UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2020
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT
For
the transition period
from ________ to _________
Commission
File Number: 000-24723
Fresh
Promise Foods, Inc.
(Exact
name of registrant as specified in its charter)
|
Nevada |
|
88-0393257 |
| (State
or other jurisdiction of incorporation or organization) |
|
(I.R.S.
Employer Identification No.) |
|
3416
Shadybrook Drive, Midwest City, Oklahoma |
|
73110 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (561)
703-4659
| Securities
registered pursuant to Section 12(b) of the Act: |
|
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
|
Not
applicable |
Not
applicable |
Not applicable |
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 [X] No [
]
Indicate
by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit such
files). Yes [X] No [
]
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, 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 |
[X] |
Smaller
reporting company |
[X] |
| |
|
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 is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes [
] No [X]
As of
November 13, 2020, the Registrant had 10,039,186,066 shares of
Common Stock issued and outstanding.
TABLE
OF CONTENTS
| |
Page |
| Part
I – FINANCIAL INFORMATION |
|
| |
|
|
| Item
1. |
Financial
Statements |
3 |
| Item
2. |
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations |
18 |
| Item
3. |
Quantitative
and Qualitative Disclosures about Market Risk |
21 |
| Item
4. |
Controls
and Procedures |
21 |
| |
|
|
| Part
II – OTHER INFORMATION |
|
| |
|
|
| Item
1. |
Legal
Proceedings |
22 |
| Item
1A. |
Risk
Factors |
22 |
| Item
2. |
Unregistered
Sales of Equity Securities and Use of Proceeds |
22 |
| Item
3. |
Defaults
upon Senior Securities |
22 |
| Item
4. |
Mine
safety disclosure |
22 |
| Item
5. |
Other
Information |
22 |
| Item
6. |
Exhibits |
|
CAUTIONARY
STATEMENT ON FORWARD-LOOKING INFORMATION
This
Quarterly Report on Form 10-Q contains “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are based upon our current
assumptions, expectations and beliefs concerning future
developments and their potential effect on our business. In some
cases, you can identify forward-looking statements by the following
words: “may,” “will,” “could,” “would,” “should,” “expect,”
“intend,” “plan,” “anticipate,” “believe,” “approximately,”
“estimate,” “predict,” “project,” “potential,” “continue,”
“ongoing,” or the negative of these terms or other comparable
terminology, although the absence of these words does not
necessarily mean that a statement is not forward-looking. This
information may involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or
achievements to be materially different from the future results,
performance or achievements expressed or implied by any
forward-looking statements.
All
forward-looking statements speak only as of the date of this
report. We undertake no obligation to update any forward-looking
statements or other information contained herein. Stockholders and
potential investors should not place undue reliance on these
forward-looking statements. Although we believe that our plans,
intentions and expectations reflected in or suggested by the
forward-looking statements in this report are reasonable, we cannot
assure stockholders and potential investors that these plans,
intentions or expectations will be achieved. We disclose important
factors that could cause our actual results to differ materially
from expectations under “Risk Factors” in our annual report on Form
10-K. These cautionary statements qualify all forward-looking
statements attributable to us or persons acting on our
behalf.
These
forward-looking statements represent our intentions, plans,
expectations, assumptions and beliefs about future events and are
subject to risks, uncertainties and other factors. Many of those
factors are outside of our control and could cause actual results
to differ materially from the results expressed or implied by those
forward-looking statements. Considering these risks, uncertainties
and assumptions, the events described in the forward-looking
statements might not occur or might occur to a different extent or
at a different time than we have described. You are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the date of the Quarterly Report on Form 10-Q. All
subsequent written and oral forward-looking statements concerning
other matters addressed in this Quarterly Report on Form 10-Q and
attributable to us or any person acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained
or referred to in this Quarterly Report on Form 10-Q.
Except
to the extent required by law, we undertake no obligation to update
or revise any forward-looking statements, whether because of new
information, future events, a change in events, conditions,
circumstances or assumptions underlying such statements, or
otherwise.
Part
I. FINANCIAL INFORMATION
Item
1. Financial Statements
FRESH
PROMISE FOODS, INC.
BALANCE
SHEETS (UNAUDITED)
September
30, 2020 and December 31, 2019
| |
|
|
|
|
| |
|
September
30, |
|
December
31, |
| |
|
2020 |
|
2019 |
| |
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
136 |
|
|
$ |
19 |
|
| Total
current assets |
|
|
136 |
|
|
|
19 |
|
|
Total
assets |
|
$ |
136 |
|
|
$ |
19 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES
AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
|
|
|
| Accounts
payable |
|
$ |
165,466 |
|
|
$ |
165,466 |
|
| Accrued
liabilities |
|
|
1,440,147 |
|
|
|
1,229,327 |
|
| Convertible
notes payable, current |
|
|
1,545,411 |
|
|
|
1,515,178 |
|
| Derivative
liabilities |
|
|
5,133,218 |
|
|
|
2,191,745 |
|
| Promissory
notes payable |
|
|
17,500 |
|
|
|
17,500 |
|
|
Related
party payables |
|
|
6,336 |
|
|
|
3,755 |
|
|
Total
current liabilities |
|
|
8,308,078 |
|
|
|
5,122,971 |
|
| Total
liabilities |
|
|
8,308,078 |
|
|
|
5,122,971 |
|
| |
|
|
|
|
|
|
|
|
| Commitments
and contingencies |
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| Stockholders'
Deficit: |
|
|
|
|
|
|
|
|
| Preferred
stock - Series A, $0.00001 par value. 69,999,990 shares authorized;
10,000,000 shares |
|
|
|
|
|
|
|
|
| issued
and outstanding as of September 30, 2020 and December 31, 2019,
respectively |
|
|
100 |
|
|
|
100 |
|
| Preferred
stock - Series D, $0.00001 par value. 1 share authorized; 0 and 1
shares |
|
|
|
|
|
|
|
|
| issued
and outstanding as of September 30, 2020 and December 31, 2019,
respectively |
|
|
— |
|
|
|
— |
|
| Preferred
stock - Series E, $0.00001 par value. 50 shares authorized; 20 and
12 shares |
|
|
|
|
|
|
|
|
| issued
and outstanding as of September 30, 2020 and December 31, 2019,
respectively |
|
|
— |
|
|
|
— |
|
| Common
stock, $0.00001 par value. 11,000,000,000 shares authorized;
9,708,186,067 and 8,638,186,067 shares |
|
|
|
|
|
|
|
|
| issued
and outstanding as of September 30, 2020 and December 31, 2019,
respectively |
|
|
97,082 |
|
|
|
86,382 |
|
| Additional
paid-in capital |
|
|
8,941,272 |
|
|
|
8,894,472 |
|
|
Accumulated
deficit |
|
|
(17,346,396 |
) |
|
|
(14,103,906 |
) |
|
Total
stockholders' deficit |
|
|
(8,307,942 |
) |
|
|
(5,122,952 |
) |
|
Total
liabilities and stockholders' deficit |
|
$ |
136 |
|
|
$ |
19 |
|
See
accompanying notes to the financial statements.
FRESH
PROMISE FOODS, INC.
