CNCC Canna Corporation (CE)

Notes to the Restated Condensed Consolidated Financial Statements

March 31, 2019

(Unaudited)

NOTE l: NATURE OF ORGANIZATION

Canna Corporation (the "Company") was initially a Florida Corporation incorporated on July 29, 2013, established to manufacture and distribute high-quality, hand-rolled , premium cigars under the Rich Cigars brand name. The Company had branded custom cigars to be sold via the internet and through retail locations. The Company's primary operations are currently through Northway Mining, LLC as a data center for third parties’ cryptomining processes located in New York State, in which the Company has a majority interest (55%) acquired on August 1, 2018. Management intends to conduct our business principally in the U.S.

Northway Mining, LLC’s (“NWM”) core business is providing hosting and security services for third parties’ cryptomining processes, including continuous camera recording, night-vision, motion activation, and automatic text notification to onsite staff.

In November 2017, the Company underwent a change in control and became a Colorado corporation. As a result of this change, the Company changed the business name to Intercontinental Technology, Inc. in order to reflect a change in the Company's direction and overall strategy. The Company's strategic direction was to focus on the acquisition, development, and marketing of proprietary patented products that are readily marketable internationally, and at the same time, entering the business of cryptocurrency mining by the ownership of multiple cryptocurrency mining machines.

On December 26, 2017, the Company completed a reorganization. Rich Cigars, Inc., having been renamed to RCGR SUB, Inc., became a direct, wholly-owned subsidiary of a newly formed Delaware corporation, First Intercontinental Technology, Inc. First Intercontinental Technology, Inc. was then considered the parent and is now the public entity. Additionally, another Delaware corporation was formed, Intercontinental Services, Inc. As of the effective date of the merger, all outstanding shares of common stock and preferred stock of Rich Cigars, Inc. were automatically converted into identical shares of common stock or preferred stock in the parent on a one-for-one basis.

On February 16, 2018, the Company's Board of Directors voted to annul and vitiate the series of transactions in Delaware by filing certificates of correction with Delaware's Secretary of State. On February 21, 2018, the Company amended and restated the Articles of incorporation in order to change the Company's name to Mining Power Group, Inc.

On April 4, 2019, the Company effected a name change in the State of Colorado from Mining Power Group, Inc. to “Canna Corporation” in preparation for a refocus of its business plan. Similarly, the name change was filed in the State of Florida, where the Company’s headquarters are located.

NOTE 2: GOING CONCERN

These consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. As of March 31, 2019, the Company has an accumulated deficit of $5,581,732 since inception. This raises substantial doubt about the Company's ability to continue as a going concern.

Management's plans include raising capital through the equity markets to fund operations and eventually generate revenue through its business; however, there can be no assurance that the Company will be successful in such activities. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classifications of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNT POLICIES

Principles of Consolidation

The accompanying consolidated financial statements of Canna Corporation include its majority-owned subsidiary Northway Mining, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements include the accounts of Canna Corporation and its subsidiary Northway Mining, LLC, which are controlled and owned 55% by Canna Corporation.

All of the equity interests in Northway Mining not held by the Company are reflected as non-controlling interests. In the consolidated statements of operations, we allocate net income (loss) attributable to non-controlling interests to arrive at net income (loss) attributable to the Company.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on June 17, 2019.

The Company has elected a December 31 fiscal year-end.

Use of Estimates

The preparation of consolidated financial statements in conformity with Generally Accepted Accounting Principles (" GAAP ") in the United States of America requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company’s long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Cash and Cash Equivalents

The Company considers all investments with a maturity date of three months or less when purchased to be cash equivalents. The Company had cash in the amount of $1,756 and $183,347 as of March 31, 2019 and December 31, 2018, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and general

economic conditions that may affect a client’s ability to pay.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company determines when receivables are past due or delinquent based on how recently payments have been received. The Company has net $0 in accounts receivable at March 31, 2019 and December 31, 2018 .

Cryptocurrencies

The Company receives cryptocurrencies from its customers as a form of payment and converts them into cash in less than 3 months from receipt. The Company accounts for its cryptocurrencies as indefinite-lived intangible assets at historical cost less impairment in accordance with ASC 350 Intangibles - Goodwill and Other. During the three months ended March 31, 2019 and 2018, the Company recorded impairment losses of $6,189 and $0, respectively, resulting in cryptocurrency balances of $0 and $6,189 as of March 31, 2019 and December 31, 2018, respectively.

Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. During the three months ended March 31, 2019 and 2018, the Company purchased $103,805 and $0, respectively, of fixed assets, wrote off $0 and $498, respectively, of fixed assets, and recorded $28,465 and $0, respectively, of depreciation expense, resulting in net fixed assets of $1,483,830 and $1,408,490 at March 31, 2019 and December 31, 2018, respectively, as follows:

Deferred revenue

The Company recognizes revenue for subscription hosting service sales over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. As of March 31, 2019 and December 31, 2018, the balances of deferred revenue were $255,362 and $275,362, respectively. The reduction of $20,000 was due to a payment made to against one customer’s deposit.

Beneficial Conversion Feature

If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature ("BCF"). A BCF is recorded by the Company as a debt discount pursuant to ASC 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF, and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method.

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion features.

Derivative Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and, further, if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black Scholes option-pricing model.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

U.S. generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

Level 1: Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

● quoted prices for similar assets or liabilities in active markets;

● quoted prices for identical or similar assets or liabilities in markets that are not active;

● inputs other than quoted prices that are observable for the asset or liability; and

● inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3: Inputs that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).

Our financial instruments consist of cash, accounts receivable, accounts payable, and debt. We have determined that the book value of our outstanding financial instruments as of March 31, 2019 and December 31, 2018, approximates the fair value due to their short-term nature.

Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of December 31, 2018 and March 31, 2019:

The Company reflects the fair value for liabilities using the Black Scholes pricing model. The following chart discloses the estimated fair values for the Company’s derivative financial instruments based on the parameters disclosed in our Notes 5 and 6 hereto:

Revenue Recognition

Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2014-09, “Revenue from Contracts with Customers,” (“Topic 606”) which provides a principles-based, five-step approach to measure and recognize revenue from contracts with customers. Revenue is recognized when the following criteria are met:

The adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations, cash flows, shareholders’ equity (deficit), or balance sheets as of the adoption date.

The Company's revenues have been generated primarily through hosting services to third parties. The terms of these agreements generally consist on a deposit and monthly billing cycles covering our services.  

For the three months ended March 31, 2019, all met the above criteria or in exceptional cases only involvement was to sell to some of the end users at pricing that is consistent with market transactions, thereby allowing for the recognition of revenue for the revenue on such transactions upon receipt. 

We periodically review for any expected period of substantial involvement under the agreements that provide for non-refundable up-front payments and fees. If applicable, we will adjust the amortization periods when appropriate to reflect changes in assumptions relating to the duration of our expected involvement.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Additionally, the recognition of future tax benefits, such as net operating loss carryforwards, is required to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are determined using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.

In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Company's assets and liabilities result in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some or all of the deferred tax asset will not be realized. In assessing the realizability of the deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies.

The Company files income tax returns in the United States, New York and Florida, which are subject to examination by the tax authorities in these jurisdictions. Generally, the statute of limitations related to the Company's federal and state income tax return is three years. The state impact of any federal changes for prior years remains subject to examination for a period up to five years after formal notification to the states.

Management has evaluated tax positions in accordance with ASC 740, Income Taxes, and has not identified any significant tax positions, other than those disclosed. All of the Company's tax years since inception remain subject to examination by Federal and State jurisdictions.

Earnings Per Share

Basic net income per common share ("Basic EPS'') excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share ("Diluted EPS'') reflects the potential dilution that could occur if stock options or other contracts to issue shares of common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share.

For the period ended March 31, 2019, the convertible instruments are anti-dilutive and therefore, have been excluded from earnings (loss) per share.

NOTE 4: RESTATEMENT

This Amendment No. 1 to the Period Ended as of March 31, 2019, on this Form (the "Amendment") amends the Quarterly Report filed to the U.S. Securities and Exchange Commission of Canna Corporation for the period ended March 31, 2019 (the "Original Filing"), that was originally filed with the U.S. Securities and Exchange Commission on June 26, 2019.

