UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark one)

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2021

 

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from _________ to ___________

 

GOOD HEMP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada

000-54509

45-2578051

(State of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

 

20311 Chartwell Center Drive, Suite 1469

Cornelius, North Carolina 28031

1-800-947-9197

(Address of principal executive offices) (Zip code)

(Issuer’s telephone number)

 

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.

Note 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 ☒  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 ☒   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by checkmark 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 ☒

 

As of  November 9, 2021, there were 23,509,775 of shares of common stock, par value $0.001 per share issued, issuable and outstanding.

 

 

 

 

GOOD HEMP, INC.

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

INDEX TO FINANCIAL STATEMENTS

 

Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020

 

3

 

 

 

 

 

Condensed Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (Unaudited)

 

4

 

 

 

 

 

Condensed Statement of Stockholders’ Deficit as of September 30, 2021 and 2020 (Unaudited)

 

5

 

 

 

 

 

Condensed Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (Unaudited)

 

6

 

 

 

 

 

Notes to Condensed Financial Statements (Unaudited)

 

7

 

 

 
2

Table of Contents

  

GOOD HEMP, INC.

CONDENSED BALANCE SHEETS

(Unaudited)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$ 13,405

 

 

$ 21,233

 

Accounts receivable

 

 

64,803

 

 

 

4,689

 

Inventory

 

 

-

 

 

 

163,567

 

Prepaid expenses

 

 

166,933

 

 

 

9,541

 

Current assets of discontinued operations

 

 

324

 

 

 

-

 

Total current assets

 

 

245,465

 

 

 

199,030

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

130,070

 

 

 

-

 

Branding agreement

 

 

-

 

 

 

1,735,714

 

Investment

 

 

66,988

 

 

 

63,433

 

Goodwill

 

 

563,524

 

 

 

-

 

Intellectual property

 

 

12,000

 

 

 

12,000

 

Total assets

 

$ 1,018,047

 

 

$ 2,010,177

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 84,628

 

 

$ 19,203

 

Accounts payable to related parties

 

 

94,572

 

 

 

82,832

 

Accrued liabilities

 

 

7,987

 

 

 

-

 

Interest payable

 

 

41,303

 

 

 

35,320

 

Interest payable to related parties

 

 

78,858

 

 

 

45,057

 

Notes payable

 

 

19,100

 

 

 

19,100

 

Convertible notes, net of discounts

 

 

1,033,803

 

 

 

286,910

 

Convertible notes to related parties, net of discounts

 

 

510,575

 

 

 

400,575

 

Derivative liabilities

 

 

4,652,050

 

 

 

1,526,495

 

Total current liabilities

 

 

6,522,876

 

 

 

2,415,492

 

Total liabilities

 

 

6,522,876

 

 

 

2,415,492

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

 

 

 

Preferred stock - Class A - 30,000,000 shares authorized, $0.001 par value, 0 and 250,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

-

 

 

 

250

 

Common stock - 150,000,000 shares authorized, $0.001 par value, 23,444,775 and 22,263,829 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

23,445

 

 

 

22,264

 

Additional paid in capital

 

 

8,608,974

 

 

 

7,962,062

 

Accumulated deficit

 

 

(14,112,736 )

 

 

(8,389,891 )

Total controlling interest

 

 

(5,480,317 )

 

 

(405,315 )

Non-controlling interest

 

 

(24,512 )

 

 

-

 

Total stockholders’ deficit

 

 

(5,504,829 )

 

 

(405,315 )

Total liabilities and stockholders’ deficit

 

$ 1,018,047

 

 

$ 2,010,177

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
3

Table of Contents

  

GOOD HEMP, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

 

September 30, 2021

 

 

September 30, 2020

 

Net sales

 

$ 416,327

 

 

$ 102,010

 

 

$ 943,364

 

 

$ 383,356

 

Cost of sales

 

 

408,757

 

 

 

77,688

 

 

 

883,510

 

 

 

290,157

 

Gross profit

 

 

7,570

 

 

 

24,322

 

 

 

59,854

 

 

 

93,199

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

650,996

 

 

 

290,922

 

 

 

2,476,204

 

 

 

456,510

 

Operating loss

 

 

(643,426 )

 

 

(266,600 )

 

 

(2,416,350 )

 

 

(363,311 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

3

 

 

 

-

 

 

 

7

 

 

 

-

 

Gain on write off of debt

 

 

-

 

 

 

-

 

 

 

38,910

 

 

 

-

 

Interest expense

 

 

(103,257 )

 

 

(3,192 )

 

 

(170,997 )

 

 

(20,360 )

Loss on derivative liabilities

 

 

(1,090,026 )

 

 

119,848

 

 

 

(3,125,555 )

 

 

(607,495 )

Other income (expense)

 

 

149

 

 

 

-

 

 

 

149

 

 

 

-

 

Total other income (expense)

 

 

(1,193,131 )

 

 

116,656

 

 

 

(3,257,486 )

 

 

(627,855 )

Net loss from continuing operations

 

 

(1,836,557 )

 

 

(149,944 )

 

 

(5,673,836 )

 

 

(991,166 )

Loss from discontinued operations

 

 

(20,376 )

 

 

-

 

 

 

(73,521 )

 

 

-

 

Net loss

 

 

(1,856,933 )

 

 

(149,944 )

 

 

(5,747,357 )

 

 

(991,166 )

Net loss - non-controlling interest

 

 

6,793

 

 

 

-

 

 

 

24,512

 

 

 

-

 

Net loss - controlling interest

 

$ (1,850,140 )

 

$ (149,944 )

 

$ (5,722,845 )

 

$ (991,166 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share from continuing operations – basic and diluted

 

$ (0.08 )

 

$ (0.01 )

 

$ (0.25 )

 

$ (0.06 )

Net loss per share from discontinued operations – basic and diluted

 

$ (0.00 )

 

$ -

 

 

$ (0.00 )

 

$ -

 

Net loss per share - basic and diluted

 

$ (0.08 )

 

$ (0.01 )

 

$ (0.25 )

 

$ (0.06 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic and diluted

 

 

22,747,492

 

 

 

21,952,470

 

 

 

22,612,048

 

 

 

17,776,646

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
4

Table of Contents

  

GOOD HEMP, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT

(Unaudited)

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Non-Controlling

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Interest

 

 

Total

 

Balance, December 31, 2020

 

 

250,000

 

 

$ 250

 

 

 

22,263,829

 

 

$ 22,264

 

 

$ 7,962,062

 

 

$ (8,389,891 )

 

$ -

 

 

$ (405,315 )

Issuance of common stock for financing

 

 

-

 

 

 

-

 

 

 

65,000

 

 

 

65

 

 

 

77,935

 

 

 

-

 

 

 

-

 

 

 

78,000

 

Issuance of common stock for services

 

 

-

 

 

 

-

 

 

 

30,000

 

 

 

30

 

 

 

26,370

 

 

 

-

 

 

 

-

 

 

 

26,400

 

Issuance of common stock for conversion of notes payable

 

 

-

 

 

 

-

 

 

 

17,405

 

 

 

18

 

 

 

10,425

 

 

 

-

 

 

 

-

 

 

 

10,443

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,442,815 )

 

 

-

 

 

 

(1,442,815 )

Balance, March 31, 2021

 

 

250,000

 

 

 

250

 

 

 

22,376,234

 

 

 

22,377

 

 

 

8,076,792

 

 

 

(9,832,706 )

 

 

-

 

 

 

(1,733,287 )

Issuance of S-1 common stock at $1.25 for cash

 

 

-

 

 

 

-

 

 

 

166,400

 

 

 

166

 

 

 

207,834

 

 

 

-

 

 

 

-

 

 

 

208,000

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,429,890 )

 

 

(17,719 )

 

 

(2,447,609 )

Balance, June 30, 2021

 

 

250,000

 

 

 

250

 

 

 

22,542,634

 

 

 

22,543

 

 

 

8,284,626

 

 

 

(12,262,596 )

 

 

(17,719 )

 

 

(3,972,896 )

Issuance of S-1 common stock at $1.25 for cash

 

 

-

 

 

 

-

 

 

 

60,000

 

 

 

60

 

 

 

74,940

 

 

 

-

 

 

 

-

 

 

 

75,000

 

Exercise of warrants for preferred shares at $1.00

 

 

250,000

 

 

 

250

 

 

 

-

 

 

 

-

 

 

 

249,750

 

 

 

-

 

 

 

-

 

 

 

250,000

 

Conversion of preferred shares to common shares

 

 

(500,000 )

 

 

(500 )

 

 

833,333

 

 

 

833

 

 

 

(333 )

 

 

-

 

 

 

-

 

 

 

-

 

Cashless warrant exercise

 

 

-

 

 

 

-

 

 

 

8,808

 

 

 

9

 

 

 

(9 )

 

 

-

 

 

 

-

 

 

 

-

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,850,140 )

 

 

(6,793 )

 

 

(1,856,933 )

Balance, September 30, 2021

 

 

-

 

 

$ -

 

 

 

23,444,775

 