STATEMENT
OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
For
the Three and Nine Months Ended September 30, 2020 and
2019
| |
|
|
|
|
|
|
|
|
| |
|
Three
Months Ended September 30, |
|
Three
Months Ended September 30, |
|
Nine
Months Ended September 30, |
|
Nine
Months Ended September 30, |
| |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
|
|
|
|
|
|
|
| Sales |
|
$- |
|
$- |
|
$- |
|
$- |
| Cost
of goods sold |
|
- |
|
- |
|
- |
|
- |
| Gross
margin |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
and benefits |
|
|
15,000 |
|
|
|
15,000 |
|
|
|
45,000 |
|
|
|
45,000 |
|
| General
and administrative expenses |
|
|
43,678 |
|
|
|
— |
|
|
|
61,429 |
|
|
|
8,594 |
|
| Professional
fees |
|
|
9,000 |
|
|
|
2,380 |
|
|
|
76,935 |
|
|
|
13,180 |
|
|
Stock
based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,970 |
|
|
Total
operating expenses |
|
|
67,678 |
|
|
|
17,380 |
|
|
|
183,364 |
|
|
|
75,744 |
|
| Income
(loss) from continuing operations before other income (expense) and
income taxes |
|
|
(67,678 |
) |
|
|
(17,380 |
) |
|
|
(183,364 |
) |
|
|
(75,744 |
) |
| Other
income (expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative
liability expense |
|
|
(27,713 |
) |
|
|
— |
|
|
|
(129,961 |
) |
|
|
— |
|
| Gain
(loss) on change in value of derivative |
|
|
(137,316 |
) |
|
|
(301,316 |
) |
|
|
(2,730,012 |
) |
|
|
(2,543,172 |
) |
| Gain
(loss) on issuance of stock |
|
|
— |
|
|
|
(24,000 |
) |
|
|
— |
|
|
|
(24,000 |
) |
| Interest
expense, net |
|
|
(76,212 |
) |
|
|
(42,885 |
) |
|
|
(199,153 |
) |
|
|
(130,029 |
) |
|
Total
other income (expense) |
|
|
(241,241 |
) |
|
|
(368,201 |
) |
|
|
(3,059,126 |
) |
|
|
(2,697,201 |
) |
| Income
(loss) from continuing operations before income taxes |
|
|
(308,919 |
) |
|
|
(385,581 |
) |
|
|
(3,242,490 |
) |
|
|
(2,772,945 |
) |
| Provision
for income taxes (benefit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Net
income (loss) |
|
|
(308,919 |
) |
|
|
(385,581 |
) |
|
|
(3,242,490 |
) |
|
|
(2,772,945 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic
and diluted earnings (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted-average
number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted |
|
|
9,616,881,187 |
|
|
|
8,888,324,133 |
|
|
|
9,014,426,943 |
|
|
|
8,873,256,659 |
|
See
accompanying notes to the financial statements.
FRESH
PROMISE FOODS, INC.
STATEMENT
OF CHANGES IN STOCKHOLDERS’ DEFICIT (UNAUDITED)
For
the Three and Nine Months Ended September 30, 2020 and
2019
| |
|
Preferred
Stock - Series A |
|
Preferred
Stock - Series D |
|
Preferred
Stock - Series E |
|
Common
Stock |
|
AdditionalPaid-in |
|
Retained |
|
TotalStockholders' |
|
Three
Months Ended September 30, 2019 |
|
Shares |
|
Value |
|
Shares |
|
Value |
|
Shares |
|
Value |
|
Shares |
|
Value |
|
Capital |
|
Earnings |
|
Equity |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
June 30, 2019 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
1 |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
8,999,999,998 |
|
|
$ |
90,000 |
|
|
$ |
8,866,854 |
|
|
$ |
(15,525,584 |
) |
|
$ |
(6,568,630 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(385,581 |
) |
|
|
(385,581 |
) |
| Exchange
of common stock for Series E preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
— |
|
|
|
(361,813,931 |
) |
|
|
(3,618 |
) |
|
|
27,618 |
|
|
|
— |
|
|
|
24,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 30, 2019 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
1 |
|
|
$ |
— |
|
|
|
12 |
|
|
$ |
— |
|
|
|
8,638,186,067 |
|
|
$ |
86,382 |
|
|
$ |
8,894,472 |
|
|
$ |
(15,911,165 |
) |
|
$ |
(6,930,211 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Preferred
Stock - Series A |
|
|
|
|
|
|
|
Preferred
Stock - Series D |
|
|
|
|
|
|
|
Preferred
Stock - Series E |
|
|
|
|
|
|
|
Common
Stock |
|
|
|
|
|
|
|
Additional
Paid-in
|
|
|
|
Retained |
|
|
|
Total
Stockholders'
|
|
| Three
Months Ended September 30, 2020 |
|
|
Shares |
|
|
|
Value |
|
|
|
Shares |
|
|
|
Value |
|
|
|
Shares |
|
|
|
Value |
|
|
|
Shares |
|
|
|
Value |
|
|
|
Capital |
|
|
|
Earnings |
|
|
|
Equity |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
June 30, 2020 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
— |
|
|
$ |
— |
|
|
|
20 |
|
|
$ |
— |
|
|
|
9,508,186,067 |
|
|
$ |
95,082 |
|
|
$ |
8,903,272 |
|
|
$ |
(17,037,477 |
) |
|
$ |
(8,039,023 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(308,919 |
) |
|
|
(308,919 |
) |
| Issuance
of common stock in exchange for fees and services
rendered |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,000,000 |
|
|
|
2,000 |
|
|
|
38,000 |
|
|
|
— |
|
|
|
40,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 30, 2020 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
— |
|
|
$ |
— |
|
|
|
20 |
|
|
$ |
— |
|
|
|
9,708,186,067 |
|
|
$ |
97,082 |
|
|
$ |
8,941,272 |
|
|
$ |
(17,346,396 |
) |
|
$ |
(8,307,942 |
) |
See
accompanying notes to the financial statements.
| |
|
Preferred
Stock - Series A |
|
Preferred
Stock - Series D |
|
Preferred
Stock - Series E |
|
Common
Stock |
|
Additional
Paid-in
|
|
Retained |
|
Total
Stockholders'
|
|
Nine
Months Ended September 30, 2019 |
|
Shares |
|
Value |
|
Shares |
|
Value |
|
Shares |
|
Value |
|
Shares |
|
Value |
|
Capital |
|
Earnings |
|
Equity |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
December 31, 2018 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
1 |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
8,809,999,998 |
|
|
$ |
88,100 |
|
|
$ |
8,830,754 |
|
|
$ |
(13,138,220 |
) |
|
$ |
(4,219,266 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,772,945 |
) |
|
|
(2,772,945 |
) |
| Exchange
of common stock for Series E preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
— |
|
|
|
(361,813,931 |
) |
|
|
(3,618 |
) |
|
|
27,618 |
|
|
|
— |
|
|
|
24,000 |
|
| Issuance
of common stock in connection with sales made under |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
private
or public offerings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
190,000,000 |
|
|
|
1,900 |
|
|
|
36,100 |
|
|
|
— |
|
|
|
38,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 30, 2019 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
1 |
|
|
$ |
— |
|
|
|
12 |
|
|
$ |
— |
|
|
|
8,638,186,067 |
|
|
$ |
86,382 |
|
|
$ |
8,894,472 |
|
|
$ |
(15,911,165 |
) |
|
$ |
(6,930,211 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Preferred
Stock - Series A |
|
|
|
|
|
|
|
Preferred
Stock - Series D |
|
|
|
|
|
|
|
Preferred
Stock - Series E |
|
|
|
|
|
|
|
Common
Stock |
|
|
|
|
|
|
|
Additional
Paid-in
|
|
|
|
Retained |
|
|
|
Total
Stockholders'
|
|
| Nine
Months Ended September 30, 2020 |
|
|
Shares |
|
|
|
Value |
|
|
|
Shares |
|
|
|
Value |
|
|
|
Shares |
|
|
|
Value |
|
|
|
Shares |
|
|
|
Value |
|
|
|
Capital |
|
|
|
Earnings |
|
|
|
Equity |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
December 31, 2019 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
1 |
|
|
$ |
— |
|
|
|
12 |
|
|
$ |
— |
|
|
|
8,638,186,067 |
|
|
$ |
86,382 |
|
|
$ |
8,894,472 |
|
|
$ |
(14,103,906 |
) |
|
$ |
(5,122,952 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,242,490 |
) |
|
|
(3,242,490 |
) |
| Conversion
of Series D preferred stock for common stock |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
870,000,000 |
|
|
|
8,700 |
|
|
|
(8,700 |
) |
|
|
— |
|
|
|
— |
|
| Issuance
of Series E preferred stock to an officer as
compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,500 |
|
|
|
— |
|
|
|
17,500 |
|
| Issuance
of common stock in exchange for fees and services
rendered |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,000,000 |
|
|
|
2,000 |
|
|
|
38,000 |
|
|
|
— |
|
|
|
40,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 30, 2020 |
|
|
10,000,000 |
|
|
$ |
100 |
|
|
|
— |
|
|
$ |
— |
|
|
|
20 |
|
|
$ |
— |
|
|
|
9,708,186,067 |
|
|
$ |
97,082 |
|
|
$ |
8,941,272 |
|
|
$ |
(17,346,396 |
) |
|
$ |
(8,307,942 |
) |
The
accompanying notes are an integral part of the consolidated
financial statements.