The Amendment is being filed to correct entries in the Original Filing pertaining to the sale and transfer on March 14, 2019 of certain convertible promissory notes, originally issued to Eagle Equities, LLC on August 10, 2018 in the amount of $300,000 and $100,000. On March 14, 2019, Eagle Equities, LLC, declared default on the $300,000 and $100,000 notes resulting in interest and penalties equal to $142,884 and $47,198, respectively. All principal, accrued interest, and penalties were purchased by four investors and the Company recognized the new debts totaling $590,082. As a result, the Company determined this transaction should be accounted for as a debt extinguishment in accordance with ASC 470-50-40, “Debt - Modifications and Extinguishments,” in that the new principal amount adjusted the net present value of the notes’ remaining cash flows by an excess of 10% from the terms of the original notes. The $190,082 in additional principal, netted with settlement of existing accrued interest on the notes of $23,787, resulted in a loss on settlement of debt of $166,295.

The revised principal balances on these notes resulted in following adjustments;

Interest expense and amortization of debt discount

Also, $51 originally reported as other current assets was charged to expense.

Except as described above, the Amendment does not modify any other disclosures presented in, or exhibits to, the Original Filing in any way.

RESTATED SUBSEQUENT EVENTS

The Company has evaluated subsequent events that occurred from the date of the Original Filing through the date these financial statements were issued, and has determined there are additional subsequent events requiring disclosure as follows:

On July 1, 2019 the Company sold any and all interest of Northway Mining, LLC to Dror Svorai, under common control.

On January 16, 2020, the Company entered into an agreement (the "Acquisition Agreement"), to acquire the majority ownership interest of Agra Nutraceuticals Corporation ("Agra"), a Colorado corporation, having a registered business address of 67 SW 12th Ave, Ste 500, Deerfield Beach, Florida 33442. Pursuant to the Acquisition Agreement the Company acquires seventy-seven and one-half percent (77.5%) of the issued and outstanding shares of common stock of Agra to be transferred to it from the majority shareholder of Agra, SBS Eco Trust. In consideration of the acquisition of the Agra shares, Dror Svorai, the Registrant's majority shareholder, President, CEO and sole officer

and director transferred his 803,000 shares of the Registrant's Series A Preferred Stock and 197,000,000 shares of its common stock to SBS Eco.

In connection with the Acquisition Agreement, the Company underwent a change of control. As a result of the Acquisition, the SBS Eco Trust, whose trustee is Esther Bittelman, an individual, and Secretary of Agra, became controlling and majority shareholder of the Registrant (the "Change of Control").

As a result of entry into the Acquisition Agreement, Mr. Svorai resigned at the end of the business day on January 17, 2020, following the appointments and acceptances by the new officers and directors of the Company, Agra will be operated as a majority-owned subsidiary of the Company. The Acquisition will become effective 20 days following the mailing of an Information Statement to shareholders pursuant to Schedule 14.

There are a total of 1,000,000 shares designated as Series A Preferred Stock. Each share of Series A Preferred converts to 1,000 shares of common. Each share of the Series A Series A Preferred Stock has the voting rights equivalent of 20,000 shares of common stock (identical in every other respect to the voting rights of the holders of common stock entitled to vote at any regular or special meeting of the shareholders).

NOTE 5 : NOTES PAYABLE

Convertible Notes Payable

Power Up Lending Group, LTD

On May 30, 2017, the Company entered into a convertible advance with Power Up Lending Group, LTD. The advance, with a face value of $38,000, bore interest at 12% per annum and was payable on March 5, 2018. The note was issued at a 7% discount, resulting in net proceeds received after issuance costs and fees of $35,000. Additionally, the note was convertible at the holder's discretion into shares of the Company's common stock based on a conversion formula of 60% multiplied by the lowest price of the common shares for the 15 trading prior to which the Notice of Conversion was received. During the year ended December 31, 2018, the noteholder converted $50,858 of principal and interest into common stock, resulting in $0 and $2,387 in principal and interest as of March 31, 2019 and December 31, 2018, respectively. The value of the conversion feature was assigned to the derivative liability. The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 0 days term to maturity, risk free interest rate of 0% and annualized volatility of 0%, valued at $7,491.