 

$ 23,445

 

 

$ 8,608,974

 

 

$ (14,112,736 )

 

$ (24,512 )

 

$ (5,504,829 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Non-Controlling

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Interest

 

 

Total

 

Balance, December 31, 2019

 

 

-

 

 

$ -

 

 

 

1,952,470

 

 

$ 1,953

 

 

$ 4,868,548

 

 

$ (6,927,936 )

 

$ -

 

 

$ (2,057,435 )

Issuance of common shares for branding agreement

 

 

-

 

 

 

-

 

 

 

6,000,000

 

 

 

6,000

 

 

 

2,694,000

 

 

 

-

 

 

 

-

 

 

 

2,700,000

 

Shares issued to William Alessi

 

 

-

 

 

 

-

 

 

 

7,000,000

 

 

 

7,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,000

 

Shares issued to Chris Chumas

 

 

-

 

 

 

-

 

 

 

7,000,000

 

 

 

7,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,000

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(188,551 )

 

 

-

 

 

 

(188,551 )

Balance, March 31, 2020

 

 

-

 

 

 

-

 

 

 

21,952,470

 

 

 

21,953

 

 

 

7,562,548

 

 

 

(7,116,487 )

 

 

-

 

 

 

468,014

 

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(652,671 )

 

 

-

 

 

 

(652,671 )

Balance, June 30, 2020

 

 

-

 

 

 

-

 

 

 

21,952,470

 

 

 

21,953

 

 

 

7,562,548

 

 

 

(7,769,158 )

 

 

-

 

 

 

(184,657 )

Issuance of Series B-1 preferred stock

 

 

250,000

 

 

 

250

 

 

 

-

 

 

 

-

 

 

 

249,750

 

 

 

-

 

 

 

-

 

 

 

250,000

 

Issuance of common stock for conversion of convertible note

 

 

-

 

 

 

-

 

 

 

111,359

 

 

 

111

 

 

 

59,889

 

 

 

-

 

 

 

-

 

 

 

60,000

 

Issuance of common stock for services

 

 

-

 

 

 

-

 

 

 

160,000

 

 

 

160

 

 

 

119,840

 

 

 

-

 

 

 

-

 

 

 

120,000

 

Issuance of common stock for joint venture

 

 

-

 

 

 

-

 

 

 

40,000

 

 

 

40

 

 

 

19,960

 

 

 

-

 

 

 

-

 

 

 

20,000

 

Amortization of derivative liabilities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(49,925 )

 

 

-

 

 

 

-

 

 

 

(49,925 )

Net loss for the period

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(149,944 )

 

 

-

 

 

 

(149,944 )

Balance, September 30, 2020

 

 

250,000

 

 

$ 250

 

 

 

22,263,829

 

 

$ 22,264

 

 

$ 7,962,062

 

 

$ (7,919,102 )

 

$ -

 

 

$ 65,474

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
5

Table of Contents

  

GOOD HEMP, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss from continuing operations

 

$ (5,673,836 )

 

$ (991,166 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

14,158

 

 

 

-

 

Amortization of branding agreement

 

 

1,735,714

 

 

 

-

 

Non-cash interest expense

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

26,400

 

 

 

52,500

 

Gain on write off of debt

 

 

(38,910 )

 

 

-

 

Gain on derivative liabilities

 

 

3,125,555

 

 

 

(607,496 )

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(18,503 )

 

 

(7,210 )

Prepaid expenses

 

 

(85,479 )

 

 

(130,616 )

Inventory

 

 

163,567

 

 

 

98,491

 

Other receivable

 

 

228

 

 

 

-

 

Accounts payable

 

 

22,623

 

 

 

126,060

 

Accounts payable to related parties

 

 

75,000

 

 

 

-

 

Accrued liabilities

 

 

(32,698 )

 

 

-

 

Interest payable

 

 

40,227

 

 

 

4,338

 

Operating cash flows from discontinued operations

 

 

(73,521 )

 

 

-

 

Net cash used in operating activities

 

 

(719,475 )

 

 

(1,455,099 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of investments

 

 

(689,055 )

 

 

-

 

Purchase of fixed assets

 

 

(47,000 )

 

 

-

 

Net cash flows from investing activities

 

 

(736,055 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from convertible notes payable to related parties, net of discounts

 

 

-

 

 

 

147,967

 

Proceeds from convertible notes payable, net of discounts

 

 

1,322,182

 

 

 

966,084

 

Repayment of convertible notes payable, net of discounts

 

 

(488,291 )

 

 

-

 

Issuance of notes payable

 

 

-

 

 

 

19,100

 

Proceeds from issuance of common stock

 

 

283,000

 

 

 

-

 

Conversion of note payables to common stock, net

 

 

-

 

 

 

60,000

 

Issuance of preferred stock

 

 

250,000

 

 

 

250,000

 

Proceeds from investment in subsidiary

 

 

42,500

 

 

 

-

 

Net cash provided by financing activities

 

 

1,409,391

 

 

 

1,443,151

 

 

 

 

 

 

 

 

 

 

Net change in cash

 

 

(46,139 )

 

 

(11,948 )

Cash and cash equivalents - beginning of period

 

 

59,868

 

 

 

48,088

 

Cash and cash equivalents – end of period for discontinued operations

 

 

324

 

 

 

-

 

Cash and cash equivalents - end of period for continuing operations

 

$ 13,405

 

 

$ 36,140

 

 

 

 

 

 

 

 

 

 

Supplemental non-cash information

 

 

 

 

 

 

 

 

Common stock issued for financing fees

 

$ 78,000

 

 

$ -

 

Spire Branding Agreement for common stock

 

$ -

 

 

$ 2,700,000

 

Conversion of notes payable into common stock

 

$ 10,000

 

 

$ 14,000

 

Exercise of cashless warrants

 

$ 8,808

 

 

$ -

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements. 

 

 
6

Table of Contents

  

GOOD HEMP, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

 

NOTE 1 – NATURE OF OPERATIONS

 

Good Hemp, Inc. (the “Company” or “Good Hemp”), formerly known as Keyser Resources, Inc., and Lone Star Gold, Inc., was incorporated in the State of Nevada on November 26, 2007.

 

The Company was involved in the exploration and development of mining properties until September 30, 2013, when it discontinued operations. In 2017, the Company was put into receivership and in 2018, it emerged from receivership. On September 11, 2019, the Company’s Board of Directors, pursuant to Nevada Revised Statute 92A.280, amended the Company’s Articles of Incorporation to change the name of the Company from Lone Star Gold, Inc. to Good Hemp, Inc. The amendment was filed with the Nevada Secretary of State on September 12, 2019.

 

The Company is now a North Carolina based company that is made up of industry veterans focused on exploiting niche markets in the hemp industry. Good Hemp® includes two lines of hemp-based beverages. Good Hemp® 2oh! is a hemp-derived, CBD-infused line of flavored waters, and Good Hemp® fizz! is a line of carbonated hemp oil infused sodas. Good Hemp® products have been sold throughout the United States since 2016 via Amazon.com, as well as local retailers.

 

By establishing a comprehensive distribution system, Good Hemp® has secured listings for its products with regional and national grocery and convenience chain stores.

 

On July 21, 2020, the Company filed with the State of Nevada a Certificate of Designation designating 250,000 shares of the Company’s authorized preferred stock as Series B-1 Convertible Preferred Stock (the “Series B-1 Preferred Stock”). Each share of Series B-1 Preferred Stock is convertible into 1.667 shares of Company common stock (subject to a 4.99% beneficial ownership limitation). The Series B-1 Preferred Stock entitles the holder to piggy-back registration rights and one vote per share.

 

Also, on July 21, 2020, the Company filed with the State of Nevada a Certificate of Designation designating 750,000 shares of the Company’s authorized preferred stock as Series B-2 Convertible Preferred Stock (the “Series B-2 Preferred Stock”). Each share of Series B-2 Preferred Stock is convertible into a number of shares of Company common stock equal to $1.00 divided by (i) the lesser of $0.60 or 60% of the 14-day average closing price of the Company’s common stock at the time of conversion (the “Market Price”) if the conversion occurs within 6 months of July 21, 2020, or (ii) 60% of the Market Price if the conversion occurs at least 6 months after July 21, 2020 (subject to a 4.99% beneficial ownership limitation). The Series B-2 Preferred Stock entitles the holder to one vote per share.

 

On February 9, 2021, the Company formed Good Hemp Wellness, LLC, a limited liability company formed under the laws of the State of North Carolina, to sell CBD products to customers through chiropractic offices. In October 2021, this company was dissolved. This company is being treated as discontinued operations in the consolidated financial statements.

 

On April 1, 2021, the Company entered into an agreement to purchase Diamond Creek Group, LLC, a North Carolina limited liability company which sells the Diamond Creek brand of high alkaline water products, for a total purchase price of $643,000. On April 2, 2021, the Company closed the acquisition and paid the initial $500,000 portion of the purchase price, and on April 23, 2021, paid the $143,000 purchase price balance. See note 4 for the purchase price allocation.