FRESH
PROMISE FOODS, INC.
STATEMENT
OF CASH FLOWS (UNAUDITED)
For
the Nine Months Ended September 30, 2020 and 2019
| |
|
|
|
|
| |
|
Nine
Months Ended September 30, |
|
Nine
Months Ended September 30, |
| |
|
2020 |
|
2019 |
| Cash
flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
(3,242,490 |
) |
|
$ |
(2,772,945 |
) |
| Adjustments
to reconcile net loss to cash used in operating
activities: |
|
|
|
|
|
|
|
|
| Amortization
of debt discount |
|
|
30,233 |
|
|
|
13,875 |
|
| Common
stock issued in exchange for fees and services |
|
|
40,000 |
|
|
|
— |
|
| Derivative
expense |
|
|
129,961 |
|
|
|
— |
|
| (Gain)
loss on change in value of derivative |
|
|
2,730,012 |
|
|
|
2,543,172 |
|
| Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts
payable |
|
|
— |
|
|
|
207 |
|
| Accrued
liabilities |
|
|
228,320 |
|
|
|
177,503 |
|
|
Related
party payables |
|
|
2,581 |
|
|
|
25 |
|
| Net
cash provided by (used in) operating activities |
|
|
(81,383 |
) |
|
|
(38,163 |
) |
| |
|
|
|
|
|
|
|
|
| Cash
flows from investing activities: |
|
|
|
|
|
|
|
|
| Net
cash provided by (used in) financing activities |
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| Cash
flows from financing activities: |
|
|
|
|
|
|
|
|
| Proceeds
from issuance of common stock |
|
|
— |
|
|
|
38,000 |
|
| Proceeds
from issuance of convertible notes |
|
|
81,500 |
|
|
|
— |
|
| Net
cash provided by (used in) financing activities - continuing
operations |
|
|
81,500 |
|
|
|
38,000 |
|
| |
|
|
|
|
|
|
|
|
| Net
increase (decrease) in cash and cash equivalents |
|
|
117 |
|
|
|
(163 |
) |
| Cash
and cash equivalents at beginning of period |
|
|
19 |
|
|
|
188 |
|
| Cash
and cash equivalents at end of period |
|
$ |
136 |
|
|
$ |
25 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental
disclosure of cash flow information: |
|
|
|
|
|
|
|
|
| Cash
paid for interest |
|
$ |
— |
|
|
$ |
— |
|
| Cash
paid for income taxes |
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
| Supplemental
disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
| Common
stock issued to reduce convertible and promissory notes
payable |
|
$ |
17,500 |
|
|
$ |
— |
|
| Series
E preferred stock issued in exchange for shares of common
stock |
|
$ |
— |
|
|
$ |
24,000 |
|
See
accompanying notes to the financial statements.
FRESH
PROMISE FOODS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Business
Fresh
Promise Foods, Inc. (“Fresh Promise” or the “Company”) is a
consumer products and marketing company focused on the high-margin,
multi-trillion-dollar alcoholic beverages sector.
Going Concern
The
accompanying unaudited consolidated financial statements have been
prepared assuming the Company will continue as a going concern,
which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business for the
twelve-month period following the date of these financial
statements. On a consolidated basis, the Company has incurred
significant operating losses since inception.
Because
the Company does not expect that existing operational cash flow
will be sufficient to fund presently anticipated operations, this
raises substantial doubt about the Company’s ability to continue as
a going concern. Therefore, the Company will need to raise
additional funds and is currently exploring alternative sources of
financing. Historically, the Company has raised capital through the
issuance of convertible debt as a measure to finance working
capital needs. The Company will be required to continue to do so
until such time that its consolidated operations become
profitable.
Basis of Presentation
The
Company has prepared the accompanying consolidated financial
statements in accordance with the rules and regulations of the
Securities and Exchange Commission (“SEC”) and in accordance with
generally accepted accounting principles in the United States of
America (“U.S. GAAP”). The Company believes these consolidated
financial statements reflect all adjustments (consisting of normal,
recurring adjustments) that are necessary for a fair presentation
of its consolidated financial position and consolidated results of
operations for the periods presented.
Use of Estimates
The
preparation of consolidated financial statements in conformity with
U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. The Company bases its estimates on historical
experience, known or expected trends and various other assumptions
that are believed to be reasonable given the quality of information
available as of the date of these financial statements. The results
of these assumptions provide the basis for making estimates about
the carrying amounts of assets and liabilities that are not readily
apparent from other sources. Actual results could differ from these
estimates.
Cash and Cash Equivalents
The
Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents. The Company places its
cash with a high credit quality financial institution. The
Company’s account at this institution is insured by the Federal
Deposit Insurance Corporation (“FDIC”) up to $250,000. At September
30, 2020 and December 31, 2019, the Company did not have bank
balances exceeding the FDIC insurance limit. To reduce its risk
associated with the failure of such financial institution, the
Company evaluates at least annually the rating of the financial
institution in which it holds deposits.
Fair Value of Financial Instruments
The
Company uses the market approach to measure fair value for its
financial instruments. The market approach uses prices and other
relevant information generated by market transactions involving
identical or comparable assets or liabilities. The respective
carrying value of certain balance sheet financial instruments
approximates its fair value. These financial instruments include
cash, related party payables, accounts payable, accrued liabilities
and short-term borrowings. Fair values were estimated to
approximate carrying values for these financial instruments since
they are short term in nature, and they are receivable or payable
on demand.
Net Income (Loss) per Common Share
Net
income (loss) per share is calculated in accordance with ASC
260, Earnings per Share. Basic net income (loss) per
common share is based on the weighted average number of shares of
common stock outstanding at September 30, 2020 and 2019. Diluted
earnings per share is calculated by dividing the Company’s net loss
available to common shareholders by the diluted weighted average
number of shares outstanding during the year. The diluted weighted
average number of shares outstanding is the basic weighted number
of shares adjusted for any potentially dilutive debt or equity. At
September 30, 2020 and 2019, the Company had convertible notes
outstanding that could be converted into approximately
17,754,746,551 and 23,377,136,247 common shares based up the
closing bid price of the Company’s common stock at September 30,
2020 and 2019, respectively. Shares which would result from the
conversion of the convertible notes were excluded from the
calculation of net loss per share for 2020 and 2019 because the
effect would be anti-dilutive.
Share-Based Compensation
ASC
718, Compensation – Stock Compensation, prescribes
accounting and reporting standards for all share-based payment
transactions in which employee services are acquired. Transactions
include incurring liabilities, or issuing or offering to issue
shares, options, and other equity instruments such as employee
stock ownership plans and stock appreciation rights. Share-based
payments to employees, including grants of employee stock options,
are recognized as compensation expense in the financial statements
based on their fair values. That expense is recognized over the
period during which an employee is required to provide services in
exchange for the award, known as the requisite service period
(usually the vesting period).
Income Taxes
The
Company accounts for income taxes pursuant to the provisions of ASC
740-10, Accounting for Income Taxes, which requires,
among other things, an asset and liability approach to calculating
deferred income taxes. The asset and liability approach
requires the recognition of deferred tax assets and liabilities for
the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and
liabilities.
A
valuation allowance is provided to offset any net deferred tax
assets for which management believes it is more likely than not
that the net deferred asset will not be realized.
The
Company follows the provisions of the ASC
740-10, Accounting for Uncertain Income Tax Positions.
When tax returns are filed, it is highly certain that some
positions taken would be sustained upon examination by the taxing
authorities, while others are subject to uncertainty about the
merits of the position taken or the amount of the position that
would be ultimately sustained. In accordance with the guidance of
ASC 740-10, the benefit of a tax position is recognized in the
financial statements in the period during which, based on all
available evidence, management believes it is more likely than not
that the position will be sustained upon examination, including the
resolution of appeals or litigation processes, if any. Tax
positions taken are not offset or aggregated with other positions.
Tax positions that meet the more-likely-than-not recognition
threshold are measured as the largest amount of tax benefit that is
more than 50 percent likely of being realized upon settlement with
the applicable taxing authority. The portion of the benefits
associated with tax positions taken that exceeds the amount
measured as described above should be reflected as a liability for
uncertain tax benefits in the accompanying balance sheet along with
any associated interest and penalties that would be payable to the
taxing authorities upon examination. The Company believes its tax
positions will be highly certain of being upheld upon examination.