Eagle Equities LLC

During 2018, the Company entered into three notes with Eagle Equities LLC. The notes are convertible at the holder’s discretion into shares of the Company’s common stock based on a conversion formula of 60% multiplied by the lowest price of the common shares for the 15 day trading period prior to which the Notice of Conversion is received. In the event the Company experiences a DTC Chill on its shares, the Conversion Price shall be decreased to 50% instead of 60% while that chill is in effect. In accordance with ASC 835-30-45, Interest, the Company records the fees, costs, and original issue discount as reduction of the carrying amount of the debt and amortizes the balances over the life of the debt instrument. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. The conversion formula created an embedded derivative conversion feature for each note. The notes are summarized as follows:

On July 3, 2018, the Company entered into a convertible note with Eagle Equities LLC. The note, with a face value of $100,000, bears interest at 8% per annum and is payable on July 3, 2019. The net proceeds received after issuance costs and fees was $96,500. On January 22, 2019, Eagle Equities LLC declared a default of the convertible note payable to them resulting in fees and penalties equal to $32,108. Also, on January 22, 2019 Eagle Equities LLC , sold all of its potentially dilutive convertible note to M Svorai Investment, Inc, a related party, including $7,600 in accrued interest. On February 2, 2019 M Svorai Investments, Inc exercised the convertible option, resulting in 5,162,242 shares issued; at a price of $0.02712 per share issued for $132,108 in principal and $7,892 in interest accrued to the conversion date. The

remaining balance principal and interest as of March 31, 2019 was $0. As of December 31, 2018, principal and interest balances were $100,000 and $9,104, respectively.

On August 10, 2018, the Company entered into a convertible note with Eagle Equities LLC. The note, with a face value of $300,000, bears interest at 8% per annum and is payable on August 10, 2019. The net proceeds received after issuance costs and fees was $285,000. On March 14, 2019 Eagle Equities LLC declared a default of the convertible note payable to them resulting in fees and penalties of $142,884, and in same date, sold all of its potentially dilutive convertible note to each of the following: $147,628 to Back Nine Capital, LLC., $147,628 to One Investment Capital, Inc., and $147,628 to Sign N Drive Auto Mall, Inc. As of March 31, 2019 the following chart show the balances on principal and interest as of March 31, 2019:

On March 14, 2019, Back Nine Capital LLC, purchased one third of a potentially dilutive convertible note held by Eagle Equities, LLC, issued on August 10, 2018 with a face value of $300,000 and $142,884 as Default Charges, therefore Back Nine Capital, LLC, now held $147,628. The Company valued the related conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 132 days to maturity, risk free interest rate of 2.44% and annualized volatility of 349%. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to be amortized over the life of the convertible debt. The principal and interest balances as of March 31, 2019 were $147,628 and $1,234 respectively.

On March 14, 2019, One Investment Capital, Inc, purchased one third of a potentially dilutive convertible note held by Eagle Equities, LLC, issued on August 10, 2018 with a face value of $300,000 and $142,884 as Default Charges, therefore Back Nine Capital, LLC, now held $147,628. The Company valued the related conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 132 days to maturity, risk free interest rate of 2.44% and annualized volatility of 349%. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to amortized over the life of the convertible debt. The principal and interest balances as of March 31, 2019 were $147,628 and $1,234 respectively.

On March 14, 2019, Sign N Drive Auto Mall, Inc, purchased one third of a potentially dilutive convertible note held by Eagle Equities, LLC, issued on August 10, 2018 with a face value of $300,000 and $142,884 as Default Charges, therefore Sign N Drive, now held $147,628. The Company valued the related conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 132 days to maturity, risk free interest rate of 2.44% and annualized volatility of 349%, valued at $422,432. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to amortized over the life of the convertible debt. The principal and interest balances as of March 31, 2019 were $147,628 and $1,234 respectively.

On August 10, 2018, the Company entered into a convertible note with Eagle Equities LLC. The note, with a face value of $100,000, bears interest at 8% per annum and is payable on August 10, 2019. The net proceeds received after issuance costs and fees was $95,000. The principal and interest balances as of March 14, 2019 were $100,000 and $ 5,384, respectively. As of December 31, 2018, principal and interest balances were $100,000 and $3,784, respectively. On March 14, 2019 Eagle Equities LLC declared a default of the convertible note payable to them in the amount of $47,198, and in same date Eagle Equities LLC, sold all of its potentially dilutive convertible note to Gary Berlly, an individual, included $47,198 in accrued interest and penalties. The Company valued the related conversion

feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 132 days term to maturity, risk free interest rate of 2.44% and annualized volatility of 349%, valued at $421,203. The value of the conversion feature was assigned to the derivative liability and created a loss and debt discount to be amortized over the life of the convertible debt. The principal and interest balances as of March 31, 2019 were $147,198 and $1,234 respectively.