 

The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy. We may experience impact from quarantines, market downturns and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations.

 

 
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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and has a year-end of December 31.

 

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Good Hemp, Inc. and its wholly owned subsidiary, Diamond Creek Group, LLC, and its controlling interest subsidiary, Good Hemp Wellness, LLC. (collectively, the “Company”). All intercompany accounts have been eliminated upon consolidation.

 

Condensed Financial Statements

 

The unaudited condensed financial statements of the Company for the nine month periods ended September 30, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2020 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2021. These unaudited condensed financial statements should be read in conjunction with that report.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the recoverability of long-lived assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

 
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Impairment of Long-Lived Assets

 

Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

 

Goodwill and Other Intangible Assets

 

Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually or when indicators of a potential impairment are present. Our impairment testing of goodwill is performed separately from our impairment testing of indefinite-lived intangibles. The annual evaluation for impairment of goodwill and indefinite-lived intangibles is based on valuation models that incorporate assumptions and internal projections of expected future cash flows and operating plans. We believe such assumptions are also comparable to those that would be used by other marketplace participants. We evaluate a number of factors to determine whether an indefinite life is appropriate, including the competitive environment, market share, brand history, product life cycles, operating plans and the macroeconomic environment of the countries in which the brands are sold. When certain events or changes in operating conditions occur, an impairment assessment is performed and indefinite-lived brands may be adjusted to a determinable life. The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. Customer relationships, brands and other non-contractual intangible assets with determinable lives are amortized over periods generally ranging from 5 to 30 years. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

 

Fair Value of Financial Instruments

 

The FASB issued ASC 820-10, Fair Value Measurements and Disclosures, for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

 

- Level 1: Quoted prices in active markets for identical assets or liabilities

 

- Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or 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 related assets 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.

 

Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, cash equivalents include demand deposits, money market funds, and all highly liquid debt instructions with original maturities of three months or less.

 

The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

 
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Inventory

 

Inventory consisting of raw materials and finished product is stated at the lower of cost (first in, first out method) or net realizable value.

 

Concentration and Credit Risk

 

The Company does not have any financial asset and therefore is not exposed to any credit risks.

 

Cash - The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

Accounts Receivable and Allowance for Doubtful Accounts

 

Trade accounts receivable consists of product sales to customers. Trade accounts receivable are generally due 30 days after issuance of the invoice. Receivables past due more than 120 days are considered delinquent. Delinquent receivables are written off based on specific circumstances of the customer. At June 30, 2021, an allowance was not deemed necessary.

 

Derivative Financial Instruments

 

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

 

Commitment and Contingencies

 

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

The Company follows ASC 440-10, Commitments, to report accounting for certain commitments.

 

Net Loss Per Common Share

 

The Company computes net income or loss per share in accordance with ASC 260 Earnings per Share. Under the provisions of the Earnings per Share Topic ASC, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.

 

Income Taxes

 

The Company accounts for its income taxes in accordance with ASC 740 Income Taxes, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is provided for the amount of deferred tax assets that would otherwise be recorded for income tax benefits primarily relating to operating loss carryforwards as realization cannot be determined to be more likely than not.

 

 
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The statement establishes a more-likely-than-not threshold for recognizing the benefits of tax return positions in the financial statements. Also, the statement implements a process for measuring those tax positions which meet the recognition threshold of being ultimately sustained upon examination by the taxing authorities. There are no uncertain tax positions taken by the Company on its tax returns and the adoption of the statement had no material impact to the Company’s financial statements. The Company files tax returns in the US and states in which it has operations and is subject to taxation. Tax years subsequent to 2013 remain open to examination by U.S. federal and state tax jurisdictions.

 

Revenue Recognition

 

Revenue is recognized in accordance with ASC 606. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

 

The Company recognizes revenue upon completion of our performance obligations or expiration of the contractual time to use services such as professional service hours purchased in bulk for a given time period.

 

Recently Issued Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

NOTE 3 – GOING CONCERN

 

The Company’s unaudited condensed 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 recurring operating losses, an accumulated deficit and a working capital deficiency. Management’s plans include raising capital in the debt and equity markets. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until its operations become established enough to be considered reliably profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The accompanying 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. As reflected in the financial statements, the Company had a working capital deficit of $6,277,411 at September 30, 2021 and had a loss of $5,747,357 for the nine months ended September 30, 2021, which raises substantial doubt as to the Company’s ability to continue as a going concern in the future.

 

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company is unable to continue as a going concern.

 

 
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NOTE 4 – INTANGIBLE ASSETS

 

On February 6, 2019, the Company, entered into an Intellectual Property Purchase Agreement (the “Agreement”) with S. Mark Spoone, a Colorado corporation (the “Seller”), to acquire all of Mr. Spoone’s intellectual property associated with Mr. Spoone’s “Good Hemp” hemp-derived CBD-infused line of consumer beverages, for a purchase price consisting of 12,000,000 shares of the Company’s Class A preferred shares for a total value of $12,000. The transaction was completed on February 12, 2019.

 

On April 30, 2019, the Company acquired from S. Mark Spoone the CANNA HEMP and CANNA trademarks including all rights and trade secrets and related inventory for consideration totaling $32,462.39. At March 31, 2021, the Company had not attributed any value to the acquired trademarks.

 

Effective February 28, 2020, the Company entered into a Branding Agreement (the “Branding Agreement”) with Spire Holdings, LLC (“Spire”), pursuant to which the Company would immediately issue Spire 6,000,000 shares of the Company’s common stock (the “Spire Shares”), and Spire would provide the Company (i) 7 primary NASCAR Cup Series No. 77 entry automobile, team and drivers (“Car”) sponsorships, and (ii) 25 associate or secondary sponsorships in connection with the Car, subject to NASCAR and network television approval. Pursuant to the Branding Agreement, Spire has some antidilution protection and piggyback registration rights with respect to the Spire Shares.

 

On February 10, 2021, the Company and Spire entered into an Amendment to Branding Agreement amending the sponsorship dates to be during the 2021-2022 NASCAR Cup Series racing seasons instead of the 2020-2021 racing season.

 

The Company recorded an intangible asset in the amount of $2,700,000 based on the closing price of GHMP common shares of $0.45 on February 28, 2020. Through the nine-month period ended September 30, 2021, the Company determined that it had utilized 100% of the services provided under the branding agreement and has recognized $2,700,000 as expenses. The following summarizes the branding agreement:

 

Gross Value of Branding Agreement

 

$ 2,700,000

 

Value Utilized

 

 

(2,700,000 )

Remaining

 

$ -

 

 

On April 1, 2021, the Company entered into an agreement to purchase Diamond Creek Group, LLC, a North Carolina limited liability company which sells the Diamond Creek brand of high alkaline water products, for a total purchase price of $643,000. On April 2, 2021, the Company closed the acquisition and paid the initial $500,000 portion of the purchase price, and on April 23, 2021, paid the $143,000 purchase price balance. The purchase price was allocated as follows:

 

Purchase Price Allocation

 

Amount

 

Acquisition cost

 

$ 643,000

 

Assets acquired

 

 

 

 

Cash and cash equivalents

 

 

38,635

 

Accounts receivable

 

 

41,611

 

Property and Equipment

 

 

97,228

 

Total assets acquired

 

 

177,474

 

 

 

 

 

 

Liabilities assumed

 

 

 

 

Accounts payable and accrued liabilities

 

 

77,998

 

Note payable

 

 

20,000

 

Total liabilities assumed

 

 

97,998

 

Goodwill

 

$ 563,524

 

 

 
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NOTE 5 – NOTES PAYABLE

 

On March 14, 2019, the Company borrowed $50,000 from an unrelated third party. The loan was unsecured, bore interest at 8% per year, and was due and payable on September 14, 2019. At the option of the note holder, the note may at any time be converted into shares of the Company’s common stock. The number of shares to be issued upon conversion would be determined by dividing the amount to be converted by 60% of the average of the three lowest closing prices of the Company’s common stock during the ten trading days immediately preceding the conversion date. If at any time prior to July 14, 2020, the Company sold or issued any shares of its common stock at a price below $1.20 per share, the Company would issue such number of additional shares of its common stock to the note holder as determined by the following:

 

A

B = C

 

A

$1.20 = D

 

C – D = Number of additional shares to be issued to the note holder

 

Where:

 

A = The principal amount of the note previously converted by the note holder.

 

B = The price per share at which the Company’s common stock was sold or issued.

 

On March 15, 2019, the note holder exercised its option to convert the note into 67,750 restricted shares of the Company’s common stock. The common stock was issued to the note holder in April 2019.