As such, the Company has not recorded a liability for uncertain tax
benefits.
The
Company has adopted ASC 740-10-25, Definition of
Settlement, which provides guidance on how an entity should
determine whether a tax position is effectively settled for the
purpose of recognizing previously unrecognized tax benefits and
provides that a tax position can be effectively settled upon the
completion of an examination by a taxing authority without being
legally extinguished. For tax positions considered effectively
settled, an entity would recognize the full amount of tax benefit,
even if the tax position is not considered more likely than not to
be sustained based solely on the basis of its technical merits and
the statute of limitations remains open. Management has not filed
tax returns for the years ended December 31, 2014 through
2019.
Recent Accounting Pronouncements
Except
for rules and interpretive releases of the SEC under the authority
of federal securities laws and a limited number of grandfathered
standards, the FASB Accounting Standards Codification™ (“ASC”) is
the sole source of authoritative GAAP literature recognized by the
FASB and applicable to the Company. Management has reviewed the
aforementioned rules and releases and believes any effect will not
have a material impact on the Company’s present or future financial
statements.
In
December 2019, the FASB issued ASU 2019-12, Income Taxes
(Topic 740), which enhances and simplifies various aspects of
the income tax accounting guidance, including requirements such as
tax basis step-up in goodwill obtained in a transaction that is not
a business combination, ownership changes in investments, and
interim-period accounting for enacted changes in tax law. The
amendment will be effective for public companies with fiscal years
beginning after December 15, 2020; early adoption is permitted. The
Company is evaluating the impact of this amendment on its
consolidated financial statements.
In
February 2020, the FASB issued ASU 2020-02, Financial
Instruments-Credit Losses (Topic 326) and Leases (Topic 842) -
Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting
Bulletin No. 119 and Update to SEC Section on Effective Date
Related to Accounting Standards Update No. 2016-02, Leases (Topic
842), which amends the effective date of the original
pronouncement for smaller reporting companies. ASU 2016-13 and its
amendments will be effective for the Company for interim and annual
periods in fiscal years beginning after December 15, 2022. The
Company believes the adoption will modify the way the Company
analyzes financial instruments, but it does not anticipate a
material impact on results of operations. The Company is in the
process of determining the effects adoption will have on its
consolidated financial statements.
NOTE
2 – GOING CONCERN
The
Company’s consolidated financial statements are prepared using
accounting principles generally accepted in the United States of
America applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal
course of business. The Company has not yet established an ongoing
source of revenues sufficient to cover its operating cost and allow
it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining
adequate capital to fund operating losses until it becomes
profitable. If the Company is unable to obtain adequate capital, it
could be forced to cease operations.
The
Company incurred a net loss of $3,242,490 for the nine months ended
September 30, 2020 and a working capital deficit of $8,307,942 at
September 30, 2020. These conditions raise substantial doubt about
the Company’s ability to continue as a going concern.
In
order to continue as a going concern, the Company will need, among
other things, additional capital resources. Management’s plan to
obtain such resources for the Company include, obtaining debt or
equity capital from various lenders, institutions and significant
stockholders sufficient to meet its minimal operating expenses.
However, management cannot provide any assurance that the Company
will be successful in accomplishing any of its plans.
There
is no assurance that the Company will be able to obtain sufficient
additional funds when needed or that such funds, if available, will
be obtainable on terms satisfactory to the Company. In addition,
profitability will ultimately depend upon the level of revenues
received from business operations. However, there is no assurance
that the Company will attain profitability. The accompanying
consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a
going concern.
NOTE
3 – RELATED PARTY TRANSACTIONS
On
March 27, 2015, the Company executed a promissory note for $15,000
with its former chief financial officer and chairman Mr. Joseph C.
Canouse. The note bears interest at 6% and has a maturity date of
March 27, 2016. The note can be converted into common stock at a
discount of 40% off of the conversion price. The conversion price
is the average closing bid price on the 3 days prior to the date of
conversion. The balance of this note was $11,000 at September 30,
2020.
On
April 1, 2015, the Company amended the terms of a convertible
promissory note for $12,000 with its former chief financial officer
and chairman Mr. Joseph C. Canouse. The aged debt was purchased
from its original note holder. The note bears interest at 6% and
has a maturity date of April 1, 2016. The conversion price is the
bid price on the day prior to the date of conversion. The balance
of this note remains $12,000 at September 30, 2020.
On
August 21, 2015, the Company executed a promissory note for $30,000
with its former chief financial officer and chairman Mr. Joseph C.
Canouse. The note bears interest at 6% and has a maturity date of
August 21, 2016. The note can be converted into common stock at a
discount of 40% off of the conversion price. The conversion price
is the average closing bid price on the 3 days prior to the date of
conversion. The balance of this note remains $30,000 at September
30, 2020.
On
August 24, 2015, the Company executed two (2) promissory notes,
each in the principal amount of $15,000, for an aggregate $30,000
with its former chief financial officer and chairman Mr. Joseph C.
Canouse. The notes bear interest at 6% and have a maturity date of
August 24, 2016. The notes can be converted into common stock at a
discount of 40% off of the conversion price. The conversion price
is the average closing bid price on the 3 days prior to the date of
conversion. The balance of these notes remains $30,000 at September
30, 2020.
NOTE
4 – CONVERTIBLE NOTES PAYABLE
The
following tables set forth the components of the Company’s
convertible notes at September 30, 2020 and December 31,
2019:
| |
|
September
30, 2020 |
|
December
31,
2019 |
| Principal
value of convertible notes |
|
$ |
1,600,378 |
|
|
$ |
1,515,178 |
|
| Unamortized
loan discounts |
|
|
(54,967 |
) |
|
|
(— |
) |
| Total
convertible notes, net |
|
$ |
1,545,411 |
|
|
$ |
1,515,178 |
|
On
January 28, 2014, the Company converted $11,000 of a $22,000
convertible note to 24,445 common shares. The note had been
purchased from a former officer of the Company based on the
contractual conversion terms per agreement. The balance of this
note was $8,263 at September 30, 2020.
On
January 5, 2015, the Company executed a promissory note for
$20,000. The note bears interest at 6% and has a maturity date of
January 5, 2016. It can be converted into common stock at a
discount of 30% off of the conversion price. The conversion price
is the average bid price on the 3 days prior to the date of
conversion, but no less than $0.0001. This note was sold to a third
party on August 21, 2015 and the terms of the notes were modified.
The new note bears interest at 8% and has a maturity date of August
20, 2017. It can be converted into common stock at a discount of
45% off of the conversion price. The conversion price is the
average of the three lowest bid prices during the 10 trading days
prior to the date of conversion. The balance of this note was
$20,000 at September 30, 2020.
On
January 26, 2015, the Company executed a promissory note for
$28,000. The note bears interest at 12% and has a maturity date of
January 26, 2016. The note can be converted into common stock at a
discount of 45% off of the conversion price. The conversion price
is the average of the three lowest bid prices during the 10 trading
days prior to the date of conversion, but no less than $0.0001. The
balance of this note was $28,000 at September 30, 2020.
On
February 10, 2015, the Company executed a promissory note for
$52,500. The note bears interest at 8% and has a maturity date of
February 10, 2016. The note can be converted into common stock at a
discount of 55% off of the conversion price. The conversion price
is the average bid price on the 3 days prior to the date of
conversion, but no less than $0.0001. The balance of this note was
$3,600 at September 30, 2020.
On
February 10, 2015, its holder sold dated June 30, 2014 a promissory
note for $88,500 to a third-party investor and the terms of the
note were modified. The note bears interest at 8% and has a
maturity date of February 10, 2016. It can be converted into common
stock at a discount of 55% off the conversion price. The conversion
price is the average bid price on the 3 days prior to the date of
conversion, but no less than $0.0001. The balance of this note was
$64,445 at September 30, 2020.
On
February 13, 2015, the Company executed a promissory note for
$50,000. The note bears interest at 8% and has a maturity date of
February 13, 2016. The note can be converted into common stock at a
discount of 30% off of the conversion price. The conversion price
is the average bid price on the 3 days prior to the date of
conversion, but no less than $0.0001. This note was sold to a third
party on August 21, 2015 and the terms of the notes were modified.
The new note bears interest at 8% and has a maturity date of August
20, 2017. It can be converted into common stock at a discount of
45% off of the conversion price. The conversion price is the
average of the three lowest bid prices during the 10 trading days
prior to the date of conversion. The balance of this note was
$52,966 at September 30, 2020.
On
March 17, 2015, the Company executed a promissory note for $28,000.
The note bears interest at 12% and has a maturity date of March 17,
2016. The note can be converted into common stock at a discount of
45% off of the conversion price. The conversion price is the
average of the three lowest bid prices during the 10 trading days
prior to the date of conversion, but no less than $0.0001. The
balance of this note was $28,000 at September 30, 2020.
On
April 1, 2015, the Company executed a promissory note for $12,000.
The note bears interest at 6% and has a maturity date of March 27,
2016. The note can be converted into common stock at a at a rate
equivalent to the average closing bid price on the 3 days prior to
the date of conversion. The balance of this note was $23,000 at
September 30, 2020.
On
May 28, 2015, the Company executed a promissory note for $23,000.
The note bears interest at 12% and has a maturity date of February
28, 2016. The note can be converted into common stock at a discount
of 45% off of the conversion price. The conversion price is the
average of the three lowest bid prices during the 20 trading days
prior to the date of conversion. The balance of this note was
$23,000 at September 30, 2020.
On
August 7, 2015, its holder sold two promissory notes aggregating
$46,705 and originating in 2014 to a third-party investor and the
terms of the notes were modified. The new note bears interest at 6%
and has a maturity date of August 6, 2017. It can be converted into
common stock at a discount of 45% off of the conversion price. The
conversion price is the average of the three lowest bid prices
during the 20 trading days prior to the date of
conversion. The balance of this note was $46,705 at September
30, 2020.
On
August 21, 2015, the Company executed a promissory note for
$30,000. The note bears interest at 6% and has a maturity date of
August 21, 2016. The note can be converted into common stock at a
discount of 40% off of the conversion price. The conversion price
is the average closing bid price on the 3 days prior to the date of
conversion. The balance of this note was $30,000 at September
30, 2020.
On
August 24, 2015, the Company executed two (2) promissory notes,
each in the principal amount of $15,000, for an aggregate $30,000.
The notes bear interest at 6% and have a maturity date of August
24, 2016. The notes can be converted into common stock at a
discount of 40% off of the conversion price. The conversion price
is the average closing bid price on the 3 days prior to the date of
conversion. The balance of these notes was $30,000 at September 30,
2020.
On
September 2, 2015, the Company executed a promissory note for
$51,414. The note bears interest at 12% and has a maturity date of
February 28, 2016. The note can be converted into common stock at a
discount of 45% off of the conversion price. The conversion price
is the average of the three lowest bid prices during the 20 trading
days prior to the date of conversion. The balance of this note was
$51,414 at September 30, 2020.
On
September 4, 2015, the Company executed a promissory note for
$52,500. The note bears interest at 8% and has a maturity date of
September 4, 2017. It can be converted into common stock at a
discount of 45% off of the conversion price. The conversion price
is the average of the three lowest bid prices during the 10 trading
days prior to the date of conversion. The balance of this note was
$39,342 at September 30, 2020.
During
the year ended December 31, 2015, the Company received debt
proceeds from the issuance of five convertible promissory notes
aggregating $99,500 to certain lenders. The Company has attempted
with no avail to locate these note agreements and validate the
sources of these debt proceeds. It has exhausted all of its
available resources in its efforts to locate these notes and note
holders. As such, the Company has made certain assumptions in
regards to the contractual terms associated with these notes, which
are consistent with other convertible debt securities issued during
the period. The balance of these notes was $99,500 at September 30,
2020.
On
January 1, 2018, the Company executed three promissory notes
aggregating $693,819 to settle a legal matter. See Note 9 –
Commitments and Contingencies. The notes bear interest at 12% and
have a maturity date of July 10, 2018. The notes can be converted
into common stock at a discount of 45% off of the conversion price.
The conversion price is the lowest bid price during the 25 trading
days prior to the date of conversion. The balance of these notes
was $693,819 at September 30, 2020.
On
March 13, 2018, the Company issued a convertible promissory note
for $5,500. The note bears interest at 12% and has a maturity date
of March 13, 2019. The note can be converted into common stock at a
discount of 50% off of the conversion price. The conversion price
is equal to the lowest bid price during the 20 trading days prior
to the date of conversion. The balance of this note was $5,500 at
September 30, 2020.
On
December 12, 2018, the Company issued a convertible promissory note
for $25,000. The note bears interest at 8% and has a maturity date
of December 12, 2019. The note can be converted into common stock
at a discount of 40% off of the conversion price. The conversion
price is equal to the lowest bid price during the five trading days
prior to the date of conversion. The balance of this note was
$25,000 at September 30, 2020.
On
April 3, 2020, the Company issued a convertible promissory note for
$35,000. The note bears interest at 12% and has a maturity date of
December 31, 2020. The note can be converted into common stock at a
discount of 45% off of the conversion price. The conversion price
is the lowest bid price during the 25 trading days prior to the
date of conversion. The balance of this note was $35,000 and
remaining unamortized discount was $17,500 at September 30,
2020.
On
May 26, 2020, the Company issued a convertible promissory note for
$15,000. The note bears interest at 12% and has a maturity date of
February 26, 2021. The note can be converted into common stock at a
discount of 50% off of the conversion price. The conversion price
is equal to the lowest bid price during the 30 trading days prior
to the date of conversion. The balance of this note was $15,000 and
remaining unamortized discount was $10,000 at September 30,
2020.
On
June 8, 2020, the Company issued a convertible promissory note for
$11,200. The note was issued with an original issue discount of
$1,200, or an effective interest rate of 12%, and has a maturity
date of June 8, 2021. The note can be converted into common stock
at a discount of 50% off of the conversion price. The conversion
price is equal to the lowest bid price during the 20 trading days
prior to the date of conversion. The balance of this note was
$11,200 and remaining unamortized discount was $7,467 at September
30, 2020.
On
August 12, 2020, the Company issued a convertible promissory note
for $24,000. The note was issued with an original issue discount of
$2,500, or an effective interest rate of 11.6%, and has a maturity
date of August 12, 2021. The note can be converted into common
stock at a discount of 50% off of the conversion price. The
conversion price is equal to the lowest bid price during the 20
trading days prior to the date of conversion. The balance of this
note was $24,000 and remaining unamortized discount was $20,000 at
September 30, 2020.
As of
September 30, 2020, many of the Company’s convertible promissory
notes were in default of payment per the terms of their contractual
maturity dates. To the best of its knowledge, the Company has not
received any formal notices of default, demands for payment or
other forms of a claim as a result of these defaults. The Company
is accruing interest on these convertible promissory notes at
default rates ranging between 12% and 24%.
All
of the convertible notes were analyzed at the time of their
issuance for derivative accounting consideration. In some
instances, the Company concluded that a derivative liability
existed. The derivative liabilities were measured using the
commitment-date stock price. At September 30, 2020 and December 31,
2019, the Company determined that the fair value of these
derivative liabilities totaled $5,133,218 and $2,191,745,
respectively.
The
value of the derivative liabilities was determined using the
following Black-Scholes methodology:
| |
|
September
30, 2020 |
|
|
December 31,
2019
|
|
| |
|
|
|
|
|
|
| Expected
dividend yield (1) |
|
|
0.0 |
% |
|
|
0.0 |
% |
| Risk-free
interest rate (2) |
|
|
0.01
– 0.2 |
% |
|
|
1.6 –
2.6 |
% |
| Expected
volatility (3) |
|
|
199.5
– 472.6 |
% |
|
|
310.1
– 582.9 |
% |
| Expected
life (in years) |
|
|
0.5 –
1.0 |
|
|
|
0.5 –
1.0 |
|
______________
| (1) |
The
Company has no history or expectation of paying cash dividends on
its common stock. |
| (2) |
The
risk-free interest rate is based on the U.S. Treasury yield for a
term consistent with the expected life of the promissory notes in
effect at the time of issuance. |
| (3) |
The
volatility of the Company’s common stock is based on trading
activity for the previous contractual term ended at each promissory
note issuance date. |
At
September 30, 2020, the number of shares of common stock underlying
these convertible debentures totaled 17,754,746,551
shares.
NOTE
5 – STOCKHOLDERS’ EQUITY (DEFICIT)
Series
A Preferred Stock
The
authorized Series A preferred stock of the Company consists of
10,000,000 shares with a par value $0.00001. At September 30,
2020 and December 31, 2019, the Company had 10,000,000 shares of
its Series A preferred stock issued and outstanding. The majority
of the Series A preferred stock entitles the stockholders to 67%
overall voting rights.
Series
D Preferred Stock
In
April 2018, the Company designated and issued one (1) share of its
preferred stock as “Series D”. The share is convertible into 8.70%
of the Company’s then outstanding common stock, but no less than
850,000,000 shares of common stock subject to the satisfaction of
certain conditions precedent. The holder is entitled to vote with
the Company’s common stockholders, entitled to dividends, and
certain liquidation rights. The Company, with the holder’s consent,
may redeem the preferred share.
On
June 15, 2020, the Company issued 870,000,000 shares of common
stock upon the conversion of the share of Series D preferred
stock.
Series
E Preferred Stock
On
September 17, 2019, the Company issued 12 shares of Series E
convertible preferred stock to six stockholders in exchange for
361,813,930 shares of common stock. Each share of Series
convertible preferred stock is convertible into 40,000,000 shares
of common stock. As a result, the Company recorded a charge of
$24,000 for the net fair value of the consideration issued to the
stockholders.
On
May 12, 2020, the Company issued 8 shares of Series E preferred
stock to Joe E. Poe, Jr., its chief executive officer, valued at
$17,500 in accordance with terms of his employment agreement. Each
share of Series convertible preferred stock is convertible into
40,000,000 shares of common stock.
Common
Stock
On
June 16, 2020, the Company amended its Articles of Incorporation to
increase the number of authorized shares of common stock from
9,000,000,000 common shares to 11,000,000,000 common shares with a
par value $0.00001. At September 30, 2020 and December 31,
2019, the Company had 9,708,186,067 and 8,638,186,067 shares of its
common stock issued and outstanding.
On
June 15, 2020, the Company issued 870,000,000 shares of common
stock upon the conversion of one share of Series D preferred
stock.
On
August 11, 2020, the Company issued 200,000,000 shares of common
stock to contractors for services rendered.
During
the nine months ended September 30, 2019, the Company issued
190,000,000 shares of common stock in a private placement with an
accredited investor for proceeds of $38,000.
These
issuances were exempt from registration under rule
144.
NOTE
6 – INCOME TAXES
As of
September 30, 2020, the Company had net operating loss carry
forwards of approximately $17.3 million that may be available to
reduce its tax liability through tax year 2039. The Company
estimates the benefits of this loss carry forward at $3.6 million
if it produces sufficient taxable income. No adjustments to the
financial statements have been recorded for this potential tax
benefit. The Company has no provisions from income tax in
2019, due to current period losses and full valuation allowance on
deferred tax assets.
For
the three months ended September 30, 2020 and 2019, a
reconciliation of the federal statutory rate of 21% to the
Company’s effective tax rate is as follows:
| |
|
Nine
Months Ended
September 30, 2020 |
|
Nine
Months Ended
September 30, 2019 |
| Expected
expense (benefit) (21%) |
|
$ |
(680,923 |
) |
|
$ |
(501,346 |
) |
| State
income taxes, net of federal benefit |
|
|
(153,694 |
) |
|
|
(113,161 |
) |
| Income
tax provision (benefit) |
|
|
(834,617 |
) |
|
|
(614,507 |
) |
| Valuation
allowance |
|
|
834,617 |
|
|
|
614,507 |
|
| Accrued
expense (benefit) |
|
$ |
— |
|
|
$ |
— |
|
The
cumulative tax effect at the expected rate of 21% of significant
items comprising the Company’s net deferred tax amount is as
follows as of September 30, 2020 and December 31, 2019:
| |
|
September
30, 2020 |
|
December
31, 2019 |
| Deferred
tax asset attributable to: |
|
|
|
|
|
|
|
|
| Net
operating loss carryover |
|
$ |
3,642,743 |
|
|
$ |
2,961,820 |
|
| Less:
valuation allowance |
|
|
(3,642,743 |
) |
|
|
(2,961,820 |
) |
| Net
deferred tax asset |
|
$ |
— |
|
|
$ |
— |
|
Tax
net operating loss carryforwards may be limited pursuant to the IRS
Section 382 in the event of certain ownership
changes.
NOTE
7 – FAIR VALUE MEASUREMENTS
The
Company has adopted the guidance under ASC 820, Fair Value
Measurements, for financial instruments measured on a fair
value on a recurring basis. ASC 820 establishes a fair value
hierarchy, giving the highest priority to quoted prices in active
markets and the lowest priority to unobservable data and requires
disclosures for assets and liabilities measured at fair value
based on their level in the hierarchy. Further authoritative
accounting guidance (ASU No. 2009-05, Measuring Liabilities
at Fair Value) under ASC 820, provides clarification that in
circumstances in which a quoted price in an active market for the
identical liabilities is not available, a reporting entity is
required to measure fair value using one or more of the techniques
provided for in this update.
The
standard describes a fair value hierarchy based on three levels of
input, of which the first two are considered observable and the
last unobservable, that may be used to measure fair value, which
are the following:
| |
• |
Level
1 – Quoted prices in active markets for identical assets and
liabilities. |
| |
• |
Level
2 – Input other than Level 1 that are observable, either directly
or indirectly, such as quoted prices for similar assets of
liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable
market data for substantially the full term of the asset or
liabilities. |
| |
• |
Level
3 – Unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets
or liabilities. |
The
Company’s assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and
considers factors specific to the asset or liability.
The
Company analyzes all financial instruments with features of both
liabilities and equity under ASC 480, Distinguishing
Liabilities from Equity and ASC 815, Derivatives
and Hedging. Derivative liabilities are adjusted to reflect
fair value at each period end, with any increase or decrease in the
fair value being recorded in results of operations as adjustments
to fair value of derivatives. The effects of interactions between
embedded derivatives are calculated and accounted for in arriving
at the over- all fair value of the financial instruments. In
addition, the fair value of free-standing derivative instruments
such as warrant and option derivatives are valued using the
Black-Scholes modes.
The
Company uses Level 3 inputs for its valuation methodology for the
embedded conversion option liabilities as their fair value were
determined by using the Black Scholes option-pricing model based on
various assumptions. The Company’s derivative liabilities are
adjusted to reflect fair value at each period end, with any
increase or decrease in the fair value being recorded in results of
operations as adjustments to fair value of
derivatives.
The
following table summarizes the change in the Company’s financial
assets and liabilities measured at fair value as of December 31,
2019:
| |
|
|
|
|
Fair
Value Measurements at Reporting Date Using |
|
| |
|
|
|
|
Quoted
prices in |
|
Significant
Other |
|
|
Significant |
|
| |
|
|
|
|
Active
Markets for |
|
Observable |
|
|
Unobservable |
|
| |
|
|
|
|
Identical
Assets |
|
Inputs |
|
|
Inputs |
|
|
Description |
|
12/31/2019 |
|
|
(Level
l) |
|
(Level
2) |
|
|
(Level
3) |
|
| Convertible
promissory notes with embedded conversion option |
|
$ |
2,191,745 |
|
|
— |
|
— |
|
|
|
$ |
2,191,745 |
|
| Total |
|
$ |
2,191,745 |
|
|
— |
|
— |
|
|
|
$ |
2,191,745 |
|
The
following table summarizes the change in the Company’s financial
assets and liabilities measured at fair value as of September 30,
2020:
| |
|
|
|
|
Fair
Value Measurements at Reporting Date Using |
|
| |
|
|
|
|
Quoted
prices in |
|
Significant
Other |
|
|
Significant |
|
| |
|
|
|
|
Active
Markets for |
|
Observable |
|
|
Unobservable |
|
| |
|
|
|
|
Identical
Assets |
|
Inputs |
|
|
Inputs |
|
|
Description |
|
09/30/2020 |
|
|
(Level
l) |
|
(Level
2) |
|
|
(Level
3) |
|
| Convertible
promissory notes with embedded conversion option |
|
$ |
5,133,218 |
|
|
— |
|
— |
|
|
|
$ |
5,133,218 |
|
| Total |
|
$ |
5,133,218 |
|
|
— |
|
— |
|
|
|
$ |
5,133,218 |
|
The
following table sets forth a summary of change in fair value of the
Company’s derivative liabilities for the three months ended
September 30, 2020:
| Beginning
balance, January 1, 2020 |
|
$ |
2,191,745 |
|
| Change
in fair value of embedded conversion features of convertible
promissory notes included in earnings |
|
|
2,730,012 |
|
| Embedded
conversion option liability recorded in connection with the
issuance of convertible promissory notes |
|
|
211,461 |
|
| Ending
balance, September 30, 2020 |
|
$ |
5,133,218 |
|
NOTE 8 – COMMITMENTS AND CONTINGENCIES
On
May 1, 2017, the Company entered into an employment agreement with
its chief executive officer, Joe E. Poe, Jr. Under the terms of the
agreement, the Mr. Poe has the right to be issued one percent
(1.0%) of the issued and outstanding shares of the Company’s common
stock on the date of his choosing. On May 12, 2020, the Company
issued 8 shares of Series E preferred stock to Joe E. Poe, Jr., its
chief executive officer, valued at $17,500 in accordance with terms
of his employment agreement. Each share of Series convertible
preferred stock is convertible into 40,000,000 shares of common
stock.
NOTE 9 – SUBSEQUENT EVENTS
In accordance with FASB ASC 855-10, Subsequent Events, the
Company has analyzed its operations subsequent to September 30,
2020 to the date these consolidated financial statements were
issued, and has determined that it does not have any material
subsequent events to disclose in these consolidated financial
statements, except as follows:
On October 13, 2020, in a resolution signed by the Board of
Directors and Series A shareholders, the Company moved to reduce
its authorized shares of Series A Preferred Stock from 69,999,990
shares authorized to 10,000,000 total authorized shares of Series A
Preferred Stock. Pursuant to the terms of the Series A Preferred
Stock Certificate of Designation, the holders of Series A Preferred
Stock, voting separately as a class, shall have the right to vote
on all shareholder matters equal to 66 2/3% of the total
shareholder vote.
On November 4, 2020, the Company’s Certificate of Amendment to its
Nevada Articles of Incorporation was approved by the Nevada
Secretary of State. Under the Amendment, the Company elected to
change its name to Rogue One, Inc. and to effect a 1-for-200
reverse stock split of the shares of the Company’s Common Stock,
either issued and outstanding or held by the Company as treasury
stock, effective as of 5:00 p.m. (Nevada time) on November 23, 2020
(the “Reverse Stock Split”).
As a result of the Reverse Stock Split, every two hundred (200)
shares of issued and outstanding Common Stock will be automatically
combined into one issued and outstanding share of Common Stock,
without any change in the par value per share. No fractional shares
will be issued as a result of the Reverse Stock Split. Any
fractional shares that would otherwise have resulted from the
Reverse Stock Split will be rounded up to the next full. The
Reverse Stock Split will reduce the number of shares of Common
Stock outstanding from 10,039,186,066 shares to approximately
50,195,931 shares, subject to adjustment for rounding up fractional
shares. The number of authorized shares of Common Stock under the
Certificate of Incorporation was also lowered to a total of
1,000,000,000 authorized shares.
The Common Stock will begin trading on a reverse stock
split-adjusted basis on or about November 24, 2020.
The Company will apply for a new CUSIP number for its Common Stock.
The Company will also apply with FINRA for a new trading
symbol.
On November 17, 2020, the Company filed a Certificate of Amendment
to Designation to its Series E Preferred Stock. Under the
Amendment, the Company revised the conversion terms so that each
share of the Series E Preferred Stock shall be convertible into
200,000 shares of the Company’s Common Stock at any time from and
after the Company: (1) effectuates a reverse stock split; (2)
receives written notice from the Financial Industry Regulatory
Authority (“FINRA”) that the application for the reverse stock
split has been approved by FINRA; and (3) the Company receives
written notice from the holder of the Series E Preferred Stock
confirming that the holder wishes to exercise the conversion rights
set forth within the designation.
Item
2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
The
following discussion should be read in conjunction with our
unaudited consolidated financial statements and notes thereto
included herein. In connection with, and because we desire to take
advantage of, the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, we caution readers
regarding certain forward-looking statements in the following
discussion and elsewhere in this report and in any other statement
made by, or on our behalf, whether or not in future filings with
the Securities and Exchange Commission. Forward looking statements
are statements not based on historical information and which relate
to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon
estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are beyond our control and many of
which, with respect to future business decisions, are subject to
change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from
those expressed in any forward-looking statements made by, or on
our behalf. We disclaim any obligation to update forward looking
statements.
Overview
Fresh
Promise Foods, Inc. (“Fresh Promise” or the “Company”) is a
consumer products and marketing company focused on the high-margin,
multi-trillion-dollar alcoholic beverages sector.
On
June 16, 2020, the Company amended its Articles of Incorporation to
increase the number of authorized shares of common stock from
9,000,000,000 common shares to 11,000,000,000 common
shares.
Results
of Operations for the Three Months Ended September 30, 2020 and
2019
Sales
We
did not record any revenues for the three months ended September
30, 2020 and 2019. While we believe that our new focus will create
opportunities that will generate future revenue for the Company, we
can provide no assurance that we will be successful in the
execution of our business plan.
Gross Profit
We
did not record any cost of goods sold for either of the three
months ended September 30, 2020 and 2019. As such, we did not
realize any gross profit during either of the three-month periods
ended September 30, 2020 and 2019.
Operating Expenses
Operating
expenses totaled $67,678 for the three months ended September 30,
2020, compared to $17,380 in operating expenses for the three
months ended September 30, 2019, or an increase of
$50,298.
Our
operating expenses are primarily comprised of compensation and
benefits, professional fees and other general and administrative
costs. The increase in operating expenses was due to the timing of
services rendered in relation to our financial reporting and
other matters, and fees incurred from various state compliance
filings. We expect our operating expenses to increase
proportionally to our business activities as we begin to execute
upon our business plan in future periods.
Other Income (Expense)
Net
other expense totaled $241,241 for the three months ended September
30, 2020, compared to $368,201 in net other income for the three
months ended September 30, 2019, or a decrease in net other expense
of $126,960.
The
Company has issued various convertible notes to help finance its
operations, some of which have embedded derivative features. The
value of these instruments will fluctuate as the trading price of
our common stock changes. During the three months ended September
30, 2020, we recorded a non-cash derivative expense of $27,713 and
experienced an unrealized loss of $137,316 from the increase in
value of these derivative features, compared to an unrealized loss
of $301,316 from the change in the value of these derivative
features during the three months ended September 30,
2019.
During
the three months ended September 30, 2020, we recorded interest
expense related to the amortization of debt discounts totaling
$19,300, compared to $4,167 during the three months ended September
30, 2019. During the three months ended September 30, 2020, we
accrued interest expense on convertible notes or $56,692, compared
to interest expense of $38,718 during the three months ended
September 30, 2019.
Net Loss
We
incurred a net loss of 308,919, or $0.00 per share, for the three
months ended September 30, 2020, compared to net income of
$385,581, or $0.00 per share, for the three months ended September
30, 2019.
The
weighted average number of basic and fully diluted shares
outstanding for the three months ended September 30, 2020 was
9,616,881,187, compared to 8,888,324,133 for the three months ended
September 30, 2019. There are no dilutive equivalents included in
our calculation of fully diluted shares for the three months ended
September 30, 2020 and 2019, since their inclusion would be
anti-dilutive due to our net loss per share.
Results
of Operations for the Nine Months Ended September 30, 2020 and
2019
Sales
We
did not record any revenues for the nine months ended September 30,
2020 and 2019. While we believe that our new focus will create
opportunities that will generate future revenue for the Company, we
can provide no assurance that we will be successful in the
execution of our business plan.
Gross Profit
We
did not record any cost of goods sold for either of the nine months
ended September 30, 2020 and 2019. As such, we did not realize any
gross profit during either of the nine-month periods ended
September 30, 2020 and 2019.
Operating Expenses
Operating
expenses totaled $183,364 for the nine months ended September 30,
2020, compared to $75,744 in operating expenses for the nine months
ended September 30, 2019, or an increase of $107,620.