Firstfire Global Opportunity Fund, LLC

On September 11, 2018, the Company entered into a convertible note with Firstfire Global Opportunities Fund, LLC. The note, with a face value of $210,000, bears interest at 5% per annum and was payable on July 11, 2018. The note was issued at a $10,000 (“OID”) discount. The net proceeds received after issuance costs and fees was $195,000. Additionally, the note is convertible at the holder's discretion into shares of the Company's common stock based on a conversion formula of 65% multiplied by the lowest price of the common shares for the 20 consecutive trading days period immediately preceding the Trading Day that the Company receives a Notice of Conversion. The conversion formula created an embedded derivative conversion feature.

On January 16, 2019, Firstfire Global Opportunities Fund, LLC sold all of its potentially dilutive convertible note of $210,000 issued on September 11, 2018 to: (i) twenty five percent (25%) of its potentially dilutive convertible note to Back Nine Capital LLC, or $52,500; (ii) twenty five percent (25%) of its potentially dilutive convertible note to Gary Berlly, or $52,500; (iii) twenty five percent (25%) of its potentially dilutive convertible note to One Investment Capital, or $52,500 and (iv) twenty five percent (25%) of its potentially dilutive convertible note to Sig N Drive Auto Mall, Inc, or $52,500.

On January 22, 2019, Back Nine Capital, LLC exercised the convertible option, resulting in 3,000,000 shares issued; at a price of $0.0130 per share issued for $39,000 in principal. The remaining balance on the note as of March 31, 2019 was $13,500 and $159 in accrued interest. The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 95 days term to maturity, risk free interest rate of 2.40% and annualized volatility of 333%, valued at $33,388. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to be amortized over the life of the convertible debt.

On January 23, 2019, Gary Berlly exercised the convertible option, resulting in 3,000,000 shares issued; at a price of $0.0130 per share issued for $39,000 in principal. The remaining balance on the note as of March 31, 2019 was $13,500 and $159 in accrued interest. The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 95 days term to maturity, risk free interest rate of 2.40% and annualized volatility of 333%, valued at $33,388. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to be amortized over the life of the convertible debt.

On January 23, 2019, One Investment Capital, Inc exercised the convertible option, resulting in 3,000,000 shares issued; at a price of $0.0130 per share issued for $39,000 in principal. The remaining balance on the note as of March 31, 2019 was $13,500 and $159 in accrued interest. The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 95 days term to maturity, risk free interest rate of 2.40% and annualized volatility of 333%, valued at $33,388. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to be amortized over the life of the convertible debt.

On January 23, 2019, Sign N Drive Auto Mall, Inc exercised the convertible option, resulting in 3,000,000 shares issued; at a price of $0.0130 per share issued for $39,000 in principal. The remaining balance on the note as of March 31, 2019 was $13,500 and $159 in accrued interest. The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of March 31, 2019: dividend yield of zero, 95 days term to maturity, risk free interest rate of 2.40% and annualized volatility of 333%, valued at $33,388. The value of

the conversion feature was assigned to the derivative liability and created a loss and a debt discount to be amortized over the life of the convertible debt.

At December 31, 2018, the above loans had an aggregate outstanding principal balance of $710,000 and unamortized debt discount of $418,314, resulting in net principal of $291,686.

Loans Payable

The Company acquired certain real estate and vehicles, [the unpaid balance is guaranteed by mortgages with a 12 months maturity 5% interest rate, along with a lien and 72 month maturity on the vehicles].

The total mortgage balance with 707 Flats Rd. and Marsan Properties as of December 31, 2018 was $617,400 and $520,000 as of March 31, 2019, which is payable in September 2019.

The Company also has loan agreements with:

The aggregate principal balance and unamortized debt discount on these loans totaled $52,579 and $180,085, respectively, at March 31, 2019 and December 31, 2018. During the three months ended March 31, 2019 and 2018, the Company received, in aggregate, total proceeds of $40,500 and $0, respectively.