 

On March 30, 2020, the Company entered into a securities purchase agreement (the “SPA”) with Power Up Lending Group Ltd., a Virginia corporation (the “Investor”), pursuant to which the Company agreed to issue to the Investor a 10% Convertible Promissory Note (the “Note”), dated March 23, 2020, in the principal amount of $67,500. The Note was funded by the Investor on March 30, 2020, and on such date pursuant to the SPA, the Company reimbursed the Investor for expenses for legal fees and due diligence of $2,500. The SPA includes customary representations, warranties and covenants by the Company and customary closing conditions. The Note matures 12 months after the date of the Note on March 23, 2021. The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the date of the Note, at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period ending on the last complete trading day prior to the date of conversion; provided, however, that the Investor may not convert the Note to the extent that such conversion would result in the Investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The beneficial ownership limitation may not be waived by the Investor. The Note carries a prepayment penalty if the Note is paid off in 60, 90, 120,150, or 180 days following the Note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 115%, 120%, 125%, 130%, and 135% respectively. After the expiration of 180 days following the issue date, the Company shall have no right of prepayment.

 

Effective April 8, 2020, the Company and its lender, GS Capital Partners, LLC, entered into a forbearance agreement relating to the Lender’s promissory note dated October 8, 2019, in the original principal amount of $103,000, pursuant to which the Company would pay the Lender $40,000 by April 10, 2020, and $80,000 by May 10, 2020. The Company made both payments, with the final payment made on May 11, 2020, since May 10, 2020, was a Sunday, and the lender’s note is now considered paid in full.

 

 
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Effective May 8, 2020, the Company entered into a securities purchase agreement with Power Up Lending Group Ltd., a Virginia corporation (“Power Up”), pursuant to which the Company agreed to issue to the Power Up an 8% Convertible Promissory Note, dated May 7, 2020, in the principal amount of $42,000. The note was funded by the Power Up on May 8, 2020, and on such date pursuant to the securities purchase agreement, the Company reimbursed the Power Up for expenses for legal fees and due diligence of $2,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on May 7, 2021. The note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the date of the note, at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period ending on the last complete trading day prior to the date of conversion; provided, however, that Power Up may not convert the note to the extent that such conversion would result in Power Up’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The beneficial ownership limitation may not be waived by Power Up. The note carries a prepayment penalty if the note is paid off in 30, 60, 90, 120, 150, or 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 112%, 115%, 118%, 125%, 130%, and 135% respectively. After the expiration of 180 days following the issue date, the Company shall have no right of prepayment. 

         

On July 31, 2020, the Company issued a Convertible Promissory Note (the “JRF Note”) to JRF AZ Investments II, LP (the “JRF Investor”), in the principal amount of $60,000, which was funded on July 31, 2020. The JRF Note matured nine months after the date of the note and was convertible into shares of the Company’s common stock at a conversion price equal to 60% of the average closing price during the 10 trading day period ending on the trading day prior to conversion. On August 1, 2020, the JRF Investor elected to convert the entire JRF Note into Company common stock and was subsequently issued 111,359 shares of Company common stock in conversion thereof.

 

On August 4, 2020, the Company entered into a securities purchase agreement with DGF Services, Inc. The note is for $10,000 bearing interest at 7% per annum and has a conversion price of $0.60 per share. The note matures on February 3, 2021. On March 15, 2021, the Company issued 30,000 shares of common stock for the conversion of principal and interest of $10,456. See Note 9.

 

On August 18, 2020, the Company entered into a securities purchase agreement with Power Up Lending Group pursuant to which the Company agreed to issue to the Investor an 8% Convertible Promissory Note, dated August 18, 2020, in the principal amount of $128,000. The note was funded by the Investor on August 18, 2020, and on such date pursuant to the securities purchase agreement, the Company reimbursed the Investor for expenses for legal fees and due diligence of $2,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on August 17, 2021. The note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the date of the note, at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period ending on the last complete trading day prior to the date of conversion; provided, however, that the Investor may not convert the note to the extent that such conversion would result in the Investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The beneficial ownership limitation may not be waived by the Investor. The note carries a prepayment penalty if the note is paid off in 30, 60, 90, 120, 150, or 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 112%, 115%, 118%, 125%, 130%, and 135% respectively. After the expiration of 180 days following the issue date, the Company shall have no right of prepayment. 

            

On February 4, 2021, the Company entered into a securities purchase agreement with Power Up Lending Group pursuant to which the Company agreed to issue to the Investor an 8% Convertible Promissory Note, dated February 4, 2021, in the principal amount of $127,000. The note was funded by the Investor on February 4, 2021, and on such date pursuant to the securities purchase agreement, the Company reimbursed the Investor for expenses for legal fees and due diligence of $2,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on February 4, 2022. The note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the date of the note, at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period ending on the last complete trading day prior to the date of conversion; provided, however, that the Investor may not convert the note to the extent that such conversion would result in the Investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The beneficial ownership limitation may not be waived by the Investor. The note carries a prepayment penalty if the note is paid off in 30, 60, 90, 120, 150, or 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 112%, 115%, 118%, 125%, 130%, and 135% respectively. After the expiration of 180 days following the issue date, the Company shall have no right of prepayment. On August 2, 2021, the Company paid the note, accrued interest and prepayment penalty in full.

 

 
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On February 16, 2021, the Company entered into a securities purchase agreement with Power Up Lending Group pursuant to which the Company agreed to issue to the Investor an 8% Convertible Promissory Note, dated February 16, 2021, in the principal amount of $78,750. The note was funded by the Investor on February 16, 2021, and on such date pursuant to the securities purchase agreement, the Company reimbursed the Investor for expenses for legal fees and due diligence of $2,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on February 16, 2022. The note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the date of the note, at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period ending on the last complete trading day prior to the date of conversion; provided, however, that the Investor may not convert the note to the extent that such conversion would result in the Investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The beneficial ownership limitation may not be waived by the Investor. The note carries a prepayment penalty if the note is paid off in 30, 60, 90, 120, 150, or 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 112%, 115%, 118%, 125%, 130%, and 135% respectively. After the expiration of 180 days following the issue date, the Company shall have no right of prepayment. On August 11, 2021, the Company paid the note, accrued interest and prepayment penalty in full.

 

On March 26, 2021, the Company entered into a securities purchase agreement with Leonite Capital LLC (“Leonite”) pursuant to which the Company agreed to issue to the Investor an 8% Convertible Promissory Note, dated March 26, 2021, in the principal amount of $568,182. The note was funded by the Investor on March 26, 2021, and on such date pursuant to the securities purchase agreement, the Company reimbursed the Investor for expenses for legal fees and due diligence of $2,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on March 26, 2022. The note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the date of the note, at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period ending on the last complete trading day prior to the date of conversion; provided, however, that the Investor may not convert the note to the extent that such conversion would result in the Investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The beneficial ownership limitation may not be waived by the Investor. The note carries a prepayment penalty if the note is paid off in 30, 60, 90, 120, 150, or 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 112%, 115%, 118%, 125%, 130%, and 135% respectively. After the expiration of 180 days following the issue date, the Company shall have no right of prepayment. The financing required the Company to issue 65,000 shares of common stock to Leonite (see Note 9).

 

On April 21, 2021, the Company entered into a securities purchase agreement (the “GS Capital SPA”) with GS Capital Partners, LLC, a New York limited liability company, pursuant to which the Company agreed to issue to the investor a 5% Convertible Redeemable Promissory Note (the “GS Capital Note”), dated April 21, 2021, in the principal amount of $85,750. The GS Capital Note included a $8,000 original issue discount, and was funded by the investor on April 22, 2021, and on such date pursuant to the GS Capital SPA, the Company reimbursed the investor for legal fees of $3,750, receiving net funding of $74,000. The GS Capital SPA includes customary representations, warranties and covenants by the Company and customary closing conditions. The GS Capital Note matures 12 months after the date of the note on April 21, 2022. The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period prior to the date of conversion (and including the conversion date); provided, however, that the investor may not convert the note to the extent that such conversion would result in the investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The note carries a prepayment penalty if it is paid off in 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 105% if prepaid within 60 days, 120% if prepaid from 61 days-120 days, and 125% if prepaid between 121 days-180 days of issuance. After the expiration of 180 days, the Company shall have no right of prepayment.

 

 
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On April 20, 2021, the Company entered into a securities purchase agreement (the “Power Up SPA”) with Power Up Lending Group Ltd., a Virginia corporation, pursuant to which the Company agreed to issue to the investor a 5% Convertible Promissory Note (the “Power Up Note”), dated April 20, 2021, in the principal amount of $82,000. The Power Up Note was funded by the investor on April 23, 2021, and on such date pursuant to the Power Up SPA, the Company reimbursed the investor for expenses for legal fees and due diligence of $2,000, receiving net funding of $80,000. The Power Up SPA includes customary representations, warranties and covenants by the Company and customary closing conditions. The Power Up Note matures 12 months after the date of the Power Up Note on April 20, 2022. The note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from the date of the note, at a conversion price equal to 65% multiplied by the lowest closing bid price during the 20 trading day period ending on the last complete trading day prior to the date of conversion; provided, however, that the investor may not convert the note to the extent that such conversion would result in the investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The beneficial ownership limitation may not be waived by the investor. The note carries a prepayment penalty if the note is paid off in 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 125%. After the expiration of 180 days following the issue date, the Company shall have no right of prepayment. 

        

On May 4, 2021, the Company entered into a securities purchase agreement with Metrospaces, Inc., a Florida corporation, pursuant to which the Company agreed to issue to the investor a 5% Convertible Redeemable Note, dated April 4, 2021, in the principal amount of $50,000. The note was funded by the investor on May 4, 2021, with the Company receiving funding of $50,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on May 4, 2022. The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to 65% multiplied by the lowest closing price during the 20 trading day period prior to the date of conversion (and including the conversion date); provided, however, that the investor may not convert the note to the extent that such conversion would result in the investor’s beneficial ownership of the Company’s common stock being in excess of 9.9% of the Company’s issued and outstanding common stock. The note carries a prepayment penalty if it is paid off in 180 days following the note date. The prepayment penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 115% if prepaid within 60 days, 120% if prepaid from 61 days-120 days, and 125% if prepaid between 121 days-180 days of issuance. After the expiration of 180 days, the Company shall have no right of prepayment.

 

On August 13, 2021, the Company entered into a securities purchase agreement with Geneva Roth Remark Holdings, Inc., a New York corporation, pursuant to which the Company agreed to issue to the investor a Convertible Note, dated August 13, 2021, in the principal amount of $250,375. The Note included a $25,375 original issue discount and was funded by the investor on August 13, 2021, with the Company receiving funding of $225,000. The note carries a one-time interest charge of 10% of $25,037. The note has mandatory monthly payments of $27,541 starting on September 30, 2021 until the note is paid in full. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on August 13, 2022. The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to 75% multiplied by the lowest closing price during the previous trading day period prior to the date of conversion (and including the conversion date); provided, however, that the investor may not convert the note to the extent that such conversion would result in the investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. The Company made the first note payment on $27,541 prior to September 30, 2021.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

All related party transactions are recorded at the exchange amount which is the value established and agreed to by the related party. Mr. William Alessi, CEO, is the Principal Executive Officer and director of the Company. The JanBella Group is an entity controlled by Mr. Alessi. Chris Chumas is a director and a minority shareholder of the Company.

 

A payable to a related party of $17,574 to Maurice Bideaux, the Company’s former chief executive officer and director, was forgiven by Mr. Bideaux in 2010. An additional advance from Mr. Bideaux of $38,910 was written off due to the statute of limitations.

 

On February 6, 2019, Mr. William Alessi, the Company’s CEO and one of its directors, personally sold 6,000,000 shares of the Company’s Class A Preferred Shares to Chris Chumas for $100,000 in cash.

 

During the quarter ended March 31, 2019, Mr. Alessi returned to treasury 12,000,000 shares of Class “A” preferred shares to facilitate the acquisition of certain intellectual property as disclosed below and in Note 4 above. As a result, $12,000 has been added to his loan account in lieu of payment.

 

On July 18, 2019, the Company issued promissory notes to Mr. Alessi, JanBella Group and Mr. Chumas to evidence the amounts they advanced to the Company. The notes are due on demand, bear interest at 10% per year, and are secured by all of the Company’s assets. At the option of the noteholders, the notes may be converted into shares of the Company’s common stock. The number of shares which will be issued upon any conversion of the notes will be determined by dividing the principal amount to be converted (plus, at the option of the noteholder, accrued and unpaid interest) by the lower of (i) $0.001 or, (ii) 50% of the lowest bid price during the forty-five consecutive trading day period ending on the trading day immediately prior to the conversion date.

 

 
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On or about July 22, 2019, the Company purchased shares of its Class A Preferred Shares from the following persons:

 

 

 

Class A

 

 

 

 

Name

 

Preferred

Shares

 

 

Consideration

 

William Alessi

 

 

12,000,000

 

 

$ 200,000

(1)

 

 

 

 

 

 

 

 

 

Chris Chumas

 

 

6,000,000

 

 

$ 100,000

(1)

____________

(1) Payment for the preferred shares was in the form of notes. The notes bear interest at 8% per year, are due and payable on December 31, 2019, and are unsecured.

 

On or about July 22, 2019, S. Mark Spoone converted his 12,000,000 Class A Preferred Shares into 450,000 shares of the Company’s common stock.

 

On January 29, 2020, the Company issued 7,000,000 shares of its common stock to each of William Alessi and Chris Chumas, respectively, for partial conversion of their promissory notes in the principal amount of $7,000 each, respectively.

 

The following table presents principal amounts due, and common and preferred shares held by William Alessi, Chris Chumas and S. Mark Spoone as of September 30, 2021:

 

 

 

 

 

Interest

 

 

Common

Shares

 

 

Preferred

Shares

 

Name

 

Principal

 

 

rate

 

 

#

 

 

#

 

Chris Chumas

 

$ 150,287

 

 

8%-10

%

 

 

7,000,000

 

 

nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William Alessi

 

 

250,288

 

 

0%-10

%

 

 

6,971,050

(1)

 

nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

JanBella Group (2)

 

 

110,000

 

 

 

10 %

 

nil

 

 

nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S. Mark Spoone

 

nil

 

 

 

 

 

 

 

450,000

 

 

nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$ 510,575

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes 6,971,000 shares held in the name of Mr. Alessi’s trust, and 50 shares held in the name of Mr. Alessi’s IRA.

 

(2) Mr. Alessi’s entity.

 

See Part II – Unregistered Sales of Equity Securities and Use of Proceeds regarding the sale of unregistered securities and use of proceeds.

 

 
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NOTE 7 – DERIVATIVE LIABILITIES

 

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of September 30, 2021. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.

 

For the nine months ended September 30, 2021, the assumptions utilized in estimating fair values of the liabilities measured on a recurring basis are as follows:

 

 

 

Nine months ended

 

 

 

September 30, 2021

 

Expected term

 

1.00 years

 

Expected average volatility

 

 

321.5 %

Expected dividend yield

 

 

-

 

Risk-free interest rate

 

 

7.00 %

 

The fair value measurements of the derivative liabilities at September 30, 2021 are summarized:

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

$

4,652,050

 

 

$ -

 

 

$ -

 

 

$ 4,652,050

 

 

The fair value measurements of the derivative liabilities at December 31, 2020 is summarized:

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

$

1,526,495

 

 

$ -

 

 

$ -

 

 

$ 1,526,495

 

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

Legal Matters

 

The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows. As of August 16, 2021, the Company did not have any legal actions pending against it.

 

Commitments

 

The Company entered into various Seed Resale Agreements to sell Hemp seeds to growers. The Company is obligated to purchase from the growers’ minimum future quantities of hemp biomass.

 

 
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NOTE 9 – CAPITAL STOCK

 

On January 29, 2020, the Company issued 7,000,000 shares of its common stock to each of William Alessi and Chris Chumas, respectively, for partial conversion of promissory notes in the principal amount of $7,000 each, respectively.

 

On February 28, 2020, the Company entered into a Branding Agreement (the “Branding Agreement”) with Spire Holdings, LLC (“Spire”), pursuant to which the Company would immediately issue Spire 6,000,000 shares of the Company’s common stock (the “Spire Shares”), and Spire would provide the Company (i) 7 primary NASCAR Cup Series No. 77 entry automobile, team and drivers (“Car”) sponsorships, and (ii) 25 associate or secondary sponsorships in connection with the Car, subject to NASCAR and network television approval. Pursuant to the Branding Agreement, Spire has some anti-dilution protection and piggyback registration rights with respect to the Spire Shares.

 

On July 29, 2020, the Company sold a third party investor (the “Investor”) the following securities (the “Securities”) for an aggregate purchase price of $250,000: (i) 250,000 shares of the Series B-1 Preferred Stock, (ii) non-cashless warrants to purchase 250,000 shares of the Series B-2 Preferred Stock for $1.00 per share terminating on January 21, 2021, (iii) non-cashless warrants to purchase 250,000 shares of the Series B-2 Preferred Stock for $1.00 per share terminating on July 21, 2021, and (iv) non-cashless warrants to purchase 250,000 shares of the Series B-2 Preferred Stock for $1.00 per share terminating on January 21, 2022.

 

Effective July 1, 2020, Scott Shellady was appointed to serve as the Chief Strategic Officer of the Company. On June 24, 2020, the Company entered into a consulting services agreement with Mr. Shellady, pursuant to which Mr. Shellady would (i) render marketing, sales, distribution, and branding services to the Company; and (ii) would be paid $5,000 per month and 100,000 shares of Company common stock for services rendered during the initial term from July 1, 2020, through December 31, 2020.

 

Effective July 31, 2020, the Company issued a Convertible Promissory Note to JRF AZ Investments II, LP in the principal amount of $60,000, which was funded on July 31, 2020. TheNote matured six months after the date of the Note and was convertible into shares of the Company’s common stock at a conversion price equal to 60% of the average closing price during the 10 trading day period ending on the trading day prior to conversion. On August 1, 2020, JRF AZ Investments II, LP elected to convert the entire Note into Company common stock and was subsequently issued 111,359 shares of Company common stock in conversion thereof.