Our
operating expenses are primarily comprised of compensation and
benefits, professional fees and other general and administrative
costs. The increase in operating expenses was due to the timing of
services rendered in relation to our financial reporting and
other matters, and fees incurred from various state compliance
filings. We expect our operating expenses to increase
proportionally to our business activities as we begin to execute
upon our business plan in future periods.
Other Income (Expense)
Net
other expense totaled $3,059,126 for the nine months ended
September 30, 2020, compared to $2,697,201 in net other expense for
the nine months ended September 30, 2019, or an increase in net
other expense of $361,925.
The
Company has issued various convertible notes to help finance its
operations, some of which have embedded derivative features. The
value of these instruments will fluctuate as the trading price of
our common stock changes. During the nine months ended September
30, 2020, we recorded a non-cash derivative expense of $129,961 and
experienced an unrealized loss of $2,730,012 from the increase in
value of these derivative features, compared to an unrealized loss
of $2,543,172 from the change in the value of these derivative
features during the nine months ended September 30,
2019.
During
the nine months ended September 30, 2020, we recorded interest
expense related to the amortization of debt discounts totaling
$30,233, compared to $13,875 during the nine months ended September
30, 2019. During the nine months ended September 30, 2020, we
accrued interest expense on convertible notes or $168,262, compared
to interest expense of $116,154 during the nine months ended
September 30, 2019.
Net Loss
We
incurred a net loss of $3,242,490, or $0.00 per share, for the nine
months ended September 30, 2020, compared to a net loss of
$2,772,945, or $0.00 per share, for the nine months ended September
30, 2019.
The
weighted average number of basic and fully diluted shares
outstanding for the nine months ended September 30, 2020 was
9,014,426,943, compared to 8,873,256,659 for the nine months ended
September 30, 2019. There are no dilutive equivalents included in
our calculation of fully diluted shares for the nine months ended
September 30, 2020 and 2019, since their inclusion would be
anti-dilutive due to our net loss per share.
Liquidity
and Capital Resources
The
accompanying unaudited financial statements have been prepared
assuming that the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and
satisfaction of liabilities in the ordinary course of
business.
The
Company sustained a net loss of $3,242,490 for the nine months
ended September 30, 2020. Because of the absence of positive cash
flows from operations, the Company requires additional funding to
execute upon its business plan. These factors raise substantial
doubt about the Company’s ability to continue as a going concern.
The accompanying consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
We
are presently unable to meet our obligations as they come due. At
September 30, 2020, we had cash and cash equivalents totaling $136
and a working capital deficit of $8,307,942. Our working capital
deficit is primarily due to the balance of our convertible notes
payable and related derivative liabilities.
During
the nine months ended September 30, 2020, net cash used in
operating activities was $81,383, compared to $38,163 of cash used
in operating activities for the nine months ended September 30,
2019. During the nine months ended September 30, 2020, net cash
provided by financing activities was $81,500 compared, to $38,000
of cash provided by financing activities for the nine months ended
September 30, 2019.
We
anticipate that our cash requirements will arise from the need to
fund our growth from operations, pay current obligations and future
capital expenditures. The primary sources of funding in the near
term for such requirements are expected to be cash generated from
raising additional funds by the issuance of convertible notes.
However, we can provide no assurances that we will be able to
generate sufficient cash flow or obtain additional financing on
terms satisfactory to us if at all, to remain a going concern. Our
continuation as a going concern is dependent upon our ability to
generate sufficient cash flow to meet our obligations on a timely
basis and ultimately to attain profitability. In addition, our
plan for the next twelve months is to raise capital to continue to
expand our operations. We are presently engaged in capital raising
activities through one or more private offerings of our company’s
securities. See “Note 2– Going Concern” in our financial statements
for additional information as to the possibility that we may not be
able to continue as a “going concern.”
Inflation
Although
our operations are influenced by general economic conditions, we do
not believe that inflation had a material effect on our results of
operations during the nine-month period ended September 30,
2020.
Off-Balance Sheet Arrangements
We
had no off-balance sheet arrangements as of September 30, 2020 and
December 31, 2019.
Critical
Accounting Estimates
Our
financial statements and accompanying notes have been prepared in
accordance with U.S. GAAP. The preparation of these financial
statements requires management to make estimates, judgments and
assumptions that affect reported amounts of assets, liabilities,
revenues and expenses. We continually evaluate the accounting
policies and estimates used to prepare the condensed financial
statements. The estimates are based on historical experience and
assumptions believed to be reasonable under current facts and
circumstances. Actual amounts and results could differ from these
estimates made by management. Certain accounting policies that
require significant management estimates and are deemed critical to
our results of operations or financial position are discussed in
our Annual Report on Form 10-K for the year ended December 31,
2019 in the Critical Accounting Policies section of Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
Not
applicable
Item
4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
We
maintain disclosure controls and procedures designed to provide
reasonable assurance that information required to be disclosed in
reports filed under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), is recorded, processed, summarized and
reported within the specified time periods and accumulated and
communicated to our management, including our principal executive
officer and principal financial officer, as appropriate to allow
timely decisions regarding disclosure.
Our
management, with the participation of our Chief Executive Officer
(“CEO”) and our Chief Financial Officer (“CFO”), evaluated the
effectiveness of our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange
Act) as of September 30, 2020. In designing and evaluating
disclosure controls and procedures, we and our management recognize
that any disclosure controls and procedures, no matter how well
designed and operated, can only provide reasonable assurance of
achieving the desired control objective. As of September 30, 2020,
based on the evaluation of these disclosure controls and
procedures, and in light of the material weaknesses found in our
internal controls, the CEO and CFO concluded that our disclosure
controls and procedures were not effective.
In
light of the conclusion that our internal controls over financial
reporting were ineffective as of September 30, 2020, we have
applied procedures and processes as necessary to ensure the
reliability of our financial reporting in regards to this quarterly
report on Form 10-Q. Accordingly, management believes, based on its
knowledge, that: (i) this quarterly report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading with
respect to the periods covered by this report; and (ii) the
financial statements, and other financial information included in
this quarterly report, fairly present in all material respects
our financial condition, results of operations and cash flows as
at, and for, the periods presented in this quarterly
report.
Changes
in Internal Control over Financial Reporting
There
have been no changes in our internal control over financial
reporting during the last quarterly period covered by this report
that have materially affected, or are reasonably likely to affect,
our internal control over financial reporting.
PART
II — OTHER INFORMATION
Item
1. Legal Proceedings.
We
are not currently involved in any litigation that we believe could
have a materially adverse effect on our financial condition or
results of operations. Except as set forth above, there is no
action, suit, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive
officers of our Company or any of our subsidiaries, threatened
against or affecting our Company, our common stock, any of our
subsidiaries or of our Company’s or our Company’s subsidiaries’
officers or directors in their capacities as such, in which an
adverse decision could have a material adverse effect.
Item
1A. Risk Factors
There
have been no material changes to the risk factors disclosed in
“Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2019 filed with the SEC on May 28, 2020.
Item
2. Unregistered Sales of Equity Securities and Use
of Proceeds
On
August 11, 2020, the Company issued 200,000,000 shares of common
stock to contractors for services rendered.
The
above issuances did not involve any underwriters, underwriting
discounts or commissions, or any public offering and we believe is
exempt from the registration requirements of the Securities Act of
1933 by virtue of Section 4(2) thereof and/or Regulation D
promulgated thereunder.
Item
3. Defaults upon Senior Securities
None.
Item
5. Other Information
None.
Item
6. Exhibits
________________
*
Pursuant to Rule 406T of Regulation S-T, these interactive data
files are not deemed filed or part of a registration statement or
prospectus for purposes of Section 11 or 12 of the Securities Act
or Section 18 of the Securities Exchange Act and otherwise not
subject to liability.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Quarterly
Report to be signed on its behalf by the undersigned thereunder
duly authorized.
| |
FRESH
PROMISE FOODS INC., INC. |
| |
|
|
| Date:
November 16, 2020 |
By: |
/s/
Joe E. Poe, Jr. |
| |
Name: |
Joe
E. Poe, Jr. |
| |
Title: |
Chief
Executive Officer |
| |
|
(Principal
Executive Officer) |