NOTE 6 : RELATED PARTY LOANS

Convertible Notes Payable

On February 21, 2018 Crown Bridge Partners LLC, sold part of its potentially dilutive convertible note to D&D Capital, Inc, a related party. Accrued interest related to this advance was $686 and $541 at March 31, 2019 and December 31, 2018, respectively. The Company valued this conversion feature using the Black Scholes valuation model; as of March 31, 2019, due to the note is in default there are no assumptions, therefore the note has a conversion option ’s value of $33,335. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to be amortized over the life of the convertible debt. The remaining principal balance as of March 31, 2019 is $ 7,379.

During the three months ended March 31, 2018, Kodiak Capital declared a default of the convertible note payable to them invoking 22% retroactive interest and also put into effect a penalty of $2,000 per day for non-delivery of the shares according to the note agreement, which led to increasing the balance of the note to $142,633 (including $2,630 accrued interest on the Kodiak note) at March 31, 2018. On February 15, 2018, S&E Capital, LLC, a related party to Mining Power Group Inc., reached an agreement with Kodiak Capital to purchase the note. As a result, the Company recognized a gain of $137,054 due to the adjustment to remove all aspects of the Kodiak note (derivative liability and unamortized issuance cost and debt discount. During 2018, S&E Capital, Inc., exercised the convertible option, resulting in 2,450,000 shares issued; at a price of $0.04134 per share issued for $101,283 in principal and $11,497 in accrued interest. The Company valued this conversion feature using the Black Scholes valuation model; as of March 31, 2019 due to the note is in default there are no assumptions, therefore the note has a conversion option ’s value of $182,454. The value of the conversion feature was assigned to the derivative liability and created a loss and a debt discount to be amortized over the life of the convertible debt. The remaining principal balance as of March 31, 2019 is $ 49,775.

At March 31, 2019 and December 31, 2018, the principal unamortized debt discount for related parties convertible notes was $57,154, interest for related parties convertible notes was $17,644 as of March 31, 2019, and $ 14,798 as of December 31, 2018. Debt conversion discount for these notes was $0 at March 31, 2019 and $12,126 on December 31, 2018.

Other Related Party Loans

The Company has non-interest bearing demand loans with various related parties. During the three months ended March 31, 2019 and 2018, the Company received $109,232 and $38,301, respectively, in proceeds from these loans, and made repayments of $83,386 and $0, respectively, resulting in principal balances of $416,024 and $360,528 as of March 31, 2019 and December 31, 2018, respectively.

NOTE 7 : EQUITY

On January 28, 2019 the Company issued 60,000,000 common stock restricted shares, $ 0.0001 par value per share, converting 60,000 shares of the one million (1,000,000) Series A Preferred Stock.

On February 1, 2019 the Company issued 3,000,000 shares of common stock at the conversion price of $0.0130. The shares were issued to convert $39,000 of principal amount, on the note dated September 11, 2018 to Gary Berlly.

On February 1, 2019 the Company issued 3,000,000 shares of common stock at the conversion price of $$0.0130. The shares were issued to convert $39,000 of principal amount, on the note dated September 11, 2018 to Back Nine Capital, LLC.

On February 1, 2019 the Company issued 3,000,000 shares of common stock at the conversion price of $$0.0130. The shares were issued to convert $39,000 of principal amount, on the note dated September 11, 2018 to One Investment Capital, Inc.

On February 1, 2019 the Company issued 3,000,000 shares of common stock at the conversion price of $$0.0130. The shares were issued to convert $39,000 of principal amount, on the note dated September 11, 2018 to Sing N Drive Auto Mall, Inc.

On February 4, 2019 the Company issued 5,162,242 shares issued; at a price of $0.02712. The shares were issued to convert $132,108 in principal and $7,892 in interest, on the note dated July 3, 2018, to M Svorai Investments, Inc a related party.

In connection with the above debt conversions occurring in February 2019, derivative liabilities totaling $1,287,038 were eliminated, with the offset recorded as an increase to additional paid-in capital.

On March 15, 2019 the Company issued 40,000,000 common stock restricted shares, $ 0.0001 par value per share, converting 40,000 shares of the one million (1,000,000) Series A Preferred Stock.

On March 22, 2019 the Company issued 50,000,000 common stock restricted shares, $ 0.0001 par value per share, converting 50,000 shares of the one million (1,000,000) Series A Preferred Stock.

NOTE 8 : COMMITMENTS AND CONTINGENCIES;

During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals.