238, Exhibit 32.1 is being
furnished and not deemed filed for purposes of Section 18 of the
Exchange Act. |
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act of
the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
BOXSCORE
BRANDS, INC. |
|
|
|
September
24, 2021 |
By: |
/s/
Andrew Boutsikakis |
|
|
Andrew
Boutsikakis |
|
|
Chief
Executive Officer and President |
Pursuant
to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates
indicated.
September
24, 2021 |
/s/
Andrew Boutsikakis |
|
Andrew
Boutsikakis
Chief Executive Officer, Chief Financial Officer, President and
Director
(Principal Executive Officer,
Principal Financial and Accounting Officer) |
September
24, 2021 |
/s/
John Edward (Jay) Hentschel |
|
John
Edward (Jay) Hentschel
Director |
|
|
September
24, 2021 |
/s/
Patrick White |
|
Patrick
White
Director |
|
|
September
24, 2021 |
/s/
Jared Levinthal |
|
Jared
Levinthal
Director |
21
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