 

On August 24, 2020, with an effective date of July 1, 2020, the Company entered into a joint venture agreement with Paul Hervey (“Hervey”), an individual, for the purpose of cultivating hemp. Hervey is a licensed hemp cultivator in good standing under the laws of North Carolina with approximately 3,700 square feet of greenhouse cultivation space and approximately 9 acres of farmable land (the “Facility”). Under the joint venture agreement, Good Hemp will contribute up to $160,000 for the preparation of the Facility, as well as up to $174,000 as ongoing operational expenses for the joint venture, and Hervey will contribute exclusive use of the Facility, as well as purchase services and/or purchase or lease necessary equipment for the planting, cultivation and irrigation for growing hemp, and profits shall be split equally by the parties after reimbursement of expenses paid by the parties. The joint venture shall conduct business under the name “Olin Farms, LLC”. On or about August 20, 2020, the Company compensated Hervey $53,433.33 for the initial expenses of the joint venture. The payment was made as follows: (i) a check payable to Hervey in the amount of $33,433.33, and (ii) the issuance of 40,000 shares of Company common stock in lieu of a $20,000 cash payment.

 

On March 15, 2021, the Company issued 30,000 shares of common stock to a consultant for services.

 

On March 23, 2021, the Company issued 17,405 shares of common stock to DGF Services, Inc. for a conversion of $77,952 in convertible debt. See Note 5.

 

 
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On March 25, 2021, the Company issued 65,000 shares of common stock to Leonite in conjunction with financing. See Note 5.

 

On June 16, 2021, the Company issued 166,400 shares of common stock to two investors under the S-1 registration at $1.25 per share for a total of $208,000 in cash.

 

On July 26, 2021, the Company issued 60,000 shares of common stock to one investor under the S-1 registration at $1.25 per share for a total of $75,000 in cash.

 

On July 30, 2021, an investor (the “Investor”) exercised a non-cashless warrants to purchase 250,000 shares of the Series B-2 Preferred Stock for $1.00 per share for $250,000 in cash.

 

On July 30, 2021, the investor holding 500,000 shares of Series B-2 Preferred Stock converted these shares into 833,333 common shares according to the conversion rights.

 

On August 27, 2021, two warrant holders exercised cashless warrants. The Company issued 8,808 shares of common stock in relation to these warrants being exercised.

 

See Part II – Unregistered Sales of Equity Securities and Use of Proceeds regarding the sale of unregistered securities and use of proceeds.

 

NOTE 10 – JOINT VENTURE

 

On August 24, 2020, with an effective date of July 1, 2020, the Company entered into a joint venture agreement with Paul Hervey (“Hervey”) for the purpose of cultivating hemp. Hervey is a licensed hemp cultivator in good standing under the laws of North Carolina with approximately 3,700 square feet of greenhouse cultivation space and approximately 9 acres of farmable land (the “Facility”). Under the joint venture agreement, Good Hemp will contribute up to $160,000 for the preparation of the Facility, as well as up to $174,000 as ongoing operational expenses for the joint venture, and Hervey will contribute exclusive use of the Facility, as well as purchase services and/or purchase or lease necessary equipment for the planting, cultivation and irrigation for growing hemp, and profits shall be split equally by the parties after reimbursement of expenses paid by the parties. The joint venture shall conduct business under the name “Olin Farms, LLC”. On or about August 20, 2020, the Company compensated Hervey $53,433.33 for the initial expenses of the joint venture. The payment was made as follows: (i) a check payable to Hervey in the amount of $33,433.33, and (ii) the issuance of 40,000 shares of Company common stock in lieu of a $20,000 cash payment. On or about August 21, 2020, the Company made an initial cash contribution to Olin Farms, LLC, in the amount of $10,000.00. In October 2021, Olin Farms, LLC was dissolved.

 

NOTE 11 – DISCONTINUED OPERATIONS

 

The Company decided during the year to discontinue operations of its majority owned subsidiary, Good Hemp Wellness, LLC. In October 2021, the Company dissolved this entity in accordance with the laws and regulations of North Carolina.

 

In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the Consolidated Balance Sheets. The assets and liabilities have been reflected as discontinued operations in the Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020, and consist of the following:

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Current Assets of Discontinued Operations:

 

 

 

 

 

 

Cash

 

$ 324

 

 

$ -

 

Total Current Assets of Discontinued Operations

 

$ 324

 

 

$ -

 

 

 
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In accordance with the provisions of ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the Consolidated Statements of Operations. The results of operations for this entity for the three and nine-month periods ended September 30, 2021 and 2020 have been reflected as discontinued operations in the Consolidated Statements of Operations, and consist of the following:

 

 

 

Three Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

Net sales

 

$ 1,885

 

 

$ -

 

Cost of sales

 

 

1,562

 

 

 

-

 

Gross profit

 

 

323

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

20,699

 

 

 

-

 

Operating loss

 

 

(20,376 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Loss before taxes of discontinued operations

 

 

(20,376 )

 

 

-

 

Provision for income taxes of discontinued operations

 

 

-

 

 

 

-

 

Net loss of discontinued operations

 

$ (20,376 )

 

$ -

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

September 30, 2020

 

Net sales

 

$ 4,189

 

 

$ -

 

Cost of sales

 

 

1,814

 

 

 

-

 

Gross profit

 

 

2,375

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

75,896

 

 

 

-

 

Operating loss

 

 

(73,521 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Loss before taxes of discontinued operations

 

 

(73,521 )

 

 

-

 

Provision for income taxes of discontinued operations

 

 

-

 

 

 

-

 

Net loss of discontinued operations

 

$ (73,521 )

 

$ -

 

 

 
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In accordance with the provisions of ASC 205-20, the Company has separately reported the cash flow activity of the discontinued operations in the Consolidated Statements of Cash Flows. The cash flow activity from discontinued operations for the period ended September 30, 2021 and year ended December 31, 2020 have been reflected as discontinued operations in the Consolidated Statements of Cash Flows and consist of the following:

 

 

 

Nine Months Ended

 

 

 

September 30, 2021

 

 

September 31, 2020

 

DISCONTINUED OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss of discontinued operations

 

$ (73,521 )

 

$ -

 

Net cash used in operating activities of discontinued operations

 

$ (73,521 )

 

$ -

 

 

NOTE 12 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events, in accordance with FASB ASC Topic 855, “Subsequent Events,” through the date which the financial statements were available to be issued and there are no material subsequent events except as noted below.

 

Effective October 5, 2021, the Company entered into a securities purchase agreement with Jefferson Street Capital, LLC, a New Jersey limited liability company, pursuant to which the Company agreed to issue to the investor a 10% Convertible Redeemable Note, dated October 5, 2021, in the principal amount of $275,000. The note was funded by the investor on October 5, 2021, with the Company receiving funding of $250,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures on August 20, 2022. The Company must begin making monthly payments in February 2022 and March 2022 of $6,000, then five payments of $58,100 from April through August 2022. The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to 75% multiplied by the lowest closing price during the 10 trading day period prior to the date of conversion (and including the conversion date); provided, however, that the investor may not convert the note to the extent that such conversion would result in the investor’s beneficial ownership of the Company’s common stock being in excess of 9.9% of the Company’s issued and outstanding common stock.

 

On October 18, 2021, the Company issued 65,000 shares of common stock to an investor under the S-1 registration at $1.25 per share for a total of $75,000 in cash.

 

Effective October 19, 2021, the Company entered into a securities purchase agreement with Sixth Street Lending, LLC, a Virginia limited liability company, pursuant to which the Company agreed to issue to the investor a 5% Convertible Redeemable Note, dated October 19, 2021, in the principal amount of $87,500. The note was funded by the investor on October 19, 2021, with the Company receiving funding of $85,000. The securities purchase agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The note matures 12 months after the date of the note on October 19, 2022. The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to 65% multiplied by the lowest closing price during the 20 trading day period prior to the date of conversion (and including the conversion date); provided, however, that the investor may not convert the note to the extent that such conversion would result in the investor’s beneficial ownership of the Company’s common stock being in excess of 9.9% of the Company’s issued and outstanding common stock.

 

 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

 

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

 

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed on April 15, 2021, and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

 

Company Overview and Product Brands

 

The Company was formed as a Nevada corporation on November 26, 2007. The Company was involved in exploration and development of mining properties until September 30, 2013, when it discontinued operations. In June 2017, the Company’s creditors filed a petition in the District Court of Harris County, Texas for the appointment of a receiver. In August of 2017, the court appointed a receiver (who was subsequently appointed as an officer and director of the Company), and in February 2018, the receiver appointed William Alessi as a director of the Company and then resigned as a director and officer of the Company.

 

On February 6, 2019, the Company acquired trademarks and intellectual property, which includes all rights and trade secrets to the hemp-derived CBD-infused line of consumer beverages sold under the “Good Hemp” brand. Since then, the Company has been conducting operations under the “Good Hemp” trade name and through the http://www.goodhemplivin.com/ website. Information on this website is not a part of this report on Form 10-Q.

 

On April 30, 2019, the Company acquired from Mr. Spoone the “CANNA HEMP” and “CANNA” trademarks including all rights and trade secrets and related inventory. At June 30, 2021, the Company had not attributed any value to these acquired trademarks.

 

On August 24, 2020, with an effective date of July 1, 2020, the Company entered into a joint venture agreement with Paul Hervey (“Hervey”), an individual, for the purpose of cultivating hemp on approximately 9 acres of farmland and in approximately 3,700 square feet of greenhouse space in North Carolina (referred to as “Olin Farms”). In October 2021, Olin Farms ceased operations, and the limited liability company joint venture entity was dissolved in North Carolina.

 

On February 9, 2021, the Company formed Good Hemp Wellness, LLC, a limited liability company formed under the laws of the State of North Carolina, to sell CBD products to customers through chiropractic offices. In October 2021, this company was dissolved in North Carolina, and it is being treated as discontinued operations in the consolidated financial statements. The Company plans to sell Good Hemp Wellness CBD inventory directly.

 

On April 1, 2021, the Company entered into an agreement to purchase Diamond Creek Group, LLC, a North Carolina limited liability company which sells the Diamond Creek brand of high alkaline water products, for a total purchase price of $643,000. On April 2, 2021, the Company closed the acquisition and paid the initial $500,000 portion of the purchase price, and on April 23, 2021, paid the $143,000 purchase price balance.

 

The Company is a North Carolina based company that is made up of industry veterans focused on exploiting niche markets in the hemp and beverage industries. The Company’s products include high alkaline water products, hemp-based beverage products under Good Hemp® brand, and CBD softgels under the Good Hemp Wellness brand. Good Hemp® products include two lines of hemp-based beverages described below. Good Hemp® products have been sold throughout the United States since 2016 via Amazon.com, as well as local retailers.

 

 
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Products

 

Good Hemp® 2oh!, CANNA HEMP and CANNA are a line-up of refreshing, all-natural, “good-for-you”, ready-to-drink waters in six flavors: blueberry-blast, island coco-lime, kiwi-strawberry, lemon-twist, mango-fandango and Q-cumbermint. Each Good Hemp® 2oh! beverage is 16.9 fluid ounces infused with 10 mg of hemp oil (CBD rich), 6g of prebiotic fiber, has 0 g of sugar, contains no artificial sweeteners or artificial flavors, is gluten free, vegan, and contains 0 net carbs.

 

Good Hemp® fizz is a line-up of carbonated refreshing, all-natural, “good-for-you”, “ready-to-drink carbonated beverages in three flavors: blueberry-bam, mango-tango and citrus-twist. Each Good Hemp® fizz beverage is 12 fluid ounces infused with 10 mg of hemp oil (CBD rich), 6 g of prebiotic fiber, contains no artificial sweeteners or artificial flavors, is gluten free and vegan.

 

Good Hemp Wellness is a line of CBD soft gels that uses a proprietary super absorption formula with the goal of minimizing the nutrients lost during the digestive process and allowing consumers to absorb more CBD in smaller doses.

 

Diamond Creek High Alkaline Water is a 9.5pH high alkaline natural spring water, sourced from the highest quality, award winning springs. Diamond Creek is available in one gallon, one liter and half liter bottles and aids in balancing the body’s pH while providing superior hydration resulting from a proprietary ionization process.

 

As of September 30, 2021, Diamond Creek water was available in over 1,500 stores in the United States.

 

Our Growth Strategy

 

Expanding our US distribution reach to service national chain stores; increase awareness of our brand in the United States; securing additional chain, convenience and key account store listings for all our brands nationwide and internationally; increasing our warehouse direct to retail channel; focusing on full-service Class “A” distributors; and focusing on placing our products in produce, natural and cold sets as opposed to the grocery aisles.

 

We will be looking for strategic acquisitions and partnerships in the beverage and hemp sectors, such as Diamond Creek Group, LLC, to strengthen our backend supply chain, distribution and relationships with retail customers.

 

Results of Operations

 

For the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

 

 

 

Nine Months Ended September 30,

 

 

Increase/

 

 

 

2021

 

 

2020

 

 

(Decrease)

 

Net Sales

 

$ 947,553

 

 

$ 383,356

 

 

$ 564,197

 

Cost of Sales

 

 

885,324

 

 

 

290,157

 

 

 

595,167

 

Gross Profit

 

 

62,229

 

 

 

93,199

 

 

 

(30,970 )

Operating Expenses

 

 

2,552,100

 

 

 

456,510

 

 

 

2,095,590

 

Operating Loss

 

 

(2,489,871 )

 

 

(363,311 )

 

 

(2,126,560 )

Interest Income

 

 

7

 

 

 

-

 

 

 

7

 

Gain on Write-off of Debt

 

 

38,910

 

 

 

-

 

 

 

38,910

 

Interest Expense

 

 

(170,997 )

 

 

(20,360 )

 

 

(150,637 )

Loss on Derivative Liabilities

 

 

(3,125,555 )

 

 

(607,495 )

 

 

(2,518,060 )

Other Expenses

 

 

149

 

 

 

-

 

 

 

149

 

Net Loss

 

$ (5,747,357 )

 

$ (991,166 )

 

$ (4,756,191 )

 

 
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Revenue

 

During the nine months ended September 30, 2021, the Company generated $947,553 in net sales compared to $383,356 for the same period in 2020. This is largely due to the acquisition of Diamond Creek, which had existing sales.

 

Cost of Sales

 

The Company had cost of sales of $885,324 for the nine months ended September 30, 2021, compared to $290,157 for the same period in 2020. The increase was primarily due to increased sales of the Company’s products.

 

Operating Expenses

 

The Company incurred general and administrative expenses totaling $2,552,100 for the nine months ended September 30, 2021, compared to $456,510 for the same period in 2020. The increase was primarily due to the amortization ($1,737,714) of the branding agreement in 2021. The remaining increase in the operating expenses is from the subsidiaries that were acquired during the current six-month period.

 

Net Loss

 

The Company had a net loss of $5,747,357 for the nine months ended September 30, 2021, compared to a net loss of $991,166 for the same period in 2020. This increase was primarily due to the amortization ($1,737,714) of the branding agreement and the change in derivative liabilities of $3,125,555.

 

For the three months ended September 30, 2021 compared to the three months ended September 30, 2020

 

 

 

Three Months Ended September 30,

 

 

Increase/

 

 

 

2021

 

 

2020

 

 

(Decrease)

 

Net Sales

 

$ 418,212

 

 

$ 102,010

 

 

$ 316,202

 

Cost of Sales

 

 

410,319

 

 

 

77,688

 

 

 

332,631

 

Gross Profit

 

 

7,893

 

 

 

24,322

 

 

 

(16,429 )

Operating Expenses

 

 

671,695

 

 

 

290,922

 

 

 

380,773

 

Operating Loss

 

 

(663,802 )

 

 

(266,600 )

 

 

(397,202 )

Interest Income

 

 

3

 

 

 

-

 

 

 

3

 

Gain on Write-off of Debt

 

 

-

 

 

 

-

 

 

 

-

 

Interest Expense

 

 

(103,257 )

 

 

(3,192 )

 

 

(100,065 )

Loss on Derivative Liabilities

 

 

(1,090,026 )

 

 

119,848

 

 

 

(1,209,874 )

Other Expenses

 

 

149

 

 

 

-

 

 

 

149

 

Net Loss

 

$ (1,856,933 )

 

$ (149,944 )

 

$ (1,706,989 )

 

Revenue

 

During the three months ended September 30, 2021, the Company generated $418,212 in net sales compared to $102,010 for the same period in 2020. This is largely due to the acquisition of Diamond Creek, which had existing sales.

 

Cost of Sales

 

The Company had cost of sales of $410,319 for the three months ended September 30, 2021, compared to $77,668 for the same period in 2020. The increase was primarily due to increased sales of the Company’s products.

 

Operating Expenses

 

The Company incurred general and administrative expenses totaling $671,695 for the three months ended September 30, 2021, compared to $290,922 for the same period in 2020. The increase was primarily due to the amortization $413,265 of the branding agreement in 2021. The remaining increase in the operating expenses is from the subsidiaries that were acquired during the current nine-month period.

 

 
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Net Loss

 

The Company had a net loss of $1,856,933 for the three months ended September 30, 2021, compared to a net loss of $149,944 for the same period in 2020. This increase was primarily due to the amortization $413,265 of the branding agreement and the change in derivative liabilities of $1,090,026.

 

Liquidity and Capital Resources

 

We had cash used in operations of $719,475 for the nine months ended September 30, 2021, compared to $1,455,099 for the nine months ended September 30, 2020. The increase in cash used in operating activities for the nine months ended September 30, 2021 is attributable to the amortization of the branding agreement of $1,735,714 compared to $0 for the nine months ended September 30, 2021 and 2020, respectively.

 

We had cash used in investing activities of $736,055 for the nine months ended September 30, 2021, and $0 for the nine months ended September 30, 2020.

 

We had cash provided by financing activities of $1,409,391 for the nine months ended September 30, 2021, compared to cash provided by $1,443,151 for the nine months ended September 30, 2020.

 

As of September 30, 2021, the Company had cash and cash equivalents of $13,729. We do not have sufficient resources to effectuate our business. We expect to incur a minimum of $200,000 in expenses during the next twelve months of operations. We estimate that these expenses will be comprised primarily of general expenses including overhead, inventory purchases, legal and accounting fees.

 

As of September 30, 2021, and 2020, the Company has primarily been funded by Mr. Alessi and Mr. Chumas. In addition, the Company has issued convertible notes to unrelated third parties. As of September 30, 2021, and December 31, 2020, related party notes totaled $510,575 and $400,575, net of discounts, respectively, and third-party notes totaled $1,052,903 and $306,010, net of discounts, respectively.

 

The Company does not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way.

 

The Company does not know of any significant changes in expected sources and uses of cash.

 

The Company does not have any commitments or arrangements from any person to provide it with any equity capital.

 

Going Concern

 

The accompanying 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. As reflected in the financial statements, the Company had a working capital deficit of $6,277,411 at September 30, 2021 and had a loss of $5,747,357 for the nine months ended September 30, 2021, which raises substantial doubt as to the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

 

Off Balance Sheet Arrangements

 

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

 
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Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

 

Reclassification of Certain Expenses

 

The results of operations as of September 30, 2021 were prepared on a consistent basis with prior periods.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

 

Item 4. Control and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and interim chief financial officer to allow timely decisions regarding disclosure.

 

 
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As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

 

 

The Company does not have a majority of independent directors;

 

Lack of in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

 

Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting; and

 

Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.

 

To remediate our internal control weaknesses, management intends to implement the following measures: as funding permits, the Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements; the Company will hire staff technically proficient at applying U.S. GAAP to financial transactions and reporting; and upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.

 

The additional hiring is contingent upon The Company’s efforts to obtain additional funding through equity or debt and the results of its operations. Management hopes to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

 

Changes in Internal Control over Financial Reporting

 

During the fiscal quarter covered by this Quarterly Report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Limitations on the Effectiveness of Controls

 

The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

 
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PART II

OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. Other than disclosed herein, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

 

Item 1A. Risk Factors

 

Not required.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

On July 30, 2021, an investor exercised non-cashless warrants to purchase 250,000 shares of the Series B-2 Preferred Stock for $1.00 per share for $250,000 in cash. On July 30, 2021, the investor holding 500,000 shares of Series B-2 Preferred Stock converted these shares into 833,333 shares of common stock pursuant to the conversion rights associated with each share of Series B-2 Preferred Stock. These shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as there was no general solicitation, and the transaction did not involve a public offering.

 

On August 27, 2021, two warrant holders exercised cashless warrants. The Company issued 8,808 shares of common stock in relation to these warrants being exercised. These shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as there was no general solicitation, and the transaction did not involve a public offering.

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

 
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Item 6. Exhibits

 

The following exhibits are filed with this Form 10-K or incorporated by reference:

 

Exhibit

 

Description

3.1

 

Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

3.2

 

Articles of Merger (changing Company name) (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

3.3

 

Bylaws (incorporated by reference to Exhibit 3.2 to Annual Report on Form 10-K filed on May 25, 2018, file no. 000-54509)

3.4

 

Certificate of Designation of Series B-1 Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on July 27, 2020, file no. 000-54509)

3.5

 

Certificate of Designation of Series B-2 Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed on July 27, 2020, file no. 000-54509)

10.1

 

Intellectual Property Purchase Agreement, between the Company and Good Hemp Living, LLC, dated February 6, 2019 (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on February 12, 2019, file no. 000-54509)

10.2

 

Branding Agreement between the Company and Spire Holdings, LLC, effective as of February 28, 2020 (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on March 2, 2020, file no. 000-54509)

10.3

 

Joint Venture Agreement of Olin Farms, LLC, between the Company and Paul Hervey, dated July 1, 2020 (incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

10.4

 

Promissory Note dated July 17, 2019, issued by the Company to William Alessi (incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

10.5

 

Promissory Note dated July 17, 2019, issued by the Company to JanBella Group, LLC (incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

10.6

 

Promissory Note dated July 17, 2019, issued by the Company to Chris P. Chumas (incorporated by reference to Exhibit 10.6 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

10.7

 

Promissory Note dated July 22, 2019, issued by the Company to William Alessi (incorporated by reference to Exhibit 10.7 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

10.8

 

Promissory Note dated July 22, 2019, issued by the Company to Chris P. Chumas IRA (incorporated by reference to Exhibit 10.8 to Registration Statement on Form S-1 filed on September 23, 2020, file no. 333-248986)

10.9

 

Consulting Services Agreement between the Company and Scott Shellady, dated June 24, 2020 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on June 30, 2020, file no. 000-54509)

10.10

 

Amendment to Branding Agreement between the Company and Spire Holdings, LLC, entered into February 10, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on February 16, 2021, file no. 000-54509)

10.11

 

Securities Purchase Agreement, between the Company and Leonite Capital LLC, dated March 25, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on March 30, 2021, file no. 000-54509)

10.12

 

Senior Secured Convertible Promissory Note dated February March 25, 2021, issued by the Company to Leonite Capital LLC (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on March 30, 2021, file no. 000-54509)

10.13

 

Common Stock Purchase Warrant, dated March 25, 2021, issued to Leonite Capital LLC (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on March 30, 2021, file no. 000-54509)

10.14

 

Pledge and Security Agreement between the Company and Leonite Capital LLC, dated March 25, 2021 (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K filed on March 30, 2021, file no. 000-54509)

10.15

 

Membership Interest Purchase Agreement, between the Company and the Sellers, dated April 1, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 7, 2021, file no. 000-54509)

10.16

 

Employment Agreement, between the Company and Kenneth Morgan, dated April 1, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 7, 2021, file no. 000-54509)

10.17

 

Common Stock Warrant, dated April 1, 2021, issued to Kenneth Morgan (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on April 7, 2021, file no. 000-54509)

10.18

 

Securities Purchase Agreement, entered into between Good Hemp, Inc. and GS Capital Partners, LLC, dated April 21, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 26, 2021, file no. 000-54509)

10.19

 

Convertible Promissory Note dated April 21, 2021, by Good Hemp, Inc. to GS Capital Partners, LLC (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on April 26, 2021, file no. 000-54509)

10.20

 

Securities Purchase Agreement, entered into between Good Hemp, Inc. and Metrospaces, Inc., dated May 4, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on May 6, 2021, file no. 000-54509)

10.21

 

Convertible Promissory Note dated May 4, 2021, by Good Hemp, Inc. to Metrospaces, Inc. (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on May 6, 2021, file no. 000-54509)

10.22

 

Engagement Agreement, between Good Hemp, Inc. and Sperry Advisory Services, LLC, dated June 16, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on June 25, 2021, file no. 000-54509)

10.23

 

Securities Purchase Agreement, entered into between Good Hemp, Inc. and Geneva Roth Remark Holdings, Inc., dated August 13, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 26, 2021, file no. 000-54509)

10.24

 

Promissory Note dated August 13, 2021, by Good Hemp, Inc. to Geneva Roth Remark Holdings, Inc. (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on August 26, 2021, file no. 000-54509)

10.25

 

Securities Purchase Agreement, entered into between Good Hemp, Inc. and Jefferson Street Capital LLC, dated October 5, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on October 20, 2021, file no. 000-54509)

10.26

 

Inventory Financing Promissory Note dated October 5, 2021, by Good Hemp, Inc. to Jefferson Street Capital LLC (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on October 20, 2021, file no. 000-54509)

10.27

 

Securities Purchase Agreement, entered into between Good Hemp, Inc. and Sixth Street Lending LLC, dated October 19, 2021 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on October 27, 2021, file no. 000-54509)

10.28

 

Convertible Promissory Note dated October 19, 2021, by Good Hemp, Inc. to Sixth Street Lending LLC (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on October 27, 2021, file no. 000-54509)

31.1 *

 

Certification by the Principal Executive Officer

31.2 *

 

Certification by the Principal Accounting Officer

32.1 *

 

Certifications by the Principal Executive Officer

32.2 *

 

Certifications by the Principal Accounting Officer

  

101 INS **

 

XBRL Instance Document

101 SCH **

 

XBRL Taxonomy Extension Schema Document

101 CAL **

 

XBRL Taxonomy Calculation Linkbase Document

101 DEF **

 

XBRL Taxonomy Extension Definition Linkbase Document

101 LAB **

 

XBRL Taxonomy Labels Linkbase Document

101 PRE **

 

XBRL Taxonomy Presentation Linkbase Document

 

*Filed herewith.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

GOOD HEMP, INC.

 

 

 

 

 

Date: November 15, 2021

 

/s/ William Alessi

 

 

 

William Alessi

 

 

 

Chief Executive Officer

 

 

 

 

 

Date: November 15, 2021

 

/s/ Rodney Sperry

 

 

Rodney Sperry

 

 

 

Chief Financial Officer

 

 

31

 

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